SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 13, 1996
FLORIDA GAMING CORPORATION
(Exact name of registrant as specified in charter)
Delaware 0-9099 59-1670533
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
1750 South Kings Highway
Fort Pierce, Florida 34945-3099
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (407) 464-7500
Not Applicable
(Former name or former address,
if changed since last report.)
INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events.
On February 13, 1996, Florida Gaming Corporation announced the
signing of a letter of intent with Gold Star International, Inc.
("GSI") to acquire the capital stock of Gold Star Casinos, Inc.
("Gold Star") a wholly owned subsidiary of GSI. Additional
information is included in Florida Gaming's press release, attached
as exhibit 99 to this report.
Headquartered in Coconut Grove, Florida, Gold Star holds the
exclusive rights to operate the casino concessions on two cruise
ships operating from Clearwater and St. Petersburg, Florida and the
ferry between Bar Harbor, Maine and Yarmouth, Nova Scotia. Upon
closing, Gold Star will also have an option to acquire an
assignment of 50% of the profits from the casino concession aboard
a cruise ship operating from Ft. Lauderdale, Florida. After the
exercise of the option, Gold Star's casino operating concessions
would involve about 22,500 square feet of gaming space and a total
of 1,175 gaming positions.
The Letter of Intent anticipates that GSI will receive, at closing,
200,000 shares of Florida Gaming's common stock ("Common Shares") in
exchange for 100% of the stock of Gold Star Casinos, Inc. GSI can also
receive up to 300,000 additional Florida Gaming Shares over a four
year period pursuant to the "earn-out" provisions of the Letter of
Intent.
The Letter of Intent is not a binding agreement between the
parties. Consummation of the transaction is subject to several
significant conditions, including the completion of due diligence
investigations by both parties, the negotiation and execution of a
definitive acquisition agreement between the parties, the
negotiation of employment arrangements with certain member of GSI's
management, the approval of the parties' respective Boards of
Directors and GSI stockholders, and the receipt of consents from
the GSI senior lenders. Because of these factors, neither
consummation of the transaction, nor the operating results
anticipated therefrom (as described in the press release) can be
assured. The Letter of Intent provides that the parties will try to
close the proposed transaction within 90 days.
In other developments, Florida Gaming is currently
reevaluating its proposed gaming venture with the Ponca Tribe of
Nebraska based on recent events adversely affecting the prospects
for Indian gaming in the state. On February 6, 1996, the Nebraska
legislature failed to pass legislation that would have authorized
a voter referendum on legalizing casino gaming in the state. In
addition, as a result of a November 1995 decision by the United
States Court of Appeals for the Eighth Circuit, the Bureau of
Indian Affairs has indefinitely suspended action on land-in-trust
applications from Indian tribes in Nebraska and other Eight Circuit
states.
On February 23, 1996, Florida Gaming completed the placement
of an additional 2,300 shares of its Series B Preferred Stock
("Series B Shares") to institutional investors outside the United
States. The purchase price for the Series B Shares was $1,000 per
share, or a total purchase price of $2.3 million. Florida Gaming
has sold a total of 4,700 Series B Shares to date for total
offering proceeds of $4.7 million. The Company currently anticipates
that the placement proceeds will be used to finance improvements to
its Fort Pierce, Florida fronton and pari-mutuel wagering facility
and/or certain contingent obligations of the Company in connection
with its proposed Indian gaming ventures.
Holders of Series B Shares are entitled, among other rights,
to receive an 8% annual cumulative dividend payable in the Company's
Common Shares upon conversion. Beginning 40 days after issuance,
each Series B share can be converted into the number of Common Shares
equal to the sum of $1,000 per Series B share plus 8% accrued and
unpaid dividends from the date of issuance through the date of conversion
divided by 80% of the average of the closing bid prices of the Common
Shares as reported by the Nasdaq SmallCap Market for the 5 consecutive
business days immediately preceding the date of conversion (the "Average
Bid Price").
To date Florida Gaming has issued 134,926 Common Shares upon
the conversion of 900 Series B Shares. Assuming an Average Bid
Price of $6.75, the closing bid price for the Common Shares on
March 8, 1996, approximately 713,862 Common Shares would be
issuable upon the conversion of the 3,800 currently outstanding
Series B Shares on April 4, 1996 (the 41st day after the February
23rd issuances). This statement is a forecast based on the
foregoing assumptions, and the actual number of Common Shares
issued upon conversion of the Series B Shares may vary based upon
changes in the trading price of the Common Shares, the timing of
conversion, and other factors.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(a) Financial statements of business acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
Exhibit 99 -- Press Release dated February 13, 1996.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
FLORIDA GAMING CORPORATION
By /s/ Timothy L. Hensley
Timothy L. Hensley
Executive Vice President, Treasurer
and Chief Financial Officer
Date: March 12, 1996
FOR IMMEDIATE RELEASE
FLORIDA GAMING CORPORATION SIGNS LETTER OF INTENT TO
ACQUIRE CASINO MANAGEMENT AND DEVELOPMENT COMPANY
Ft. Pierce, Florida, February 13, 1996. Florida Gaming Corporation
(NASDAQ SmallCap - "BETS") announced today the signing of a Letter
of Intent with Gold Star International, Inc. ("GSI") to acquire the
capital stock of Gold Star Casinos, Inc. ("Gold Star") a wholly-owned
subsidiary of GSI.
Gold Star is headquartered in Coconut Grove, Florida and owns the
exclusive rights to operate the casino concessions on the following
ships:
M/V Crown Empress - Clearwater, Florida
M/V Majestic Empress - St. Petersburg, Florida
M/V Bluenose (Ferry) - Bar Harbor, Maine and
Yarmouth, Nova Scotia
Upon closing, Gold Star will also have an option to acquire from a
principal of Gold Star and others an assignment of 50% of the
profits from the casino concession aboard the M/V Discovery I --
operating from Ft. Lauderdale, Florida.
After the exercise of the M/V Discovery option, Gold Star's casino
operating concessions will involve about 22,500 square feet of
gaming space, containing 731 slot machines, and 74 table games --
a total of 1,175 gaming positions. Gold Star has approximately 125
employees with offices in Coconut Grove and St. Petersburg,
Florida, and New York City.
For the fiscal year ended May 31, 1995, Gold Star's slot handle
(money wagered) was $103,950,950 and the "drop" from table games
was $41,266,885. Gold Star's revenues and income from operations
(unaudited) were approximately $18,392,055 and $1,905,022
respectively.
The Letter of Intent anticipates that GSI will receive, at closing,
200,000 shares of Florida Gaming common stock in exchange for 100%
of the stock of Gold Star Casinos, Inc. GSI can also receive up to
300,000 additional shares of Florida Gaming stock over a four (4)
year period pursuant to the "earn-out" provisions of the Letter of
Intent.
The Letter of Intent is not a binding agreement between the
parties. Consummation of the transaction is subject to several
significant conditions, including the completion of due diligence
investigations by both parties, the negotiation and execution of a
definitive acquisition agreement between the parties, the
negotiation of employment arrangements with certain member of GSI's
management, the approval of the parties' respective Boards of
Directors and GSI stockholders, and the receipt of consents from
the GSI senior lenders. Neither consummation of the transaction,
nor the operating results anticipated therefrom, can be assured.
Both parties have agreed to try to close the proposed transaction
within 90 days.
W. Bennett Collett, Chairman of Florida Gaming stated, "The
combination of Gold Star and Florida Gaming will create critical
depth in management and development talent needed for Florida
Gaming's future expansion plans. Combined annual gaming revenues
for 1995 would be approximately $22.6 million compared to $4.2
million for Florida Gaming along for fiscal 1995 -- an increase of
about 438%. This merger should be a very positive move for Florida
Gaming shareholders."
Clive Tilley, Chairman of Gold Star commented that, "This merger
will allow the casino and management disciplines within Gold Star
to expand Florida Gaming into both land-based and offshore casinos.
The combined expertise and business plans of each company will be
combined to achieve this -- the prospects are very exciting!"
Florida Gaming is involved in Native American gaming ventures with
the Rincon San Luiseno Band of Mission Indians in northern San
Diego County, California, the Apache Tribe of Oklahoma (near
Wichita Falls, Texas), and the Ponca Tribe of Nebraska (Omaha).
Florida Gaming is currently reevaluating its proposed gaming venture
with the Ponca Tribe of Nebraska based on recent developments
adversely affecting the prospects for Indian gaming in the state.
On February 6, 1996, the Nebraska legislature failed to pass
legislation that would have authorized a voter referendum on
legalizing casino gaming in the state. In addition, as a result of
a November 1995 decision by the United States Court of Appeals for
the Eighth Circuit, the Bureau of Indian Affairs has indefinitely
suspended action on land-in-trust applications from Indian tribes
in Nebraska and other Eight Circuit states.
Florida Gaming also owns and operates an 80,000 sq. ft. pari-mutuel
wagering facility at Ft. Pierce, Florida where live Jai-Alai games
are played and Inter-Track wagering (ITW) is conducted. Florida
Gaming's ITW division offers simulcast pari-mutuel wagering on
horse racing (both thoroughbred and harness), dog racing, and Jai-Alai
games. The total handle (money wagered) at the Ft. Pierce
facility for the year ended December 31, 1995 was $25,344,674,
compared to $19,232,481 for the same period in 1994 -- an increase
of $6,112,193 (32%).
Contact:
W. Bennett Collett
Chairman and C.E.O.
(502)589-2000
or
(407)464-7500
