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): December 31, 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 2. Acquisition or Disposition of Assets.
As set forth in its Current Report on Form 8-K dated November 25,
1996, Florida Gaming Corporation (the "Registrant") entered into an Assets
Purchase Agreement dated as of November 20, 1996 (the "Agreement") between
the Registrant, Florida Gaming Centers, Inc. (the "Subsidiary"), and WJA
Realty Limited Partnership (World Jai-Alai)("WJA"), pursuant to which the
Subsidiary (a wholly owned subsidiary of Registrant) agreed to acquire all
of the tangible and intangible properties and assets owned by WJA. Upon
the terms and subject to the conditions set forth in the Agreement, on
December 31, 1996, with an effective date of January 1, 1997, the Registrant
acquired WJA's jai-alai and inter-track wagering facilities located in Miami,
Tampa and Ocala, Florida. The assets acquired have been combined with the
Registrant's Ft. Pierce Jai-Alai and Inter-Track Wagering operations into the
Subsidiary.
Following is a brief description of the three jai-alai and inter-track
wagering facilities acquired:
Size of Number
Number Building of Gaming
Location of Acres Sq. Ft. Seats*
Miami 25.50 165,000 4389
Tampa 34.21 114,000 3500
Ocala 47.98 63,000 1774
______ _______ ____
Totals 107.69 342,000 9663*
*These figures do not include up to approximately 1,000 future
gaming positions that are expected to result from the proposed addition
of cardrooms.
The consideration for the acquisition included (i) the cancellation
of WJA's bank notes and related obligations recently acquired by the
Registrant from the Bank of Oklahoma, NA, (ii) the retention by WJA of
200,000 shares of the Registrant's common stock owned by WJA, and (iii) a
profit sharing arrangement described in more detail below. The Registrant
assumed all liabilities of WJA arising in the ordinary course of the business,
subject to certain limitations and exceptions. The Registrant also assumed
the principal amount outstanding under a $500,000 promissory note owed to
Wheeler-Phoenix, Inc., with the terms amended to provide for repayment of
principal over a ten year period following the closing in equal annual
installments and an annual interest rate of 6%.
The profit sharing arrangement is based on the Subsidiary's net profits,
as defined, before income taxes. The Company will pay WJA 20% of the
cumulative net profits of the Subsidiary for each of the ten full calendar
years 1997 through 2006, subject to a cumulative $1,000,000 per year cap
described below. The cumulative $1,000,000 cap is equal to the product of
$1,000,000 multiplied by the number of years in the ten-year period completed,
minus the sum of all amounts previously paid under the 20% profit sharing
arrangement. In addition, if the Subsidiary has net profits in any calendar
year during the ten-year period in excess of $5,000,000, but does not receive
a 20% payment on the entire amount because of the cumulative $1,000,000 per
year cap, the Subsidiary shall pay WJA 5% of the portion of the net profits
on which the 20% payment is not made. No net profit payments will be due for
any year after the ten year period. If during the ten year period, the
Subsidiary disposes of any of its significant assets or operations, then WJA
would be entitled to receive an amount equal to ten percent of the
Subsidiary's gain, if any, on the disposition.
It is anticipated that two principals of WJA, Roger M. Wheeler, Jr.
and Richard P. Donovan, will be named to the Registrant's Board of Directors.
In addition, Mr. Wheeler has entered into a ten-year consulting agreement with
the Subsidiary, with annual compensation of $100,000 during the first five
years of the agreement and annual compensation of $50,000 during the second
five years of the agreement. Mr. Donovan has entered into a five-year
consulting agreement with the Subsidiary, with annual compensation of
$240,000, plus certain benefits.
The terms of the transaction were determined through arm's-length
negotiations between the Registrant and WJA.
The foregoing description of the transaction is qualified in its
entirety by the express terms of the Agreement which is filed as Exhibit 10.1
to the Registrant's Current Report on Form 8-K dated November 25, 1996 and
incorporated herein by reference as Exhibit 2.1.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(a) The financial statements required by this Item are not available at
the time of this filing; the Registrant expects to file with the
Commission the financial statements required no later than March 17,
1997.
(b) The pro forma financial information required by this Item is not
available at the time of this filing; the Registrant expects to file
with the Commission the pro forma financial information required no
later than March 17, 1997.
(c) Exhibits.
Exhibit 2.1 -- Assets Purchase Agreement dated as of November 20,
1996 between the Registrant, Florida Gaming Centers, Inc., and WJA
Realty Limited Partnership (World Jai-Alai), as incorporated by
reference to Exhibit 10.1 of the Registrant's Current Report on Form
8-K dated November 25, 1996 [File No. 0-9099]. Omitted from this
Exhibit, as filed, are the schedules and annexes as referenced in
the Agreement. The Registrant will furnish supplementally a copy
of any such schedules and annexes to the Commission upon request.
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: January 14, 1997
