FORM 8-K/A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934
Date of Report (Date of earliest event reported): May 1, 1998
OASIS RESORTS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter.)
Nevada
(State of incorporation or organization)
0-9476 48-0680109
(Commission File Number) (I.R.S. Employee Identification No.)
3753 Howard Hughes Parkway, Suite 200, Las Vegas, Nevada
(Address of principal executive offices)
89103
(Zip Code)
Registrant's telephone number, including area code: (702) 892-3742
Flexweight Corporation, 915 N. Wells, Wendover, NV 89833
(Former name or former address, if changed since last report)
<PAGE>
Introduction
Pursuant to Items 7 (a) and Item 7 (b) of the Securities and Exchange
Commission's (the "Commission") General Instructions for Form 8-K, Oasis Resorts
International, Inc. (the "Company") formerly Flexweight Corporation hereby
amends Item 7 (a) and 7 (b) of its Current Report on Form 8-K, filed with the
Commission on May 26, 1998 to file pro forma financial information for the
Company reflecting the merger (the "Merger") with Oasis Resort, Hotel &
Casino-III, Inc. ("ORHC") which was effective May 1, 1998.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
Filed herewith as part of this report are the following financial
statements: Oasis Resort, Hotel & Casino-III, Inc. (i) Report of Independent
Auditors, (ii) Balance Sheet as of May 31, 1998, (iii) Statements of Operations
for the nine months ended May 31, 1998, the year ended August 31, 1997, and the
period from inception (December 21, 1995) through May 31, 1998, (iv) Statements
of Stockholder's Equity (Deficit) for the period from inception (December 21,
1995) through August 31, 1996, the year ended August 31, 1997, and the nine
months ended May 31, 1998, (v) Statements of Cash Flows for the nine months
ended May 31, 1998, the year ended August 31, 1997, and the period from
inception (December 21, 1995) through May 31, 1998, and (vi) Notes to Financial
Statements.
(b) PRO FORMA FINANCIAL INFORMATION
Filed herewith as part of this report are the Company's unaudited pro forma
condensed consolidated balance sheet as of May 31, 1998, unaudited pro forma
condensed consolidated statements of operations for the nine months ended May
31, 1998 and the year ended August 31, 1997 and the notes thereto.
2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
OASIS RESORTS INTERNATIONAL, INC.
(formerly FLEXWEIGHT CORPORATION)
(Registrant)
Dated: July 5, 2000 By: /s/ Walter Sanders
Walter Sanders,
Chairman of the Board and President
3
<PAGE>
OASIS RESORTS INTERNATIONAL, INC.
(Formerly Flexweight Corporation)
(A Development-Stage Company)
Index to Financial Statements
Page
OASIS HOTEL, RESORT & CASINO-III, INC.
Independent Auditors' Report.................................................F-2
Balance Sheet as of May 31, 1998.............................................F-3
Statements of Operations for the nine months ended May 31, 1998,
the year ended August 31, 1997, and the period from inception
(December 21, 1995) to May 31, 1998.......................................F-4
Statements of Stockholder's Deficit for the nine months ended May 31, 1998,
the year ended August 31, 1997, and the period from inception
(December 21, 1995) to August 31, 1996....................................F-5
Statements of Cash Flows for the nine months ended May 31, 1998, the
year ended August 31, 1997, and the period from inception
(December 21, 1995) to May 31, 1998.......................................F-8
Notes to Financial Statements................................................F-9
OASIS RESORTS INTERNATIONAL, INC. (Formerly Flexweight Corporation)
Introduction to Unaudited Pro Forma Condensed Consolidated
Financial Statements.....................................................F-14
Unaudited Pro Forma Condensed Consolidated
Balance Sheet at May 31, 1998............................................F-15
Unaudited Pro Forma Condensed Consolidated Statement
of Operations for the nine months ended May 31, 1998.....................F-16
Unaudited Pro Forma Condensed Consolidated Statement
of Operations for the year ended August 31, 1997.........................F-17
Notes to Financial Statements...............................................F-18
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
Oasis Hotel, Resort & Casino-III, Inc.
We have audited the accompanying consolidated balance sheet of Oasis Hotel,
Resort & Casino-III, Inc. (the "Company") as of May 31, 1998, and the related
consolidated statements of operations, stockholder's deficit and cash flows for
the nine months ended May 31, 1998 and for the year ended August 31, 1997, and
the period from inception (December 21, 1995) to May 31, 1998. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Oasis Hotel, Resort &
Casino-III, Inc. as of May 31, 1998, and the results of its operations and its
cash flows for the nine months ended May 31, 1998, the year ended August 31,
1997, and the period from inception (December 21, 1995) to May 31, 1998, in
conformity with generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company is a development-stage company
with no revenues from intended operations since its inception. The Company
requires substantial construction financing, as well as working capital
financing to meet its obligations as they become due. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 2. The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ McKennon, Wilson & Morgan LLP
McKennon, Wilson & Morgan LLP
Irvine, California
June 30, 1999
F-2
<PAGE>
OASIS HOTEL, RESORT & CASINO-III, INC.
(A Development-Stage Company)
Balance Sheet
<TABLE>
<CAPTION>
May 31,
ASSETS 1998
<S> <C>
Cash $ 121
Land held for development 1,038,783
Property and equipment, net 24,816
Investment in NuOasis, at cost 350,000
Security deposit 550,000
Total assets $1,963,720
LIABILITIES AND STOCKHOLDER'S DEFICIT
Accounts payable $ 20,000
First trust deed note payable 550,000
Second trust deed note payable to OIHC 3,425,000
Total liabilities 3,995,000
Commitments and Contingencies (Note 5)
Stockholder's Deficit:
Common stock, par value $0.001; 20,000,000 shares
authorized, 3,010,000 shares issued and outstanding 3,010
Additional paid-in-capital 2,829,589
Deficit accumulated during the development stage (4,863,879)
Total stockholder's deficit (2,031,280)
Total liabilities and stockholder's deficit $1,963,720
</TABLE>
See accompanying notes to these financial statements.
F-3
<PAGE>
OASIS HOTEL, RESORT & CASINO-III, INC.
(A Development-Stage Company)
Statements of Operations
For The Nine Months Ended May 31, 1998, The
Year Ended August 31, 1997,
and The Period From Inception (December 21, 1995)
Through May 31, 1998
<TABLE>
<CAPTION>
Inception
May 31, August 31, Through
1998 1997 May 31, 1998
<S> <C> <C> <C>
Revenues $ - $ - $ -
Expenses:
Stock compensation expenses 899,808 - 899,808
Value of unpaid services 112,500 150,000 375,000
Other operating expenses 62,913 40,435 164,071
Total Expenses 1,075,221 190,435 1,438,879
Net Loss $ (1,075,221) $ (190,435) $ (1,438,879)
</TABLE>
See accompanying notes to these financial statements.
F-4
<PAGE>
OASIS HOTEL, RESORT & CASINO-III, INC.
(A Development-Stage Company)
Statements of Stockholder's Deficit
For The Nine Months Ended May 31, 1998,
The Year Ended August 31, 1997,
and The Period From Inception (December 21, 1995)
Through August 31, 1996
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional During the
Paid-In Development
Capital Stage Total
Shares Amount
<S> <C> <C> <C> <C> <C>
Inception, December 21, 1995 3,010,000 $ 3,010 $ (3,010) $ - $ -
Common stock of affiliate issued
in connection with land
acquisition - - 225,000 - 225,000
Capital contributions - - 83,253 - 83,253
Value of contributed services - - 112,500 - 112,500
Net loss for period - - - (173,223) (173,223)
Balances, August 31, 1996 3,010,000 3,010 417,743 (173,223) 247,530
Capital contributions - - 84,766 - 84,766
Value of contributed services - - 150,000 - 150,000
Net loss for year - - - (190,435) (190,435)
Balances, August 31, 1997 3,010,000 3,010 652,509 (363,658) 291,861
</TABLE>
(Continued)
See accompanying notes to these financial statements.
F-5
<PAGE>
OASIS HOTEL, RESORT & CASINO-III, INC.
(A Development-Stage Company)
Statements Stockholder's Deficit
For The Nine Months Ended May 31, 1998,
The Year Ended August 31, 1997,
and The Period From Inception (December 21, 1995)
Through August 31, 1996 (Continued)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional During the
Paid-In Development
Capital Stage Total
<S> <C> <C> <C> <C> <C>
Shares Amount
Capital contributions - - 164,772 - 164,772
Issuance of common stock by parent in
exchange for common stock of NuOasis - - 350,000 - 350,000
Issuance of common stock by parent to
NuOasis for services rendered - - 650,000 - 650,000
Issuance of common stock by parent
for services rendered - - 22,308 - 22,308
Value of warrants issued by parent
for services rendered - - 227,500 - 227,500
Issuance of common stock by parent for
land financing - - 100,000 - 100,000
Issuance of common stock by parent for
security deposit - - 550,000 - 550,000
Value of contributed services - - 112,500 - 112,500
Deemed distribution resulting from
note payable issued to OIHC - - - (3,425,000) (3,425,000)
Net loss for period - - - (1,075,221) (1,075,221)
Balances May 31, 1998 3,010,000 $ 3,010 $2,829,589 $ (4,863,879) $(2,031,280)
</TABLE>
See accompanying notes to these financial statements.
F-6
<PAGE>
OASIS HOTEL, RESORT & CASINO-III, INC.
(A Development-Stage Company)
Statements of Operations
For The Nine Months Ended May 31, 1998,
The Year Ended August 31, 1997,
and The Period From Inception (December 21, 1995)
Through May 31, 1998
<TABLE>
<CAPTION>
Inception
May 31, August 31, Through
1998 1997 May 31, 1998
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (1,075,221) $ (190,435) $ (1,438,879)
Adjustments to reconcile net loss to
net cash used by operating activities:
Common stock and warrants issued by parent for
services rendered 899,808 - 899,808
Value of contributed services 112,500 150,000 375,000
Increase in accounts payable 20,000 - 20,000
Net cash used in operating activities (42,913) (40,435) (144,071)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (24,816) - (24,816)
Land acquisition and development costs (66,540) (44,331) (133,402)
Net cash used in investing activities (91,356) (44,331) (158,218)
CASH FLOWS FROM FINANCING ACTIVITIES:
Contributions from owner/shareholder 134,390 84,766 302,410
Net cash provided by financing activities 134,390 84,766 302,410
NET INCREASE IN CASH 121 - 121
CASH AT BEGINNING OF PERIOD - - -
CASH AT END OF PERIOD $ 121 $ - $ 121
CASH PAID FOR:
Interest $ - $ - $ -
NON CASH FINANCING ACTIVITIES
Common stock of affiliate issued for land acquisition $ - $ - $ 225,000
Common stock issued by parent for land financing $ 100,000 $ - $ 100,000
Common stock issued by parent for security deposit $ 550,000 $ - $ 550,000
Common stock issued by parent for investment $ 350,000 $ - $ 350,000
Note payable issued for acquisition of land $ 250,000 $ - $ 550,000
Other noncash capital contributions for land development
costs $ 30,321 $ - $ 30,321
</TABLE>
See accompanying notes to these consolidated financial statements.
F-7
<PAGE>
OASIS HOTEL, RESORT & CASINO-III, INC.
(A Development-Stage Company)
Notes to Financial Statements
Note 1 - Organization and History
Oasis Hotel, Resort, Hotel and Casino-III, Inc. (the "Company") was incorporated
in the state of Nevada on December 21, 1995 for the purpose of acquiring 20
acres of partially developed land located in Oasis, Nevada from Oasis
International Hotel and Casino, Inc. ("OIHC"). Management intends to build a
hotel, resort and casino on such site.
On May 1, 1998, Flexweight Corporation, a Kansas corporation ("Flexweight")
acquired 100% of the issued and outstanding common stock of the Company from
OIHC. Effective October 19, 1998, Flexweight reincorporated in Nevada and
changed its name to Oasis Resorts International, Inc. (the "Oasis") to better
reflect its new corporate direction.
Note 2 - Basis of Presentation and Principles of Accounting
Basis of Presentation
The accompanying financial statements have been prepared on a "carve-out" basis
whereby the net assets, and the operations related to the development of the
20-acre parcel since the original acquisition made by OIHC on December 27, 1995.
The cost of the 20-acre land was based on OIHC's historical cost, pro rated by
management based on their estimates of relative cost. The operations reflect the
operations of the 20-acre parcel, plus allocated costs of OIHC based on
reasonable allocation methods.
Development-stage Operations
Since inception, the Company has been in the development stage with no revenues
from it's intended operations which are the construction and operation of gaming
facilities. The Company lacks the financing to continue the development of it's
gaming facilities. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans with respect to these
matters include obtaining sources of capital which may be acceptable to the
Company. Management believes that the Company's capital requirements are in
excess of $75 million. There are no assurances that such financing will be
consummated on terms favorable to the Company. The successful consummation of
adequate financing, and ultimately, the achievement of operating revenues
sufficient to meet the Company's cost structure is management's primary
objective. There are no assurances that adequate financing at terms satisfactory
to the Company will be obtained, and if obtained, there are no assurances that
the Company will achieve profitability. No adjustments have been made to the
carrying value of assets or liabilities as a result of this uncertainty.
Incidental Operations
The Company's operations are intended to consist of the development and
operation of gaming facilities. During the periods presented herein, the
Company, from time to time, leased its facilities in order to reduce operating
costs during it's licensing and permitting process. In connection therewith, the
Company has reported leasing revenues, net of operating costs, as incidental
operations in the accompanying statements of operations.
F-8
<PAGE>
OASIS HOTEL, RESORT & CASINO-III, INC.
(A Development-Stage Company)
Notes to Financial Statements
Fiscal Year End
For financial reporting purposes, The Company uses an August 31 year end.
Cash and Cash Equivalents
Cash equivalents include short-term, highly liquid investments with maturities
of three months or less at the time of acquisition.
Marketable Securities
The Company accounts for its equity securities as available-for-sale securities.
In connection therewith, the Company records unrealized gains and losses as a
component of shareholders' equity. Realized gains and losses are recorded in
income.
Property and Equipment
Property and equipment are depreciated over their estimated useful lives using
the straight-line method ranging three to five years. Buildings will be
depreciated over a period of 30 years. Additions and betterments are
capitalized. The cost of maintenance and repairs is charged to expense as
incurred. When depreciable property is retired or otherwise disposed of, the
related cost and accumulated depreciation and amortization are removed from the
accounts and any gain or loss is reflected in the consolidated statements of
operations. Depreciation expense reflected in the accompanying consolidated
financial statements was not significant.
The Company assesses the recoverability of property and equipment by determining
whether the depreciation and amortization of property, and equipment over its
remaining life can be recovered through projected undiscounted future cash
flows. The amount of property and equipment impairment, if any, is measured
based on fair value and is charged to operations in the period in which such
impairment is determined by management. As of May 31, 1998, management believes
that there is no impairment of property and equipment.
Interest Capitalization
The Company will capitalize interest charges incurred for development of its
land. During the periods presented, The Company capitalized interest costs
totaling $52,200, capitalized acquisition related costs incurred through the
issuance of an affiliate's common stock valued at $225,000 and capitalized the
increase in the face amount of the First Trust Deed from $300,000 to $550,000
during the nine months ended May 31, 1998.
Allocation of Expenses
Since inception, the Company has had minimal operations. OIHC and affiliates
provide administrative, accounting, and legal services, as well as office space.
The value of these services is approximately $100,000, annually. In addition,
The Company's president provides services at cost below fair value. The value of
the president's salary is estimated at approximately $50,000, annually. Since
inception, allocations for the services charged to the accompanying statements
of operations aggregated $375,000. Such amounts
F-9
<PAGE>
OASIS HOTEL, RESORT & CASINO-III, INC.
(A Development-Stage Company)
Notes to Financial Statements
are considered capital contributions and are reflected as additional paid-in
capital in the accompanying statements of stockholder's deficit.
Provision for Income Taxes
The Company accounts for its income taxes under a separate-return basis using
the asset and liability method whereby deferred tax assets and liabilities are
determined based on temporary differences between bases used for financial
reporting and income tax reporting purposes. Income taxes are provided based on
the enacted tax rates in effect at the time such temporary differences are
expected to reverse. A valuation allowance is provided for certain deferred tax
assets if it is more likely than not that the Company will not realize tax
assets through future operations.
The Company's net deferred tax assets at May 31, 1998, consist of federal net
operating loss carryforwards amounting to approximately $1.1 million which
expire through 2013. At May 31, 1998, the Company provided a 100% valuation
allowance for these federal net operating loss carryforwards totaling $374,000.
During the nine months ended May 31, 1998 and year ended August 31, 1997, the
Company's valuation allowance increased $271,000 and $65,000, respectively.
Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Risks, Uncertainties and Concentrations
The gaming industry is subject to laws and regulations. The Company must obtain
licenses to operate a hotel and casino. There is no assurance that the Company
will obtain these licenses.
Financial Instruments
Financial assets with carrying values approximating fair value include cash and
cash equivalents, marketable securities, notes receivable and other investments.
Financial liabilities with carrying values approximating fair value include
accounts payable and accrued interest, and notes payable.
Reporting Comprehensive Income
In June 1997, the FASB issued SFAS No. 130, Reporting Comprehensive Income. This
statement establishes standards for reporting the components of comprehensive
income and requires that all items that are required to be recognized under
accounting standards as components of comprehensive income be included in a
financial statement that is displayed with the same prominence as other
financial statements. Comprehensive income includes net income, as well as
certain non-shareholder items that are reported directly within a separate
component of stockholder's equity and bypass net income. The Company will adopt
the provisions of this statement in fiscal 1999.
F-10
<PAGE>
OASIS HOTEL, RESORT & CASINO-III, INC.
(A Development-Stage Company)
Notes to Financial Statements
Stock-based Compensation
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 123 ("SFAS 123"), "Accounting for Stock-Based
Compensation," which defines a fair value-based method of accounting for
stock-based compensation. However, SFAS 123 allows an entity to continue to
measure compensation cost related to stock and stock options issued to employees
using the intrinsic method of accounting prescribed by Accounting Principles
Board Opinion No. 25 ("APB 25"), "Accounting for Stock Issued to Employees."
Entities electing to remain with the accounting method of APB 25 must make pro
forma disclosures of net income and earnings per share, as if the fair value
method of accounting defined in SFAS 123 had been applied. In 1996, the Company
adopted the provisions of SFAS 123 which relate to non- employee stock-based
compensation, and has elected to account for its stock-based compensation to
employees under APB 25. Through August 31, 1998, the Company had no employee
stock options outstanding.
Note 3 - Land Held for Development
On December 27, 1995, OIHC acquired 1,100 acres of real property for $1,450,000.
In addition, an affiliate of OIHC issued shares valued at 562,000 as additional
consideration to fund the land acquisition. OIHC subdivided the property and
entered into a real estate purchase agreement (the "Real Estate Agreement")
dated April 9, 1998, as amended, with the Company to acquire a 20-acre interest
and acquire an option to purchase an additional 30 acres adjacent to the 20-acre
interest. The cost allocated to the 20-acre parcel amounted to $525,000
($300,000 related to the land purchase and $225,000 related to the value of
shares issued by the affiliate). In connection therewith, the Company assumed a
$550,000 (originally $300,000 - see below) First Trust Deed Note Payable and
issued a note payable to OIHC totaling $3,425,000 (See Notes 4 and 6). As an
inducement for the First Deed of Trust holder to extend credit to the Company,
additional shares of Flexweight's common stock, fairly valued at $100,000, were
issued to the First Deed Trust Holder and the amount of the debt was increased
from $300,000 to $550,000. The Company agreed to this arrangement because of its
lack of operating history and the high degree of risk involved in executing the
Company's plan of operations. Flexweight also issued shares of its common stock
valued at $550,000 to the First Trust Deed lender as security for repayment of
the loan.
Note 4 - Notes Payable
On or about December 27, 1995, the Company issued a $300,000 First Trust Deed to
an individual as part of the cash tendered upon close of the purchase of its
land held for development. The terms of the note were interest only at a rate of
10.9% per annum, originally due December 27, 1997, extended until March 27,
1998, and further extended to the date of closing on or about May 7, 1998
(funded on May 11, 1998). As an inducement to convince the First Deed of Trust
holder to extend credit to the Company, on May 11, 1998, additional shares of
Flexweight's common stock were issued valued at $100,000 to the First Deed Trust
Holder and the amount of the underlying debt was increased from $300,000 to
$550,000. The note was originally due May 11, 1999, with interest-only payments
(at an annual rate of 10.9% per annum) of $5,000 monthly. The note was extended
until May 11, 2000. The note has been extended by mutual consent of the parties
and is due on demand. No demand has been made for repayment of the note.
OIHC agreed to accept a Second Deed of Trust note payable in the amount
$3,425,000 related to the acquisition of the 20-acre parcel on May 11, 1998. The
term of this Second Deed of Trust is for 30 years principal and interest payable
at 9% per annum. All interest payments are current; however, certain principal
repayments have been delinquent. No default notice has been presented to the
Company by OIHC.
F-11
<PAGE>
OASIS HOTEL, RESORT & CASINO-III, INC.
(A Development-Stage Company)
Notes to Financial Statements
Note 5 - Commitments and Contingencies
Litigation
The Company is subject to claims and suits that arise from time to time out of
the ordinary course of its business. Through June 30, 1999, management of the
Company is not aware of any claims that will have a material impact on the
Company's business, financial condition or results of operations which are not
reflected in the accompanying consolidated financial statements.
Note 6 - Stockholder's Equity
Common Stock and Capital Contributions
On or about December 27, 1995, ad affiliate, Canton Industrial Corporation
issued 550,000 shares of its common stock valued at $562,000. Management
allocated $225,000 of such costs to the 20-acre parcel and reflected the cost as
a capital contribution in the accompanying statement of stockholder's deficit
for the period from inception to August 31, 1996.
From May 7, 1998 to May 23, 1998, Flexweight issued shares of its common stock
valued at $22,308 to certain individuals and consulting firms for services
rendered. The Company received consultations in connection with its business
plan and market research. Such costs have been charged to operations in fiscal
1998.
On May 30, 1998, Flexweight issued shares of its common stock valued at
$1,000,000 in exchange for 3,250,000 shares of NuOasis Resorts Inc. The fair
value of the NuOasis shares of common stock were valued at $350,000, based on
the closing bid price of such shares at the date of issuance, and were accounted
for as an investment in common stock under the equity method of accounting for
investments. The difference between the fair value of the NuOasis shares of
common stock received of $350,000 and the estimated value of the Company's
common stock issued of $1,000,000, or $650,000, was charged to expense for
management advisory services performed by certain directors and officers of
NuOasis for the benefit of the Company.
See Notes 3 and 4 for discussion of shares issued for financing and security
deposit on the First Trust Deed Note Payable, valued at $100,000 and $550,000,
respectively, and Note 2 for discussion of services provided below fair value.
Common Stock Purchase Warrants
Flexweight used the Black-Scholes model to value the common stock purchase
warrants granted in fiscal 1998; no warrants were granted in fiscal 1997 and
prior. The weighted-average assumptions used by Flexweight to estimate the value
of the warrants was 1) a volatility of 20% (based on limited trading history),
2) a risk-free interest rate of 5%, 3) no dividends, and 4) an expected life of
one (1) to three (3) years, depending on the terms of the agreements.
On May 30, 1998, Flexweight granted NuOasis an option to purchase shares of its
common stock. Using the Black-Scholes model, the Company valued these warrants
at $227,500 and have charged the value of these warrants to operations in 1998.
F-12
<PAGE>
OASIS HOTEL, RESORT & CASINO-III, INC.
(A Development-Stage Company)
Notes to Financial Statements
Dividend Distribution
The issuance of the Second Deed of Trust totaling $3,425,000 to OIHC, the
predecessor parent company to the Company, is accounted for as a dividend
distribution since OIHC is a control company. Accordingly, management recorded a
charge to the deficit accumulated during the development stage as presented in
the accompanying statement of stockholder's deficit during the nine months ended
May 31, 1998.
F-13
<PAGE>
OASIS RESORTS INTERNATIONAL, INC.
(Formerly Flexweight Corporation)
(A Development-Stage Company)
Unaudited Pro Forma Condensed Consolidated Financial Statements
The accompanying unaudited pro forma balance sheet at May 31, 1998 reflects the
acquisition of Oasis Hotel, Resort, & Casino - III, Inc. (the "Company" or
"OHRC") as a recapitalization since the shareholders of the Company control
Oasis Resorts International, Inc. ("Oasis"), (formerly Flexweight Corporation)
after the merger, and Oasis was formerly a blank-check company with no
operations. The accompanying unaudited condensed consolidated pro forma balance
sheet reflects the assets and liabilities of the Company at their historical
bases.
The unaudited pro forma condensed consolidated statements of operations for the
year ended August 31, 1997 and the nine months ended May 31, 1998, give effect
to the acquisition as if it had occurred at the beginning of the respective
period presented.
The following unaudited pro forma condensed consolidated financial statements
give effect to the recapitalization of Oasis. This pro forma presentation has
been prepared utilizing historical financial statements and notes thereto
included herein, as well as pro forma adjustments as described in the notes to
unaudited pro forma condensed consolidated financial statements.
The unaudited pro forma condensed consolidated financial statements are
presented for illustrative purposes only and do not purport to represent what
the results of operations or financial position would have been had the
acquisition described herein occurred on the dates indicated for any future
period or at any future date, and are therefore qualified in their entirety by
reference to and should be read in conjunction with the historical financial
statements and notes thereto of Oasis and the historical financial statements of
the Company.
F-14
<PAGE>
OASIS RESORTS INTERNATIONAL, INC.
(Formerly Flexweight Corporation)
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
BALANCE SHEET AS OF MAY 31, 1998
<TABLE>
<CAPTION>
Adjustments Pro Forma
Oasis OHRC Note A Consolidated
<S> <C> <C> <C> <C>
Cash $ - $ 121 $ - $ 121
Land held for development - 1,038,783 - 1,038,783
Property and equipment, net - 24,816 - 24,816
Investment in NuOasis - 350,000 - 350,000
Security deposit - 550,000 - 550,000
Total Assets $ - $ 1,963,720 $ - $ 1,963,720
Liabilities and Stockholders' Equity
Accounts payable $ 10,133 $ 20,000 $ - $ 30,133
Taxes payable 12,500 - - 12,500
First trust deed note payable - 550,000 - 550,000
Second trust deed note payable to OIHC - 3,425,000 - 3,425,000
Total Liabilities 22,633 3,995,000 - 4,017,633
Stockholders' Deficit
Common stock 495,808 3,010 64,221 (1) 563,039
Additional paid-in-capital 1,040,508 2,829,589 (1,623,170) (2) 2,246,927
Deficit accumulated in the
development stage (1,558,949) (4,863,879) 1,558,949 (2) (4,863,879)
Total Stockholders' Deficit (22,633) (2,031,280) - (2,053,913)
Total Liabilities and
Stockholders' Deficit $ - $ 1,963,720 $ - $ 1,963,720
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
F-15
<PAGE>
OASIS RESORTS INTERNATIONAL, INC.
(Formerly Flexweight Corporation)
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED MAY 31, 1998
<TABLE>
<CAPTION>
Adjustments Pro Forma
Oasis OHRC Note B Consolidated
<S> <C> <C> <C> <C>
Revenues $ - $ - $ - $ -
Expenses:
Common stock issued for
employment and consulting
services - 899,808 - 899,808
Value of services by others - 112,500 - 112,500
Other operating expenses 10,000 62,913 - 72,913
Total expenses 10,000 1,075,221 - 1,085,221
Net Loss $ (10,000) $(1,075,221) $ - $(1,085,221)
Weighted Average Shares
Outstanding - Basic and Dilutive 4,958,078 5,630,386
Net Loss Per Share $ - $ (.19)
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
F-16
<PAGE>
OASIS RESORTS INTERNATIONAL, INC.
(Formerly Flexweight Corporation)
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1997
<TABLE>
<CAPTION>
Adjustments Pro Forma
Oasis OHRC Note C Consolidated
<S> <C> <C> <C> <C>
Revenues $ - $ - $ - $ -
Expenses:
Value of services provided
by officers - 150,000 - 150,000
Other operating expenses 8,000 40,435 - 48,435
Total expenses 8,000 190,435 - 198,435
Net Loss $ (8,000) $ (190,435) $ - $ (198,435)
Weighted Average Shares
Outstanding - Basic and
Dilutive 4,958,078 5,630,386
Net Loss Per Share $ - $ (.04)
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
F-17
<PAGE>
OASIS RESORTS INTERNATIONAL, INC.
(Formerly Flexweight Corporation)
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
NOTE A: UNAUDITED PRO FORMA CONDENSED BALANCE SHEET AS OF MAY 31, 1998
The following pro forma adjustments to the unaudited condensed consolidated
balance sheet are as if the Merger had been completed as of May 31, 1998, and
are not indicative of what would have occurred if the Merger actually had been
completed as of such date.
(1) Adjustment to issue additional common stock based on the merger agreement.
(2) Adjustment to additional paid-in capital for recapitalization and
accumulated deficit.
NOTE B: UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED MAY 31, 1998
No pro forma adjustments have been made to the unaudited pro forma condensed
consolidated statement of operations as if the acquisitions and related
transactions had been completed at the beginning of the fiscal period.
NOTE C: UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1997
No pro forma adjustments have been made to the unaudited pro forma condensed
consolidated statement of operations as if the acquisitions and related
transactions had been completed at the beginning of the fiscal period.
F-18
