<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1O-QSB
[X] Quarterly Report under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarterly period ended July 31, 1996
Commission File Number 0-24846
COLORADO CASINO RESORTS, INC.
(Exact name of Registrant as Specified in its Charter)
Texas 84-1303693
(State or other jurisdiction (IRS Number)
of incorporation)
304 South 8th Street
Suite 201
Colorado Springs, CO 80905
(719) 635-7047
(Address, including zip code, and telephone number,
including area code, of Registrant's principal
executive offices)
Securities Registered Under Section 12(g)
of the Exchange Act. Common Stock,$.001 Par Value
Indicate by check mark whether the registrant (1) has filed all reports
required to filled by Section 13 or 15(d) or the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's class
of common stock as the latest practicable date:
33,710,886 shares of Common Stock, $.001 par value per share.
<PAGE> 2
COLORADO CASINO RESORTS, INC. & SUBSIDIARIES
INDEX
Part I. Financial Information Page
Item 1. Financial Statements
Consolidated Balance Sheets - (unaudited)for
July 31, 1996 3
Consolidated Statement of Operations (unaudited)
for July 31, 1996 and July 31, 1995 4
Consolidated Statements of Cash Flows (unaudited)
for July 31, 1996 and July 31, 1995 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis
of Financial Condition as well as Future Plans 7
Part II. Other Information
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults upon Senior Securities 11
Item 4. Submission of Matters to a Vote of
Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports 11
Signatures 12
<PAGE> 3
<TABLE>
COLORADO CASINO RESORTS, INC.
CONSOLIDATED BALANCE SHEETS
<CAPTION>
(UNAUDITED) (AUDITED)
JULY 31, OCTOBER 31,
1996 1995
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and temporary investments $1,646,456 $1,375,145
Cash and investments, restricted 1,073,325 450,000
Inventory 52,849 49,885
Other current assets 264,280 87,885
TOTAL CURRENT ASSETS 3,035,910 1,962,915
REAL ESTATE HELD FOR FUTURE
DEVELOPMENT 4,504,970 4,504,970
REAL ESTATE UNDER DEVELOPMENT -- 6,196,644
CONSTRUCTION IN PROCESS -- 3,301,432
LAND, BUILDING AND EQUIPMENT
Land 7,071,644 875,000
Building 22,867,040 1,625,154
Furniture and equipment 11,548,470 2,244,529
Accumulated depreciation (946,111) (533,606)
TOTAL LAND, BUILDING AND EQUIPMENT40,541,043 4,211,077
OTHER ASSETS
Deposits, land purchase option 25,000 25,000
Debt issue costs, net 540,787 -
Advances to officers 314,617 114,617
Other 25,534 8,176
TOTAL OTHER ASSETS 905,938 147,793
TOTAL ASSETS $48,987,861 $20,324,831
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES
Accounts/construction costs
payable $848,540 $52,975
Accrued other expenses 1,454,802 525,486
Notes payable 12,895,000 500,000
Current portion, long-term debt,
related party 77,381 64,681
Current portion, long-term debt 1,349,183 279,794
TOTAL CURRENT LIABILITIES 16,624,906 1,422,936
LONG-TERM DEBT, RELATED PARTY 1,328,361 1,041,900
LONG-TERM DEBT 13,760,483 4,318,684
CONVERTIBLE DEBENTURES 8,000,000 4,500,000
TOTAL LIABILITIES 39,713,750 11,283,520
STOCKHOLDERS' EQUITY
Preferred convertible stock,
Series One, $10 par value,
5,000,000 shares authorized,
250,000 issued and outstanding 2,500,000 6,500,000
Preferred convertible stock,
Series Two, $10 par value,
5,000,000 shares authorized,
none issued and outstanding - -
Common stock, $.001 par value,
100,000,000 shares authorized,
33,710,886 issued and outstanding 33,710 30,845
Paid-in capital 9,494,137 4,283,532
Accumulated deficit (2,753,736) (1,773,066)
TOTAL STOCKHOLDERS' EQUITY 9,274,111 9,041,311
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $48,987,861 $20,324,831
</TABLE>
<PAGE> 4
<TABLE>
COLORADO CASINO RESORTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
NINE MONTHS NINE MONTHS THREE THREE
ENDED ENDED MONTHS MONTHS
JULY 31, JULY 31, ENDED ENDED
1996 1995 JULY 31, JULY31,
1996 1995
<S> <C> <C> <C> <C>
OPERATING REVENUE
Casino $4,724,411 $2,706,781 $2,012,689 $1,268,107
Food, beverage, other 533,739 337,711 217,848 167,527
TOTAL REVENUE 5,258,150 3,044,492 2,230,537 1,435,634
OPERATING EXPENSES
Casino 2,197,458 1,246,406 1,035,911 493,083
Food, beverage and other 772,141 557,494 372,552 226,005
General and
administrative 1,661,916 965,617 798,953 435,279
Depreciation and
amortization 412,506 196,554 175,284 101,447
TOTAL OPERATING EXPENSES 5,044,021 2,966,071 2,382,700 1,255,814
Income(Loss) From
Operations 214,129 78,421 (152,163) 179,820
NONOPERATING INCOME
(EXPENSES)
Interest expense 1,194,799 458,131 571,611 162,455
Loss Before Income Taxes (980,670) (379,710) (723,774) 17,365
Income taxes - - - -
Net Loss $(980,670) $(379,710) $(723,774) $17,365
Net loss Per Share $(0.0291) $(0.0131) $(0.0215) $(0.0006)
Weighted Average Number
Shares Outstanding 33,710,886 29,040,000 33,710,886 29,040,000
</TABLE>
<PAGE> 5
<TABLE>
COLORADO CASINO RESORTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
NINE MONTHS NINE MONTHS
ENDED ENDED
JULY 31, JULY 31,
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(980,670) $(379,710)
Noncash items
Depreciation and amortization 412,506 196,554
Amortization of debt issue costs 422,817 -
Interest added to debt 299,161 362,555
(Increase) decrease in:
Inventory (2,964) (9,424)
Other current assets (176,395) (54,747)
Other assets (17,358) -
(Decrease) increase in:
Accounts payable 795,565 (30,123)
Accrued other expenses 929,316 21,930
Net cash provided (used) by
operating activities 1,681,978 107,035
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase/construction of
land,building and equipment (20,688,520) (1,787,457)
Cash and investments, restricted (623,325) -
Deposits, purchase options - (51,180)
Advances to officers (200,000) (63,014)
Net cash provided (used) by
investing activities (21,511,845) (1,901,651)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings,convertible
debentures 4,044,866 -
Borrowings, long-term debt - -
Borrowings, short-term debt 13,325,000 1,044,520
Repayments, short-term debt (1,500,000) -
Repayments, long-term debt (44,688) (367,161)
Distributions, prior S-Corp
stockholders - (183,537)
Issuance of preferred stock 3,150,000 5,000,000
Issuance of common stock 1,125,000 305,000
Net cash provided (used) by
financing activities 20,100,078 5,798,822
INCREASE (DECREASE) IN CASH AND 270,311 4,004,206
EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING 1,375,145 641,943
CASH AND CASH EQUIVALENTS, ENDING $1,645,456 $4,646,149
</TABLE>
<PAGE> 6
Note A:Summary of Significant Accounting Policies
The Company's accounting policies are outlined in the audited financial
statements included with the Company's most recent 10KSB. There have been
no changes in accounting principles or practices in the current fiscal year.
All prior period amounts have been restated to include the results of
Creekers, Inc., the Company's subsidiary, which was acquired in the first
quarter of fiscal 1995. The acquisition has been accounted for as a
pooling-of-interests.
Note B:Cash and Investments, Restricted
Cash and investments, restricted are pledged as collateral for standby
letters of credit to the City of Cripple Creek and the construction
contractor for construction of the Double Eagle Hotel and Casino.
Note C:Property and Equipment
The Company has expended $8,131,424 in the current quarter for equipment,
furniture and fixtures for the Double Eagle Hotel and Casino. Construction
costs for the Double Eagle Hotel and Casino project amounted to $4,591,866
for the quarter including $698,200 of capitalized interest.
Note D:Deposits, Purchase Options
The Company has an option to purchase the parking lot behind Creeker's for
$750,000 through the expiration of the agreement in April 1997.
Note E:Long Term Debt
During the quarter, the Company entered into long term equipment financing
of $6,555,876. The Company also exchanged $4,000,000 of preferred
convertible stock, Series One, for $4,000,000 of long term debt.
Note F:Stockholders' Equity
During the quarter, $3,150,000 (net of issue costs of $350,000) of
preferred convertible stock, Series Two was converted into 2,056,308 shares
of common stock. Convertible debt of $938,470 (net of issue costs of
$61,530) was converted into 452,435 shares of common stock.
The Company has outstanding stock options to directors to purchase 240,000
shares of common stock at $1 per share.
Note G:Income Taxes
The Company has an estimated deferred tax benefit of $288,000 for the
current fiscal quarter which has been offset in full by a valuation
allowance due to the availability of net operating loss carryforwards at
July 31, 1996.
<PAGE> 7
COLORADO CASINO RESORTS , INC. & SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND PLANS FOR FUTURE
OPERATIONS
OVERVIEW AND PLAN OF OPERATION
Colorado Casino Resorts, Inc., ("CCRI" and/or the "Company") is in the
business of developing and operating casino and hotel properties. Through
its wholly owned subsidiaries, Creeker's Inc. and Double Eagle Resorts,
Inc., CCRI is the owner of Creeker's Casino ("Creeker's") and the Double
Eagle Hotel & Casino (the "Double Eagle"), both located in Cripple Creek,
Colorado.
During this quarter, Creeker's reported a significant increase in revenues
compared to one year ago and the Double Eagle opened its doors for business.
Creeker's reported a 55% increase in revenues over one year. For the
quarter, Creeker's generated $680,000 in earnings before interest, taxes,
depreciation, and amortization on revenues of $2,178,652. The Company plans
to remodel Creeker's this fall.
The Company completed construction of the Double Eagle, opened its hotel and
restaurant for business, and was awarded a gaming license by State of
Colorado Division of Gaming to operate its casino, the largest hotel and
casino in the city of Cripple Creek. The Company met all regulatory gaming
requirements and commenced its casino operations on August 29, in time for
the Labor Day holiday, one of the busiest weekends of the year. During the
four days, an estimated 100,000 people walked through the casino producing
approximately $850,000 in revenues for the Company. CCRI plans to hold a
grand opening celebration for the Double Eagle on September 27 and 28.
The Double Eagle represents a new class of gaming entertainment by
introducing a "Las Vegas-style" resort to the Colorado market. In addition
to its quality accommodations and high level of service, the Company plans
to add a conference center to the Double Eagle this winter. Management
believes this addition will enhance its revenue producing capabilities by
offering accommodations for business meetings and retreats.
<PAGE> 8
Creeker's Casino
Creeker's management is constantly analyzing slot machine performance data
to design optimal floor layouts and machine mix to attract players. Several
slot machine game themes have been changed and others are in the process of
being changed. As a result, Creeker's has realized increased play and
significantly improved revenues. The Company is currently working with its
architects and interior designers to upgrade and remodel Creeker's. The
improvements will include the addition of new slot machines and new game
themes. This upgrade is a prelude to the planned addition of the new
Creeker's Hotel in late 1997.
Double Eagle Hotel & Casino
The Double Eagle is designed to be a modern, state-of-the-art hotel and
casino featuring 159 hotel rooms and suites, over 750 slot machines, and 5
table games spanning a 45,000 square foot casino on two levels. This
facility employs the latest in lodging and gaming network systems for
reservations and player tracking, inter-linked voice and data
communications, and computerized ventilation and environment controls.
Located on the southwestern corner of Bennett Avenue and 5th Street, where
Route 67 and Bennett Avenue come together, the Double Eagle provides
superior access and visibility to all motorist and pedestrian traffic
entering and exiting Cripple Creek. The exterior of the building is
designed to be reminiscent of the historic structures which adorned the
streets of Cripple Creek during the pre-World War I era. The interior of
the Double Eagle is themed to offer the hospitality and glamour of the
"roaring 20's". With its breathtaking stained glass (Envelex) barrel
ceiling, complete with two five foot gold-leaf renditions of a 1927 Double
Eagle coin, elegant winding staircases, and large, three-dimensional, themed
progressive slot machine signs throughout, the Double Eagle offers its
guests an unforgettable gaming experience. As an added convenience to its
guests, the Double Eagle offers free valet parking from its port-o-couche
and free shuttle bus service to and from the hotel/casino, Creeker's Casino,
and its own 6-acre parking lot.
The hotel rooms are designed with elegance in mind, featuring suites with
hot tubs, fireplaces, and big screen televisions. Room service, an up-scale
restaurant, two entertainment bars, a gift shop, and a full service staff
will ensure the needs of the guest are always serviced.
<PAGE> 9
COMPANY REVENUE
Casino revenues for the quarter were up compared to the same period twelve
months ago. Operating revenues for the quarter ending July 31, 1996 totaled
$2,230,537, compared to revenues of $1,435,634 for the same period in 1995,
representing an increase of over 55%. Although the Company attributes the
increase in gaming revenue to the continued improvement of Creeker's through
the strategic selection and placement of new slot machines, a significant
portion of that growth is the result of an aggressive promotional
advertising and marketing campaign. Operating expenses for this quarter
also rose from $1,255,814 to $2,382,700 representing a 90% increase from one
year ago. This increase is primarily due to the additional payroll
associated with initial staffing for the Double Eagle and related general
and administrative expenses.
Acquisitions
There were no acquisitions of any significance during this quarter.
Sale of Stock
During the quarter, $3,500,000 of preferred convertible stock, Series Two
was converted into 2,056,308 shares of common stock. Also, $1,000,000 of
convertible debt was converted into 452,435 shares of common stock resulting
in a total of 33,710,886 shares of common stock issued and outstanding.
Results of Operations
For the six months ending July 31, 1996, Creeker's reported revenues from
casino operations of $2,012,689 compared to $1,268,107 for the same period
from one year ago, representing an 58% increase. Due to $858,000 in
additional labor and related general and administrative expenses associated
with Double Eagle staffing, the Company incurred a net consolidated loss
from operations of ($152,163) compared to a profit of $179,820 in 1995.
Interest expense in the amount of $571,611 ($492,921 of which was associated
with the financing of the Double Eagle project) further reduced the net
figure to a quarter loss of ($723,774).
<PAGE> 10
Operating expenses increased by over 70% from to $2,966,071 to $5,044,021
for the same 9-month ending period due primarily to the Double Eagle
development expenses and depreciation and amortization expenses related to
the acquisition of additional capital equipment. Expenses for Creeker's
casino operations increased by approximately 58% from $1,246,406 to
$1,971,004 due to complimentary offers associated with an aggressive
promotional and marketing campaign during the past nine months. This
increase accounted for additional cost of labor and merchandising material
used during the same period.
Expenses for food, beverage and other also increased from $557,494 to
$772,141 reflecting an increase in revenues which rose by 58% to $533,739
for the same period. A large part of this increase coincides with the
Company's heightened marketing strategy through which liquor, soda and pizza
were offered complimentary to casino patrons.
General and administrative expenses rose nearly 72% from $965,617 to
$1,661,916 during the same nine month period, with a significant portion of
the increase attributed to corporate support of the Double Eagle project.
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-QSB
and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normally recurring accruals) considered
necessary for a fair presentation have been included.
Operating results for the quarter ending July 31, 1996 are not necessarily
indicative of the results that may be expected for the year ending October
31, 1996. For further information, refer to the consolidated statements and
footnotes included in the Registrant's annual report on Form 10-KSB for the
year ending October 31, 1995.
<PAGE> 11
COLORADO CASINO RESORTS , INC. & SUBSIDIARIES
OTHER INFORMATION
PART II. Other Information
Item 1. Legal Proceedings
The Company is party to various lawsuits relating to routine matters
incidental to its business. Management does not believe that the outcome
of any such litigation, in aggregate, will have a material adverse effect
on the Company.
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to Vote of Security Holders - None
Item 5. Other Information - None
Item 6. Exhibits and Reports - None
<PAGE> 12
COLORADO CASINO RESORTS, INC. & SUBSIDIARIES
SIGNATURES
Pursuant to the requirement 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.
COLORADO CASINO RESORTS, INC.
Registrant
______________________
Rudy S. Saenz
President & CEO
Principal Executive Officer
______________________
Farrid E. Tannous
Treasurer & CFO
Principal Financial Officer
September 12, 1996
<PAGE> 13
<TABLE> <S> <C>
<ARTICLE>5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1995
<PERIOD-END> JUL-31-1996
<CASH> 1,646,456
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 52,849
<CURRENT-ASSETS> 3,056,910
<PP&E> 41,487,154
<DEPRECIATION> 946,111
<TOTAL-ASSETS> 48,987,861
<CURRENT-LIABILITIES> 16,624,906
<BONDS> 8,000,000
0
2,500,000
<COMMON> 33,710
<OTHER-SE> 9,240,401
<TOTAL-LIABILITY-AND-EQUITY> 48,987,681
<SALES> 5,258,150
<TOTAL-REVENUES> 5,258,150
<CGS> 2,969,599
<TOTAL-COSTS> 5,044,021
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,194,799
<INCOME-PRETAX> (980,670)
<INCOME-TAX> 0
<INCOME-CONTINUING> (980,670)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (980,670)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
