SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly Report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended April 30, 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 S. 8th Street
Suite 201
Colorado Springs, CO 80905
(719) 635-7047
(Address, including zip code, and telehpone number, including
area code, of Registrat'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
classes of common stock as the latest practicable date: 31,202,143
shares of Common Stock, $.001 par value per share.
<PAGE>
COLORADO CASINO RESORTS, INC. & SUBSIDIARIES
INDEX
Part I. Financial Information
Item 1.Financial Statements
Consolidated Balance Sheets - (unaudited) for April 30,
1996 ........... 3
Consolidated Statement of Operations - (unaudited) for
April 30, 1996 and April 30, 1995
............................................ 4
Consolidated Statements of Cash Flows - (unaudited) for
April 30, 1996 and April 30, 1995
............................................ 5
Notes to Consolidated Financial Statements
........................................... 6
Item 2.Management's Discussion and Analysis of Financial
Condition
as well as Future Plans
....................................................
................... 8
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>
<TABLE>
COLORADO CASINO RESORTS, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITE (AUDITED)
<CAPTION> D) OCTOBER
APRIL 30, 31,
1996 1995
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and temporary investments $ $
5,850,824 1,375,145
Cash and investments, restricted 5,545,238 450,000
Inventory 46,726 49,885
Other current assets 172,445 87,885
TOTAL CURRENT ASSETS 11,615,23 1,962,915
3
REAL ESTATE HELD FOR FUTURE DEVELOPMENT 4,504,970 4,504,970
REAL ESTATE UNDER DEVELOPMENT 6,196,644 6,196,644
CONSTRUCTION IN PROCESS 16,523,11 3,301,432
5
LAND, BUILDING AND EQUIPMENT
Land 875,000 875,000
Building 1,752,059 1,625,154
Furniture and equipment 3,206,062 2,244,529
Accumulated depreciation (770,828) (533,606)
TOTAL LAND, BUILDING AND EQUIPMENT 5,062,293 4,211,077
OTHER ASSETS
Deposits, land purchase option 25,000 25,000
Debt issue costs, net 895,009 -
Advances to officers 114,617 114,617
Other 43,922 8,176
TOTAL OTHER ASSETS 1,078,548 147,793
TOTAL ASSETS $ $
44,980,80 20,324,83
3 1
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts and construction costs payable $ $
3,120,396 52,975
Accrued other expenses 1,149,518 525,486
Short term construction loans 7,355,000 -
Notes payable - 500,000
Current portion, long-term debt, related party 77,135 64,681
Current portion, long-term debt 5,825,306 279,794
TOTAL CURRENT LIABILITIES 17,527,35 1,422,936
5
LONG-TERM DEBT, RELATED PARTY 1,215,759 1,041,900
LONG-TERM DEBT 4,178,272 4,318,684
CONVERTIBLE DEBENTURES 9,000,000 4,500,000
TOTAL LIABILITIES 31,921,38 11,283,52
6 0
STOCKHOLDERS' EQUITY
Preferred convertible stock, Series One, $10 par 6,500,000 6,500,000
value, 5,000,000 shares authorized, 650,000
issued and outstanding
Preferred convertible stock, Series Two, $10 par 3,500,000 -
value, 5,000,000 shares authorized, 350,000
issued and outstanding
Common stock, $.001 par value, 100,000,000 shares 31,202 30,845
authorized, 31,202,143 issued and outstanding
Paid-in capital 5,058,175 4,283,532
Accumulated deficit (2,029,96 (1,773,06
0) 6)
TOTAL STOCKHOLDERS' EQUITY 13,059,41 9,041,311
7
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ $
44,980,80 20,324,83
3 1
</TABLE>
<PAGE>
<TABLE>COLORADO CASINO RESORTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
SIX SIX THREE THREE
MONTHS MONTHS MONTHS MONTHS
ENDED ENDED ENDED ENDED
APRIL APRIL APRIL APRIL 30,
30, 30, 30, 1995
1996 1995 1996
<S> <C> <C> <C> <C>
OPERATING REVENUE
Casino $ $ $ $
2,711,7 1,438,6 1,587,71 727,697
22 74 5
Food, beverage, other 315,891 170,184 182,815 86,039
3,027,6 1,608,8 1,770,53 813,736
13 58 0
OPERATING EXPENSES
Casino 1,161,5 753,323 704,635 414,364
47
Food, beverage and other 399,589 331,489 224,846 165,115
General and administrative 862,963 530,338 377,650 312,339
Depreciation and 237,222 95,107 129,754 58,371
amortization
2,661,3 1,710,2 1,436,88 950,189
21 57 5
Income(Loss) From 366,292 (101,39 333,645 (136,453)
Operations 9)
NONOPERATING INCOME
(EXPENSES)
Interest expense 623,188 295,676 403,111 135,064
Loss Before Income Taxes (256,89 (397,07 (69,466) (271,517)
6) 5)
Income taxes - - - -
Net Loss $ $ $ $
(256,89 (397,07 (69,466) (271,517)
6) 5)
Net loss Per Share $ $ $ $
(0.0083 (0.0129 (0.0022) (0.0088)
) )
Weighted Average Number of 31,023, 30,755, 31,023,5 30,755,21
Shares Outstanding 572 217 72 7
</TABLE>
<PAGE>
<TABLE>
COLORADO CASINO RESORTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED ENDED
APRIL 30, APRIL 30,
1996 1995
<S> <C> <C>
CASH FLOWS FORM OPERATING ACTIVITIES
Net income (loss) $ $
(256,896) (397,075)
Noncash items
Depreciation and amortization 237,222 95,107
Amortization of debt issue costs 130,125 -
Interest income added to restricted (2,427) -
cash
Interest added to debt 186,313
(Increase) decrease in: 199,793
Inventory 3,159 (5,721)
Other current assets (89,692) (57,667)
Other assets (35,746) -
(Decrease) increase in:
Accounts payable (27,552) 37,651
Accrued other expenses 624,032 102,180
Net cash provided (used) by operating 768,538 (25,732)
activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of land, building and (1,088,438) (359,914)
equipment
Construction in process (10,126,710) -
Cash and investments, restricted (5,092,811) -
Deposits, purchase options - (56,680)
Advances to officers - (75,000)
Net cash provided (used) by investing (16,307,959) (491,594)
activities
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments, note payable (500,000) -
Borrowings, convertible debentures, 4,050,000 -
net of issue costs
Borrowings, long-term debt, net of 4,970,000 -
issue costs
Borrowings, short term, construction 7,355,000 -
Repayments, long-term debt (134,900) (134,826)
Advances from officers -
Repayments, long-term debt, related - 112,785
party
Distributions, prior S-Corp - (143,537)
stockholders
Issuance of preferred stock, net of 3,150,000 250,000
issue costs
Issuance of common stock, net of 1,125,000 300,000
issue costs
Net cash provided (used) by financing 20,015,100 384,422
activities
INCREASE (DECREASE) IN CASH AND 4,475,679 (132,904)
EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING 1,375,145 641,943
CASH AND CASH EQUIVALENTS, ENDING $ 5,850,824 $ 509,039
</TABLE>
<PAGE>
COLORADO CASINO RESORTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 a collateral under the
$250,000 and $450,000 standby letters of credit to the City of Cripple
Creek and the $5,000,000 standby letters of credit issued to the
contractor for construction. The City released $157,188 of restricted
funds for payment of floodplain excavation costs during the quarter.
Note C:Property and Equipment
The Company has spent $1,023,927 in the current quarter on equipment,
furniture and fixtures for the Double Eagle Hotel and Casino.
Construction costs for the Double Eagle Hotel and Casino project
amounted to $8,975,153 for the quarter including $387,560 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 and Convertible Debentures
The Company issued $1,000,000, 10% convertible debentures in February
1996, maturing in February 1997. Issue costs amounted to $100,000.
The Company issued $1,500,000, 5% convertible debentures in March
1996, maturing in March 1998. Issue costs amounted to $150,000.
The Company issued a $5,540,000, 12% mortgage note secured by the
Double Eagle property in April 1996, maturing December 1996. The
Company has the option to extend the note for an additional four month
period. Issue costs amounted to $570,000.
The Company obtained additional short term construction financing of
$1,355,000 and repaid short term financing of $1,000,000 during the
quarter. The short term financing is at an average interest rate of
18.40%.
The Company repaid $67,721 of long-term debt during the quarter.
<PAGE>
Note F:Stockholders' Equity
The Company issued $3,150,000 (net of issue costs of $350,000) of
Series Two preferred convertible stock during the quarter.
The Company issued 357,143 shares of common stock for $1,125,000 (net
of issue costs of $125,000) during the quarter.
The Company has outstanding stock options to directors to purchase
240,000 shares of common stock at $1 per share. The options expire
February 1, 1997.
Note G:Income Taxes
The Company has an estimated deferred tax benefit of $17,500 for the
current fiscal quarter which has been offset in full by a valuation
allowance due to the availability of a net operating loss carryforward
of approximately $1,150,000 at April 30, 1996.
<PAGE>
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., (OCCRIO and/or the OCompanyO) is in the
business of developing and operating casino and hotel properties.
Through its wholly owned subsidiaries, CreekerOs Inc. and Double Eagle
Resorts, Inc., CCRI is the owner of CreekerOs Casino (OCreekerOsO) and
the Double Eagle Hotel & Casino (the ODouble EagleO), both located in
Cripple Creek, Colorado.
The Double Eagle Hotel & Casino, the CompanyOs flagship project, is
proceeding on schedule, with the opening date slated for mid-summer
1996. The Double Eagle will be the first major hotel and casino
serving the greater Colorado Springs area with a capturable adult
population in excess of 800,000. With its superior amenities, it will
also compete for the Denver market which has an aggregate capturable
adult population of an additional 1.75 million. CCRI expects the
Double Eagle to establish a dominant presence in the Cripple Creek
gaming market while generating significant revenues for the Company.
As reported in the 10-KSB for the year ending October 31, 1995, CCRIOs
two principle goals for both the near term and the long term are: (1)
To improve revenue production of CreekerOs Casino, and (2) To continue
development of the Double Eagle Hotel & Casino project. The Company
is pleased to report that CreekerOs has reported a significant
increase in revenues compared to one year ago and the Double Eagle is
nearing successful completion.
CreekerOs Casino
The Company continues to upgrade the overall gaming experience at
CreekerOs Casino. The recently implemented Winners Circle slot club
is continuing to be a success. Since its inception in November 1995,
the club has enrolled over 10,000 members.
CreekerOs 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, CreekerOs
has realized increased play and significantly improved revenues.
CreekerOs has completed upgrading over 95% of its slot machines to
include improved embedded bill validators.
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 will employ 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. 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
<PAGE>
the Double Eagle is themed to offer the hospitality and glamour of the
"roaring 20's". With its breathtaking stained glass barrel ceiling,
complete with two renditions of a 1927 Double Eagle coin, elegant
winding staircases, and large, colorful signs throughout, the Double
Eagle will offer its guests an unforgettable gaming experience.
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 make sure the needs of the guest are always
serviced. As an added convenience, the Double Eagle will offer free
valet parking from its port-o-couche and free daily shuttle bus
service to and from the hotel/casino, Creeker's Casino, and its own 6-
acre parking lot. 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.
At this point, with the structure complete, G.E. Johnson Construction
Company, the general contractor, is continuing work on interior
finishes. Mechanical and electrical system installation is complete.
Most furniture, fixtures and equipment has been installed and
completion is expected by the end of June. All gaming devices have
been selected and orders placed with International Gaming Technology
for late June delivery. The property management system, integrated
phone system, and surveillance systems are in the final stages of
implementation. The Company is currently in the process of obtaining
the gaming license for the Double Eagle.
COMPANY REVENUE
Casino revenues for the quarter were up substantially over the same
period twelve months ago. Operating revenues for the quarter ending
April 30, 1996 totaled $1,770,530, compared to revenues of $813,736
for the same period in 1995, representing an increase of over 117%.
The Company attributes this increase to the expansion and improvement
of Creeker's through the increased number and strategic selection and
placement of new slot machines throughout the casino. Operating
expenses for this quarter also rose from $950,189 to $1,436,885
representing a 51% increase from one year ago due to increased
marketing effort as well as reflecting increased depreciation and
amortization values associated with the increase in gaming devices.
During this quarter, the Company has fulfilled its capital
requirements for the completion of the Double Eagle Hotel & Casino.
Related construction costs have been capitalized and added to the
total project development cost. Early development costs including
associated cost of capital were expensed, contributing to the reduced
earnings figure.
Acquisitions
There were no acquisitions of any significance during this quarter.
Sale of Stock
The Company issued $3,150,000 (net of issue costs of $350,000) of
Series Two preferred convertible stock during the quarter. Also, the
Company issued 357,143 shares of common stock for $1,250,000.
<PAGE>
Results of Operations
For the six months ending April 30, 1996, CreekerOs reported revenues
from casino operations of $2,711,722 compared to $1,438,674 for the
same period from one year ago, representing an 88% increase. Net
consolidated income from operations for the Company came to $333,645
compared to a loss of ($136,453) in 1995. However, an interest
expense of $403,111 associated with the financing of the Double Eagle
project reduced the net income to produce a quarter loss of ($69,466).
Operating expenses increased by almost 56% from to $1,710,257 to
$2,661,321 for the same 6-month ending period due primarily to the
increase in depreciation and amortization expenses related to the
acquisition of additional capital equipment.
Expenses for casino operations increased by approximately 54% to
$1,161,547 due to complimentary promotions associated with an
aggressive marketing campaign during the past six 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 $331,489 to
$399,589 reflecting an increase in revenues which rose by 86% to
$315,891 for the same period. Also, 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 63% to $862,963 during
the same 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 April 30, 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 RegistrantOs
annual report on Form 10-KSB for the year ending October 31, 1995.
<PAGE>
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>
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
Date: June 11, 1996
Rudy S. Saenz
President & CEO
Principal Executive Officer
Date: June 11, 1996
Farid E. Tannous
Treasurer & CFO
Principal Financial Officer
<PAGE>
