===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------------------------------------------------------
FORM 10-QSB
---------------------------------------------------------------------------
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For fiscal quarter ended July 31, 1997
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 of (IRS Employer
incorporation or organization) Identification No.)
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 PURSUANT TO SECTION 12(g) OF THE EXCHANGE ACT:
Common Stock, $0.001 Par Value
(Title of Class)
- -------------------------------------------------------------------------------
Check whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of 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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date: 38,282,715 shares of common
stock, $0.001 par value per share.
DOCUMENTS INCORPORATED BY REFERENCE:
None.
<PAGE>
COLORADO CASINO RESORTS, INC. & SUBSIDIARIES
<TABLE>
<CAPTION>
INDEX
<S> <C> <C>
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets - (unaudited) for July 31, 1997.... 3
Consolidated Statement of Operations - (unaudited) for
July 31, 1997 and July 31, 1996............................ 5
Consolidated Statements of Cash Flows - (unaudited) for
July 31, 1997 and July 31, 1996............................ 6
Notes to Consolidated Financial Statements..................... 7
Item 2. Management's Discussion and Analysis of Financial Condition
as well as Future Plans........................................ 8
Part II. Other Information
Item 1. Legal Proceedings.............................................. 12
Item 2. Changes in Securities.......................................... 12
Item 3. Defaults upon Senior Securities................................ 12
Item 4. Submission of Matters to a Vote of Security Holders............ 12
Item 5. Other Information.............................................. 12
Item 6. Exhibits and Reports........................................... 12
Signatures ................................................................. 13
</TABLE>
-2-
<PAGE>
Colorado Casino Resorts, Inc.
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS (Unaudited)
July 31, October 31,
1997 1996
------------ ------------
<S> <C> <C>
CURRENT ASSETS
Cash & cash equivalents .......................... $ 3,011,159 $ 2,828,994
Advances to officers ............................. -- 379,617
Inventory ........................................ 192,414 251,662
Other ............................................ 229,575 553,992
------------ ------------
TOTAL CURRENT ASSETS .......................... 3,433,148 4,014,265
------------ ------------
REAL ESTATE HELD FOR FUTURE DEVELOPMENT .......... 4,504,970 4,504,970
PROPERTY, PLANT & EQUIPMENT
Land ............................................. 7,821,644 7,071,644
Building and improvements ........................ 23,595,910 23,085,250
Furniture, fixtures & equipment .................. 13,181,095 12,832,717
Accumulated depreciation & amortization .......... (3,516,758) (1,520,102)
------------ ------------
TOTAL PROPERTY, PLANT & EQUIPMENT ............. 41,081,891 41,469,509
------------ ------------
OTHER ASSETS ..................................... 446,949 313,483
------------ ------------
TOTAL ASSETS .................................. 49,466,958 50,302,227
============ ============
</TABLE>
[THIS SECTION INTENTIONALLY LEFT BLANK]
The accompanying notes are an integral part of these consolidated financial
statements
-3-
<PAGE>
Colorado Casino Resorts, Inc.
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS (Unaudited)
(CONTINUED)
July 31, October 31,
1997 1996
------------ ------------
LIABILITIES & STOCKHOLDER'S EQUITY
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable .................................................... $ 398,965 $ 649,895
Accrued interest payable ............................................ 1,482,014 1,142,000
Accrued other expenses .............................................. 936,753 1,253,026
Progressive jackpot liabilities ..................................... 2,025,210 1,995,388
Advances from officers .............................................. 4,074 --
Current portion, long-term debt ..................................... 6,501,303 6,015,931
Current portion, long-term debt, related party ...................... 1,649,748 7,676,209
Current portion, capital lease obligations .......................... 2,580,123 1,535,656
------------ ------------
TOTAL CURRENT LIABILITIES ........................................ 15,578,190 20,268,105
------------ ------------
CONVERTIBLE DEBENTURES .............................................. 250,000 2,500,000
------------ ------------
CONVERTIBLE DEBENTURES, RELATED PARTY .............................. 5,358,364 5,199,739
------------ ------------
LONG-TERM DEBT ...................................................... 11,230,265 8,238,993
------------ ------------
LONG-TERM DEBT, RELATED PARTY ....................................... 6,438,585 412,125
------------ ------------
OBLIGATION UNDER CAPITAL LEASE ...................................... 4,343,222 5,785,285
------------ ------------
TOTAL LIABILITIES ................................................ 43,198,626 42,404,247
------------ ------------
STOCKHOLDERS' EQUITY
Preferred convertible stock, Series One, $10 par value,
5,000,000 shares authorized, 250,000 issued and outstanding ...... -- 2,500,000
Common stock, $0.001 par value, 100,000,000 shares authorized,
38,282,715 and 34,537,711 issued and outstanding, respectively ... 38,282 34,537
Paid-in capital ..................................................... 15,011,180 10,467,270
Retained earnings (accumulated deficit) ............................. (8,781,130) (5,103,827)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY ....................................... 6,268,332 7,897,980
------------ ------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY ......................... 49,466,958 50,302,227
============ ============
</TABLE>
[THIS SECTION INTENTIONALLY LEFT BLANK]
The accompanying notes are an integral part of these consolidated financial
statements
-4-
<PAGE>
Colorado Casino Resorts, Inc.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
Nine Months Quarter Nine Months Quarter
Ended Ended Ended Ended
July 31, July 31, July 31, July 31,
1997 1997 1996 1996
---------- --------- ---------- ----------
<S> <C> <C> <C> <C>
OPERATING REVENUE
Casino ............................. 13,785,817 5,913,089 4,724,411 2,012,689
Hotel .............................. 1,784,651 821,816 -- --
Food, beverage & gift shop, other .. 1,370,870 621,649 533,739 217,848
------------ ------------ ------------ ------------
TOTAL OPERATING REVENUE ......... 16,941,338 7,356,554 5,258,150 2,230,537
------------ ------------ ------------ ------------
OPERATING EXPENSES
Casino ............................. 6,237,799 2,438,581 2,197,458 1,035,911
Hotel .............................. 1,024,888 365,612 -- --
Food, beverage & gift shop ......... 2,075,647 907,339 772,141 372,552
Marketing/General and administrative 5,340,735 1,982,162 1,661,916 798,953
Depreciation and amortization ...... 2,071,787 781,252 412,506 175,284
------------ ------------ ------------ ------------
TOTAL OPERATING EXPENSE ......... 16,750,856 6,474,946 5,044,021 2,382,700
------------ ------------ ------------ ------------
INCOME (LOSS) FROM OPERATIONS ........ 190,482 881,608 214,129 (152,163)
------------ ------------ ------------ ------------
NONOPERATING INCOME (EXPENSE)
Interest expense ................... 3,867,576 1,250,913 1,194,799 571,611
------------ ------------ ------------ ------------
INCOME (LOSS) BEFORE INCOME TAXES ..... (3,677,094) (369,305) (980,670) (723,774)
------------ ------------ ------------ ------------
INCOME TAXES .......................... -- -- -- --
------------ ------------ ------------ ------------
NET LOSS .............................. $ (3,677,094) $ (369,305) $ (980,670) $ (723,774)
============ ============ ============ ============
NET LOSS PER SHARE .................... $ (0.1003) $ (0.0101) $ (0.0291) $ (0.0215)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING .......... 36,668,319 36,668,319 33,710,886 33,710,886
------------ ------------ ------------ ------------
</TABLE>
[THIS SECTION INTENTIONALLY LEFT BLANK]
The accompanying notes are an integral part of these consolidated financial
statements
-5-
<PAGE>
Colorado Casino Resorts, Inc.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CASHFLOWS (Unaudited)
Nine Months Ended Nine Months Ended
July 31, July 31,
1997 1996
---------------- -----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss ................................................... $ (3,677,094) $ (980,670)
Noncash items
Depreciation and amortization ........................ 2,071,787 412,506
Amortization of debt issue costs ..................... 369,500 422,817
Interest converted to debt ........................... -- 299,161
(Increase) decrease in:
Inventory ............................................ 59,248 (2,964)
Other current assets ................................. 324,417 (176,395)
Other assets ......................................... (578,097) (17,358)
(Decrease) increase in:
Accounts payable ..................................... (250,930) 795,565
Interest payable ..................................... 340,014 --
Accrued other expenses ............................... (286,451) 929,316
------------ ------------
Net cash provided (used) by operating activities (1,627,606) 1,681,978
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of land, building and equipment ................... (1,609,038) (20,688,520)
Construction in process .................................... -- (623,325)
Cash and investments, restricted ........................... -- (200,000)
------------ ------------
Net cash provided (used) by investing activities (1,609,038) (21,511,845)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from officers ..................................... 383,691 --
Borrowings, convertible debentures, net of issue costs ..... -- 4,044,866
Borrowings, long-term debt & capital lease obligations ..... 3,432,714 --
Borrowings, short-term debt ................................ -- 13,325,000
Repayments, long-term debt & capital lease obligations ..... (397,596) (44,688)
Repayments, short-term debt ................................ -- (1,500,000)
Issuance of common stock ................................... -- 1,125,000
Issuance of preferred stock ................................ -- 3,150,000
------------ ------------
Net cash provided (used) by financing activities 3,418,809 20,100,178
------------ ------------
INCREASE (DECREASE) IN CASH AND EQUIVALENTS ................ 182,165 270,311
------------ ------------
CASH AND EQUIVALENTS, BEGINNING ............................ 2,828,994 1,375,145
------------ ------------
CASH AND EQUIVALENTS, ENDING ............................... 3,011,159 1,645,456
============ ============
</TABLE>
[THIS SECTION INTENTIONALLY LEFT BLANK]
The accompanying notes are an integral part of these consolidated financial
statements
-6-
<PAGE>
COLORADO CASINO RESORTS, INC. & SUBSIDIARIES
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.
Note B: Long Term Debt & Capital Lease Obligations
------------------------------------------
During the nine months ended July 31, 1997, the Company borrowed an aggregate of
$3,432,714 and made repayments of $397,596. The maturity of related-party notes,
with an aggregate total of $7,676,000, was extended for a two-year period.
Note C: Advances to/from Officers
-------------------------
During the nine months ended July 31, 1997, the officers advanced a total of
$775,000 to the Company, $379,617 of which was used to repay the outstanding
receivable as of October 31, 1996, and $391,309 was used to repay additional
advances extended during the same period, with the balance of $4,074 remaining
as a payable to the officers at July 31, 1997.
Note D: Stockholders' Equity
--------------------
During the nine months ended July 31, 1997, the Company issued 2,345,004 shares
of common stock on the partial conversion of $2,250,000 in convertible
debentures. A balance of $250,000 in convertible debentures remain unconverted.
The Series One, Preferred Stock was converted into 1,400,000 shares of common
stock at an average price of $1.79 per share during the quarter ended July 31,
1997.
During the quarter, the Company issued to key executive management an option to
acquire 100,000 shares of the Company's stock at a strike price of $2.00 per
share. Also, options to acquire 65,000 shares of common stock in the Company
lapsed or were otherwise cancelled. As of July 31, 1997, the Company had
outstanding stock options to officers to purchase 270,000 shares of common stock
at $1.00 per share and outstanding stock options to officers and key employees
to purchase 852,500 shares of common stock at $2.00 per share.
In addition, the Company issued warrants to Gemini Ventures, L.L.C., entitling
it to acquire 1,400,000 shares of the Company's common stock at $2.50 per share.
The warrants expire in 2002.
Note E: Income Taxes
------------
The Company has an estimated deferred tax benefit of $1,324,000 for the nine
months ended July 31, 1997 which has been offset in full by a valuation
allowance due to the availability of a net operating loss carryforwards at July
31, 1997.
-7-
<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., ("CCRI" and/or the "Company") is in the business
of developing and operating casino and hotel resort 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 the quarter, CCRI reported an increase in total revenues compared to the
same period one year ago, primarily as a result of nine months of operations of
the Double Eagle Hotel & Casino. The Company reported net operating revenues of
$16,941,338, an increase of $11,683,188, or 222% from the $5,258,150 reported
during the same period in 1996. The Company reported a net loss of $(3,677,094),
or $(0.1035) per share, for the nine months ended July 31, 1997 compared to a
net loss of $(980,670), or $(0.0291) per share, reported last year. For the
quarter, the Company posted a net loss of $(369,305), or $(0.0104) per share.
Although the Company's business is not considered to be seasonal, the highest
levels of business activity in Colorado occur during the tourist season (i.e.,
from May through September). Its base level (i.e., November through May) is
fairly constant although weather conditions during this period could have a
significant impact on business levels in Colorado. Although the Company recorded
a loss from operations, EBITDA (earnings before interest taxes depreciation and
amortization) totaled $2,262,269, significantly higher than the $626,635
reported during the same period last year.
Business and Marketing Strategy
The Company continually places emphasis on the implementation of its business
strategy to offer casino gaming and a full range of amenities in a friendly
atmosphere that caters to middle and upper-middle income customers.
Incorporating the distinction between Creeker's Casino and the Double Eagle
Hotel & Casino in its marketing efforts, management believes it is able to
increase gaming activity at its respective casinos by attracting customers from
two market segments. Through the use of radio and print advertising, direct
mail, promotional coupons and special events designed uniquely to address each
market segment, management attracts players to its respective properties.
Promotional allowances, such as complimentary rooms, food, beverage and
entertainment are used at both casinos to reward and retain its customers.
Specifically, Creeker's promotes coupons for free bus transportation, discounts
on buffet meals, and cash and prize give-aways while the Double Eagle offers
discounted and complimentary hotel rooms, complimentary dinners, VIP services
and promotions and cash sweepstakes to attract and keep respective customers.
The implementation of the "Winners Circle" slot club at both Creeker's and the
Double Eagle, and the use of a player tracking system which monitors the
wagering of its customers, provides the Company with an important tool for
understanding its customer base. Information from the computerized tracking
system assists management to plan and direct marketing efforts to its customers
in both market segments. As of July 31, 1997 the database consisted of over
40,000 members.
-8-
<PAGE>
The Company is currently in the process of strategically acquiring significant
parcels of land around the Double and Creeker's for use as parking lots for its
gaming patrons and hotel guests. Management believes that providing clean and
secure parking facilities in near proximity to its buildings provides an added
convenience to its guests, which will have a direct favorable impact on its
business.
Management continues to make significant investments in key management and
personnel. In addition to the recent recruitment of the General Manager and
Director of Marketing from the Nevada market, the Company hired a new Director
of Finance, also from Nevada, who most recently held the position of controller
at New York, New York in Las Vegas. The aforementioned key management bring over
fifty years of experience to the Company.
Emphasis continues to be placed on the Company's technological infrastructure to
optimize the movement and management of timely information. A new hotel property
system was recently installed to streamline the check-in and check-out process.
Also, the Company is embarking on a comprehensive marketing campaign through the
use of the Internet with Web page advertising and promotion.
Creeker's Casino
Creeker's targets middle to upper-income customers from the greater Colorado
Springs area and surrounding communities who prefer to make day trips to Cripple
Creek. Because of its smaller size and "down-to-earth" atmosphere, Creeker's
appeals to many customers who enjoy a cozier environment and the personal touch
offered by its friendly employees. Free pizza and a hearty buffet served in its
restaurant further heightens Creeker's attractiveness to this market segment.
Management at Creeker's plans to employ an aggressive bussing program for
day-trip patrons as well as joint marketing with the Double Eagle for extended
stay visits. Efforts are also underway to upgrade all slot machines and to
introduce a "sports bar" atmosphere complete with big-screen televisions, sports
posters and memorabilia and satellite receiver system for all major sports
channels.
Double Eagle Hotel & Casino
With the largest number of rooms and elegant suites in Cripple Creek, free valet
parking under a covered car port, and an exciting and lively atmosphere, the
Double Eagle attracts customers who enjoy gaming within a facility which offers
the hospitality and convenience of first-class accommodations. Although the
Double Eagle appeals to higher income patrons because of its "Las-Vegas" style
casino atmosphere, quality hotel and restaurant facilities and a variety of
special events, management has implemented programs to expand its focus to
include a larger target market.
Management of the Double Eagle continues to reinforce its commitment to a high
growth strategy by improving its overall image and effectiveness through new and
innovative marketing programs, a redesigned casino floor layout with looser slot
machines, the addition of poker tables, an amusement arcade, and the
introduction of a VIP lounge for rated players. In addition to free daily slot
tournaments and special events, the Double Eagle hosts live entertainment and
music acts at its new piano bar and lounge. Responding to the needs of its
customers, management recently changed the menu and theme of the restaurant. As
the new Lombard's Bar & Grill, the ambiance is less formal, the menu features a
greater selection of popular items, and a children's menu was added with service
offered throughout the day.
-9-
<PAGE>
Completion of the anticipated convention facility at the Double Eagle has been
delayed until Spring 1998. Once complete, management expects this new addition
will attract new players by capturing meeting and small convention business.
Another expected future improvement at the Double Eagle is the construction of a
five-story parking structure which will include a juice bar and health club
facility located on the mezzanine level, along with a swimming pool, Jacuzzi,
sauna and workout room.
COMPANY REVENUE
The Company reported net operating revenue of $16,941,338, for the nine months
and $7,356,554 for the quarter ended July 31, 1997, respectively. Compared to
the respective periods during 1996, revenue increased by $11,683,188 or 222%
from the $5,258,150 for the nine months and $5,126,017 or 230% from the
$2,230,537 for the quarter. Casino revenues of $13,785,817, which constituted
over 81% of total revenues, were up by $9,061,406, or 192%, compared to the same
nine-month period one year ago. Hotel revenues totaled $1,784,651 while food,
beverage and gift shop revenues amounted to $1,370,870, an increase of $837,131,
or 157% from the $533,739 recorded during the same period in 1996.
For the quarter ended July 31, 1997, total revenues of $7,356,554 increased
$2,159,591 or 42%, compared to $5,196,963 reported for the previous quarter.
Casino revenues increased by $1,697,733 to $5,913,089 from $4,215,356
representing a 40% increase over last quarter. Hotel revenues increased 50% to
$821,816, while food, beverage and gift shop revenues improved by over 44% to
$621,649 during this quarter.
Acquisitions
There were no acquisitions of any significance during this quarter.
Sale of Stock
During the quarter, $400,000 of non-related party debenture principal was
converted into 435,250 shares of common stock.
The Series One, Preferred Stock was converted into 1,400,000 shares of common
stock at an average price of $1.79 per share.
Results of Operations
For the nine months ended July 31, 1997, the Company's results of operations
included the activities of the Double Eagle Hotel & Casino and Creeker's Casino.
The Company reported net operating revenues for the nine months ended July 31,
1997 of $16,941,338, with the new operations of the Double Eagle contributing
more than 78% of the total revenues.
During the nine months, the Company increased charges in labor, marketing and
related general and administrative expenses associated with the continued
enhancement of Double Eagle operations. Total operating expenses increased by
217%, up $10,047,554 to $14,679,069 compared to the same period last year due
primarily to increased direct and indirect labor, depreciation and amortization
expenses related to additional capital equipment, and gaming taxes. Additional
cost of marketing and promotion also increased marketing/general &
administrative expenses during the same period.
-10-
<PAGE>
Although the Company reported income from operations of $881,608 during the
quarter, EBITDA amounted to $1,662,860. Interest expense of $1,250,913 reduced
earnings to a third quarter net loss of $(369,305).
Food, beverage and gift shop revenues improved by 157%, up $837,131 to
$1,370,870 in the nine months. Food and beverage costs and expenses rose by
169%, up $1,303,506 to $2,075,647, with food, beverage and gift shop operations
at the Double Eagle accounting for 68% of the increase compared to the same
period last year.
General and administrative expenses increased 221%, up $3,678,819 to $5,340,735
for this nine months. Approximately $2,917,848, or 79% of the increase, was
directly attributable to the additional operations and marketing efforts at the
Double Eagle.
Depreciation and amortization expense increased 402%, up $1,659,281 to
$2,071,787 for the nine months. Interest expense increased by $2,672,777, or
224% to $3,867,576 from $1,194,799 recorded during the same period last year.
This increase was attributable to the debt related to Double Eagle construction
financing, equipment leasing and additional working capital.
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, 1997 are not necessarily
indicative of the results that may be expected for the year ending October 31,
1997. 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, 1996.
-11-
<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.
-12-
<PAGE>
COLORADO CASINO RESORTS, INC. & SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of
1934, as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized this 12th day of September,
1997.
COLORADO CASINO RESORTS, INC.
September 12, 1997 By: /s/ Rudy S. Saenz
--------------------
Rudy S. Saenz
President and Chief Executive Officer,
Director (Principal Executive Officer)
September 12, 1997 /s/ Farid E. Tannous
-----------------------
Farid E. Tannous
Treasurer and Chief Financial Officer
(Principal Financial Officer)
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> JUL-31-1997
<EXCHANGE-RATE> 1
<CASH> 3,011,159
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 192,414
<CURRENT-ASSETS> 3,433,148
<PP&E> 41,081,891
<DEPRECIATION> (3,516,758)
<TOTAL-ASSETS> 49,466,958
<CURRENT-LIABILITIES> 15,578,190
<BONDS> 0
0
0
<COMMON> 38,282
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 49,466,958
<SALES> 16,941,338
<TOTAL-REVENUES> 16,941,338
<CGS> 5,527,782
<TOTAL-COSTS> 16,750,856
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,867,576
<INCOME-PRETAX> (3,677,094)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,677,094)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,677,094)
<EPS-PRIMARY> (0.10)
<EPS-DILUTED> (0.10)
</TABLE>
