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 January 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: 34,666,472 shares of common
stock, $0.001 par value per share.
DOCUMENTS INCORPORATED BY REFERENCE:
None.
<PAGE>
COLORADO CASINO RESORTS, INC. & SUBSIDIARIES
INDEX
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets - (unaudited) for
January 31, 1997 3
Consolidated Statement of Operations - (unaudited) for
January 31, 1997 and January 31, 1996 5
Consolidated Statements of Cash Flows - (unaudited) for
January 31, 1997 and January 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 14
Item 2. Changes in Securities 14
Item 3. Defaults upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information. 14
Item 6. Exhibits and Reports 14
Signatures 15
<PAGE>
<TABLE>
<CAPTION>
Colorado Casino Resorts, Inc.
CONSOLIDATED BALANCE SHEETS (Unaudited)
January October
31, 31,
1997 1996
---- ----
<S> <C> <C>
CURRENT ASSETS
Cash & cash equivalents $2,833,745 $2,828,994
Advances to officers --- 379,617
Inventory 187,513 251,662
Other 8,410 553,992
----- -------
TOTAL CURRENT ASSETS 3,029,668 4,014,265
--------- ---------
REAL ESTATE HELD FOR FUTURE DEVELOPMENT 4,504,970 4,504,970
PROPERTY, PLANT & EQUIPMENT
Land and improvements 7,071,644 7,071,644
Building 23,226,355 23,085,250
Furniture, fixtures & equipment 12,843,487 12,832,717
Accumulated depreciation & amortization (2,169,706) (1,520,102)
---------- ----------
TOTAL PROPERTY, PLANT & EQUIPMENT 40,971,780 41,469,509
---------- ----------
OTHER ASSETS 476,430 313,483
------- -------
TOTAL ASSETS 48,982,848 50,302,227
========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements
<PAGE>
<TABLE>
<CAPTION>
Colorado Casino Resorts, Inc.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(CONTINUED)
January October
31, 31,
1997 1996
<S> <C> <C>
LIABILITIES & STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts payable 819,998 649,895
Accrued interest payable 1,461,381 1,142,000
Accrued other expenses 541,932 1,253,026
Progressive jackpot liabilities 2,059,969 1,995,388
Advances from officers 105,384 ---
Current portion, long-term debt 5,830,459 6,015,931
Current portion, long-term debt, related 115,116 7,676,209
party
Current portion, capital lease obligations 1,433,703 1,535,656
--------- ---------
TOTAL CURRENT LIABILITIES 12,367,942 20,268,105
---------- ----------
CONVERTIBLE DEBENTURES 2,350,000 2,500,000
--------- ---------
CONVERTIBLE DEBENTURES, RELATED PARTY 5,279,051 5,199,739
--------- ---------
LONG-TERM DEBT 8,045,096 8,238,993
--------- ---------
LONG-TERM DEBT, RELATED PARTY 7,976,999 412,125
--------- -------
OBLIGATION UNDER CAPITAL LEASE 6,519,150 5,785,285
--------- ---------
TOTAL LIABILITIES 42,538,238 42,404,247
---------- ----------
STOCKHOLDERS' EQUITY
Preferred convertible stock, Series One,
$10 par value, 2,500,000 2,500,000
5,000,000 shares authorized, 250,000
issued and outstanding
Common stock, $0.001 par value,
100,000,000 shares authorized, 34,666 34,537
34,666,472 and 34,537,711 issued and
outstanding, respectively
Paid-in capital 10,467,270 10,467,270
Retained earnings (accumulated deficit) (6,557,326) (5,103,827)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 6,444,610 7,897,980
--------- ---------
TOTAL LIABILITIES & STOCKHOLDERS' 48,982,848 50,302,227
EQUITY ========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements
<PAGE>
<TABLE>
<CAPTION>
Colorado Casino Resorts, Inc.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Quarter Quarter
Ended Ended
January 31, January 31,
1997 1996
---- ----
<S> <C> <C>
OPERATING REVENUE
Casino $3,657,372 $1,124,007
Hotel & gift shop 407,906 ---
Restaurant & bars 321,113 133,076
Other 1,430 ---
-----
TOTAL OPERATING REVENUE 4,387,821 1,257,083
--------- ---------
OPERATING EXPENSES
Casino 1,563,850 456,912
Hotel & gift shop 260,533 ---
Restaurant & bars 604,613 174,743
Marketing/General and administrative 1,625,733 485,313
Depreciation and amortization 650,715 107,468
------- -------
TOTAL OPERATING EXPENSE 4,705,444 1,224,436
--------- ---------
INCOME (LOSS) FROM OPERATIONS (317,623) 32,647
-------- ------
NONOPERATING INCOME (EXPENSE)
Interest expense 1,135,876 220,077
--------- -------
LOSS BEFORE INCOME TAXES (1,453,499) (187,430)
---------- --------
INCOME TAXES --- ---
NET LOSS $(1,453,499) $(187,430)
=========== =========
NET LOSS PER SHARE $(0.0420) $(0.0061)
======== ========
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 34,581,000 30,845,000
========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements
<PAGE>
<TABLE>
<CAPTION>
Colorado Casino Resorts, Inc.
CONSOLIDATED STATEMENT OF CASHFLOWS
(Unaudited)
Quarter Quarter
Ended Ended
January 31, January 31,
1997 1996
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $(1,453,499) $(187,430)
Noncash items
Depreciation and amortization 650,715 107,468
Amortization of debt issue costs 125,250 8,493
Interest income added to restricted --- (1,130)
cash
Interest added to debt --- 98,215
(Increase) decrease in:
Inventory 64,149 442
Other current assets 545,582 (21,880)
Other assets (288,068) (4,518)
(Decrease) increase in:
Accounts payable 170,103 (33,116)
Construction costs payable --- 2,460,232
Interest payable 319,381 ---
Accrued other expenses (646,513) 98,610
-------- ------
Net cash provided (used) by (512,900) 2,525,386
-------- ---------
operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of land, building and equipment (152,986) (57,169)
Construction in process --- (4,246,530)
Cash and investments, restricted --- (5,250,000)
Advances to officers 379,617 ---
-------
Net cash provided (used) by 226,631 (9,553,699)
------- ----------
investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from officers 105,384 ---
Repayments, note payable --- (500,000)
Borrowings, convertible debentures, net --- 1,794,866
of issue costs
Borrowings, long-term debt 185,636 ---
Borrowings, short-term, construction --- 7,000,000
Repayments, long-term debt --- (67,179)
Repayments, long-term debt, related party --- (5,201)
Net cash provided (used) by 291,020 8,222,486
------- ---------
financing activities
INCREASE (DECREASE) IN CASH AND 4,751 1,194,173
----- ---------
EQUIVALENTS
CASH AND EQUIVALENTS, BEGINNING 2,828,994 1,375,145
--------- ---------
CASH AND EQUIVALENTS, ENDING 2,833,745 2,569,318
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements
<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. All prior period amounts have been restated
to include the result of Creeker's, Inc., which was acquired in the
first quarter of fiscal 1995. The acquisition has been accounted for
as a pooling-of-assets.
Note B: 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 C: Long Term Debt
- ------- --------------
During the quarter, the Company borrowed an aggregate of $1,000,000
and issued unsecured promissory notes bearing an interest rate of 18%
due in January, 1999.
The maturity of related-party notes, with an aggregate total of $7,976,000,
was extended for a two year period.
Note D: Advances to/from Officers
- ------- -------------------------
During the quarter, the officers advanced a total of $755,000 to the
Company, $379,617 of which was used to repay the outstanding
receivable as of October 31, 1996. The balance of $375,383 was also
used to repay a $270,000 advancement during the quarter, with the
balance of $105,383 remaining as a payable to the Company.
Note E: Stockholders' Equity
- ------- --------------------
The Company issued 128,761 shares of common stock on the partial
conversion of $2,500,000 convertible debenture.
The Company has outstanding stock options to directors to purchase
240,000 shares of common stock at $1.00 per share and outstanding
stock options to officers and key employees to purchase 817,500 shares
of common stock at $2.00 per share.
Note F: Income Taxes
- ------- ------------
The Company has an estimated deferred tax benefit of $575,000 for the
fiscal quarter which has been offset in full by a valuation allowance
due to the availability of a net operating loss carryforwards at
January 31, 1997.
<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 a significant increase in total
revenues compared to one year ago, primarily due to the first full
quarter of operations of the Double Eagle Hotel & Casino. The Company
reported net operating revenues of $4,387,821, an increase of
$3,130,738, or 249% from the $1,257,083 reported during the same
period in 1996. Although the Company recorded a loss from operations
of $(317,623) compared to an income of $32,647 in 1996, EBITDA
(earnings before interest taxes depreciation and amortization) totaled
$333,092 compared to $140,115, an increase of $192,977, or 138%
compared to the same period last year.
The Company reported a net loss of $(1,453,499) for the quarter
compared to a net loss of $(187,430) reported last year. However,
results for the first quarter of the Company's new flagship property,
the Double Eagle, were within projections for the first quarter. The
first quarter is traditionally the slowest quarter for the Company,
due to reduced traffic during the winter months. Furthermore, the
occurrence snow and poor weather on a higher number of weekend days
during the quarter contributed to an overall reduction in gaming
revenues in Cripple Creek as well as Blackhawk/Central City.
The introduction of the Double Eagle in the City of Cripple Creek
produced a significant initial impact. The increase in gaming devices
and hotel rooms to the city shifted the supply curve creating a lag in
demand. Within the first 90 days of the opening, two casinos have
ceased operations, reducing the number of gaming devices by
approximately 300 machines. However, with intensive marketing and
through word-of-mouth, the Double Eagle has realized an increasing
demand from new and return patrons.
A significant portion of the expenses in the operations of the
Company's operating subsidiaries and corporate offices are associated
with the implementation of computer systems, networks and associated
software. These expenses also include the staffing and training of
skilled accounting and computer professionals. The management of the
Company believes in making capital investments in information
technology today to further improve operating efficiencies in the
future. These operating efficiencies are currently being realized in
the operations and management of the Company's two properties through
technology and the reduction in overhead. For example, all accounting
and marketing functions take place from a centralized office located
at the Double Eagle while utilizing a computer network with voice and
data communications to connect the casinos to the corporate offices.
The management of the Company believes that public perception and
image are paramount in the gaming industry and therefore have made a
commitment to providing the best gaming experience for its patrons by
implementing continuous training programs in customer service and
relations.
<PAGE>
Creeker's Casino
Creeker's continues to be a strong revenue producer for the Company,
as it has been in the past. During the first quarter, Creeker's
revenues were up slightly over the first quarter in 1996, this in
spite of almost 6 weeks of disruptions to casino operations during a
complete remodel during the months of November and December. During
the remodel, at least half of the slot machines were off the floor
during the six-week period, due the construction in progress. The
increase in revenues at Creeker's during this slowest quarter with the
remodel as well as the addition to the Double Eagle as prime
competition is encouraging for the future of Creeker's planned hotel
expansion.
As a result of the extensive remodel, Creeker's was transformed into
one of the most appealing mid-size gaming properties in Cripple Creek.
New, high-quality carpet (Axminster) was installed throughout the
gaming areas, along with new tile on the floor in the pizza and bar
areas. A lighter shade of high quality wall covering was also
installed, along with mirrored ceiling tiles. The interior of the
building was repainted and new lights and mirrors were installed. The
resulting product was well received with a renewed enthusiasm from the
gaming customer as well as a renewed sense of pride from the employees
at Creeker's.
Marketing
- ---------
During the quarter, Creeker's discontinued its association with
Ramblin Express bus lines. After carefully analyzing the busing
program, the management of Creeker's decided to pool its marketing
budget with the Double Eagle and develop a strategy to capture the
higher dollar gaming patron, primarily through the use of its data
base marketing and niche bus groups. However, Creeker's will continue
to participate in limited bus promotions with Ramblin Express in the
future on an as-needed basis.
Creeker's continues to attract a nominal percentage of the neighboring
bus traffic by accepting all casino bus coupons. By providing the
gaming patron with a higher level of customer service, along with a
clean, safe, and beautiful gaming environment, Creeker's is continuing
to increase its market share in Cripple Creek.
New projects
- ------------
The Company has begun preliminary design and feasibility studies on
the Creeker's hotel and casino expansion. The new expansion would be
located directly south of the existing facility, and would include
approximately 50 rooms and 240 gaming devices and table games.
Parking for this facility will be provided by the planned parking lot
development of the Myers Avenue one acre site located approximately 50
yards from Creeker's.
Along with the development of the Creeker's Hotel and Casino
expansion, the Company anticipates adding the same level of
information technology upgrades to Creeker's. This includes a new
digital phone system, the Micros point of sale systems, all networked
to the Double Eagle and the Company's corporate location via a
dedicated T-1 trunck line. The associated PC networks and support
software upgrades would also be included in the upgrade. The Company
anticipates additional staffing requirements with the planned
expansion.
<PAGE>
Double Eagle Hotel & Casino
The Double Eagle Hotel & Casino has become the anchor in the Cripple
Creek gaming market. With the most visible location as the first
casino and hotel property at the entrance of Cripple Creek, and being
the largest single structure in Teller county, this property has
garnered the interest of many players and visitors alike. The Double
Eagle was designed with nearly every convenience and amenity in mind.
From the moment the guest drives into the covered port-o-couche, they
realize they are in a special environment. The Double Eagle is the
only luxury hotel and casino in its class in the Southern Colorado
market, and has found a niche with the high-end gaming customer.
General description
- -------------------
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 the hospitality
and glamour of the "roaring 20's". With its breathtaking simulated
stained glass barrel ceiling, complete with two five-foot diameter
gold-leaf renditions of a 1927 Double Eagle coin, elegant winding
staircases, and large, three-dimensional, 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.
Lombard's Restaurant, located on the ground level of the Double Eagle,
is continuing its tradition of being Cripple Creek's only fine dining
restaurant. Lombard's feature a variety of choice cuts of steaks and
chops, as well as fresh poultry and seafood, complimented by an
extensive list of fine wines. The gaming customer at the Double Eagle
has come to expect this level of culinary excellence, which is a large
part of the Company's strategy to attract and retain the high dollar
gaming customer. The Double Eagle started room service during this
latest quarter, with the response being very positive. Special
events, banquets, and meetings are also providing a strong income base
for the hotel and restaurant operations.
Marketing
- ---------
Being the largest casino and hotel in the Southern Colorado market has
its advantages when providing the most complete gaming experience for
the gaming customer. A large part of the strategy for the Double
Eagle is to build up the customer base through the use of the Winner's
Circle players club. The Winner's Circle club card is a player
tracking card that enables the customer to get a 1% rebate on their
total coin in played, which is the most generous redemption in Cripple
Creek. As a member of the Winner's Circle, the gaming customer also
gets discounts on food, drinks, and merchandise. Depending on what
their player rating is, the gaming customer can also receive
complementary rooms, meals, merchandise, and drinks.
<PAGE>
During the first 5 months of operation, the management of Double Eagle
has spent a considerable amount of time and effort to build the
Winner's Circle club, which is now at 25,000 members. The Double
Eagle has used a variety of promotions, from cash giveaways,
individualized cash coupons, in-house fun books, and a variety of cash
and discount items to attract and retain high end gaming customers.
The Double Eagle has also begun marketing to the surrounding five-
state area on the eastern slope of the Rocky Mountains (Kansas,
Nebraska, Oklahoma, Texas, and New Mexico). Of these states, only New
Mexico has Indian gaming, and none to the quality and level of the
Double Eagle. Overnight bus trips from Denver have also proven to be
a viable market for the Double Eagle. On several occasions, special
overnight bus trips that provide for package deals have been offered
to the Denver market (2 hours away), have proven to be very
successful. These types of overnight packages will be expanded over
the next 12 months to fill in the mid week traffic during the
traditionally slower winter months. Special charter day trips are
being scheduled, with the groups receiving a casino rating for
discounts on future trips.
The Double Eagle is committed to high growth strategy by continuously
improving its overall image and effectiveness through new marketing
programs. In order to facilitate this aggressive strategy, the
Company has recently hired a new Director of Marketing from a major
casino property in Nevada.
New projects
- ------------
In order to make the Double Eagle Hotel & Casino the best in the state
of Colorado, the Company has embarked on a capital development
strategy that will make the Double Eagle the first and only 4 star
hotel in Cripple Creek. The first project that is planned for the
Double Eagle is the addition of a 150 seat meeting and conference
center (within the existing structure), due for completion by Labor
Day, 1997. The Double Eagle has already booked several fall meetings,
and has numerous requests for fall and winter dates as well. This
facility will also include additional kitchen facilities for banquets
and dinners, as well as state of the art audio and visual amenities
for the meetings.
Also planned for 1997 is the development of 4th and Myers property,
from wetland ground, to prime parking and future casino and hotel
development property. The Company is presently working with the city
of Cripple Creek, as well the associated federal agencies, and plans
for infrastructure development to begin as soon as the third quarter
of 1997.
The Company is also conducting a feasibility study for the development
of a multi-level parking structure and health club facilities (which
would include a spa, steam room, exercise facility, swimming pool, and
possible additional restaurant space). The Company believes that the
continued growth in the Colorado gaming market will also increase the
demand for a high end product of this type.
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.
Technology Infrastructure
- -------------------------
<PAGE>
The Company considers the timely compilation and analysis of
information to be key to the future success of both the Double Eagle
and Creeker's. In order to achieve this goal, every facet of the
business has been computerized at the Double Eagle. From the digital
phone network, to the three PC networks linked to an AS/400 mini-
mainframe at the heart of the system, every detail has been designed
into making this property the most information efficient in the
Colorado gaming industry. Information transfer and analysis
procedures have been (or are being) designed to totally automate the
process of information flow. Initial investment in this level of
technology infrastructure is expected to produce efficiencies in
operations and increase in revenue production capability. The Company
is presently on the leading edge of applying information and computer
technology to the gaming industry, and is committed to remain in that
position in the foreseeable future.
COMPANY REVENUE
Casino revenues for the quarter were up significantly compared to the
same period twelve months ago. Operating revenues for the quarter
ending January 31, 1997 totaled $4,387,821 compared to revenues of
$1,257,083 for the same period in 1995, representing an increase of
over 249%. The Company attributes the increase in revenues to the
addition of the Double Eagle, as well as a continued increase in
Creeker's revenues. Operating expenses for this quarter also rose
from $1,224,436 to $4,705,444 representing a 284% increase from one
year ago. This increase is primarily due to the additional payroll
associated with the staffing for the Double Eagle, as well as
increases in marketing and related general and administrative
expenses.
Additional operating expenses associated with additional services of
Lombard's Grill, a full service restaurant, valet service, room
service, bell service, etc. at Double Eagle contributed to the
additional operating expenses. There were also additional expenses
attributed to training the staff to use the latest software and
hardware in the hotel and accounting departments.
Acquisitions
There were no acquisitions of any significance during this quarter.
Sale of Stock
During the quarter, $150,000 of non-related party debenture principal
was converted into 128,761 shares of common stock.
Results of Operations
For the three months ending January 31, 1997, the Company reported
revenues from casino operations of $3,657,372 compared to $1,124,007
for the same period from one year ago, representing a 225% increase.
During this period the Company had increased charges in labor,
marketing and related general and administrative expenses associated
with staffing of the Double Eagle. During this quarter the Company
also incurred significant lost revenues due to approximately 6 weeks
of construction associated with the remodeling of Creeker's. Taking
into account these two factors, the Company incurred a net
consolidated loss from operations of ($317,623) compared to a profit
of $32,647 in 1996. Interest expense in the amount of $1,135,876
($745,000 of which was associated with the construction financing of
the Double Eagle project, $390,876 associated with capital leases)
further reduced the net figure to a quarter loss of ($1,453,499).
<PAGE>
Operating expenses increased by over 284% from $1,224,436 to
$4,705,444 for the quarter due primarily to increased labor expenses
and depreciation and amortization expenses related to the acquisition
of additional capital equipment. This increase accounted for
additional cost of labor and merchandising material used during the
same period.
Expenses for food, beverage and other also increased 317% from
$174,743 to $729,019, reflecting a substantial increase in operations
costs associated with the Double Eagle Hotel & Casino. A large part
of this increase coincides with the operations of two full service
bars, the Double Eagle Hotel, as well as the world class cuisine
offered by Lombard's Restaurant at the Double Eagle.
General and Administrative (G&A) and marketing expenses rose 235% from
$485,313 to $1,625,733 during the quarter. All of the increase in G&A
expenses are associated with the additional costs associated with the
Double Eagle.
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 January 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.
<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 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 13th day of March, 1997.
COLORADO CASINO RESORTS, INC.
March 13, 1997 By: /s/ Rudy S. Saenz
-----------------
Rudy S. Saenz
President and Chief Executive
Officer,
Director (Principal Executive
Officer)
March 13, 1997 /s/ Farid E. Tannous
--------------------
Farid E. Tannous
Treasurer and Chief Financial
Officer
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S.
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