================================================================================
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 April 30, 1999
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: 38,740,632 shares of common
stock, $0.001 par value per share.
Transitional Small Business Disclosure Format: Yes [X] No [ ]
DOCUMENTS INCORPORATED BY REFERENCE:
None.
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<PAGE>
Colorado Casino Resorts, Inc.
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS (Unaudited)
April 30, October 31,
1999 1998
----------- ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash & cash equivalents ........................ $ 1,720,626 $ 1,573,519
Inventory ...................................... 68,397 96,429
Advances to officers ........................... 110,443 125,443
Other .......................................... 232,143 349,781
-----------
-----------
TOTAL CURRENT ASSETS ........................ 2,131,609 2,145,172
----------- -----------
REAL ESTATE HELD FOR FUTURE DEVELOPMENT ........ 3,250,000 3,250,000
----------- -----------
LAND, BUILDING AND EQUIPMENT - NET ............. 38,961,012 40,459,018
----------- -----------
OTHER ASSETS
Debt issue cost ............................. 273,391 359,819
Debt extension cost ......................... 0 158,100
Deposits .................................... 63,108 63,108
----------- -----------
TOTAL OTHER ASSETS ............................. 336,499 581,027
----------- -----------
TOTAL ASSETS ................................ $44,679,120 $46,435,217
=========== ===========
</TABLE>
[THIS SECTION INTENTIONALLY LEFT BLANK]
The accompanying notes are an integral part of these consolidated financial
statements
-2-
<PAGE>
Colorado Casino Resorts, Inc.
<TABLE>
<CAPTION>
LIABILITIES & STOCKHOLDERS' EQUITY [DEFICIENCY] April 30, October 31,
1999 1998
---------- ----------
<S> <C> <C>
CURRENT LIABILITIES
Revolving Credit Facility .............................. 15,046,586 13,655,296
Accounts payable ....................................... 1,219,018 349,320
Accrued expenses ....................................... 957,388 1,303,328
Slot club liability .................................... 415,465 348,949
Incremental progressive slot liability ................. 273,244 374,264
Current maturities - long term debt .................... 10,182,631 10,819,963
Current maturities - long term debt, related party ..... 7,832,629 7,796,411
Convertible debenture, related party ................... 4,500,000 4,500,000
Current maturities - capital lease obligations ......... 895,969 629,787
Interest payable ....................................... 2,466,020 1,252,825
Interest payable - related party ....................... 1,899,440 1,953,240
Interest payable - convertible debentures, related party 631,488 909,261
Due to officers ........................................ 0 30,000
Other current liabilities .............................. 130,220 99,711
------------ ------------
TOTAL CURRENT LIABILITIES .............................. 46,450,098 44,022,355
LONG-TERM DEBT-LESS CURRENT PORTION ....................... 4,867,774 3,908,702
CAPITAL LEASE OBLIGATIONS-LESS CURRENT PORTION ............ 250,900 667,437
------------ ------------
TOTAL LIABILITIES ...................................... 51,568,772 48,598,494
------------ ------------
STOCKHOLDERS' EQUITY [DEFICIENCY]
Preferred convertible stock, Series One, $10 par value
5,000,000 shares authorized, None and None
issued and outstanding, respectively ................. -- --
Common stock, $0.001 par value, 100,000,000
shares authorized, 38,740,632 and 38,740,632
issued and outstanding, respectively ................. 38,741 38,741
Paid-in capital ........................................ 19,025,188 19,025,188
Deferred compensation .................................. (61,125) (81,500)
Accumulated deficit .................................... (25,892,457) (21,145,706)
------------ ------------
TOTAL STOCKHOLDERS' DEFICIENCY ......................... (6,889,653) (2,163,277)
------------ ------------
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIENCY ........... $ 44,679,120 $ 46,435,217
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
-3-
<PAGE>
Colorado Casino Resorts,Inc.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(As Restated) (As Restated)
Six Months Quarter Six Months Quarter
Ended Ended Ended Ended
April 30, April 30, April 30, April 30,
1999 1999 1998 1998
------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES
Casino ................................... $ 9,698,513 $ 4,949,749 $ 7,997,166 $ 4,197,797
Rooms .................................... 1,009,841 508,828 844,715 469,444
Food and beverage ........................ 998,089 507,737 903,719 471,746
Other .................................... 176,899 52,410 268,161 135,718
------------ ------------ ------------ ------------
TOTAL REVENUES ........................... 11,883,342 6,018,724 10,013,761 5,274,705
------------ ------------ ------------ ------------
EXPENSES
Casino ................................... 4,292,332 2,227,062 2,190,322
4,001,507
Rooms .................................... 514,840 230,217
529,407 289,331
Food and beverage ........................ 1,353,214 648,979 1,290,383
662,194
Marketing ................................ 2,696,778 1,098,956 1,064,574
339,058
General and administrative ............... 2,809,517 1,511,655 2,236,956
1,135,660
Depreciation and amortization ............ 2,078,479 1,356,888 1,096,774 579,028
------------ ------------ ------------ ------------
TOTAL EXPENSES ........................... 13,745,160 7,073,757 10,219,601 5,195,593
------------ ------------ ------------ ------------
LOSS FROM OPERATIONS ........................ (1,861,818) (1,055,033) (205,840) 79,112
Interest expense ......................... 2,884,933 1,827,192 2,256,262 1,083,576
------------ ------------ ------------ ------------
LOSS BEFORE INCOME TAX ...................... (4,746,751) (2,882,225) (2,462,102) (1,004,464)
============ ============ ============ ============
INCOME TAXES ................................ -- -- -- --
NET LOSS
$ (4,746,751) $ (2,882,225) $ (2,462,102) $ (1,004,464)
============ ============ ============ ============
NET LOSS PER COMMON SHARE ................... $ (0.1225) $ (0.0743) $ (0.0637) $ (0.0260)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 38,740,632 38,667,715 38,666,000 38,666,000
========== ========== ========== ==========
</TABLE>
[THIS SECTION INTENTIONALLY LEFT BLANK]
-4-
<PAGE>
Colorado Casino Resorts, Inc.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CASHFLOWS (Unaudited)
(As Restated)
Quarter Ended Quarter Ended
April 30, April 30,
1999 1998
------------ -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss ................................................... $(4,746,751) $(2,462,102)
Noncash items .............................................. 2,164,907 1,384,934
Cash items ................................................. 925,018 1,336,757
----------- -----------
Net cash used for operating activities ......... (1,656,826) 259,589
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of land, building and equipment ................... 592,816 (180,177)
Advances to officers ....................................... (15,000) (292,662)
----------- -----------
Net cash provided (used) by investing activities 577,816 (472,839)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from officers ..................................... -- 267,500
Borrowings, long-term debt ................................. 1,391,290 --
Repayments, long-term debt ................................. (128,956) (316,489)
Repayments, long-term debt, related party .................. (36,218) (321,741)
----------- -----------
Net cash provided (used) by financing activities 1,226,117 (370,730)
----------- -----------
INCREASE (DECREASE) IN CASH AND EQUIVALENTS ................ 147,107 (583,980)
CASH AND EQUIVALENTS, BEGINNING ............................ 1,573,519 1,962,486
----------- -----------
CASH AND EQUIVALENTS, ENDING ............................... $ 1,720,626 $ 1,378,506
=========== ===========
</TABLE>
[THIS SECTION INTENTIONALLY LEFT BLANK]
-5-
<PAGE>
COLORADO CASINO RESORTS, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note A: Basis of Presentation
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 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 normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the six month period ended April 30, 1999 are
not necessarily indicative of the results that may be expected for the year
ended October 31, 1999. The unaudited condensed consolidated financial
statements should be read in conjunction with the consolidated financial
statements and the footnotes thereto included in the Company's annual report on
Form 10-KSB for the year ended October 31, 1998.
Note B: Summary of Significant Accounting Policies
The Company's accounting policies are outlined in the audited financial
statements included with the Company's most recent Form 10-KSB. There have been
no changes in accounting principles or practices in the current fiscal year.
Note C: Long Term Debt
During the six months ended April 30, 1999, the Company made total repayments of
$165,174, with $128,956 on long-term debt and capital leases and $36,218 on
long-term debt, related party. The Company borrowed $1,391,290 from its
revolving credit facility during the six months ended April 30, 1999.
*****
-6-
<PAGE>
COLORADO CASINO RESORTS, INC. & SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
PLANS FOR FUTURE OPERATIONS
RESULTS OF OPERATIONS
The Company has made several restatements and reclassifications to the Company's
1998 fiscal year financial statements. The restatements relate principally from:
(i) the reclassification and accounting for the Company's slot machines, other
leased assets and its licensed software; (ii) interest and other expenses
related to the Company's convertible preferred stock, stock warrants,
convertible debentures, tokens and chips and computer player tracking system;
and (iii) the reclassification of certain one-time casino revenue to
extraordinary gain. The financial information contained herein for the fiscal
quarter ended April 30, 1998, has been amended to reflect such restatement and
reclassifications. Furthermore, the information set forth in the financial
statements for the fiscal quarter ended April 30, 1999, give effect to said
adjustments to the Company's general ledger required to be made as of fiscal
year ended October 31, 1998. These adjustment have caused material changes to
the financial information included herein. The Company reflects these changes
and details the restatements in the Form 10KSB dated October 31, 1998.
The results described herein reflect the consolidated operations of the Company
and its wholly-owned operating subsidiaries, Double Eagle Resorts, Inc. and
Creeker's, Inc., for the fiscal quarter ended April 30, 1999, compared with the
same period in fiscal year 1998.
The Company reported total operating revenues for the fiscal quarter ended April
30, 1999 of $11,883,342, an increase of $1,869,581, or 18.7%, from revenues of
$10,013,761 recorded for the same fiscal quarter in 1998. Total operating
expenses were $13,745,160 for the six months ended April 30, 1999, increasing by
$3,525,559, or 34.5% from $10,219,601 reported in 1998. Total operating expenses
as a percentage of total revenues increased to 115.7% from 102.1% reported in
the comparable period of 1998, largely due, in part, to an increase in
marketing, general and administrative, and depreciation expenses. There were no
acquisitions nor any sale of stock of any significance during this quarter.
Casino. Casino revenues, consist primarily of slot machine and table revenue,
accounted for approximately 76% of the total operating revenues in second fiscal
quarter 1999. For the six months ended April 30, 1999, casino revenues were
$9,698,513, representing an increase of $1,701,347 from the $7,997,166 reported
during the same period in 1998. Management attributes this increase to improved
customer patronage resulting from the increased payout percentages and
aggressive marketing campaign deployed to advertise this fact. Slot machine
revenues generally consist of the total amount wagered (i.e., the handle) less
the amounts paid out to customers. During the same period in 1998, the Company's
slot machines had a lower payout percentage than the slot machines of its
competitors in Cripple Creek. Management continues to monitor the payout
percentage of its gaming devices and may further adjust such percentages in the
future in order to maximize casino revenues.
Costs and expenses of casino operations were $4,292,332 for the fiscal quarter
ended April 30, 1999, an increase of $290,825, or 7.3%, from the $4,001,507
reported in 1998. The net increases in costs and expenses of casino operations
is attributable to the coupon and coin redemptions. During the quarter, in order
to provide incentives for customer patronage the Company participated in a
city-wide bussing program whereby riders are given coupon books which include a
coupon redeemable for $5.00 cash from the Company's casinos. Casino costs and
expenses as a percentage of casino revenues decreased to 44.3% for the 1999
period compared to 50.1% from the comparable period in 1998, as a result of
improved efficiencies.
Rooms. Room revenues accounted for approximately 7.9% of total operating
revenues in the 1999 period. During this period, room revenues were $1,009,841,
representing an increase of $165,126, or 19.5%, from the $844,715 reported in
the 1998 period. The increase in such revenues during the second quarter 1999 is
primarily attributable to better focused marketing programs and incentive
packages directed at the Company's rated players. Costs and expenses of hotel
operations decreased $14,567, or 2.8%, to $514,840, from $529,407 recorded in
1998. Costs and expenses as a percentage of room revenues decreased to 51% in
the six months ended April 30, 1999 as compared to 62.7% during the comparable
period in 1998.
Food and Beverage. Food and beverage revenues accounted for approximately 7.8%
of total revenues in the 1999 period. During this period, food and beverage
revenues were $998,089, representing an increase of $94,370, or 10.5%, from the
$903,719 reported in the 1998 period. Costs and expenses of food and beverage
were $1,353,214 for the 1999 period, up $62,831, or 4.9%, from $1,290,383
recorded in the 1998 period. Costs and expenses as a percentage of food and
beverage revenues decreased to 135.6% in the 1999 period from 142.8% in the 1998
period, reflecting the cost savings derived from the restaurant buffet format.
-7-
<PAGE>
Other. Other consists of revenues generated from the Company's gift shop and
parking lot operations. During the second fiscal quarter 1999, other revenues
were $176,899, down by $91,262, or 34.1%, from $268,161 reported in the 1998
period. This decrease is attributable to free parking program implemented during
the quarter ended April 30, 1999.
Marketing. Marketing expenses were $2,696,778 for the fiscal quarter ended April
30, 1999, up by $1,632,204, or 153% from the $1,064,574 reported in the 1998
period. The increase in marketing expense reflects the Company's aggressive
deployment of its marketing campaign, which includes comprehensive advertising,
direct mail programs, generous slot club point awards, and cash disbursements
made to patrons upon the redemption of bus coupons. Marketing expenses as a
percentage of total revenues increased to 22.7% for the six months ended April
30, 1999 compared to 10.7% reported in 1998.
General and Administrative. General and administrative expenses were $2,809,517
for the six months ended April 30, 1999, up $572,561 or 25.6% from the
$2,236,956 reported in the 1998 period. General and administrative expenses as a
percentage of total revenues increased to 23.7% for the fiscal quarter ended
April 30, 1999 from 22.4% for the comparable period in 1998.
Depreciation and Amortization. Depreciation and amortization increased $981,705
to $2,078,479 the fiscal quarter ended April 30, 1999, compared to $1,096,684
reported in 1998. The increase in depreciation and amortization is a result of
the October 31, 1998 year-end adjustments detailed in the 10-KSB.
Loss from Operations. As a result of the factors discussed above, the Company
recognized a loss from operations of $1,861,818 for the fiscal quarter ended
April 30, 1999 as compared to a loss from operations of $205,840 recorded in the
1998 period.
Interest Expense. Interest expense was $2,884,933 for the six months ended April
30, 1999, an increase of $628,671, or 27.8%, from the $2,256,262 reported for
the comparable period in 1998. The increase in interest expense is primarily
attributable to the replacement of debt with the Foothill Revolving Credit
Facility as of July 1998. See "Liquidity and Capital Resources" below.
Net Loss. The net loss for the Company was $4,746,751 for the fiscal quarter
ended April 30, 1999, an increase of $2,284,649, or 92.8% from the net loss of
$2,462,102 reported in the 1998 period.
Liquidity and Capital Resources
The Company has financed its operations and capital expenditures with
principally borrowings from private investors, the sale of equity securities in
private transactions, and bank borrowings.
At April 30, 1999, the Company had cash and cash equivalents totaling
$1,720,626. Net cash used by operating activities was $1,656,826 for the
six-months ended April 30, 1999. Cash used by investing activities totaled
$577,816 for the quarter ended April 30, 1999, primarily for the purchase of
gaming devices. Net cash provided by financing activities was $1,226,117, which
included $1,391,290 of net borrowings during the six months ended April 30,
1999.
The Company had $46,545,474 of liabilities due within one year, but only
$2,192,734 in current assets at April 30, 1999. The Company's substantial
indebtedness could have important consequences to the Company, may: (i) make it
more difficult for the Company to satisfy its obligations to its creditors; (ii)
increase the Company's vulnerability to general adverse economic and industry
conditions; (iii) limit the Company's ability to fund future operations, capital
expenditures and other general corporate requirements; (iv) limit the Company's
flexibility in planning for, or reacting to, changes in the Company's business;
(v) limit the ability of the Company to carry out its growth strategy, which
includes the construction of a parking garage and conference center adjacent to
the Double Eagle Casino, and the acquisition and development of additional
casinos. The report of the Company's independent public auditors for the fiscal
year ended October 31, 1998 contained an explanatory paragraph which states that
the Company's current working capital deficiency and net losses raise
substantial doubt about the Company's ability to continue as a going concern.
The Company is in payment default on several of its debt obligations. Among
others, at April 30, 1999, the Company was in default under its credit facility
with Foothill Corporation for not maintaining EBITDA (Earnings Before Interest,
Taxes, Depreciation and Amortization, as defined) of at least four million
($4,000,000), measured on a rolling twelve-month basis. The Foothill Credit
Facility bears interest at the greater of 8% or the prime rate plus 3% (9.75% at
April 30, 1999), and is secured by a first mortgage lien on The Double Eagle
(including the adjacent parking lot) and a lien on the equipment and other
personal property of Double Eagle Resorts, Inc. The Company has guaranteed
Double Eagle's obligations under the Foothill Credit Facility, which guarantee
is secured by a pledge of the Company's equity interest in The Double Eagle.
Management will seek to negotiate payment plans or otherwise reach a
satisfactory resolution with each of its creditors with whom the Company has
defaulted in its obligations. No assurance can be given that the Company will be
successful in restructuring its various debt obligations.
If the Company is unsuccessful in raising additional financing or unsuccessful
in satisfactorily renegotiating its debt obligations with its current lenders,
the Company is not expected to have sufficient cash to fund operations for the
next twelve months and would be required to take some or all of the following
actions in order to conserve its cash resources: (i) postpone the implementation
of its
-8-
<PAGE>
growth strategy, including the construction of the parking garage and conference
center; (ii) implement significant cost controls; (iii) reduce or otherwise
discontinue operations; (iv) sell one or more of its assets; or (v) engage in a
merger or other form of corporate reorganization. If such actions are inadequate
to generate sufficient cash to meet its debt obligations and support its
operations, the Company would be required to seek protection under applicable
bankruptcy laws.
YEAR 2000 COMPLIANCE
The inability of computers, software and other equipment utilizing
microprocessors to recognize and properly process data fields containing a
two-digit year is commonly referred to as the Year 2000 compliance issue. As the
Year 2000 approaches, such systems may be unable to accurately process certain
date-based information.
The Company is in the process of identifying and modifying all significant
hardware and software applications that will require modification to ensure Year
2000 compliance. Relying primarily on internal resources, the Company has
completed a preliminary review of its significant hardware and software
applications. This review revealed that the player tracking software that the
Company licenses from IGT and certain personal computers used in the Company's
casino operations may not presently be Year 2000 compliant. The estimated cost
to address the Company's Year 2000 issues is not expected to have a material
impact on the Company's business, operations or financial condition. If the
modification of the Company's hardware and software compliance is not timely
completed or is not fully effective, the Year 2000 problem may have a serious
negative impact on the operations of the Company.
Although the Company has communicated with its external service providers and
vendors to ensure that the providers and vendors are taking the appropriate
action to address Year 2000 issues and has not received any notice from such
persons that their operations will not be Year 2000 compliant, there can be no
assurance that the systems of third parties on which the Company's systems rely
will be timely converted.
FORWARD-LOOKING STATEMENTS
In connection with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"), the Company is hereby
providing cautionary statements identifying important factors that could cause
the Company's actual results to differ materially from those projected in
forward-looking statements (as such term is defined in the Reform Act) made by
or on behalf of the Company herein or orally, whether in presentations, in
response to questions or otherwise. Any statements that express, or involve
discussions as to, expectations, beliefs, plans, objectives, assumptions or
future events or performance (often, but not always, through the use of words or
phrases such as "intends," "plans," "will result," "are expected to," "will
continue," "is anticipated," "estimated," "projection" and "outlook") are not
historical facts and may be forward-looking and, accordingly, such statements
involve estimates, assumptions, and uncertainties which could cause actual
results to differ materially from those expressed in the forward-looking
statements. Such uncertainties include the risk factors set forth in the
Company's Annual Report on Form 10-KSB for the fiscal year ended October 31,
1998. They also include the following conditions or uncertainties: (i) risk
associated with real estate ownership, operations and development, including
environmental liabilities, worker's strikes, construction delays, obtaining
building permits and necessary zoning changes; (ii) illiquidity of real estate
holdings; (iii) imposition of new regulatory requirements affecting the Company;
(iv) the delay or failure to properly manage growth; (v) effect of uninsured
loss; and (vi) breakdown of water, sewage or other municipal services in Cripple
Creek and other conditions beyond the control of the Company. The Company
cautions that actual results or outcomes could differ materially from those
expressed in any forward-looking statements made by or on behalf of the Company.
Any forward-looking statement speaks only as of the date on which such statement
is made, and the Company undertakes no obligation to update any forward-looking
statement or statements to reflect events or circumstances after the date on
which such statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time, and it is not possible for
management to predict all of such factors. Further, management cannot assess the
impact of each such factor on the business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements.
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, 1999 are not necessarily
indicative of the results that may be expected for the year ending October 31,
1999. 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, 1998.
*****
-9-
<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 21st day of June,
1999.
COLORADO CASINO RESORTS, INC.
June 21, 1999 By: /s/ Michael S. Smith
--------------------------------------
Michael S. Smith
Interim President and Chief Executive
Officer,
Secretary and General Counsel, Director
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-START> FEB-01-1999
<PERIOD-END> APR-30-1999
<EXCHANGE-RATE> 1
<CASH> 1,720,626
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 68,397
<CURRENT-ASSETS> 2,131,609
<PP&E> 38,961,012
<DEPRECIATION> 2,078,479
<TOTAL-ASSETS> 44,679,120
<CURRENT-LIABILITIES> 46,450,098
<BONDS> 0
0
0
<COMMON> 38,741
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 44,679,120
<SALES> 11,883,342
<TOTAL-REVENUES> 11,883,342
<CGS> 687,499
<TOTAL-COSTS> 13,745,160
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,884,933
<INCOME-PRETAX> (4,746,751)
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,861,818
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,746,751)
<EPS-BASIC> .122
<EPS-DILUTED> .122
</TABLE>
