<PAGE>
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-15415
GLOBAL CASINOS, INC.
--------------------
(Exact Name of Small Business Issuer as specified in its Charter)
Utah 84-0340206
---- ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1777 South Harrison Street, The Skydeck, Denver, Colorado 80210
----------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(303) 756-3777
--------------
(Issuer's telephone number)
--------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 / /
As of May 2, 1997, 1,400,811 shares of Common Stock of the Registrant were
outstanding.
Transitional Small Business Disclosure Format (check one) Yes / / No /X/
<PAGE>
<PAGE>
INDEX
PART 1. FINANCIAL INFORMATION:
Item 1. Financial Statements
Balance Sheet at March 31, 1997 (unaudited) and June 30,
1996
Statement of Operations for the Three Months Ended March
31, 1997 (unaudited) and March 31, 1996 (unaudited)
Statement of Operations for the Nine Months Ended March 31,
1997 (unaudited) and March 31, 1996 (unaudited)
Statement of Cash Flows for the Nine Months Ended March 31,
1997 (unaudited) and March 31, 1996 (unaudited)
Notes to Unaudited Financial Statements
Item 2. Management's Discussion and Analysis
PART II. OTHER INFORMATION:
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Default Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying Balance Sheet at March 31, 1997, Statement of
Operations for the Three Months and Nine Months Ended March 31, 1997 and March
31, 1996, and Statement of Cash Flows for the Nine Months Ended March 31, 1997
and March 31, 1996 are unaudited but reflect all adjustments which are, in the
opinion of management, necessary to a fair statement of the financial position
and results of operations for the interim period presented.
<PAGE>
<PAGE>
<TABLE>
GLOBAL CASINOS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<CAPTION>
March 31, June 30,
1997 1996
(unaudited)
------------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 1,458,185 $ 887,374
Receivables, related parties 4,097 23,511
Accounts receivable, net of
allowance for doubtful
accounts of $8,500 at
March 31, 1997 and $4,000
at June 30, 1996 62,348 73,884
Prepaid expenses and other 69,484 29,459
Current portion of notes receivable 56,412 53,734
------------- -------------
Total current assets 1,650,526 1,067,962
Note and interest receivable, subject
to cancellation due to Chapter 11
Bankruptcy 1,217,588
Land, buildings and equipment:
Land 531,715 531,715
Building 3,913,510 3,913,510
Equipment 2,613,396 1,998,414
------------- -------------
7,058,621 6,443,639
Accumulated depreciation (1,507,086) (1,120,353)
------------- -------------
Net land, buildings and equipment 5,551,535 5,323,286
Other assets, net of amortization of
$38,272 at March 31, 1997 and
$31,002 at June 30, 1996 82,378 62,841
Leasehold and contract rights, net of
amortization of $973,724 at March 31,
1997 and $714,124 at June 30, 1996 2,137,801 2,414,276
Notes receivable, net of current portion,
including receivables in default
and note receivable from a related
party for $372,568 which includes
an interest receivable of $15,568 831,575 501,659
------------- -------------
Total assets $ 10,253,815 $ 10,587,612
============= =============
</TABLE>
<PAGE>
<PAGE>
<TABLE>
GLOBAL CASINOS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(CONTINUED)
<CAPTION>
March 31, June 30,
1997 1996
(unaudited)
------------- -------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, includes related
party payables of $22,921 at
March 31, 1997 and $143,245
at June 30, 1996 $ 443,005 $ 735,437
Accrued expenses 1,185,385 784,817
Accrued interest 123,202 231,775
Notes payable, related parties 47,158 52,158
Current portion of long-term debt
including debt in default 569,094 998,021
Mandatory redeemable convertible
Class A preferred stock,
in default 53,500 88,500
------------- -------------
Total current liabilities 2,421,344 2,890,708
Liabilities subject to compromise 5,085,705
Long-term debt, less current portion 3,768,111 52,266
------------- -------------
Total liabilities 6,189,455 8,028,679
------------- -------------
Minority interest 40,134 17,969
------------- -------------
Commitments and Contingencies:
Stockholders' equity:
Class A preferred stock -
Convertible nonvoting,
$2 par value:
Authorized - 10,000,000 shares;
issued and outstanding -
147,750 shares at March 31, 1997
and
688,500 shares at June 30, 1996 268,538 1,251,361
Common stock - $.05 par value:
Authorized - 5,000,000 shares;
issued and outstanding -
1,400,811 shares at
March 31, 1996 and
1,283,419 shares at June 30, 1996
(restated to reflect 1-for-10 of
stock effected on
November 18, 1996) 66,021 64,494
Additional paid-in capital 8,910,029 7,819,454
Accumulated deficit (5,220,362) (6,594,345)
------------- -------------
Total stockholders' equity 4,024,226 2,540,964
------------- -------------
Total liabilities and
stockholders' equity $ 10,253,815 $ 10,587,612
============= =============
See accompanying notes.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
GLOBAL CASINOS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
Three Months Ended March 31,
1997 1996
(unaudited) (unaudited)
------------- -------------
<S> <C> <C>
Revenues:
Casino $ 2,841,527 $ 2,107,195
Food and beverage 80,260 122,832
Other 38,969 1,089
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2,960,756 2,231,116
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Expenses:
Operating,
general and administrative 2,411,133 1,731,776
Depreciation 132,769 107,365
Amortization 98,555 98,065
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2,642,457 1,937,206
------------- -------------
Income from operations 318,299 293,910
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Other income (expense):
Interest income 25,152 41,503
Interest expense (contractual
interest of $227,955 (1996)) (81,637) (227,955)
------------- -------------
(56,485) (186,452)
------------- -------------
Income (loss) before minority interest 261,814 107,458
------------- -------------
Minority interest in
income of subsidiary (41,009) (10,399)
------------- -------------
Net income $ 220,805 $ 97,059
============= =============
Net income per share $0.16 $0.08
============= =============
Weighted average number of shares
outstanding (restated to reflect
1-for-10 reverse split of
stock effected on November 18, 1996) 1,374,144 1,222,250
============= =============
See accompanying notes.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
GLOBAL CASINOS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
Nine Months Ended March 31,
1997 1996
(unaudited) (unaudited)
------------- -------------
<S> <C> <C>
Revenues:
Casino $ 6,957,063 $ 5,651,222
Food and beverage 267,317 302,348
Other 83,569 5,691
------------- -------------
7,307,949 5,959,261
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Expenses:
Operating, general and administrative 6,371,546 5,119,343
Depreciation 386,733 321,800
Amortization 280,475 275,445
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7,038,754 5,716,588
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Income from operations 269,195 242,673
Other income (expense):
Interest income 38,134 114,615
Interest expense (237,991) (522,719)
------------- -------------
(199,857) (408,104)
Income (loss) before reorganization
items, extraordinary items and
minority interests 69,338 (165,431)
------------- -------------
Reorganization items:
Interest earned on accumulated cash
resulting from Chapter 11
proceedings 7,608 -
Professional fees (11,111) -
------------- -------------
(3,503) -
Income (loss) before minority
interest and extraordinary items 65,835 (165,431)
Extraordinary gain from
debt restructuring 1,450,392 201,814
Minority interest in income of a
subsidiary (142,244) (187,469)
------------- -------------
Net income (loss) $ 1,373,983 $ (151,086)
============= =============
Net income (loss) per share $1.03 $(0.14)
============= =============
Weighted average number of shares
outstanding (restated to reflect
1-for-10 reverse split of
stock effected on November 18, 1996) 1,329,065 1,079,840
============= =============
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
GLOBAL CASINOS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Nine Months Ended March 31,
1997 1996
(unaudited) (unaudited)
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by
operating activities $ 786,359 $ 558,673
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Other assets (23,537) (2,637)
Purchase of equipment (616,981) (133,226)
Note receivable (372,566) -
Proceeds from sale of equipment 1,999 -
Collections on notes receivable 39,972 57,464
Distribution to minority interest (110,896)
------------- -------------
Net cash used in investing activities (1,082,009) (78,399)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on notes (601,159) (266,429)
Borrowings against notes payable 1,467,620 1,160
Redemption of preferred stock (8,140)
Proceeds from issuance of common stock - 137,514
------------- -------------
Net cash provided by (used in)
financing activities 866,461 (135,895)
------------- -------------
Net increase in cash 570,811 344,379
Cash, beginning period 887,374 564,996
------------- -------------
Cash, end period $ 1,458,185 $ 909,375
============= =============
Supplemental cash flow information:
Cash paid for interest $ 66,467 $ 275,283
============= =============
Supplemental disclosure of non-cash
investing and financing activities:
Debt converted to common stock: $ 109,279 $ -
------------- -------------
$ 109,279 $ -
============= =============
Acquisition of additional interest in
BPJ Holdings, N.V. and Casino
Las Vegas in exchange for the
Company's interest in Casino
Lazurnaya:
Assets and liabilities exchanged:
Accounts receivable $ - $ (55,753)
Equipment, net - (515,262)
Leasehold and contract rights - (516,832)
Accrued expenses - 17,388
Assets acquired and liability released:
Note receivable - 200,000
Accounts payable - 45,459
------------- -------------
Leasehold and contract rights $ - $ 825,000
============= =============
See accompanying notes.
</TABLE>
<PAGE>
<PAGE>
GLOBAL CASINOS, INC. & SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION AND MANAGEMENT'S PLANS
The accompanying financial statements have been prepared assuming that
Global Casinos, Inc. (the "Company") will continue as a going concern. The
Company has recurring operating losses and a working capital deficiency. In
addition, the Company is in default on approximately $400,000 of its loan
agreements. These conditions raise substantial doubt about the Company's
ability to continue as a going concern. The financial statements do not
include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and classification
of liabilities that may result from the outcome of these uncertainties.
Management is currently in the process of renegotiating its current debts
in order to extend the maturities, and Casinos U.S.A., Inc., a wholly-owned
subsidiary, filed a voluntary petition under Chapter 11 of the United States
Bankruptcy Code to prevent the foreclosure of its Bull Durham property.
Casinos U.S.A. received U.S. Bankruptcy Court approval for its Plan of
Reorganization under Chapter 11 on December 18, 1996. Management believes that
between anticipated improvements in casino operations and debt restructuring,
it will have the necessary capital to continue operations.
ORGANIZATION AND CONSOLIDATION
Global Casinos, Inc., a Utah corporation, develops and operates gaming
casinos domestically and internationally. The consolidated financial
statements of the Company include the accounts of the following wholly-owned
subsidiaries. All significant intercompany accounts and transactions have been
eliminated in consolidation.
BPJ HOLDINGS N.V.("BPJ"), a Curacao Limited Liability Company, which
operates the Casino Masquerade on the Caribbean resort island of Aruba.
GLOBAL PELICAN N.V. ("Pelican"), a St. Maarten Limited Liability Company
which operates the Pelican Casino located on the island of St. Maarten in
the Netherlands Antilles. Pelican operates the casino under a Management
and Operating Lease Agreement.
CASINOS U.S.A., INC. ("Casinos U.S.A."), a Colorado corporation, which owns
and operates the Bull Durham Saloon and Casino ("Bull Durham"), located in
the limited stakes gaming district in Black Hawk, Colorado.
GLOBAL CASINOS INTERNATIONAL, INC. ("Global International"), a Delaware
corporation, which through July 15, 1995 owned an 80% interest in an
International Joint Venture ("IJV") which held certain rights to develop
and operate gaming casinos in several international locations. Through the
IJV, the Company opened Casino Lazurnaya in Sochi, Russia and Casino Las
Vegas in Bishkek, Kyrgyzstan. Effective July 15, 1995, the Company
exchanged its interest in Global International and Casino Lazurnaya for an
additional interest in BPJ and the Casino Las Vegas. Through this
transaction, the Company owns 100% of BPJ and an original 61% profits
interest in the Casino Las Vegas. Effective September 18, 1996, the
Company has a fifty percent (50%) profits interest in the Casino Las Vegas.
COLORADO GAMING PROPERTIES, INC. ("CGP"), a Colorado corporation, which
through June, 1996, owned two non-operating real estate properties, the
Nitro Club and Gas Light properties located in Central City, Colorado.
LINCOLN CORPORATION ("Lincoln"), a South Dakota corporation, which operated
the Last Chance Saloon ("Last Chance") in Deadwood, South Dakota under a
lease agreement. Last Chance was closed effective May 31, 1994, and the
lease agreement was terminated.
WOODBINE CORPORATION ("Woodbine"), a South Dakota corporation, which
operated Lillie's Casino ("Lillie's") in Deadwood, South Dakota. Lillie's
was closed effective June 30, 1995.
The accompanying unaudited 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 Item
310(b) of Regulation S-B. Accordingly, they do not include all the information
and footnotes required by generally accepted accounting principles for complete
financial statements. There has not been any significant change in the
Company's significant accounting policies nor has there been any significant
development in contingent liabilities and commitments.
In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. The results for these interim periods are not necessarily indicative
of the results for the entire year. These statements should be read in
conjunction with the financial statements and footnotes thereto included in the
Form 10-KSB for the fiscal year ended June 30, 1996.
RECLASSIFICATIONS
Certain amounts reported in the 1996 interim financial statements have been
reclassified to conform to classifications in the 1997 interim financial
statements.
2. BANKRUPTCY OF CASINOS U.S.A., INC.
Casinos U.S.A. ("Debtor") was in default under all of its secured
obligations encumbering the Bull Durham. The efforts of the Company to
negotiate restructured terms for the repayment of the secured obligations were
unsuccessful. As a result, on October 18, 1995, Casinos U.S.A. filed a
voluntary petition under Chapter 11 of the United States Bankruptcy Code.
Since October 18, 1995, Casinos U.S.A. continued to operate the Bull Durham as
debtor-in-possession. Under Chapter 11, claims against the Debtor in existence
prior to the Chapter 11 filing of the petition are stayed while the Debtor
formulates and obtains confirmation of a Plan of Reorganization. These claims
are reflected in the June 30, 1996 balance sheet as "liabilities subject to
compromise". Additional claims (liabilities subject to compromise) may arise
subsequent to the filing date resulting from rejection of executory contracts,
including leases, and from the determination by the court (or agreed to by
parties in interest) of allowed claims for contingencies and other disputed
amounts. Claims secured against the Debtor's assets ("secured claims") also
are stayed, although the holders of such claims have the right to move the
court for relief from the stay. Secured claims are secured primarily by liens
on the Debtor's property. The Court confirmed the Debtor's Second Amended Plan
of Reorganization (the "Plan") on December 18, 1996. The effective date of the
Plan is thirty (30) days after confirmation.
As a result of the Court's approval and confirmation of the Debtor's Plan,
the Company recognized an extraordinary gain on the extinguishment of debt of
$1,285,765.
Condensed financial information for Casinos U.S.A. is as follows:
<TABLE>
<CAPTION>
March 31, June 30,
1997 1996
(unaudited)
------------- -------------
<S> <C> <C>
BALANCE SHEET INFORMATION:
Current assets $ 419,446 $ 459,363
Net land, buildings and equipment 3,943,000 4,048,618
Note receivable, subject to cancellation - 1,217,588
Intercompany receivables 91,044 212,063
------------- -------------
Total assets $ 4,453,490 $ 5,937,632
============= =============
Accounts payable and accrued
expenses, not subject to
compromise, all current $ 68,774 $ 50,884
Current portion of long-term debt 69,788 -
Liabilities subject to compromise:
Secured claims - 4,941,248
Unsecured priority and
non-priority claims - 144,457
Intercompany liabilities - 1,368,148
Secured inter-company debts 20,150 -
Long-term debt 2,600,433 -
------------- -------------
Total liabilities 2,759,145 6,504,737
Shareholder's earnings (deficit) 1,694,345 (567,105)
------------- -------------
$ 4,453,490 $ 5,937,632
============= =============
OPERATING INFORMATION:
Net revenues $ 1,827,400 $ 1,958,349
Total operating expenses 1,669,051 1,712,996
------------- -------------
Income from operations 158,349 245,353
Interest income 3,418 96,781
Interest expense (142,795) (477,489)
Net reorganization items (3,503) (32,449)
Gain from reorganization 1,987,801 -
------------- -------------
Net income (loss) $ 2,003,270 $ (167,804)
============= =============
</TABLE>
Intercompany receivables, liabilities, equity, income and expenses are
eliminated in consolidation at June 30, 1996 and March 31, 1997. The Company
does not anticipate any income taxes from the gain from reorganization due to
the Company's net operating loss carryforwards.
On December 18, 1996, the Bankruptcy Court confirmed the Company's Plan of
Reorganization ("Plan"). The confirmed Plan requires the following:
Creditors classified as holders of administrative claims, priority claims
(including taxes and wages), and administrative convenience classes with a
total amount of $95,690 are payable, in full, within thirty (30) days
following the Effective Date of the Plan. At March 31, 1997, the Company
had approximately $30,000 in unpaid legal fees, the debt to be retired
once the Company has received the Bankruptcy Court's approval to issue
payment.
Creditors classified as holders of Senior Secured Debt in the total amount
of $1,280,102 will receive new promissory notes totalling $1,101,647 and
bearing interest at the rate of seven percent (7%), with monthly principal
and interest payments of $7,329 due in January, 2004. The Promissory
Notes are secured by a first deed of trust on real estate.
Creditors classified as holders of Junior Secured Debt in the total amount
of $3,257,170 ($1,217,588 of which represents debt included in a wrap-
around mortgage which was cancelled pursuant to the terms of the Plan)
will receive new promissory notes totalling $1,248,353 and bearing
interest at the rate of nine-point-two percent (9.2%), with monthly
principal and interest payments of $10,225 due in January, 2004. In
addition, these creditors are allowed an unsecured claim of $50,000, which
was paid within thirty (30) days following the Effective Date of the Plan.
Creditors classified as holders of subordinated debt in the total amount
of $329,626 ($258,180 of which is held by a related party) shall receive
new promissory notes bearing no interest, payable out of available
cashflow and due in January, 2004 or issuance of stock in the reorganized
Debtor under the terms of the Plan. The claim of the related party in the
amount of $258,180 will receive 100% of the outstanding stock of the
reorganized Debtor. The remaining creditors will receive non-interest
bearing promissory notes in the amount of $71,445.
The Creditor classified as the holder of an Allowed Unsecured Claim (Class
9) in the total amount of $403,976, which claim is secured by a security
interest in equipment owned by the Debtor, will receive a new promissory
note in the amount of $243,200 and bearing interest at the rate of ten
percent (10%). The Debtor paid the Creditor the sum of $35,000 within
thirty (30) days following the Effective Date of the Plan. Thereafter,
the Debtor shall make thirty-five (35) monthly payments of $6,000, and one
(1) balloon payment of all unpaid principal and interest. In addition,
the Creditor shall be allowed a Class 11 unsecured claim, in the total
amount of $75,000, such claim to be paid from available cashflow over a
period not to exceed seven (7) years.
The Plan also provides for an administrative convenience class for
creditors holding allowed unsecured claims which do not exceed $1,500 or
which exceed $5,150 and the holder thereof has elected to reduce their
claim to $1,500. Creditors holding allowed Class 10 claims shall be paid
100% of their claims within the thirty (30) days following the Effective
Date of the Plan. The total amount of Class 10 claims paid pursuant to
the Plan was $15,721.12
Creditors classified as holders of Allowed Unsecured Claims (Class 11) in
the total amount of $123,380.05 were paid a pro rata amount of their
allowed claims from a pool of $50,000.00 less amounts paid to the holders
of Class 10 Allowed Unsecured Claims, in cash within thirty (30) days
following the Effective Date. Approximately $35,000 of this amount was
paid during the period ended March 31, 1997. The holders of Class 11
Allowed Unsecured Claims shall also receive noninterest bearing promissory
notes for the remainder of their Allowed Claims payable within seven (7)
years of the Effective Date of the Plan. The Debtor will make reasonable
efforts to prepay the Class 11 promissory notes (pro rata with payments on
the Class 12 promissory notes) from available net cash flow not otherwise
committed under the Plan.
Creditors classified as Related Parties and Unsecured Accrued Interest in
the approximate amount of $1,100,000 shall receive nothing under the Plan.
The Shareholders of all of the stock of the Debtor shall receive nothing
under the Plan, and all outstanding stock of the Debtor shall be
cancelled.
In addition to the above-stated terms, the Senior Secured Debt Holders and
the Junior Secured Debt Holders shall receive warrants that permit their
holders to purchase from the reorganized Debtor an amount of common stock
so that immediately after exercise, the Warrant holders will own eighty
percent (80%) of the common stock of the Debtor. The Warrants shall be
exercisable at any time from one year after the Effective Date and before
seven (7) years after the Effective Date, but only subsequent to a sale of
substantially all of the Debtor's assets, merger, recapitalization,
refinance or other restructuring. The Warrants shall terminate after all
of the indebtedness to that holder of the Warrant has been paid, even
where seven (7) years from the Effective Date have not passed, so long as
there has been no merger, recapitalization, restructuring, refinance or
sale of substantially all of the assets of the Debtor prior to the payment
of such indebtedness.
3. NOTES PAYABLE
In October, 1996, the Company raised $630,250 through an offering of Units
("Units"), each Unit consisting of one (1) eight percent (8%) $1,000
convertible Promissory Note ("Promissory Note"), 200 Class E Common Stock
Purchase Warrants ("E Warrants"), 200 Class F Common Stock Purchase Warrants
("F Warrants"), and 200 Class G Common Stock Purchase Warrants ("G Warrants").
The Promissory Note is convertible to common stock at $5.00 per $1.00 loaned
and the Promissory Notes are due October 31, 1998. The Class E Warrants, F
Warrants and G Warrants are exercisable at $6.00, $7.00, and $8.00,
respectively.
By Letter Agreement dated July 31, 1996, the Company was able to
renegotiate the terms of a $750,000 Convertible Note. The restructured terms
call for the conversion price to be lowered from $30.00 per $1.00 loaned to
$10.00 per $1.00 loaned. Interest on the Convertible Note was reduced from
nine percent (9%) to seven percent (7%) and all prior accrued interest was
waived which resulted in an extraordinary gain of $164,627 from debt
restructuring. In addition, the Company shall assign its secured indebtedness
on Casinos in the amount of $249,418 to the holder of the $750,000 Convertible
Note as a principal reduction of this note. This Letter Agreement is effective
upon the Effective Date of Casinos U.S.A.'s Bankruptcy Plan.
4. STOCKHOLDERS' EQUITY
On November 18, 1996, the Company effected a one-for-ten (1-for-10)
reverse split of its securities pursuant to the prior authorization of its
shareholders and Board of Directors.
During the nine (9) months ended March 31, 1997, the Company issued
117,392 shares of Common Stock, consisting of 540,750 shares of Class A
Preferred Stock, that were converted into 96,134 shares of Common Stock. The
Company exchanged 21,258 shares of Common Stock for debt reduction of $109,279.
<PAGE>
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion and analysis should be read in conjunction with
the Financial Statements and Notes thereto appearing elsewhere in this
document.
LIQUIDITY AND CAPITAL RESOURCES - MARCH 31, 1997 COMPARED TO JUNE 30, 1996
The Company is organized as a holding company for several entities holding
gaming-related properties. The independent auditors' report on the Company's
June 30, 1996 consolidated financial statements contains an explanatory
paragraph that discusses certain conditions that raise substantial doubt about
the Company's ability to continue as a going concern. The Company has
recurring operating losses and a working capital deficiency. In addition, the
Company is in default on a significant amount of its loan proceedings, and
Casinos U.S.A. has filed a voluntary petition under Chapter 11 of the United
States Bankruptcy Code. Casinos U.S.A. received Bankruptcy Court approval for
its Plan of Reorganization under Chapter 11 on December 18, 1996. These
conditions raise substantial doubt about the Company's ability to continue as a
going concern. Management is currently in the process of renegotiating its
current debts in order to extend the maturities. Also, the Company continually
investigates opportunities to undertake further financings. If these efforts
are successful, of which there can be no assurance, management believes that it
will have the necessary capital to continue operations.
Casinos U.S.A. ("Debtor") was in default under all of its secured
obligations encumbering the Bull Durham. The efforts of the Company to
negotiate restructured terms for the repayment of the secured obligations were
unsuccessful. As a result, on October 18, 1995, Casinos U.S.A. filed a
voluntary petition under Chapter 11 of the United States Bankruptcy Code.
Since October 18, 1995, Casinos U.S.A. continued to operate the Bull Durham as
debtor-in-possession. Under Chapter 11, certain claims against the Debtor in
existence prior to the filing of the Chapter 11 petition are stayed while the
Debtor formulates and obtains confirmation of a Plan of Reorganization. These
claims are reflected in the June 30, 1996 balance sheet as "liabilities subject
to compromise". Additional claims (liabilities subject to compromise) may
arise subsequent to the filing date resulting from rejection of executory
contracts, including leases, and from the determination by the court (or agreed
to by parties in interest) of allowed claims for contingencies and other
disputed amounts. Claims secured against the Debtor's assets ("secured
claims") also are stayed, although the holders of such claims have the right to
move the court for relief from the stay. Secured claims are secured primarily
by liens on the Debtor's property. On December 18, 1996 the Debtor's Second
Amended Plan of Reorganization was confirmed by the Bankruptcy Court.
The Company is in the process of renegotiating its current debts to
compromise the amounts or to extend the maturities. Management believes that
between anticipated improvements in casino operating results and debt
restructuring, the Company will have the capital necessary to continue
operations.
The Company's balance sheet reflects an increase in current assets, a
decrease in total assets and negative working capital. Specifically, current
assets increased from $1,067,962 at June 30, 1996, to $1,650,526 at March 31,
1997, an increase of $582,564 or 54.5%. At March 31, 1997, the Company showed
increases in cash of $570,811, or 64.3%, and prepaid expenses of $40,025, or
135.9%. Receivables, related parties, and accounts receivable collectively
decreased $30,950, or 31.7%.
At March 31, 1997, the Company's investment in property, plant and
equipment increased by $614,982, or 9.5%, the majority of which is due to
improvements in equipment and leasehold improvements at the Pelican Casino.
Accumulated depreciation increased by $386,733, or 34.5%. Other assets
increased by $19,537 or 31.1%. Leasehold and contract rights decreased by
$276,475 due to amortization expense. Notes receivable increased by $372,566
due to a loan to a related party for development costs to explore gaming
opportunities on the Internet. This was offset by $39,972 of collections on a
note receivable.
Current liabilities decreased from $2,890,708 at June 30, 1996, to
$2,421,344 at March 31, 1997, or 16.2%. This decrease is comprised of an
increase in accrued expenses of $400,568, the majority of which is attributable
to the Pelican Casino.
This increase is offset by a reduction in accounts payable of $292,432,
mandatory redeemable preferred stock of $35,000, accrued interest of $108,573,
notes payable to related parties of $5,000, and current portion of long-term
debt including debt in default of $428,927.
As a result of the foregoing increases in current assets and decreases in
current liabilities, the Company's working capital deficit decreased from
$(1,822,746) on June 30, 1996, to $(770,818) on March 31, 1997, a decrease of
$1,051,928, or 57.7%. The Company continues to face a severe shortage of
working capital, and there can be no assurance that the Company will be able to
raise the capital or show the improvements in operations that would be
necessary to overcome the deficit.
During the nine (9) months ended March 31, 1997, the Company was able to
negotiate the reduction of $109,279 of debt in exchange for 21,258 shares of
Common Stock in satisfaction of this debt. During this period, the Company
reported net income of $1,373,983. As a result of the foregoing, stockholders'
equity increased from $2,540,964 on June 30, 1996, to $4,024,226 on March 31,
1997, an increase of $1,483,262, or 58.4%.
Net cash used by investing activities for the nine (9) months ended
March 31, 1996 was $(78,399). This compares with net cash used by investing
activities of $(1,082,009) for the nine (9) months ended March 31, 1997. For
the nine (9) months ended March 31, 1996, the Company used $133,226 for the
purchase of equipment and $2,637 for additions to other assets. This compares
to $616,981 for the purchase of equipment, $23,537 for acquisition of other
assets, the majority of which are attributable to Pelican Casino, $372,566 in
notes receivable, and $110,896 in distribution to minority interest for the
nine (9) months ended March 31, 1997. Offset against this, the Company
received $57,464 of principal payments on its notes receivable for the nine (9)
months ended March 31, 1996. This compares with principal payments on its notes
receivable of $39,972 and proceeds from sale of equipment of $1,999 for the
nine (9) months ended March 31, 1997.
Net cash used by financing activities for the nine (9) months ended March
31, 1996 was $(135,895). This compares with net cash provided by financing
activities of $866,461 for the nine (9) months ended March 31, 1997.
Specifically, cash provided by financing activities for the nine (9) months
ended March 31, 1996 was $137,514 realized from the exercise of Common Stock
Purchase Warrants and stock offerings and $1,160 from borrowing against notes.
Offset against the cash provided by financing activities were promissory note
principal reduction payments in the amount of $266,429. This compares to
proceeds from borrowings of $1,467,620 for the nine (9) months ended March 31,
1997. This was offset by debt payments of $601,159.
Neither the Company nor any of its subsidiaries have any commercial bank
credit facilities.
Other than the foregoing, Management knows of no other trends, events or
uncertainties that will have or are reasonably likely to have a material impact
on the Company's short-term or long-term liquidity.
RESULTS OF OPERATIONS--THREE (3) MONTHS ENDED MARCH 31, 1997 COMPARED TO THE
THREE (3) MONTHS ENDED MARCH 31, 1996
For the three (3) months ended March 31, 1996, the Company's income
consisted of revenues generated by the Bull Durham Saloon and Casino in Black
Hawk, Colorado, Casino Las Vegas in Bishkek, Kyrgyzstan, and Casino Masquerade
in Aruba. In contrast, Bull Durham, Casino Las Vegas, Casino Masquerade, and
the Pelican Casino in St. Maarten operated for the same period in 1997.
Net revenues for the three (3) months ended March 31, 1996 were $2,231,116
based on casino revenues of $2,107,195, revenues from the sale of food and
beverage of $122,832, and other revenue of $1,089. Net revenues for the three
(3) months ended March 31, 1997 were $2,960,756 comprised of casino revenues of
$2,841,527, food and beverage of $80,260, and other revenues of $38,969.
More specifically, net revenues at Casino Las Vegas and Casino Masquerade
decreased from $1,738,546 at March 31, 1996 to $1,597,145 at March 31, 1997.
It is believed this decrease is a result of increased competition in these
markets and the threat of an employee strike against a major airline carrier to
the Caribbean. At March 31, 1996, net revenues from domestic operations were
$492,570 from the Bull Durham and other revenue from domestic operations,
compared to net revenues from domestic operations at March 31, 1997 of $634,756
from the Bull Durham and other revenue from domestic operations. In addition,
at March 31, 1997 the Company had net revenues of $728,855 from the Pelican
Casino.
The foregoing changes in operations also resulted in an increase in
operating, general and administrative expenses which increased from $1,731,776
for the three (3) months ended March 31, 1996 to $2,411,133 for the three (3)
months ended March 31, 1997, an increase of 39.2%. The Pelican Casino added
general and administrative expenses of $669,601 for the three (3) months ended
March 31, 1997. Depreciation increased 23.6% and amortization increased 0.5%
over the same period.
Total operating expenses increased from $1,937,206 for the three (3)
months ended March 31, 1996, to $2,642,457 for the three months ended March 31,
1997, an increase of 36.4%.
As a result of the increase in net revenues, and an increase in operating
expenses, income from operations increased 8.3% to income of $318,299 for the
three (3) months ended March 31, 1997, from income of $293,910 for the three
(3) months ended March 31, 1996. Interest income decreased 39.4% while
interest expense decreased 64.2% over the same period due to the Chapter 11
proceedings of Casinos U.S.A.. Income before minority interest increased from
income of $107,458 for the three (3) months ended March 31, 1996, to income of
$261,814 for the three (3) months ended March 31, 1997.
Due to an increase in the minority interest's share of profits in Casino
Las Vegas, the Company reported minority interest expense of $(41,009) for the
three (3) months ended March 31, 1997, compared to a minority interest expense
of $(10,399) for the three (3) months ended March 31, 1996.
As a result of the foregoing, the Company reported net income for the
three (3) months ended March 31, 1997 of $220,805, compared to net income for
the three (3) months ended March 31, 1996 of $97,059, which translates into net
income per share of $0.16 based on 1,374,144 weighted average shares
outstanding for the three (3) months ended March 31, 1997 and net income per
share of $0.08, based on 1,222,250 weighted average shares outstanding for the
three (3) months ended March 31, 1996.
RESULTS OF OPERATIONS--NINE (9) MONTHS ENDED MARCH 31, 1997 COMPARED TO THE
NINE (9) MONTHS ENDED MARCH 31, 1996
For the nine (9) months ended March 31, 1996, the Company's income
consisted of revenues generated by the Bull Durham Saloon and Casino in Black
Hawk, Colorado, Casino Las Vegas in Bishkek, Kyrgyzstan, and Casino Masquerade
in Aruba. Casino Lazurnaya in Sochi, Russia operated for the first 15 days of
July, 1995. In contrast, for the nine (9) months ended March 31, 1997, the
Company derived its income from revenues generated by the Bull Durham, Casino
Las Vegas, and Casino Masquerade. The Pelican Casino in St. Maarten began
operations in August, 1996.
Net revenues for the nine (9) months ended March 31, 1996 were $5,959,261
based on casino revenues of $5,651,222, revenues from the sale of food of
$302,348, and other income of $5,691. Net revenues for the nine (9) months
ended March 31, 1997 were $7,307,949 comprised of casino revenues of
$6,957,063, food and beverage of $267,317, and other revenues of $83,569.
More specifically, net revenues at Casino Las Vegas and Casino Masquerade
decreased from $4,386,313 at March 31, 1996 to $3,773,212 at March 31, 1997.
It is believed this decrease is a result of increased competition in these
markets. Net Revenues in Sochi, Russia decreased from $24,485 at March 31,
1996 due to the disposition of this property in July, 1995. At March 31, 1996,
net revenues from domestic operations were $1,548,463 compared to net revenues
from domestic operations at March 31, 1997 of $1,827,400 from the Bull Durham
and $19,000 in other revenue from domestic operations. In addition, at March
31, 1997 the Company had net revenues of $1,688,337 from Pelican Casino.
The foregoing changes in operations also resulted in an increase in
operating, general and administrative expenses from $5,119,343 for the nine (9)
months ended March 31, 1996 to $6,371,546 for the nine (9) months ended March
31, 1997, an increase of 24.5%. The Pelican Casino added general and
administrative expenses of $1,569,433 for the nine (9) months ended March 31,
1997. Depreciation increased 20.2% and amortization increased 2.0% over the
same period.
Total operating expenses increased from $5,716,588 for the nine (9) months
ended March 31, 1996, to $7,038,754 for the nine (9) months ended March 31,
1997, an increase of 23.1%.
As a result of the increase in net revenues, and an increase in operating
expenses, income from operations increased 10.9% to income of $269,195 for the
nine (9) months ended March 31, 1997, from income of $242,673 for the nine (9)
months ended March 31, 1996. Interest income decreased 66.7% while interest
expense decreased 54.5% over the same period due to the Chapter 11 proceedings
of Casinos U.S.A.. Income (losses) before reorganization items, extraordinary
items, and minority interest increased from a loss of $(165,431) for the nine
(9) months ended March 31, 1996, to income of $69,338 for the nine (9) months
ended March 31, 1997.
For the nine (9) months ended March 31, 1997, the Company had net expenses
from reorganization of $(3,503) and an extraordinary gain from reorganization
of $1,285,765. The Company reported a gain from debt restructuring of $164,627
for the nine (9) months ended March 31, 1997, compared to a gain from debt
restructuring of $201,814 for the nine (9) months ended March 31, 1996. Due to
a decrease in the operating results of the Casino Las Vegas, the Company
reported minority interest expense of $(142,244) for the nine (9) months ended
March 31, 1997, compared to a minority interest expense of $(187,469) for the
nine (9) months ended March 31, 1996.
As a result of the foregoing, the Company reported net income for the nine
(9) months ended March 31, 1997 of $1,373,983, compared to a net loss for the
nine (9) months ended March 31, 1996 of $(151,086), which translates into net
income per share of $1.03 based on 1,329,065 weighted average shares
outstanding for the nine (9) months ended March 31, 1997 and a net loss per
share of $(0.14), based on 1,079,840 weighted average shares outstanding for
the nine (9) months ended March 31, 1996.
Other than the foregoing, management knows of no trends, or other demands,
commitments, events or uncertainties that will result in, or that are
reasonably likely to result in, a material impact on the income and expenses of
the Company.
PRIVATE SECURITIES LITIGATION REFORM ACT
Certain statements in this Quarterly Report on Form 10-QSB which are not
historical facts are forward looking statements, such as statements relating to
future operating results, existing and expected competition, financing and
refinancing sources and availability and plans for future development or
expansion activities and capital expenditures. Such forward looking statements
involve a number of risks and uncertainties that may significantly affect the
Company's liquidity and results in the future and, accordingly, actual results
may differ materially from those expressed in any forward looking statements.
Such risks and uncertainties include, but are not limited to, those related to
effects of competition, leverage and debt service financing and refinancing
efforts, general economic conditions, changes in gaming laws or regulations
(including the legalization of gaming in various jurisdictions) and risks
related to development and construction activities.
<PAGE>
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is currently involved in the following pending legal
proceedings.
1) Astraea Investment Management, L.P., as Trustee vs. Global Casinos,
Inc., et. al,
----------------------------------------------------------
Case Number 94-02498 in the District Court of Dallas County, Texas,
116th Judicial District.
As previously reported, this matter had been brought by the
holder of certain promissory notes made by the Company's wholly-
owned subsidiary, Casinos U.S.A., Inc. ("Casinos U.S.A.") prior
to its acquisition by the Company. The notes held by the
Plaintiff were secured by a senior deed of trust against the
Bull Durham Saloon and Casino ("Bull Durham") located in Black
Hawk, Colorado. The Company had previously negotiated a
settlement accord in which it guaranteed the obligation of
Casinos U.S.A. and which resulted in a dismissal of the lawsuit.
However, the Company was unable to meet a balloon payment which
was due on August 31, 1994. As a result of that default, the
Plaintiff filed a motion to reinstate the case in October, 1994.
In May, 1995, the Company executed its Convertible Promissory
Note in the original principal amount of $756,000.00 which note
was convertible into shares of the Company's Common Stock at the
rate of $3.00 per share. By agreement dated July 31, 1996, the
Company and Astraea agreed to settle these claims remaining
between the parties. Pursuant to the terms of the settlement,
Astraea agreed to reduce the conversion rate to $1.00 per share
and the interest rate of the note from 9% per annum to 7% per
annum, and the Company agreed to, among other things, assign to
Astraea the Company's secured claim in the Casinos U.S.A., Inc.
Chapter 11 bankruptcy to reduce the principal balance of the
note. The settlement was further subject to the Plan of
Reorganization with Casinos U.S.A., Inc. being confirmed by the
Bankruptcy Court, which occurred on December 18, 1996. The
Company's agreements with Astraea are currently in the process
of finalizing the assignment documents.
2) Angell & Deering v. Casinos, USA, Inc. and Global Casinos, Inc.,
----------------------------------------------------------------
Case No. 95-CV-3289, in the Colorado District Court for the City and
County of Denver.
The Company and Casinos U.S.A. are named defendants in a civil
action filed on July 20, 1995, in the Colorado District Court
for the City and County of Denver. The Plaintiff is claiming
amounts due for breach of contract and quantum meruit based upon
accounting services provided to Casinos U.S.A.. The Plaintiff
seeks damages in the amount of $60,099 plus interest and
attorney's fees. The Company disputes its liability, and
Casinos U.S.A. disputes the damages claimed. The litigation is
stayed as to Casinos U.S.A. due to the Bankruptcy Proceeding.
All parties reached a conditional settlement whereby Casinos
U.S.A. agreed to an allowed unsecured claim for the plaintiff in
the bankruptcy proceeding in the amount of $30,000. The Company
purchased this claim in consideration for an initial payment of
$10,000 and a guarantee of future payments from the Plan of
Reorganization totalling $20,000. Upon payment of the remaining
$20,000, the lawsuit pending in the Colorado District Court
would be dismissed with prejudice. The Bankruptcy Court
confirmed Casinos U.S.A.'s Plan of Reorganization on December
18, 1996, and, to date, the Company has paid the plaintiff
$8,335 of the remaining $20,000.
3) In Re Casinos U.S.A., Inc.,
---------------------------
Case No. 95-20864 MSK, in the United States District Court for the
District of Colorado.
Casinos U.S.A. is currently in default under all of its secured
obligations encumbering the Bull Durham. Civil actions were
initiated to foreclose upon the junior liens. The efforts of
the Company to negotiate restructured terms for the repayment of
the foregoing secured obligations were unsuccessful. As a
result, on October 18, 1995, Casinos U.S.A. filed a voluntary
petition under Chapter 11 of the United States Bankruptcy Code.
Since October 18, 1995, Casinos U.S.A. has continued to operate
the Bull Durham as debtor-in-possession. On December 18, 1996,
the Bankruptcy Court confirmed Casinos U.S.A., Inc.'s Second
Amended Plan of Reorganization (the "Plan"). The effective date
of the Plan was thirty (30) days after confirmation.
4) Securities and Exchange Commission Investigation.
------------------------------------------------
During 1995 and 1996, the Company and certain officers and
directors of the Company received requests for information from
the U.S. Securities and Exchange Commission ("SEC") related to
an investigation begun by the SEC during 1994 into various
matters, including certain transactions in securities by the
Company and one of its officers and directors. On January 13,
1997, the Company was notified that the SEC staff intended to
recommend charging the Company and two of its former officers
and directors with violations of securities laws. The Company
is engaged in negotiations with the SEC staff concerning
possible disposition of this matter. Based upon the content of
these discussions, management believes that the outcome of the
investigation will not have a material adverse effect on the
Company, however, there can be no assurance that such will be
the case.
Item 2. CHANGES IN SECURITIES
None
Item 3. DEFAULT UPON SENIOR SECURITIES
Mandatory Redeemable Preferred Stock
------------------------------------
In June, 1994, the Company issued 1,406,250 units comprised of one share
of Series A Redeemable Convertible Preferred Stock with a mandatory
redemption date of May 31, 1995 and one-half Class D Common Stock Purchase
Warrant with an exercise price of $3.00 per share. The redemption price
of $2.00 per share is subject to adjustment for certain events such as
splits and dividends. Holders of the Redeemable Convertible Preferred
Stock have the option to convert each share of the preferred stock into
one share of the Company's Common Stock. On May 31, 1995, holders of
1,233,000 shares of the Company's Series A Preferred Stock agreed to waive
the mandatory redemption in consideration of a lower conversion price,
from $2,00 to $1.125 per share, approximately 1.778 shares of common stock
for each share of preferred stock, and a reduction in the exercise price
of 616,500 D Warrants from $3.00 per share to $.50 per share, if exercised
on or before June 30, 1995, and $1.75 per share, if exercised after June
30, 1995.
The foregoing modifications are applicable only to shares of Preferred
Stock and D Warrants owned by holders who voluntarily agreed to such
modifications. In June, 1996, the holder of 125,000 shares of Mandatory
Redeemable Preferred Stock in default agreed to convert the preferred
shares into Common Stock at a conversion of $1.125 per share; provided,
however, that the Company issue additional shares of Common Stock to
reduce the conversion price to $1.00 per share depending upon the public
trading price of the Common Stock over a 90-day period, and provided that
the holder waive all interest accrued and accept no reduction in the
exercise price of D Warrants. At June 30, 1996, 44,250 shares of
Mandatory Redeemable Convertible Preferred Stock remain outstanding, and
the Company remains in default on its mandatory redemption obligation.
During the three (3) months ended March 31, 1997, 17,500 shares of
Mandatory Redeemable Convertible Preferred Stock in default was converted
into Common Stock.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the three
(3) months ended March 31, 1997.
Item 5. OTHER INFORMATION
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
None
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GLOBAL CASINOS, INC.
Dated: 05/06/97 By: /s/ Stephen G. Calandrella
---------------- ------------------------------
Stephen G. Calandrella
Interim President
Dated: 05/06/97 By: /s/ Pete Bloomquist
---------------- ------------------------------
Pete Bloomquist
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AND STATEMENT OF OPERATIONS FOUND ON PAGES 4 THROUGH 7 OF THE COMPANY'S
FORM 10-QSB FOR THE NINE MONTHS ENDED MARCH 31, 1997 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,458,185
<SECURITIES> 0
<RECEIVABLES> 127,260
<ALLOWANCES> 8,500
<INVENTORY> 0
<CURRENT-ASSETS> 1,650,526
<PP&E> 7,058,621
<DEPRECIATION> 1,507,086
<TOTAL-ASSETS> 10,253,815
<CURRENT-LIABILITIES> 2,421,344
<BONDS> 3,768,111
53,500
268,538
<COMMON> 66,021
<OTHER-SE> 8,910,029
<TOTAL-LIABILITY-AND-EQUITY> 10,253,815
<SALES> 267,317
<TOTAL-REVENUES> 7,307,949
<CGS> 0
<TOTAL-COSTS> 7,038,754
<OTHER-EXPENSES> 237,991
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 237,991
<INCOME-PRETAX> 69,338
<INCOME-TAX> 0
<INCOME-CONTINUING> 69,338
<DISCONTINUED> 0
<EXTRAORDINARY> 1,450,392
<CHANGES> 0
<NET-INCOME> 1,373,983
<EPS-PRIMARY> 1.03
<EPS-DILUTED> 1.03
</TABLE>
