<PAGE> 1
RULE 424(B)(3)
REGISTRATION NO. 33-79484
SUPPLEMENT NO. 2 TO PROSPECTUS DATED MARCH 15, 1996
OF CROWN CASINO CORPORATION
PUBLIC OFFERING OF
10,121,869 SHARES OF COMMON STOCK
Attached hereto is a Current Report on Form 8-K of Crown Casino Corporation
dated May 3, 1996 reporting the sale by the Company of its remaining 50%
interest in SCGC to Casino America.
The following paragraphs are added to the RISK FACTORS section of the
Prospectus:
RECENT GAMING LEGISLATION IN LOUISIANA
In April 1996 the Louisiana Legislature passed a number of gaming related acts
(the "New Law") that became law during May, 1996. These acts substantially
modify gaming legislation in Louisiana and may have an adverse impact on gaming
generally in Louisiana. A summary of the acts follows:
Local Option Elections Required
At the time of the November 1996 Congressional General Election a separate
proposal will be placed on the ballot to determine whether to continue each
form of gaming that was present in a particular parish in May 1996. Voting
will be determined on a parish-by-parish basis, and each of
(i) riverboat gaming, (ii) video draw poker, and (iii) the New Orleans
land-based casino will be voted on separately. Thus, one parish may approve a
certain form of gaming while another parish rejects it. If riverboat gaming is
not approved in a particular parish, the licensee may continue to conduct such
gaming operation in such parish but only until the earlier of
(ii) A. the expiration of its current gaming license term, or (ii) any
suspension or revocation of such license. If a parish rejects the continuance
of riverboat gaming then any riverboat gaming licensee operating in that parish
may only relocate the berthing site of its riverboat casino to a parish in
which riverboat gaming is then being conducted.
Furthermore, a proposed amendment to the Constitution of Louisiana has been
passed by the legislature that, if approved by the general public in November
1996, would require local elections and voter approval before (i) any new forms
of gaming may be conducted, (ii) existing forms of gaming may be conducted in a
new parish, and (iii) additional riverboat gaming, or riverboat gaming at a
different docking facility, may be conducted in a parish where it already
exists.
Creation of Louisiana Gaming Control Board
Effective in May 1996 gaming activities and operations in Louisiana will be
regulated by the Louisiana Gaming Control Board (the "Gaming Board"). The
Gaming Board shall have all regulatory authority, control, and jurisdiction,
including investigation, licensing, and enforcement, and all power incidental
or necessary to regulate and control gaming activities in the state, with
certain exceptions. The Louisiana Riverboat Gaming Commission has been
abolished and certain duties and responsibilities previously held by the
Louisiana Riverboat Gaming Enforcement Division have been transferred to the
Gaming Board. The Gaming Board, when appointed by the governor and confirmed by
the senate, will consist of nine members. Members of the Gaming Board will
serve staggered six year terms.
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OWNERSHIP OF CASINO AMERICA COMMON STOCK
As a result of the sale of the remaining 50% interest in SCGC, the Company now
owns approximately 9% of the outstanding shares of Casino America stock plus
warrants. While the Company does not intend to be a long term holder of its
Casino America common stock, currently approximately 26% of the Company's total
assets are in the form of Casino America common stock. Casino America owns and
operates two dockside casinos in Mississippi, and has substantial interests in
two casinos in Louisiana. Accordingly, events or circumstances which negatively
affect Casino America may also indirectly negatively affect the Company by
reducing the value of Casino America stock held by the Company.
Furthermore, as an approximate 9% holder of Casino America's common stock, the
Company has been advised that it must be found suitable by the Mississippi
gaming authorities to hold such stock. Failure to be found suitable by the
Mississippi gaming authorities may result in the Company being required to
dispose of its holdings in Casino America in an accelerated manner, or at a
time which is undesirable. While the Company has no reason to believe it will
be found unsuitable, there can be no assurance that the Mississippi gaming
authorities will find the Company suitable to hold its Casino America common
stock.
The sections "Business - Gaming Development" and "Louisiana Gaming Regulation"
contained in the Prospectus dated March 15, 1996 are hereby modified by the
disclosures contained in the foregoing paragraphs under "Recent Gaming
Legislation in Louisiana."
The date of this Prospectus Supplement is May 17, 1996.
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) May 3, 1996
-------------------------------
CROWN CASINO CORPORATION
-------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
TEXAS 0-14939 63-0851141
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
4040 NORTH MACARTHUR BOULEVARD, SUITE 100, IRVING, TEXAS 75038
-------------------------------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code (214) 717-3423
-----------------------------
2415 WEST NORTHWEST HIGHWAY, SUITE 103, DALLAS, TEXAS 75220-4446
-------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 4
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On May 3, 1996, Crown Casino Corporation (the "Company") closed the sale
of the remaining 50% interest owned by the Company in St. Charles Gaming
Company, Inc., its 50%-owned subsidiary ("SCGC"), to Casino America, Inc. In
June 1995, the Company sold a 50% interest in SCGC to Louisiana Riverboat
Gaming Partnership ("LRGP"), a joint venture owned 50% by Casino America, Inc.
The Company sold its remaining 50% interest in SCGC in exchange for (i)
1,850,000 shares of Casino America common stock, (ii) an additional five year
warrant to purchase up to 416,667 shares of Casino America common stock
(bringing the total number of shares purchasable pursuant to warrants held by
the Company to 833,334 shares) at an exercise price equal to $12.00 per share,
and (iii) causing the exchange of the existing $20 million LRGP Note for
Purchase Money Note A ("Note A") and Purchase Money Note B ("Note B"), each
issued by LRGP in the principal amount of $10 million, and making certain
modifications to the payment terms of Note A and Note B as compared to the
prior LRGP Note. Based upon the closing price on May 3, 1996 of Casino
America's common stock of $7.75 (as reported by Nasdaq), the total value of
consideration received by the Company in this transaction was approximately
$14.3 million (attributing no value to the Casino America warrants). The
purchase price was negotiated at arms-length by the parties to the agreement.
Casino America has agreed to register the shares issued to the Company for
resale by July 1, 1996. The warrants to purchase shares of Casino America's
common stock are subject to the condition that the warrants may only be
exercised by converting all or a portion of Note B issued by LRGP in favor of
Crown. Crown also granted a proxy to the Chairman of the Board, President and
any Executive Vice President of Casino America with respect to voting of the
Casino America shares owned by Crown.
The Company does not presently intend to be a long-term holder of Casino
America common stock. The Company may exchange its Casino America stock in the
course of making an acquisition, or sell such shares for cash, which may then
be used for acquisitions or for general corporate purposes.
ITEM 5. OTHER EVENTS.
In March 1996, Casino America filed a registration statement on Form S-3
with the Securities and Exchange Commission to register approximately 3.9
million shares to conduct a rights offering to existing shareholders. Pursuant
to the proposed rights offering, the Company expects that it will receive the
right to purchase approximately 677,000 shares of Casino America common stock
at a price of $5.875. The closing bid price of Casino America's common stock
on May 15, 1996 was $8.125. As of May 15, 1996, Casino America's registration
statement had not yet been declared effective. It is the Company's present
intention to participate in the rights offering should it be given the
opportunity to do so.
2
<PAGE> 5
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(b) Pro Forma Financial Information.
The following pro forma financial information is included in
this report:
Introduction to Pro Forma Financial Information
Pro Forma Consolidated Balance Sheet (Unaudited) - January 31,
1996
Pro Forma Consolidated Statement of Operations for the year
ended April 30, 1995 (Unaudited)
Pro Forma Consolidated Statement of Operations for the nine
months ended January 31, 1996 (Unaudited)
Notes to Pro Forma Consolidated Financial Statements
(c) Exhibits.
The following exhibit is incorporated by reference from Registration
Statement on Form S-1, Registration No. 33-79484, Post Effective
Amendment No. 10 filed on February 23, 1996, Exhibit 10.17:
Stock Purchase Agreement dated January 18, 1996
by and between the Registrant and Casino America,
Inc., including form of Registration Agreement,
Promissory Notes and Warrants issued in favor of
the Registrant to purchase common stock of Casino
America, Inc.
3
<PAGE> 6
CROWN CASINO CORPORATION
PRO FORMA FINANCIAL INFORMATION
SALE OF FIRST 50% OF SCGC
On June 9, 1995 pursuant to a definitive stock purchase agreement Crown Casino
Corporation ("Crown" or the "Company") sold a 50% interest in St. Charles
Gaming Company, Inc. ("SCGC") to Louisiana Riverboat Gaming Partnership
("LRGP"), a joint venture owned 50% by Casino America, Inc. ("Casino America")
and 50% by Louisiana Downs, Inc. LRGP owns the Isle of Capri(SM) dockside
riverboat casino in Bossier City, Louisiana. The purchase price consisted of
(i) a five-year $20 million note (the "LRGP Note"), (ii) $1 million cash, and
(iii) a warrant (which may only be exercised by converting a portion of the
LRGP Note) to purchase 416,667 shares of Casino America common stock at $12 per
share. The LRGP Note bears interest at 11.5% per annum, payable monthly, and
is secured by LRGP's 50% interest in SCGC. On July 29, 1995 SCGC's riverboat
casino commenced gaming operations in Calcasieu Parish, Louisiana.
SALE OF REMAINING 50% INTEREST IN SCGC
On May 3, 1996, pursuant to a definitive stock purchase agreement, Crown sold
its remaining 50% interest in SCGC to Casino America in exchange for (i)
1,850,000 shares of Casino America common stock that are to be registered for
resale by July 1, 1996, (ii) the exchange of the $20 million LRGP Note for
Purchase Money Note A ("Note A") and Purchase Money Note B ("Note B") each
issued by LRGP in the principle amount of $10 million and making certain
modifications to the payment terms of Note A and Note B as compared to the
prior LRGP Note, and (iii) an additional five year warrant (which may only be
exercised by converting a portion of Note B) to purchase 416,667 shares of
Casino America common stock at $12 per share.
PRO FORMA FINANCIAL STATEMENTS
The following pro forma consolidated balance sheet as of January 31, 1996 gives
effect to the sale of the Company's remaining 50% interest in SCGC as of such
date. The sale of the first 50% of SCGC has already been reflected in Crown's
historical consolidated balance sheet at January 31, 1996.
The following pro forma consolidated statements of operations of Crown for the
nine months ended January 31, 1996 and for the year ended April 30, 1995 gives
effect to (i) Crown's sale of 50% of SCGC to LRGP, and (ii) Crown's sale of the
remaining 50% interest in SCGC to Casino America as if such transactions had
occurred at the beginning of the respective periods.
The pro forma information is based on the historical financial statements of
Crown and SCGC giving effect to the transactions described above and the
adjustments described in the accompanying notes to pro forma consolidated
financial statements and may not be indicative of the results that actually
would have occurred had the transactions taken place on the dates indicated or
the results which may be obtained in the future.
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<PAGE> 7
CROWN CASINO CORPORATION
PRO FORMA CONSOLIDATED BALANCE SHEET
UNAUDITED
JANUARY 31, 1996
(IN THOUSANDS)
<TABLE>
Record Sale of
Remaining 50% Pro Forma
Crown Interest in SCGC Consolidated
--------- ---------------- ------------
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 376 $ 376
Receivables 1,021 1,021
Prepaid expenses and other 506 506
Marketable securities $ 14,338(a) 14,338
--------- --------- ---------
1,903 14,338 16,241
Property and equipment:
Furniture, fixtures and equipment 1,715 1,715
Land held for development 16,170 16,170
--------- ---------
17,885 17,885
Accumulated depreciation (167) (167)
--------- ---------
17,718 17,718
Note receivable 20,000 20,000
--------- --------- ---------
$ 39,621 $ 14,338 $ 53,959
========= ========= =========
Current liabilities:
Accounts payable $ 32 $ 32
Accrued liabilities 318 $ 2,400 (c) 2,718
Current portion of long term obligations 68 68
--------- --------- ---------
418 2,400 2,818
Long term obligations, less current portion 930 930
Investment in SCGC 3,458 (3,458) (c)
Deferred income taxes 8,224 8,224
Stockholders' equity 26,591 15,396 41,987
--------- --------- ---------
$ 39,621 $ 14,338 $ 53,959
========= ========= =========
</TABLE>
See Accompanying Notes to Pro Forma Consolidated Financial Statements
5
<PAGE> 8
CROWN CASINO CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED APRIL 30, 1995
UNAUDITED
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
Historical Deconsolidate Pro Forma
Crown SCGC Adjustments Consolidated
---------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
Revenues: $ - $ -
Costs and expenses:
General and administrative 2,008 2,008
Gaming pre-opening and development 8,190 $ (7,677) 513
Site abandonment and contract buy-out 7,131 (7,131)
Depreciation and amortization 248 (111) 137
--------- --------- --------
17,577 (14,919) 2,658
--------- --------- --------
Other income (expense):
Interest expense (6,827) 6,810 (17)
Interest income 177 $ 2,300 (d) 2,477
Gain on sale of first 50% of SCGC 21,513 (e) 21,513
Gain on sale of remaining 50% of SCGC 17,796 (f) 17,796
--------- --------- --------- ---------
(6,650) 6,810 41,609 41,769
--------- --------- --------- ---------
Income (loss) before taxes (24,227) 21,729 41,609 39,111
Provision (benefit) for income taxes (3,902) 2,827 8,200 (g) 7,125
---------- --------- --------- ---------
Net income (loss) $ (20,325) $ 18,902 $ 33,409 $ 31,986
========== ========= ========= =========
Income (loss) per share $ (2.01) $ 3.02
========== =========
Weighted average common and common
equivalent shares outstanding 10,104 10,576
========== =========
</TABLE>
See Accompanying Notes to Pro Forma Consolidated Financial Statements
6
<PAGE> 9
CROWN CASINO CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED JANUARY 31, 1996
UNAUDITED
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
Historical Deconsolidate Pro Forma
Crown SCGC Adjustments Consolidated
--------------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
Revenues: $ - $ -
Costs and expenses:
General and administrative 1,896 1,896
Gaming pre-opening and development 708 $ (536) 172
Depreciation and amortization 102 (16) 86
Bourbon Street write-off and other 703 703
--------- ------- --------
3,409 (552) 2,857
--------- ------- --------
Other income (expense):
Interest expense (983) 965 (18)
Interest income 1,660 $ 95 (h) 1,755
Equity in loss of SCGC (2,569) 2,569 (i)
Gain on sale of first 50% of SCGC 21,513 21,513
Gain on sale of remaining 50% of SCGC 17,796 (j) 17,796
--------- ------- --------- --------
19,621 965 20,460 41,046
--------- ------- --------- --------
Income before taxes 16,212 1,517 20,460 38,189
Provision for income taxes 7,723 2,450 (k) 10,173
--------- ------- --------- --------
Net income $ 8,489 $ 1,517 $ 18,010 $ 28,016
========= ======= ========= ========
Income per share $ .70 $ 2.31
========= ========
Weighted average common and common
equivalent shares outstanding 12,106 12,106
========= ========
</TABLE>
See Accompanying Notes to Pro Forma Consolidated Financial Statements
7
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CROWN CASINO CORPORATION
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS AND PERCENTAGES)
BALANCE SHEET
a - To record the receipt of 1,850,000 shares of Casino America common stock at
the estimated fair value of $7.75 per share. On May 3, 1996 the closing bid
price for Casino America's common stock was $7.75 per share.
b - To eliminate the investment in SCGC account.
c - To record the impact of income taxes on the sale of the remaining 50%
interest in SCGC based upon a 38% effective income tax rate.
TWELVE MONTH PERIOD
d - To record twelve months of interest income at a rate of 11.5% per annum on
the $20,000 LRGP Note (which was subsequently exchanged for Note A and Note
B) received in the first sale of the 50% interest in SCGC.
e - To record Crown's sale of the first 50% interest in SCGC presumed to have
occurred at the beginning of the period.
f - To record the sale of Crown's remaining 50% interest in SCGC and the receipt
of 1,850,000 shares of Casino America common stock presumed to have occurred
at the beginning of the period. The gain before income taxes on such
transaction is calculated as follows:
<TABLE>
<S> <C> <C>
Consideration received:
Shares of Casino America common stock 1,850,000
Closing bid price on May 3, 1996 x $7.75
---------
$14,338
Crown's negative book basis in SCGC stock sold 3,458
-------
$17,796
=======
</TABLE>
g - To record the impact of income taxes on the adjustments described above
based upon a 38% effective income tax rate.
NINE MONTH PERIOD
h - To record interest income at a rate of 11.5% per annum on the $20,000 LRGP
Note (which was subsequently exchanged for Note A and Note B) received in
the sale of the first 50% interest in SCGC from the beginning of the period
to the point when interest on such LRGP Note has been included in the
historical financial statements.
i - To eliminate Crown's proportionate share of the equity in net loss of SCGC.
j - To record the sale of Crown's remaining 50% interest in SCGC and the receipt
of 1,850,000 shares of Casino America common stock presumed to have occurred
at the beginning of the period. The gain before income taxes on such
transaction is calculated as follows:
<TABLE>
<S> <C> <C>
Consideration received:
Shares of Casino America common stock 1,850,000
Closing bid price on May 3, 1996 x $7.75
---------
$14,338
Crown's negative book basis in SCGC stock sold 3,458
-------
$17,796
=======
</TABLE>
k - To record the impact of income taxes on the adjustments described above
based upon a 38% effective income tax rate.
8
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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.
CROWN CASINO CORPORATION
By: /s/ Mark D. Slusser
-----------------------
Mark D. Slusser
Chief Financial Officer
Dated: May 16, 1996
