NUOASIS RESORTS INC
10QSB, 2001-01-02
MISCELLANEOUS AMUSEMENT & RECREATION
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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   Form 10-QSB

                   Quarterly Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

For Quarter Ended March 31, 1999                    Commission File No. 0-18377

                              NuOASIS RESORTS INC.
             (Exact name of registrant as specified in its charter)

               Nevada                                  84-1126818
(State or other jurisdiction of         (I.R.S. Employer Identification Number)
 incorporation or organization)



4695 MacArthur Court, Suite 1450, Newport Beach, CA                92660
    (Address of principal executive offices)                     (Zip Code)

                                 (949) 833-5381
              (Registrant's telephone number, including area code)

            N/A                                            N/A
(Former Address, if changed                       (Former Zip Code, if changed
 since last report)                                since last report)


                                       N/A
             (Former telephone number, if changed since last report)

     Indicate by check mark 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 shorter period that the Company was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                                    Yes              No X

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares outstanding of each of the issuer's classes
of capital stock, as of the latest practicable date.

     Common Stock $.01 par 66,914,300 shares as of March 31, 1999.




<PAGE>
                              NuOASIS RESORTS INC.
                                      INDEX



                                                                          Page

                                     PART I


Item 1.  Financial Statements

         Consolidated Condensed Balance Sheet
           as of March 31, 1999 (unaudited)................................  1

         Consolidated Condensed Statements of Operations
           for the Three and Nine Months Ended
           March 31, 1999 and 1998 (unaudited).............................  2

         Consolidated Condensed Statements of Cash Flows
            for the Nine Months Ended March 31,
            1999 and 1998 (unaudited)......................................  3

         Notes to Consolidated Condensed Financial Statements .............  4


Item 2.  Management's Discussion and Analysis of
           Financial Condition and Results
           of Operations...................................................  9


                                     PART II

Item 1.  Legal Proceedings................................................. 11

Item 2.  Changes In Securities............................................. 11

Item 3.  Defaults Upon Senior Securities................................... 11

Item 4.  Submission Of Matters To A Vote Of Security Holders............... 11

Item 5.  Other Information................................................. 11

Item 6.  Exhibits And Reports On Form 8-K.................................. 11

         Signatures........................................................ 12


<PAGE>
                              NuOASIS RESORTS INC.
                      Condensed Consolidated Balance Sheet
                        As of March 31, 1999 (Unaudited)

<TABLE>
<S>                                                     <C>
ASSETS
Current assets:
 Cash                                                   $   141,415
 Amounts receivable, net                                    471,553
 Equity investments                                         103,500
 Inventory                                                  174,148
 Other current assets                                       102,848
     Total current assets                                   993,464

Property and equipment, net                                 191,100

Other assets:
 Equity investments                                       2,000,000
 Receivable from STTG                                     1,134,117
 Land held for development                                3,700,000
 Other                                                      555,952
     Total other assets                                   7,390,069
TOTAL ASSETS                                            $ 8,574,633

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
  Accounts payable                                      $ 2,133,780
  Accrued expenses                                        4,861,063
  Due to affiliates, net                                    260,887
  Note Payable to Affiliate                               3,000,000
  Current portion of notes payable                          772,883
     Total current liabilities                           11,028,613

  Notes Payable, net of current portion                   3,355,680

     Total liabilities                                   14,384,293

Stockholders' equity (deficit):
Preferred stock, Series D, $.01 par value;
  24,000,000 shares authorized, issued and outstanding
  (aggregate liquidation value of up to $10,000,000)        240,000
Common stock, $.01 par value;
  75,000,000 shares authorized;
  66,914,300 shares issued and outstanding                  669,143
Additional paid-in-capital                               42,364,414
Common stock subscriptions receivable                      (457,793)
Other comprehensive loss                                   (365,619)
Accumulated deficit                                     (48,259,805)
     Total stockholders' equity (deficit)                (5,809,660)

TOTAL LIABILITIES & STOCKHOLDERS'
  EQUITY (DEFICIT)                                      $ 8,574,633
</TABLE>

   See accompanying notes to these condensed consolidated financial statements


                                        1
<PAGE>
                              NuOASIS RESORTS INC.
                 Condensed Consolidated Statements of Operations
                         for Three and Nine Months Ended
                       March 31, 1999 and 1998 (Unaudited)


<TABLE>
<CAPTION>
                                                 Three Months Ended             Nine Months Ended
                                                     March 31,                       March 31,
                                                 1999         1998           1999         1998
                                             (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
<S>                                          <C>           <C>           <C>           <C>
Revenue:
  Hotel Rooms and Food                       $   914,000   $ 1,182,776   $ 3,734,100   $ 1,582,841
  Food Distribution                                    -       166,586       262,336       595,314
     Total revenue                               914,000     1,349,362     3,996,436     2,178,155

Cost of Revenue:
  Cost of Hotel Rooms and Food                 1,188,000     2,484,614     4,108,700     2,866,636
  Cost of food distribution                            -        96,139       238,996       340,094
     Total cost of revenue                     1,188,000     2,580,753     4,347,696     3,206,730

Gross (loss) profit                             (274,000)   (1,231,391)     (351,260)   (1,028,799)
   Depreciation and amortization                  10,023       275,279        30,069       405,958
   Legal and professional fees                   294,025       350,192       882,075       992,342
   Selling, general and administrative
     expenses                                    753,350       262,450     2,260,050     2,148,295
   Minority interest                                   -      (392,381)            -      (815,757)
       Total operating expenses                1,057,398       495,540     3,172,194     2,730,838

Operating (loss)                              (1,331,398)   (1,726,931)   (3,523,454)   (3,759,637)

 Equity in earnings (loss) in affiliates               -       223,098             -       395,229
 Interest and other expenses, net               (134,222)      (87,485)     (402,666)      (85,104)
                                                (134,222)      135,613      (402,666)      310,125
Net (loss)                                   $(1,465,620)  $(1,591,318)  $(3,926,120)  $(3,449,512)

Items of other comprehensive income:
 Foreign currency translation adjustments    $     38,695  $         -   $   116,095   $         -

Basic and diluted loss per common share      $       (.02) $      (.03)  $      (.06)  $      (.07)

Weighted average number of common
  shares outstanding used to compute
  basic and diluted loss per common share      66,914,300   50,754,633    66,914,300    49,478,411
</TABLE>











   See accompanying notes to these condensed consolidated financial statements


                                        2
<PAGE>
                              NuOASIS RESORTS INC.
                 Consolidated Condensed Statements of Cash Flows
                            for the Nine Months Ended
                       March 31, 1999 and 1998 (Unaudited)


<TABLE>
<CAPTION>
                                                         Nine Months Ended
                                                             March  31,
                                                        1999          1998
                                                    (Unaudited)    (Unaudited)
<S>                                                 <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                 $ (3,926,120)  $ (3,449,512)

  Adjustments to reconcile net
   income (loss) to net cash
   provided (used) by operating activities:
   Depreciation and amortization                          30,000        405,968
   Effect of services exchanged for stock                               500,468
   Minority interest                                                   (815,756)
   Equity in losses in affiliates                                      (395,229)
 Increases (decreases) in changes in
   assets and liabilities:
   Accounts receivable, net of
   due from affiliate                                    182,663      4,106,961
   Inventory                                              29,616          1,253
   Other assets                                           99,060       (255,219)
   Security deposits                                     321,480        461,797
   Accounts payable                                      185,534     (2,547,220)
   Accrued expenses                                    2,566,533      1,144,058
   Due to affiliates                                     773,997     (1,314,885)

Net cash provided (used) by operating activities         262,763     (2,157,316)

CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchase of equipment and furnishing                   (147,362)       (52,864)
 Proceeds from sale of assets and investments             27,500      1,882,214

Net cash (used) provided by investing activities        (119,862)     1,829,350

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds received from issuance of debt                      -      2,031,134
  Principal payments on notes payable                          -       (550,000)
  Advances to STTG                                      (149,225)             -

Net cash (used) provided by financing activities        (149,225)     1,481,134

Net (decrease) increase in cash                           (6,324)     1,153,168

Cash and cash equivalents, beginning of period           147,739        576,734

Cash and cash equivalents, end of period            $    141,415   $  1,729,902

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

  Cash paid during year for:
      Interest                                      $          -   $     28,111
</TABLE>


   See accompanying notes to these consolidated condensed financial statements


                                        3
<PAGE>
                              NuOASIS RESORTS INC.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                           March 31, 1999 (Unaudited)


1. Summary of Significant Accounting Policies and Description of Business

Description of Business

NuOasis Resorts, Inc. (formerly, Nona Morelli's II, Inc.) and its subsidiaries
(the "Company"), a Nevada corporation (formerly, a Colorado corporation),
operates as a holding company for leisure and entertainment-related businesses.
At March 31, 1999, the Company had seven wholly-owned subsidiaries and two
majority-owned subsidiaries engaged in food manufacturing and distribution,
casino gaming and hotel management.

The activities of the Company's subsidiaries are domestic and international,
with existing food manufacturing activities in the United States, and casino
gaming and hotel management activities in North Africa.

Restructuring

In July 1998, the Company entered into various agreements with Cleopatra and
Cleopatra's World, and other related Cleopatra subsidiaries, to effect a
restructuring which resulted in the Company disposing of its interest in
Cleopatra, decreasing its interest in Cleopatra Hammamet, and increasing its
interest in Cleopatra's World. To effect the restructuring (a) Cleopatra and
Cleopatra's World assigned to a newly-formed entity, Cleopatra Palace Resorts
and Casinos Limited a British corporation ("CPRC"), all of their rights, title
and interest in and to (i) the Letter of Intent dated July 7, 1996 between
Compagnie Monastirienne Immobiliere et Touristique S.A. ("CMI") and Cleopatra,
(ii) the Letter of Intent between Cleopatra and CMI dated July 7, 1996, (iii)
Cleopatra's rights to the Casino Lease and gaming license between Cleopatra and
the Government of Morocco, (iv) Cleopatra's rights to acquire certain real
estate and the building known as the "Casino Nuevo San Roque" together with the
gaming license and the agreement in principle with Trans Mer S.A. to finance the
project, (v) certain trade accounts receivable, and (vi) Cleopatra's right to
the $1.5 million deposit which it tendered to Club Loisirs Hammamet, the Lessor
of the Hammamet Casino. As a result of the Cleopatra restructuring, the Company
became the 75% owner of CPRC and acquired an additional 10% equity interest in
Cleopatra's World.

Principles of Consolidation

The March 31, 1999 consolidated financial statements, and references therein to
the Company, include the accounts of the Company and its wholly-owned
subsidiaries; NuOasis International, Inc. ("NuOI"), Fantastic Foods
International, Inc. ("Fantastic Foods"), Casino Management of America, Inc.
("CMA") NuOasis Laughlin, Inc., ("NuLA") NuOasis Las Vegas, Inc. ("NuLV"), ACI
Asset Management Inc. ("ACI") and NuOasis Properties, Inc. ("NuOasis
Properties"), its 70% owned subsidiary, Cleopatra Palace Limited ("Cleopatra"),
and its 60% owned subsidiary Cleopatra's World, Inc. ("Cleopatra's World" or
"CWI"). The accounts of Oasis Resorts, Inc. have been included since October 19,
1998.

All material intercompany accounts and transactions have been eliminated in
consolidation.



                                        4
<PAGE>

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                           March 31, 1999 (Unaudited)

1. Summary of Significant Accounting Policies and Description of Business
(continued)

Going Concern Considerations

The Company has recurring losses from operations, and at March, 31, 1999, the
Company has a working capital deficit of $10 million. The Company requires
approximately $5 million of immediate working capital to complete the final
phase of construction of the Le Palace Hotel & Resort and the Cleopatra Cap
Gammarth Casino, as well as service certain past-due trade creditors. The
Company will require additional capital to meet obligations of the hotel and
casino as they become due during the next 12 months. The Company is currently a
plaintiff in litigation with the owners of the Cleopatra Cap Gammarth Casino due
to delays in the completion of the project by the owner. The Company has
received a judgment totaling approximately $292 million against Societe
D'Animation et de Loisirs Touristique, a Tunisian corporation ("SALT"), the
ultimate collectibility of which is unknown. The Company is a defendant in a
matter initiated by the owners of the Le Palace Hotel & Resort for unpaid rents.

Unaudited Interim Financial Statements

The interim financial data as of March 31, 1999, and for the nine months ended
March 31, 1999 and 1998, is unaudited; however, in the opinion of management,
the interim data includes all adjustments, consisting only of normal recurring
adjustments, necessary to present fairly and Company's financial position as of
March 31, 1998, and the results of its operations and cash flows for the nine
months ended December 31, 1999 and 1998.


2. Acquisition and Liquidation of Investments

In July 1998, Cleopatra, Cleopatra's World, and certain other Cleopatra-themed
entities effected a restructuring which resulted in the Company disposing of its
interest in Cleopatra, decreasing its rights to future equity interests in
Cleopatra Hammamet and increasing its interest in Cleopatra's World.

Cleopatra's World

Effective April 30, 1998, the Company acquired an additional 10% equity interest
in Cleopatra's World in exchange for $10,000,000 of notes payable issued by
NuOasis Resorts, Inc., 2,000,000 shares of treasury stock (Note 7), and 280,000
shares of common stock of The Hartcourt Companies Inc. In addition, the Company
also transferred its rights under the Warrant Note and the Put (see below) to
Cleopatra's World. As a result of this exchange, the Company's interest in
Cleopatra's World increased from 50% to 60% and, accordingly, the accounts of
Cleopatra's World are consolidated with those of the Company.


                                        5
<PAGE>

                              NuOASIS RESORTS INC.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                           March 31, 1999 (Unaudited)

2. Acquisition and Liquidation of Investments (continued)

Oasis resorts Inc., formerly Flexweight Corporation

In May 1998, the Company entered into an "Exchange Agreement" with Flexweight
Corporation (currently, Oasis Resorts, Inc.) whereby the Company issued
3,250,000 shares of treasury stock in exchange for 1,000,000 shares of common
stock of Flexweight Corporation and an option to purchase shares in the future
such that the Company may maintain a 19.5% equity interest in Flexweight
Corporation or $2.5 million in market value.

On October 19, 1998, ORI then entered into an exchange agreement with NuOI to
acquire NuOI's 75% interest in CPRC. In connection with its acquisition of CPRC,
ORI issued to NuOI, 1,363,450 shares of ORI common stock, common stock purchase
warrants representing the right to acquire 7,200,000 shares at $30.00 per share,
and promissory notes with an aggregate face value of $180 million. CPRC had
previously acquired an equity interest in Cleopatra Cap Gammarth, which operates
the casino Cleopatra Cap Gammarth, a right to reacquire an interest in Cleopatra
Hammamet Limited, which operates the casino Cleopatra Hammamet Casino, and CWI
which operates the Le Palace Hotel & Resort at Cap Gammarth. All of the
properties are located in Tunisia. CPL is a predecessor company to CPRC, an
entity controlled by NuOI, which previously held the interests in the Cleopatra
Hammamet Casino and the Cleopatra Cap Gammarth Casino.

As to any future projects undertaken by the Company, NuOI, Cleopatra or
Cleopatra's World, additional project financing will be required. Capital
investments may include all or some of the following: acquisition and
development of land, acquisition of leasehold investments and contract rights,
and construction of other facilities. In connection with development activities
relating to potential acquisitions or new jurisdictions, the Company also makes
expenditures for professional services which are expenses as incurred. The
Company's financing requirements depend upon actual development costs, the
amounts and timing of such expenditures, the amount of available cash flow from
operations, the availability of other financing arrangements including selling
equity securities, and selling or borrowing against assets (including current
facilities). The Company may also consider strategic combinations or alliances.
Although there can be no assurance that the Company can effectuate any of the
financing strategies discussed above, the Company believes that if it determines
to seek any additional licenses to operate gaming or permits to conduct hotel
operations in other jurisdictions it will be able to raise sufficient capital to
pursue its strategic plan.

If for any reason, Cleopatra or Cleopatra's World are unable to borrow or
otherwise meet their commitments under current agreements to provide the
furniture, fixtures, equipment and working capital to open the Cap Gammarth
Casino, or acquire and develop future casino gaming and hotel management
projects, the Company may be required to intercede and seek to provide the
requisite financing and working capital, or be forced to sell all or a portion
of the respective interests, or lose the respective rights to the projects and
properties entirely.



                                        6
<PAGE>

                              NuOASIS RESORTS INC.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                           March 31, 1999 (Unaudited)

3. Legal Proceedings

In July 1998, the Company filed a complaint for damages against SALT and several
others due to significant delays in completing the Cleopatra Cap Gammarth
project. In July 1999, the Company received a judgment of approximately $300
million against SALT. Although management is proceeding to collect upon this
judgment, there can be no assurance that the Company will ultimately realize any
amount from this judgment, and the accompanying financial statements do not
include amounts related to this gain contingency.

The Company is also a party to litigation with STTG due to significant delays in
completing the Le Palace Hotel. Through March 31, 1998, the Company has not paid
rent to STTG in connection with the related lease arrangement. However, the
Company has purchased equipment and has paid opening costs of approximately $1.8
million, which were the responsibility of STTG. Subsequent to March 31, 1999,
STTG received an arbitration award for calendar 1998 and 1997 rental payments,
net of amounts expended by the Company. As a result, the accompanying financial
statements include an estimate for rent at the Hotel based upon the arbitration
award.

In November 1998, Group V Corporation and Joe Monterosso filed a claim against
the Company in connection with the purchase of securities from the Company
alleging material misrepresentation. In July 1999, the Company filed a cross
complaint against Group V Corporation and Joe Monterosso. The trial date for the
action is set for September 2000. Management believes the suit lacks substantial
merit and plans to vigorously defend against the complaint and pursue the cross
complaint. No provision has been made in the accompanying financial statements
for this contingency.


4. Subsequent Events

In December 1998, the Hammamet Casino opened. The Company financed the
completion and opening of the Hammamet Casino through a financing agreement with
Cedric International Company Inc., a Panamanian corporation ("Cedric") pursuant
to which the Company and Cedric each agreed to contribute $1.5 million to the
capital of Cleopatra Hammamet. The Company pledged its rights to equity
interests in Hammamet to Cedric to secure the certain loans and investment by
Cedric. The Company and Cedric agreed that Cedric would return such interest
when, and if, the Company reimbursed Cedric for all funds advanced prior to the
first anniversary date of the agreement (on an all-or-nothing basis), plus
interest at the rate of 15% per annum. The Company did not reimburse Cedric, due
to sustained losses at the Hammamet Casino, and the Company forfeited its right
to reacquire its interest in Cleopatra Hammamet. Accordingly, the Company
impaired its interest in Cleopatra Hammamet.


                                        7
<PAGE>

                              NuOASIS RESORTS INC.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                           March 31, 1999 (Unaudited)

4. Subsequent Events (continued)

In connection with its acquisition of CPRC, ORI issued 1,363,450 shares of ORI
common stock, common stock purchase warrants representing the right to acquire
7,200,000 shares at $30.00 per share, and promissory notes with an aggregate
face value of $180 million to NuOI. At the time of the transaction, ORI had no
ability to repay the notes, and therefore, the notes had an estimated fair value
substantially less than the face value at the date of issuance. Based on the
estimated enterprise value of ORI at the date of the acquisition of
approximately $16.6 million, management valued the debt at $7 million. On
November 15, 1999, management of ORI agreed to extinguish this debt and cancel
the 7,200,000 warrants for the issuance of an additional 8,111,240 shares of ORI
common stock. As a result, after the transaction, NuOI shareholders controled
approximately 86% of the ORI's issued and outstanding common stock.

Spinoff of five wholly-owned subsidiaries

In February 2000, the Company completed the spinoff of five of its wholly-owned
subsidiaries CMA, NuLA, NuLV, ACI and NuOasis Properties. The spinoff was
effected through the distribution of 812,500 shares of common stock and 300,000
shares of Series A preferred stock of each subsidiary to the respective NuOasis
shareholders of record on June 30, 1999. The shares of each of these companies
are restricted and no market is expected to develop until each of the
subsidiaries has filed a registration statement on Form 10-SB, and other reports
as required. In February 2000, registration statements on Form 10-SB were filed,
but were subsequently retracted. Each subsidiary intends to file a new
registration statement so that the unregistered shares become registered.

Treasury Shares

During the year ended June 30, 1999, the Company sold all of the remaining
Treasury Shares. The total amount received from the sale of 9,430,000 shares
amounted to $408,663. Because the fair value of the Company's common stock
issued in these transactions was less than the $.50 per share basis of the
common stock, the Company has reduced additional paid in capital for the
difference, which aggregated $4,306,537 during the year ended June 30, 1999.








                                        8
<PAGE>


ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

Going Concern

The Company's working capital resources during the period ended March 31, 1999
were provided by utilizing the cash on hand at June 30, 1998 and from the
operations of the Le Palace Hotel. The Company has experienced recurring net
losses, has limited liquid resources and negative working capital. Management's
intent is to continue searching for additional sources of capital and, in the
case of NuOasis International, new casino gaming and hotel management
opportunities. In the interim, the Company intends to continue operating with
minimal overhead and key administrative functions provided by consultants who
are compensated in the form of the Company's common stock. It is estimated,
based upon its historical operating expenses and current obligations, that the
Company may need to utilize its common stock for future financial support to
finance its needs during fiscal 1999. Accordingly, the accompanying consolidated
financial statements have been presented under the assumption the Company will
continue as a going concern.

Results of Operations -
  Quarter Ended March 31, 1999 Compared to Quarter Ended March 31, 1998



Revenues for the third quarter of fiscal 1999 were $.9 million compared to $1.3
million of revenues in the fiscal 1998 third quarter. The decrease in revenues
was due both to FFI no longer conducting food distribution operations and the Le
Palace Hotel Tunisia realizing lower occupancy due to the hotel complex not
being complete. To date, the hotel has not been able to realize its potential
due the failure of the developer to complete certain amenities at the hotel, the
Cap Gammarth Casino and the surrounding properties associated with the complex.
As the LePalace Hotel is a tourist resort, the occupancy is seasonal with higher
occupancy in the summer months which accounts for the significant reduction in
revenues in the second fiscal quarter.

Total cost of revenues were $1.2 million in the current quarter compared to $2.5
million in the fiscal 1998 quarter. The fiscal 1998 quarter was the first full
quarter of operation for the LePalace Hotel which only opened in December 1997.
Higher than normal costs were incurred because management was anticipating
higher occupancy during the 1998 quarter. The operating results of the LePalace
Hotel were less than anticipated due to lower than expected occupancy levels due
to the developer not completing the adjoining properties in the Cap Gammarth
complex. Additionally, the hotel is required to maintain minimum staffing even
during the off season.

  Nine Months Ended March 31, 1999 Compared to the Nine Months Ended
  March 31, 1998

Revenues for the first nine months of fiscal 1999 were $4.0 million compared to
$2.2 million of revenues in the comparable fiscal 1998 period. The increase in
revenues was entirely primarily due to the operations of the Le Palace Hotel
Tunisia which only began operations in December 1997. Additionally, the increase
was partially offset, as no revenues were realized in the third quarter from FFI
which ceased food distribution at the end of the second quarter. To date, the
hotel has not been able to realize its potential due the failure of the
developer to complete certain amenities at the hotel, the Cap Gammarth Casino
and the surrounding properties associated with the complex. As the LePalace
Hotel is a tourist resort, the


                                        9
<PAGE>


occupancy is seasonal with higher occupancy in the summer months which accounts
for the significant reduction in revenues in the second fiscal quarter.

Total cost of revenues were $4.3 million in the first nine months of fiscal 1999
compared to $3.2 million in the fiscal 1998 period. As in revenues, the increase
is due the operations of the LePalace Hotel which only opened in December 1997,
partially offset by FFI ceasing food distribution at the end of the second
quarter. The operating results of the LePalace Hotel were less than anticipated
due to lower than expected occupancy levels due to the developer not completing
the adjoining properties in the Cap Gammarth complex. Additionally, the hotel is
required to maintain minimum staffing even during the off season.

Liquidity and Capital Resources

The Company has recurring losses from operations and requires approximately $5
million of immediate working capital to complete the final phase of construction
of the Le Palace Hotel and Resort and the Cleopatra Cap Gammath Casino and
service certain trade creditors. The Company will require additional capital to
meet obligations of the hotel and casino as they become due during the next 12
months. The Company is currently a plaintiff in litigation with the owners of
the Cleopatra Cap Gammarth Casino due to delays in the completion of the
projects by the owner. The Company has received a judgment totaling
approximately $300 million, the ultimate collectibility of which is unknown. The
Company is a defendant in a matter initiated by the owners of the Le Palace
Hotel and Resort for rents unpaid by the Company. The Company also requires
approximately $70 million to continue the development of its gaming facility in
Oasis, Nevada, and may be subject to foreclosure proceedings in the event the
Company is unable to raise the financing necessary to complete the project.
These factors raise substantial doubt about the Company's ability to continue as
a going concern. Management's plans with respect to these matters include
obtaining sources of capital to complete the projects, pay its trade creditors
and its past-due rents. Meanwhile, the Company will attempt to perfect its
judgment against the landlords of the Cleoparta Cap Gammarth Casino. There are
no assurances that such financing will be consummated on terms favorable to the
Company, if at all, nor that the Company will be successful in collecting on its
judgment against the owners of the Cleopatra Cap Gammarth Casino.

As of March 31, 1999, the Company had a working capital deficit of $10 million,
which approximates the deficit at June 30, 1998 after giving effect to the
consolidation of the Company with ORI. The Company has currently been accruing
the rent due on the Le Palace Hotel and the resulting cash from operations has
been funding its cash needs.

The Company had a cash balance of approximately $141,000 at March 31, 1999. The
limited cash balance is a direct result of the Company having limited operations
during the quarters.

The Company has no commitments for capital expenditures or additional equity or
debt financing and no assurances can be made that its working capital needs can
be met.

Additionally, as of March 31, 1999, the Company had no employees other than its
President. The Le Palace Hotel had approximately 185 employees.




                                       10
<PAGE>


PART II: OTHER INFORMATION

Item 1. Legal Proceedings

See details provided in Note 3 - Legal Proceedings and Note 4 - Subsequent
events regarding changes in any of the Company's legal proceedings.


Item 2. Changes in Securitie

        None


Item 3. Defaults Upon Senior Securities

        None

Item 4. Submission of Matters to a Vote of Security Holders

        None

Item 5. Other Information

        None

Item 6. Exhibits and Reports on Form 8-K

        (a)  Exhibits:
             Exhibit Number                Description of Exhibit

             27                            Financial Data Schedule

        (b)  Reports on Form 8-K:          None



                                       11
<PAGE>


                                   SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this Report to be signed on its behalf by the undersigned
thereunto duly authorized.

                                                   NuOASIS RESORTS, INC.



Dated:   December 31, 2000                     By: /s/ Leonard J. Roman
                                                       Leonard J. Roman
                                                       Chief Financial Officer
                                                       and Director






























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