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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
ON
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of earliest event reported: July 24, 1997
PRESIDENT CASINOS, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-20840 51-0341200
--------------- ---------------- ----------------
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
organization) Number)
802 North First Street, St. Louis, Missouri 63102
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(Address of principal executive offices) (Zip code)
(314) 622-3000
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(Registrant's telephone number, including area code)
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<PAGE>
ITEM 7. Financial Statements and Exhibits
(a) Financial statements of business acquired.
(i) Independent Auditor's Report
(ii) BH Acquisition Corporation Balance Sheet as of December 31, 1996
(iii) BH Acquisition Corporation Statement of Operations for the year
ended December 31, 1996
(iv) BH Acquisition Corporation Statement of Changes in Stockholder's
Deficit for the year ended December 31, 1996
(v) BH Acquisition Corporation Statement of Cash Flows for the year
ended December 31, 1996
(vi) BH Acquisition Corporation Notes to Financial Statements
(vii) BH Acquisition Corporation Unaudited Condensed Balance Sheets as of
March 31, 1997 and December 31, 1996
(viii) BH Acquisition Corporation Unaudited Condensed Statements of
Operations for the three-month periods ended March 31, 1997 and
1996
(ix) BH Acquisition Corporation Unaudited Condensed Statements of
Cash Flows for the three-month periods ended March 31, 1997 and
1996
(x) BH Acquisition Corporation Notes to Unaudited Condensed Financial
Statements
(b) Pro forma financial information.
(i) President Casinos, Inc. and BH Acquisition Corporation Unaudited
Pro Forma Condensed Combined Statement of Financial Position as of
May 31, 1997 and March 31, 1997, respectively
(ii) President Casinos, Inc. and BH Acquisition Corporation Unaudited
Pro Forma Condensed Combined Statement of Operations for the three-
month period ended May 31, 1997 and March 31, 1997, respectively
(iii) President Casinos, Inc. and BH Acquisition Corporation Unaudited
Pro Forma Condensed Combined Statement of Operations for the year
ended February 28, 1997 and December 31, 1996, respectively
(iv) President Casinos, Inc. Notes to Unaudited Pro Forma Condensed
Combined Financial Statements
(c) Exhibits. See Exhibit Index.
1
<PAGE>
INDEPENDENT AUDITOR'S REPORT
February 22, 1997
(except for Notes 10 and
13 as to which the date
is June 30, 1997)
To the Stockholder of
BH Acquisition Corporation
We have audited the accompanying balance sheet of BH Acquisition Corporation
as of December 31, 1996 and the related statements of operations,
stockholder's deficit, and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of BH Acquisition Corporation as
of December 31, 1996, and the results of its operations, changes in its
stockholder's deficit, and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
/s/ Chamberlin, Shaffer & Griffiths, A.C.
Certified Public Accountants
2
<PAGE>
BH ACQUISITION CORPORATION
BALANCE SHEET
(in thousands, except share data)
<TABLE>
<CAPTION>
Notes Dec. 31, 1996
------- ---------------
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents...................... $ 205
Accounts receivable, trade..................... 233
Accounts receivable, related parties..........8 216
Inventories.................................... 227
Prepaid expenses............................... 769
---------
Total current assets....................... 1,650
---------
Property and equipment, net.....................3 22,973
---------
Advance to related party........................2 1,980
Other assets..................................... 43
---------
$ 26,646
=========
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
Current liabilities:
Current maturities of long-term debt........4,5 $ 492
Current maturities, due to related parties....4 1,000
Accounts payable............................... 382
Other current liabilities.....................6 2,304
---------
Total current liabilities................... 4,178
---------
Long-term liabilities:
Long-term debt, net of current maturities...4,5 462
Long-term debt, due to related parties........4 1,000
Note payable to stockholder................7,11 21,352
---------
Total long-term liabilities................. 22,814
---------
Total liabilities........................... 26,992
---------
Commitments and contingencies..................12 --
Stockholder's deficit:
Common Stock, $1 par value per share, 5,000
shares authorized, 1,000 shares issued
and outstanding.............................. 1
Additional paid-in capital.................7,11 16,395
Accumulated deficit............................ (16,742)
---------
Total stockholder's deficit................ (346)
---------
$ 26,646
=========
</TABLE>
See auditor's report and accompanying notes.
3
<PAGE>
BH ACQUISITION CORPORATION
STATEMENT OF OPERATIONS
(in thousands)
<TABLE>
<CAPTION>
Year Ended
Notes Dec. 31, 1996
----- --------------
<S> <C>
OPERATING REVENUES:
Rooms.................................. $ 10,102
Food and beverage...................... 2,778
Recreation, retail and other........... 5,679
---------
Net operating revenues............... 18,559
OPERATING COSTS AND EXPENSES:
Rooms.................................. 2,585
Food and beverage...................... 2,759
Recreation, retail and other........... 1,671
Selling, general and administrative.... 7,943
Depreciation and amortization.......... 2,759
---------
Total operating costs and expenses... 17,717
---------
OPERATING INCOME ........................ 842
OTHER INCOME (EXPENSE):
Interest expense, net.................. (2,031)
---------
LOSS FROM CONTINUING OPERATIONS.......... (1,189)
DISCONTINUED OPERATIONS:
Income from operation of Sea Course..12 58
Loss on sale of Sea Course...........12 (355)
---------
Net discontinued operations.......... (297)
---------
NET LOSS................................. $ (1,486)
=========
</TABLE>
See auditor's report and accompanying notes.
4
<PAGE>
BH ACQUISITION CORPORATION
STATEMENT OF CHANGES IN STOCKHOLDER'S DEFICIT
(in thousands)
<TABLE>
<CAPTION>
CAPITAL PAID-IN RETAINED
Notes STOCK CAPITAL DEFICIT TOTAL
----- ------- --------- --------- -------
<S> <C> <C> <C> <C>
Ending balance at
December 31, 1995............. $ 1 $ 8,545 $(15,256) $ (6,710)
Capital contributions.......7,11 -- 7,850 -- 7,850
Net loss........................ -- -- (1,486) (1,486)
--------- --------- --------- ---------
Ending balance at
December 31, 1996............. $ 1 $ 16,395 $(16,742) $ (346)
========= ========= ========= =========
</TABLE>
See auditor's report and accompanying notes.
5
<PAGE>
BH ACQUISITION CORPORATION
STATEMENT OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Year Ended
December 31, 1996
-------------------
<S> <C>
Net loss.......................................... $(1,486)
Adjustments to reconcile net loss to
cash flows from operating activities:
Depreciation and amortization................. 2,794
Loss on sale of Sea Course.................... 355
Noncash revenue............................... (2,812)
Noncash expense............................... 1,953
Accounts receivable........................... (39)
Inventories................................... 70
Prepaid expenses.............................. 6
Accounts payable.............................. (703)
Other current liabilities..................... (24)
--------
Net cash provided by operating activities... 114
--------
Cash flows from investing activities:
Expenditures for property and equipment......... (267)
Proceeds from sale of golf course............... 2,301
--------
Net cash provided by investing activities... 2,034
--------
Cash flows from financing activities:
Loan proceeds from shareholder.................. 1,498
Repayments to shareholder....................... (360)
Repayment of notes payable and
capital lease obligations..................... (502)
Payments on litigation settlement............... (2,000)
Loan proceeds from related party................ 1,000
Advance to related party........................ (1,925)
--------
Net cash used in financing activities....... (2,289)
--------
Net decrease in cash and cash equivalents......... (141)
Cash and cash equivalents at beginning of period.. 346
--------
Cash and cash equivalents at end of period........ $ 205
========
</TABLE>
See auditor's report and accompanying notes.
6
<PAGE>
BH ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS
(dollars in thousands, unless otherwise stated)
Note 1 - Corporate Organization and Significant Accounting Policies
ORGANIZATION
BH Acquisition Corporation ("BH"), an S corporation, is incorporated under
the laws of the State of Mississippi and is owned solely by John E. Connelly
("Mr. Connelly").
Subsequent to December 31, 1996, BH is to be merged with J. Edward Connelly
Associates, Inc. ("JECA"), an entity also owned 100% by Mr. Connelly. JECA is
to remain as the surviving entity.
BUSINESS OPERATIONS
BH operates in the hotel/resort business in Biloxi, Mississippi, along the
Gulf Coast. The three properties it owns and operates are comprised of
approximately 855 guest rooms, meeting room facilities, swimming pools, a golf
course, a marina, a marina restaurant and various other amenities. The three
properties are individually referred to as the Resort, the Resort-East and the
Inn. BH also has an easement for property which is contiguous to both its
Resort and Resort-East properties which provides guests direct passage between
the two facilities.
BH's operations are impacted by the gaming and tourism industries in the
area and its guests are primarily from the mid-western and southeastern
portions of the United States. The State of Mississippi's Gaming Commission
now requires all gaming operations in Biloxi, Mississippi to have a relative
number of guests rooms for its patrons in order to obtain or renew a gaming
license. To comply with this requirement more hotels are being built in the
area which has resulted in a more competitive environment for the local
hotel/resort industry.
See Notes 12 and 13 regarding the sale of the properties.
ACCOUNTING POLICIES
Cash
For purposes of the statement of cash flows, cash includes cash on hand and
on deposit.
BH maintains its cash balances in two financial institutions located in
Biloxi, Mississippi and one in Pittsburgh, Pennsylvania. The balances in each
financial institution are insured by the Federal Deposit Insurance Corporation
up to $100.
7
<PAGE>
Inventories
Inventories consist of food, beverages, golf merchandise and supplies which
are stated at cost, as determined by the first-in, first-out method.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost. Depreciation is
provided principally on the straight-line method over the estimated useful
lives of the respective assets. Maintenance and repairs are charged to
expense as incurred; major renewals and betterments are capitalized. When
items of property and equipment are sold or retired, the related costs and
accumulated depreciation are removed from the accounts and any gain or loss is
included in the results of operations.
Income Tax Status
Since BH is treated as an S corporation for federal and state income tax
purposes, it is not liable for any federal or state taxes on its income. Its
items of income and deduction are included in the personal return of BH's
stockholder.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Note 2 - Advance to Affiliate
In July 1996, BH loaned JECA $1,925 in accordance with an unsecured demand
promissory note that bore interest at the Applicable Federal Rate (5.80% at
December 31, 1996). The loan was satisfied in February 1997.
8
<PAGE>
Note 3 - Property, Plant and Equipment
The following is the composition of property, plant and equipment at
December 31, 1996:
Buildings, improvements and land improvements.... $13,984
Marina land improvements and slips............... 2,772
Furniture, fixtures and equipment................ 9,783
--------
26,539
Less: Accumulated depreciation................... 10,841
--------
15,698
Land............................................. 7,275
--------
$22,973
========
Note 4 - Long-Term Debt
Following is a summary of long-term debt at December 31, 1996:
Hancock Bank - Revolving credit line........... $ 704
PRC Management, Inc. ("PRC").................... 2,000
--------
2,704
Less: Current maturities....................... (1,325)
--------
$ 1,379
========
Hancock Bank
In February 1995, all of the loans outstanding with Hancock Bank were
refinanced into a $1.3 million revolving credit line. BH received proceeds of
$416,000 from this transaction. Pursuant to the credit line agreement, BH can
borrow, at Chase Manhattan Bank's prime rate, an amount not to exceed $1,300
reduced by $27 per month. A monthly principal payment will not be due if the
outstanding balance is less than the available credit line at that date. The
credit line matures February 1, 1999 and is collateralized by equipment. Mr.
Connelly personally guaranteed the loan.
PRC
BH has two $1,000 loans payable to PRC, a wholly-owned subsidiary of
President Casinos, Inc (see Note 8). The first originated in February 1995,
upon execution of a settlement and mutual release agreement with an unrelated
third party. This loan was amended and the principal is now due February 8,
1998 or upon the transfer of an interest in any or all of BH's three
properties. BH borrowed the second $1,000 from PRC to pay another installment
relating to the settlement agreement that was due February 17, 1996. The
principal balance on the second note is due August 8, 1997. Both loans bear
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<PAGE>
interest at 13%, which is payable monthly, and are guaranteed by Mr. Connelly
who pledged collateral in support of his guarantee.
Long-term debt maturities are as follows at December 31, 1996:
1998.................. $ 1,325
1999.................. 54
---------
$ 1,379
=========
Note 5 - Capital Leases
BH leases an IBM computer system and various other equipment pursuant to
lease agreements expiring from October 1, 1997 through April 2001. Aggregate
monthly lease payments are $17, including imputed interest ranging from 9% to
16.7%, including maintenance. Following is an analysis of the leased
property, under capital leases, included in property, plant and equipment at
December 31, 1996:
Furniture, fixtures and equipment.... $ 670
Accumulated depreciation............. (395)
---------
$ 275
=========
For 1996 depreciation expense relating to these leased assets was charged in
the amount of $128. The future minimum lease payments required under capital
leases at December 31, 1996 are as follows:
1997............................. $ 185
1998............................. 44
1999............................. 27
2000............................. 20
2001............................. 2
-------
278
Less: Amount representing
interest and maintenance........ (28)
-------
Present value of net
minimum lease payments.......... 250
Less: current portion............. (167)
-------
Long-term portion................. $ 83
=======
10
<PAGE>
Note 6 - Other Current Liabilities
The balance of other current liabilities is comprised of the following:
Payroll related................... $ 327
Property taxes.................... 578
Deferred rental income............ 455
Legal............................. 367
Insurance payable................. 303
Utilities......................... 87
Sales/use taxes payable........... 81
Advance deposits and
gift certificates............... 64
Interest.......................... 6
Other............................. 36
--------
$ 2,304
========
Note 7 - Note Payable to Stockholder
When the unsecured note due to the stockholder originated in 1993, it
related primarily to the purchases of the Resort and Resort-East properties.
The note bears interest at the Applicable Federal Rate (5.80% at December 31,
1996) which accumulates monthly. This note also reflects cash and non-cash
advances to and from Mr. Connelly (see Note 11).
Effective December 31, 1996, Mr. Connelly contributed an additional $7,850
to BH's paid-in capital by reducing the balance of the note BH owes to him.
Note 8 - Related Party Transactions
Mr. Connelly is Chairman and Chief Executive Officer of President Casinos,
Inc. ("Prez"), a public company traded on the NASDAQ exchange. The President
Riverboat Casino-Mississippi, Inc. ("Pres-Miss"), a subsidiary of Prez,
operates a riverboat gaming facility docked at the Resort marina under a long-
term lease described in Note 9. The deferred rental income balance reflected
in other current liabilities at December 31, 1996 consists primarily of
advance payments Pres-Miss made to BH each year for the marina and tidelands
lease reimbursements.
JECA charges BH for financial advisory services, accounting and corporate
jet costs based on time and usage reports.
11
<PAGE>
During the year being reported on, the following related party transactions
are reflected in BH's revenues and expenses:
Related
Party Transaction 1996
------- ----------- ------
Revenues:
Rooms, food & beverage Pres-Miss Rooms, food & beverage $ 786
--------
Recreation, retail
and other Pres-Miss Marina lease 2,725
Pres-Miss Tidelands lease 525
Pres-Miss Property tax 151
Pres-Miss Warehouse rent 32
JECA Interest on advance 55
--------
3,488
--------
$ 4,274
========
Expenses:
Selling, general and
administrative JECA Administrative
allocation $ 287
JECA Corporate airplane
allocation 44
--------
331
--------
Interest Mr. Connelly Stockholder note 1,614
PRC Notes payable 244
--------
1,858
--------
$ 2,189
========
At December 31, 1996, related party receivables are composed of the
following:
Pres-Miss - Various income related
items and reimbursements.......... $ 216
=======
Note 9 - Pres-Miss and Other Marina Leases
Effective July 15, 1992, BH entered into a lease agreement with Pres-Miss
("lessee") to lease certain dock areas, related tidelands and fastlands,
twenty-one hotel units and the right to use approximately 685 parking spaces
on a non-exclusive basis and approximately 400 parking spaces on an exclusive
basis.
12
<PAGE>
The initial lease term covered the period July 15, 1992 to July 14, 1995 and
the lease provides for nine renewal options for an additional three-year
periods, thereafter. All renewals are exercisable at the option of the lessee
and Pres-Miss exercised its first renewal option for the period July 15, 1995
to July 15, 1998.
The annual rental amount of $2,500 for the initial lease term, was based on
an appraised rent determined by an independent appraiser. For each renewal
period, the rental increases are based on the Consumer Price Index ("CPI"),
unless, either party requests an appraisal to determine the new rental rate.
The rent is payable monthly on the 15th day of each month. The annual rental
for the first renewal option period was increased to $2,725.
In accordance with the lease, Pres-Miss is solely responsible for paying any
and all costs and necessary expenses to improve the leased premises to enable
it to conduct dockside gaming operations from the dock area plus all costs and
expenses necessary to construct and maintain a parking lot for approximately
360 parking spaces on the fastlands and another parking lot on the Resort
property.
The rental payments are net to BH in that Pres-Miss is responsible for all
real estate taxes and any special assessments against the marina parcel, as
well as, all utilities and other charges which relate to the use and occupancy
of all the leased properties. This obligation includes, but is not limited
to, any lease payments and other costs, expenses and obligations arising out
of the tidelands and fastlands leases (see Note 10).
In addition, there are various other provisions in the agreement, which
includes Pres-Miss's right to terminate the lease if its gaming license is
revoked or terminated. The lease also restricts BH from entering into lease
agreements for boat slips at the marina for periods in excess of six months
and BH cannot lease, without the written consent of Pres-Miss, any other
portions of the Resort to non-affiliated entities in the gaming industry.
The lease agreement was also amended, effective August 1, 1993, to increase
the annual base rent by $32 as consideration for BH including an 8,000 square
foot warehouse in the leased premises. The annual warehouse rental was not
changed for the renewal period.
The future minimum rental income under the above lease agreement, for the
renewal term, through July 14, 1998 is as follows:
Tidelands and Fastlands
Base Rent Reimbursements
--------- --------------
1997 $ 2,757 $ 576
1998 1,493 335
-------- --------
$ 4,250 $ 911
======== ========
13
<PAGE>
As guarantor of note obligations, BH has assigned all of its rights, title
and interest in all leases of any Resort and Resort-East properties to PNC
Bank, Pittsburgh, PA ("PNC"). (See Note 12.)
Note 10 - Public Trust Tidelands and Fastlands Leases
On August 6, 1992 and December 31, 1996, BH entered into a Public Trust
Tidelands Lease and a Public Trust Tidelands Lease of Fastlands, respectively,
with the Secretary of State of Mississippi ("lessor"). The lessor agrees to
lease all submerged lands or tidelands and superjacent water column and all
artificially filled tidelands known as "fast" lands within the Resort property
owned by BH.
- --Tidelands Lease
The primary term of the tidelands lease is ten years, beginning August 1,
1992. At the end of the first five-year period of the lease term, the lessor
will adjust the annual rental in accordance with the then current Mississippi
law. If the new annual rental amount cannot be agreed upon, the lease may be
canceled at the option of the lessor.
Subject to compliance with all material terms, covenants, conditions and
obligations of the lease, BH has the option to extend the lease for a renewal
term of five years under the same terms and provisions as the original lease,
subject to renegotiation of the annual rental, based on an appraisal obtained
by the lessor.
The annual rental during the period August 1, 1992 to July 31, 1997 was to
be $295, provided the same singular gaming vessel was moored at the Resort
marina. However, on June 20, 1995, a more substantial gaming vessel was moved
to the marina to replace the existing vessel. Pursuant to amended lease
terms, annual rent increased to $525 prorated as of the effective date of the
move. Since the annual rent is due in advance by August 1, of each year, $306
of the annual rent is included in prepaid expense at December 31, 1996.
In the event the Pres-Miss gaming license is suspended or revoked by the
Mississippi Gaming Commission, the lessor, at its option, may immediately
terminate the operating lease agreement.
In June 1997, BH received a letter from the lessor informing BH that the
tidelands annual rental payment will be increased effective August 1, 1997,
based upon a five year increase in the CPI. From August 1992 to June 1997,
the CPI increase was approximately 13.6% and accordingly the annual rent will
increase to approximately $597.
- --Fastlands Lease
The primary term of the fastlands lease is 40 years, beginning January 1,
1997 and terminating December 31, 2037. Provided BH has complied with all
material terms and conditions of the lease, it shall have the option to extend
14
<PAGE>
the lease for a renewal term of 25 years. BH also has the option to terminate
the lease upon 30 days prior written notice to the lessor in the event its
tidelands leases dated August 6, 1992 is terminated.
During the first 30 years of the initial lease period, BH will pay annual
rental to the lessor in the amount of $21, being the 1996 ad valorem tax
amount assessed against the leased property. At the end of the first 30
years, the annual rental shall be based upon the fair market value determined
by an appraisal.
Even though the rental amount for the first 30 years is based upon the ad
valorem tax rates, the lessor shall, at the end of each five-year period of
the lease term adjust the rental amount based upon the tax value, excluding
the value of any and all improvements on the property.
The future minimum rental payments, based upon the recent letter referred to
above for the tidelands lease and based upon the present annual rentals for
the fastlands lease, for the next five calendar years and thereafter are as
follows:
Tidelands Fastlands
----------- -----------
1997......... $ 555 $ 21
1998......... 597 21
1999......... 597 22
2000......... 597 21
2001......... 597 21
Thereafter... 348 747
-------- --------
$ 3,291 $ 853
======== ========
Recreation, retail and other expenses include $525 of rental expense,
relating to the leases for the year ended December 31, 1996.
Note 11 - Supplemental Cash Flow Statement Disclosures
Cash paid for interest amounted to $430 for the year ended December 31,
1996.
15
<PAGE>
The following items comprise the non-cash transactions for 1996:
1. Loan proceeds attributed to
Mr. Connelly.......................... $ 3,451
Less:
Non-cash expenditures paid by
Mr. Connelly to:
JECA............................. (317)
Non-related parties.............. (22)
Accrued interest included in
Mr. Connelly's note payable......... (1,614)
--------
Net cash proceeds attributable
to Mr. Connelly..................... $ 1,498
========
2. Loan repayments attributed to
Mr. Connelly........................... $ 3,117
Less:
Marina rental income remitted by
Pres-Miss to PNC to repay
Mr. Connelly's loans................. (2,757)
--------
Net cash repayments attributable to
Mr. Connelly........................... $ 360
========
3. Other non-cash revenues:
Interest income from the JECA note..... $ 55
========
4. Other non-cash expenditures:
Capital lease transactions............ $ 40
========
5. Reduction in note payable-stockholder
and stockholder contribution to
paid-in capital........................ $ 7,850
========
Note 12 - Litigation and Other Contingencies
- --Loan Guarantee - PNC
BH is a guarantor of two term loans, dated October 18, 1995, that Mr.
Connelly entered into with PNC Bank. The loans bear interest at PNC'S prime
rate plus 1%. The first note, in the amount of $16,000 is payable in 35
monthly payments of $89, through September 18, 1998. The remaining principal
balance is due October 18, 1998. The second note, in the principal amount of
$1,200, is due the earlier of March 31, 1997 or the day the Inn property is
sold.
The proceeds from the loans were used by Mr. Connelly, on behalf of BH,
primarily to fund the purchase of BH's properties and finance capital
improvements for the properties. Mr. Connelly has pledged 100% of his BH
16
<PAGE>
stock. As guarantor, BH granted PNC security interests in all of its
properties and assigned all of its rights, title and interest in all leases
and rents.
As a result, Pres-Miss remits directly to PNC, through a collateral account,
all payments of rent and any other payments due under its lease with BH, in
accordance with an amended lockbox agreement. These remittances are applied
by PNC to the currently payable portion of the indebtedness due under the
loans.
The loans are also collateralized by 1,466,004 shares of Prez's common
shares owned personally by Mr. Connelly and contain various covenants which BH
and Mr. Connelly have to adhere to.
See Note 13 regarding subsequent PNC transactions.
- --Discontinued Operations-Sale of Sea Course
BH was defendant in a lawsuit brought by Broadwater Country Club and Great
Southern Golf Club, Inc. The suit was filed in March 1993, and sought
specific performance of an alleged agreement by BH to sell the Sea Course golf
course owned by BH to the plaintiffs.
On April 11, 1996, the Chancery Court of Harrison County's Special
Chancellor rendered a decision ordering BH to convey the Broadwater Sea Course
and buildings thereon to the plaintiffs within 90 days. The sale was closed
July 2, 1996 and BH recognized a loss from the sale in the amount of $355.
Income from operations of the Sea Course through the date of sale reflect
revenues of $627 and costs and expenses of $569, including depreciation
expense of $35.
Note - 13 Subsequent Events
- --PNC Loan-Amendment
Effective March 31, 1997, the PNC loans that BH guarantees on behalf of Mr.
Connelly were amended. The maturity date on the $1,200 term note was extended
to April 30, 1997 and was subsequently paid with proceeds from The Peoples
Bank loan noted below. The principal balance of the other term loan was
increased by $1,511 to the original balance of $16,000. Interest rates on
both loans remain the same as the original notes, as does the repayment
schedule on the latter note.
- --Peoples Bank Loan
On April 17, 1997, BH entered into an installment loan agreement with The
Peoples Bank for $2,500. The loan is payable in 23 monthly installments of
$31 which includes interest at approximately 8-1/2%. Payments commence May
15, 1997 and a balloon payment in the approximate amount of $2,170 is due
17
<PAGE>
April 15, 1999. The loan is secured by a Deed of Trust on the Broadwater Inn
property and all other assets relating to the Inn, an assignment of leases and
rents and the guarantee of Mr. Connelly.
Approximately $1,200 of the loans proceeds was used to repay the outstanding
balance on the PNC loan dated October 18, 1995.
- --Sale of Inn
In May 1997, BH entered into a Hotel Purchase Agreement with an unrelated
third party for the sale of the Inn. The agreement is for $3,290 from which
BH has agreed to pay $131 in real estate commissions and other closing costs.
The purchaser has the right of a "due diligence period" for thirty days from
the receipt of a current survey and a commitment to title insurance, whichever
is later. If necessary, the due diligence period could be extended for
another twenty days.
If the agreement fails to close, it is BH's management's intent to find
another buyer for a comparable selling price.
Provided the transaction closes, a portion of the proceeds will be used to
repay The Peoples Bank loan dated April 17, 1997.
- --Sales Agreement with Prez in the Process of Negotiation
As of the date of this report, BH is in the process of negotiating a sales
agreement with Prez to sell virtually all of its assets, except the Inn
property.
- --Settlement
In June 1997, BH received a demand letter seeking $700 as reimbursement for
alleged costs incurred by a party who had been negotiating with BH for the
purchase of the Resort and Resort-East properties. BH has reached a
settlement with the third party, whereby, BH is to pay the party $400, at
closing, when BH sells the Resort-East and Resort properties, which include
the marina and the Sun Golf Course, to Prez.
18
<PAGE>
BH ACQUISITION CORPORATION
CONDENSED BALANCE SHEETS
(in thousands, except share data, unaudited)
<TABLE>
<CAPTION>
Mar. 31, Dec. 31,
1997 1996
------- -------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................... $ 352 $ 205
Accounts receivable, trade.................. 308 233
Accounts receivable, related parties........ 97 216
Inventories................................. 218 227
Prepaid expenses............................ 480 769
--------- ---------
Total current assets.................... 1,455 1,650
--------- ---------
Property and equipment, net of accumulated
depreciation of $11,526 AND $10,841......... 22,286 22,973
Other assets.................................. -- 2,023
--------- ---------
$ 23,741 $ 26,646
========= =========
LIABILITIES AND STOCKHOLDER'S DEFICIT
Current liabilities:
Current maturities of long-term debt........ $ 464 $ 492
Current maturities, due to related parties.. 2,000 1,000
Other current liabilities................... 2,434 2,686
--------- ---------
Total current liabilities............... 4,898 4,178
--------- ---------
Long-term liabilities:
Long-term debt, net of current maturities... 365 462
Note payable to stockholder................. 18,930 22,352
--------- ---------
Total long-term liabilities............. 19,295 22,814
--------- ---------
Total liabilities....................... 24,193 26,992
--------- ---------
Commitments and contingencies................. -- --
Stockholder's deficit:
Common Stock, 1,000 shares issued
and outstanding........................... 1 1
Additional paid-in capital.................. 16,395 16,395
Accumulated deficit......................... (16,848) (16,742)
--------- ---------
Total stockholder's deficit............. (452) (346)
--------- ---------
$ 23,741 $ 26,646
========= =========
</TABLE>
See accompanying notes.
19
<PAGE>
BH ACQUISITION CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, unaudited)
<TABLE>
<CAPTION>
Three-Month Period
Ended March 31,
1997 1996
------ ------
<S> <C> <C>
OPERATING REVENUES:
Rooms.................................. $ 2,171 $ 2,634
Food and beverage...................... 419 608
Recreation, retail and other........... 1,556 1,543
--------- ---------
Net operating revenues............... 4,146 4,785
--------- ---------
OPERATING COSTS AND EXPENSES:
Rooms.................................. 651 748
Food and beverage...................... 405 607
Recreation, retail and other........... 399 407
Selling, general and administrative.... 1,747 2,126
Depreciation and amortization.......... 687 690
--------- ---------
Total operating costs and expenses... 3,889 4,579
--------- ---------
OPERATING INCOME ........................ 257 207
--------- ---------
OTHER INCOME (EXPENSE):
Interest expense, net.................. 363 451
--------- ---------
LOSS FROM CONTINUING OPERATIONS.......... (106) (244)
DISCONTINUED OPERATIONS:
Income from operation of Sea Course.... -- 92
--------- ---------
NET LOSS................................. $ (106) $ (152)
========= =========
</TABLE>
See accompanying notes.
20
<PAGE>
BH ACQUISITION CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
<TABLE>
<CAPTION>
Three-Month Period
Ended March 31,
1997 1996
------ ------
<S> <C> <C>
Net cash provided by (used in)
operating activities...................... $ 372 $ (36)
-------- --------
Cash flows from investing activities:
Expenditures for property and equipment......... -- (142)
-------- --------
Net cash used in investing activities....... -- (142)
-------- --------
Cash flows from financing activities:
Loan proceeds from shareholder.................. 75 393
Repayments to shareholder....................... (175) (335)
Repayment of notes payable and
capital lease obligations..................... (125) (120)
Payments on litigation settlement............... -- (1,000)
Loan proceeds from related party................ -- 1,000
-------- --------
Net cash used in financing activities....... (225) (62)
-------- --------
Net increase (decrease) in cash
and cash equivalents............................ 147 (240)
Cash and cash equivalents at beginning of period.. 205 346
-------- --------
Cash and cash equivalents at end of period........ $ 352 $ 106
======== ========
</TABLE>
See accompanying notes.
21
<PAGE>
BH ACQUISITION CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
Note 1 - Corporate Organization and Significant Accounting Policies
BH Acquisition Corporation ("BH"), an S corporation, is incorporated under
the laws of the State of Mississippi and is owned solely by John E. Connelly
("Mr. Connelly"). Subsequent to December 31, 1996, BH is to be merged with J.
Edward Connelly Associates, Inc. ("JECA"), an entity also owned 100% by Mr.
Connelly. JECA is to remain as the surviving entity.
BH operates in the hotel/resort business in Biloxi, Mississippi, along the
Gulf Coast. The three properties it owns and operates are comprised of
approximately 855 guest rooms, meeting room facilities, swimming pools, a golf
course, a marina, a marina restaurant and various other amenities. The three
properties are individually referred to as the Resort, the Resort-East and the
Inn. BH also has an easement for property which is contiguous to both its
Resort and Resort-East properties which provides guests direct passage between
the two facilities.
In the opinion of management, all adjustments, consisting only of normal
recurring entries, necessary to present fairly BH's financial information for
the interim periods presented have been included and the accompanying
financial statements have been prepared in accordance with generally accepted
accounting principles. The interim results reflected in the condensed
financial statements are not necessarily indicative of results for the full
year or other periods.
The financial statements contained herein should be read in conjunction with
the audited financial statements and accompanying notes to the financial
statements for the year ending December 31, 1996. Accordingly, footnote
disclosure which would substantially duplicate the disclosure in the audited
financial statements has been omitted.
22
<PAGE>
PRESIDENT CASINOS, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
INTRODUCTION
The following unaudited pro forma condensed combined financial statements
give effect to the acquisition by President Casinos, Inc. ("President") of
certain assets of BH Acquisition Corporation ("BH")(collectively, the
"Company") pursuant to a purchase agreement dated July 24, 1997.
President and BH have fiscal year ends of February 28 and December 31,
respectively. As such, condensed combined financial statements have been
prepared based on each entity's corresponding quarter end or year end.
The unaudited pro forma condensed combined statement of financial position
combines the historical balance sheets of President as of May 31, 1997 and BH
as of March 31, 1997, assuming that the acquisition of BH occurred as of the
dates of each entity's first quarter end. The unaudited pro forma condensed
combined statements of operations have been prepared assuming that the
acquisition occurred as of the beginning of the periods presented. The
unaudited condensed combined statements of operations reflect the historical
results of operations for the President and BH for their respective most
recently ended fiscal years and first three months of their current fiscal
years.
The unaudited pro forma condensed combined financial statements give effect
to certain pro forma adjustments which are described in the accompanying
notes. These statements have been prepared based on the purchase price and
the allocation thereof to the fair value of assets acquired. The unaudited
pro forma condensed combined financial statements do not reflect any projected
cost savings which may result from the acquisition. However, historical
material intracompany transactions, consisting primarily of room and dock
rental, have been eliminated in acquisition adjustments assuming the
acquisition had occurred as of the beginning of the periods presented.
The unaudited pro forma financial information is not necessarily indicative
either of the results of operations which would have occurred had the
acquisition been completed as of the beginning of the periods presented or of
the Company's future results of operations or financial position. The
unaudited pro forma condensed combined financial statements should be read in
conjunction with the historical consolidated financial statements of
President, included it its 1997 Annual Report on Form 10-K and 1998 First
Quarter Report on Form 10-Q, and the historical financial statements of BH,
included in Item 7(a) of this Current Report on Form 8-K.
23
<PAGE>
PRESIDENT CASINOS, INC.
PRO FORMA CONDENSED COMBINED STATEMENT OF FINANCIAL POSITION
(in thousands, unaudited)
<TABLE>
<CAPTION>
Pro Forma Adjustments
-------------------------
President BH
May 31, Mar. 31, Excluded Acquisition
1997 1997 Properties Adjustments
NOTE 1 NOTE 1 NOTE 2 NOTE 3 Pro Forma
-------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents....... $ 22,221 $ 352 $ 23 $ 1,297 (a) $ 23,847
Trade accounts receivable, net.. 1,597 308 29 (279) (b) 1,597
Related party receivable........ 2,022 97 -- (2,119) (c) --
Other........................... 6,845 698 207 (487) (d) 6,849
--------- --------- --------- --------- ---------
Total current assets........ 32,685 1,455 259 (1,588) 32,293
--------- --------- --------- --------- ---------
Properties, Net................... 114,858 22,286 2,813 21,415 (e) 155,746
--------- --------- --------- --------- ---------
Other Assets...................... 3,471 -- -- -- 3,471
--------- --------- --------- --------- ---------
$151,014 $ 23,741 $ 3,072 $ 19,827 $191,510
========= ========= ========= ========= =========
LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Current portion of long-term
debt.......................... $ 1,772 $ 464 $ -- $ (364) (b) $ 1,872
Current portion, due to related
party......................... 68 2,000 -- (2,062) (c) 6
Other........................... 23,210 2,434 268 (1,764) (f) 23,612
--------- --------- --------- --------- ---------
Total current liabilities... 25,050 4,898 268 (4,190) 25,490
--------- --------- --------- --------- ---------
Long-term Liabilities:
Long-term debt.................. 104,862 365 -- 29,691 (g) 134,895
Note payable to stockholder..... -- 18,930 -- (18,930) (c) --
Due to related parties.......... -- -- 2,562 2,562 (c) --
--------- --------- --------- --------- ---------
Total long-term liabilities. 104,862 19,295 2,562 13,323 134,895
--------- --------- --------- --------- ---------
Total liabilities........... 129,862 24,193 2,830 9,133 160,385
--------- --------- --------- --------- ---------
Minority Interest................. 283 -- -- 10,000 (h) 10,283
Stockholders' Equity (Deficit):
Common stock.................... 302 1 -- (1) (i) 302
Additional paid-in capital...... 101,729 16,395 -- (16,395) (i) 101,729
Retained earnings
(accumulated deficit)......... (81,189) (16,848) 242 17,090 (i) (81,189)
--------- --------- --------- --------- ---------
Total stockholders'
equity (deficit).......... 20,842 (452) 242 694 20,842
--------- --------- --------- --------- ---------
$151,014 $ 23,741 $ 3,072 $ 19,827 $191,510
========= ========= ========= ========= =========
</TABLE>
See accompanying notes.
24
<PAGE>
PRESIDENT CASINOS, INC.
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
For the Three Month-Period as Indicated
(in thousands except per share data, unaudited)
<TABLE>
<CAPTION>
Pro Forma Adjustments
------------------------
President BH
May 31, Mar. 31, Excluded Acquisition
1997 1997 Properties Adjustments
NOTE 1 NOTE 1 NOTE 2 NOTE 4 Pro Forma
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
OPERATING REVENUES, NET......... $ 46,132 $ 4,146 $ 531 $ (1,721) (a) $ 48,026
--------- --------- --------- --------- ---------
OPERATING EXPENSES:
Operations.................... 28,493 1,455 154 (994) (a) 28,800
Selling, general and
administrative.............. 12,463 1,747 219 (727) (a) 13,264
Depreciation and amortization. 3,754 687 132 (555) (b)
7 (c) 3,761
Other......................... 870 -- -- -- 870
--------- --------- --------- --------- ---------
Total operating expenses.. 45,480 3,889 505 (2,269) 46,695
--------- --------- --------- --------- ---------
OPERATING INCOME (LOSS)......... 552 257 26 548 1,331
Interest expense, net........... 3,413 363 49 915 (d) 4,642
--------- --------- --------- --------- ---------
LOSS BEFORE MINORITY INTEREST... (2,861) (106) (23) (367) (3,311)
Minority interest............... 18 -- -- 243 (e) 261
--------- --------- --------- --------- ---------
NET LOSS........................ $ (2,879) $ (106) $ (23) $ (610) $ (3,572)
========= ========= ========= ========= =========
Earnings per share of stock..... $ (0.57) $ (0.71)
========= =========
Weighted average number of
shares outstanding........ 5,032 5,032
========= =========
</TABLE>
See accompanying notes.
25
<PAGE>
PRESIDENT CASINOS, INC.
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
For the Year as Indicated
(in thousands, except per share data, unaudited)
<TABLE>
<CAPTION>
Pro Forma Adjustments
-----------------------
President BH
Feb. 28, Dec. 31, Excluded Acquisition
1997 1996 Properties Adjustments
NOTE 1 NOTE 1 NOTE 2 NOTE 4 Pro Forma
-------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
OPERATING REVENUES, NET......... $187,027 $ 18,559 $ 2,371 $ (4,293) (a) $198,912
--------- --------- --------- --------- ---------
OPERATING EXPENSES:
Operations.................... 116,523 7,015 780 (1,375) (a) 121,373
Selling, general and
administrative.............. 51,819 7,943 1,169 (2,918) (a) 55,675
Depreciation and amortization. 15,324 2,759 530 (2,229) (b)
31 (c) 15,355
Other......................... (423) -- -- -- (423)
--------- --------- --------- --------- ---------
Total operating expenses.. 183,243 17,717 2,479 (6,491) 191,990
--------- --------- --------- --------- ---------
OPERATING INCOME (LOSS)......... 3,784 842 (108) 2,229 6,963
Interest expense, net........... 13,704 2,031 273 3,096 (d) 18,558
--------- --------- --------- --------- ---------
LOSS BEFORE INCOME TAXES,
MINORITY INTEREST AND
DISCONTINUED OPERATIONS....... (9,920) (1,189) (381) (898) (11,626)
Income tax benefit.............. (1,367) -- -- -- (1,367)
Minority interest............... 232 -- -- 970 (e) 1,202
--------- --------- --------- --------- ---------
LOSS BEFORE DISCONTINUED
OPERATIONS.................... (8,785) (1,189) (381) (1,868) (11,461)
Discontinued operations, net.... -- 297 297 -- --
--------- --------- --------- --------- ---------
NET LOSS........................ $ (8,785) $ (1,486) $ (678) $ (1,868) $(11,461)
========= ========= ========= ========= =========
Loss per share of stock......... $ (1.75) $ (2.28)
========= =========
Weighted average number of
shares outstanding............ 5,032 5,032
========= =========
</TABLE>
See accompanying notes.
26
<PAGE>
PRESIDENT CASINOS, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(in thousands, unless otherwise stated)
NOTE 1. Basis of Presentation
The unaudited pro forma condensed combined statement of financial position
is based on the historical balance sheets of President Casinos, Inc.
("President") and BH Acquisition Corporation ("BH")(collectively, the "Company")
as of May 31, 1997 and March 31, 1997, respectively, assuming that the
acquisition occurred as of the dates thereof.
The unaudited pro forma condensed combined statements of operations assume
that the transaction occurred as of the beginning of the periods presented.
The unaudited pro forma condensed statements of operations reflect President's
historical results of operations for the year ended February 28, 1997 and for
the three-month period ended May 31, 1997. The unaudited pro forma condensed
statements of operations reflect BH's historical results of operations for the
year ended December 31, 1996 and for the three-month period ended March 31,
1997.
The Company believes that the assumptions used in preparing the unaudited
pro forma condensed combined financial statements provide a reasonable basis
for presenting all of the significant effects of the acquisition, other than
any projected cost savings attributable to the acquisition, and that the pro
forma adjustments give effect to those assumptions in the unaudited pro forma
condensed combined financial statements.
NOTE 2. Pro Forma Adjustments for Excluded Properties
The acquisition of BH excluded the Broadwater Inn (the "Inn"), one of three
hotel complexes owned by BH. Accordingly, revenues and costs associated with
the Inn are reported in "Excluded Properties." Additionally, BH sold one of
two golf courses owned by BH during its year ended December 31, 1996. The net
loss from the sale of this property is reported as discontinued operations of
"Excluded Properties."
NOTE 3. Pro Forma Acquisition Adjustments to Statement of Financial Position
All pro forma adjustments to the unaudited condensed combined statement of
financial position are made as if the acquisition was made as of the
respective entity's statement. The adjustments are as follows:
(a) Adjustments record the reduction of $2,000 of principal owed by BH to
President and the payment of interest thereon, net of certain prepaid assets
purchased by President and certain liabilities assumed as a result of the
acquisition.
(b) Adjustments record certain assets not acquired or liabilities not
assumed by President as a part of the acquisition.
27
<PAGE>
(c) Adjustments eliminate the intercompany balances after the acquisition
which were formerly accounted for as related party transactions.
(d) Adjustments record certain assets not acquired by President as a part
of the acquisition, eliminates certain transactions between BH and President
which were accounted for as prepaid expenses by one party and deferred revenue
by the other party and eliminates certain intercompany transactions which
resulted as a timing difference.
(e) Adjustments record the acquisition of the Broadwater Properties for
$40,500 plus (i) capitalized acquisition costs net of a credit provided by BH
on certain assets and (ii) the acquisition of certain assets through the
assumption of their related capital lease obligations. The following purchase
price allocation is based upon the preliminary valuation of an independent
appraisal performed:
Land and land held for future development... $ 40,732
Machinery and equipment..................... 156
---------
$ 40,888
=========
(f) Adjustments record certain liabilities not acquired by President as a
part of the acquisition and eliminates certain transactions between BH and
President which were accounted for as prepaid expenses by one party and
deferred revenue by the other party.
(g) Adjustment records debt incurred of $30,000 to acquire the Broadwater
Properties and $56 of long-term portion of capital leases assumed, less debt
of BH not assumed by President.
(h) Adjustment records the Class B stock of JECA.
(i) Adjustments eliminate the capital accounts of BH, as required by the
purchase method of accounting.
NOTE 4. Pro Forma Acquisition Adjustments to Statements of Operations
Pro forma adjustments to the unaudited condensed combined statements of
operations are made to reflect the following:
(a) Adjustments eliminate certain transactions between BH and President,
primarily room revenue and marina revenue.
(b) Adjustment eliminates BH's historical depreciation and amortization
expense.
(c) Adjustment records depreciation and amortization expense based on the
estimated fair market value of assets acquired through the assumption of
related capital leases obligations. Depreciation expense has been computed
using the straight-line method based on estimated useful lives of five years.
28
<PAGE>
(d) Adjustments record (i) additional interest expense on long-term
borrowings used to partially finance the acquisition of the Broadwater
Properties. Interest expense is based on principal of $30,000 at a rate of
9.7% annually and the amortization of a $7,000 loan fee over the three year
life of the loan, offset by (ii) a reduction of interest expense on the debt
of BH which was not assumed by President.
(e) Adjustment represents minority interest expense based on $10,000 Class
B stock at a rate of 9.7% annually.
29
<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 thereunto duly authorized.
PRESIDENT CASINOS, INC.
/s/ James A. Zweifel
Date: October 7, 1997 ------------------------------------
(James A. Zweifel)
Executive Vice President and
Chief Financial Officer
30
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
2.1 * Promissory Note dated July 22, 1997, by and between President
Broadwater Hotel, L.L.C. and Lehman Brothers Holdings Inc.
2.2 * Redemption Agreement dated July 22, 1997, by and among J. Edward
Connelly Associates, Inc. and President Broadwater Hotel, L.L.C.
and Broadwater Hotel, Inc.
2.3 * Indemnity Agreement dated July 22, 1997, by President Broadwater
Hotel, L.L.C., President Casinos, Inc. and The President Riverboat
Casino-Mississippi, Inc., jointly and severally, in favor of Lehman
Brothers Holdings Inc.
2.4 * Indemnity and Guaranty Agreement dated July 22, 1997, by President
Casinos, Inc. and The President Casino Riverboat Casino-
Mississippi, Inc. in favor of Lehman Brothers Holdings Inc.
2.5 * Unconditional Guaranty of Lease Obligations dated July 22, 1997, by
President Casinos, Inc.
2.6 * Amended and Restated Limited Liability Company Operating Agreement,
dated as of July 22, 1997, by and between J. Edward Connelly
Associates, Inc. and Broadwater Hotel, Inc.
23 Consent of Chamberlin, Shaffer & Griffiths, A.C.
* Exhibit was previously filed on August 7, 1997.
31
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 of President Casinos, Inc. with respect to the President Casinos,
Inc. 1992 Stock Option Plan, of our report dated February 22, 1997 (except for
Notes 10 and 13 as to which the date is June 30, 1997) related to the balance
sheet of BH Acquisition Corporation (a Mississippi corporation) as of December
31, 1996 and the statements of operations, stockholder's deficit and cash
flows for the year then ended, which report appears in the accompanying
Current Report on Form 8-K of President Casinos, Inc. dated July 24, 1997.
/s/ Chamberlin, Shaffer & Griffiths, A.C.
Certified Public Accountants
Pittsburgh, Pennsylvania
October 7, 1997
