UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1997
[ ]TRANSITION REPORT UNDER SECTION 13 or 15(D) OF THE EXCHANGE ACT
Commission file number: 0-22242
CASINO RESOURCE CORPORATION
Minnesota 41-0950482
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1719 Beach Boulevard, Suite 306
Biloxi, Mississippi 39531
(Address of principal executive officers)
601-435-1976
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
[X] Yes [ ] No
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court. [ ] Yes [ ] No
As of May 13, 1997, 10,053,364 Shares of Common Stock and 2,760,000 of
Redeemable Class A Warrants of the Company were outstanding.
INDEX TO QUARTERLY REPORT
ON FORM 10-QSB
PART I - FINANCIAL INFORMATION
Item 1.Financial Statements
Item 2.Management's Discussion and Analysis of Financial Condition and
Results of Operations
PART II - OTHER INFORMATION
Item 1.Legal Proceedings
Item 2.Exhibits and Reports on Form 8-K
SIGNATURES
PART I - FINANCIAL INFORMATION
Item 1.Financial Statements
CASINO RESOURCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, September 30,
1997 1996*
ASSETS
Current Assets
Cash and cash equivalents $ 963 $ 1,546
Restricted cash - 339
Accounts receivable, net 1,567 307
Prepaid expenses 723 438
---------- ----------
Total Current Assets 3,253 2,630
---------- ----------
Property and Equipment 17,751 17,670
Less accumulated depreciation (3,126) (2,587)
---------- ----------
Net Property and Equipment 14,625 15,083
---------- ----------
Other Assets
Due from related parties 572 557
Deferred development cost 2,655 2,201
Intangibles, net 575 599
Other 675 715
---------- ----------
Total Other Assets 4,477 4,072
---------- ----------
$22,355 $21,785
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 881 $ 1,173
Accrued expenses 929 947
Line-of-credit and current maturities of
long-term debt 850 1,138
---------- ----------
Total Current Liabilities 2,660 3,258
---------- ----------
Long-term debt 11,259 10,302
---------- ----------
Total Liabilities 13,919 13,560
Minority Interest in Subsidiary 169 -
Commitments and Contingencies
Stockholders' Equity
Capital shares 100 98
Paid in Capital 23,019 22,671
Deficit (13,620) (13,312)
Note receivable related to common stock (1,232) (1,232)
---------- ----------
Total Stockholders' Equity 8,267 8,225
---------- ----------
$22,355 $21,785
========== ==========
*Condensed from restated audited financial statements
The accompanying notes are an integral part of these condensed financial
statements.
CASINO RESOURCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND CASH FLOWS
FOR THE SIX MONTHS ENDED MARCH 31
(unaudited)
(In thousands, except per share data)
1997 1996
(as restated)
Entertainment revenues $ 4,087 $ 3,268
Hospitality revenues 1,848 1,793
Operating costs - entertainment 3,168 2,683
Operating costs - hospitality 1,291 1,084
General and administrative expenses 1,031 1,181
Loss on gaming project 387 771
Other expense-net 397 891
Minority interest in operations of
subsidiary (31) -
---------- ----------
Net Loss $ (308) $ (1,549)
========== ==========
Net Loss per Common Share $(0.03) $(0.18)
========== ==========
Weighted average shares, common stock 9,988,231 8,511,582
========== ==========
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (308) $ (1,549)
Adjustments to reconcile net loss to net
cash provided by operating activities
Depreciation and amortization 609 696
Discount upon conversion of debentures - 278
Changes in assets and liabilities
Accounts receivable (1,260) (75)
Prepaid expenses (285 (180)
Other assets (2) 1
Accounts payable (292) (429)
Accrued expenses 181 242
---------- ----------
Net Cash Used In Operating Activities (1,357) (1,016)
CASH FLOWS FROM INVESTING ACTIVITIES
(Increase) decrease in restricted cash 339 (5)
Purchase of property and equipment (81) (158)
(Increase) decrease in deferred
development costs - net (454) (22)
Increase in due to/from related
parties-net (15) (60)
----------- ----------
Net Cash Used in Investing Activities (211) (245)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock
and other equity transactions - 873
Issuance of debentures and draws on line
of credit 1,438 1,493
Payments on line-of-credit and long-term
debt (453) (816)
---------- ----------
Net Cash Provided by Financing Activities 985 1,550
---------- ----------
Net Increase(Decrease) in Cash and Cash
Equivalents (583) 289
CASH AND CASH EQUIVALENTS
At beginning of period 1,546 1,043
--------- ----------
At end of period $ 963 $ 1,332
========== ==========
The accompanying notes are an integral part of these condensed financial
statements.
<PAGE>
CASINO RESOURCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31
(unaudited)
(In thousands, except per share data)
1997 1996
(as restated)
Entertainment revenues $ 1,326 $ 880
Hospitality revenues 946 921
Operating costs - entertainment 1,483 1,002
Operating costs - hospitality 654 575
General and administrative expenses 542 630
Loss on gaming projects 387 771
Other expense-net 204 595
Minority interest in operations of
subsidiary (31) -
---------- ----------
NET LOSS $ (967) $ (1,762)
========== ==========
NET LOSS PER COMMON SHARE $ (.10) $ (.20)
========== ==========
Weighted average shares, common stock 10,043,364 8,896,044
========== ==========
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss (967) (1,762)
Adjustments to reconcile net loss to net
cash provided by operating activities
Depreciation and amortization 325 321
Discount upon conversion of debentures - 278
Changes in assets and liabilities
Accounts receivable (1,017) (41)
Prepaid expenses (460) (305)
Other assets 204 (8)
Accounts payable 34 237
Accrued expenses (50) 267
---------- ----------
Net Cash Used In Operating Activities (1,931) (1,023)
CASH FLOWS FROM INVESTING ACTIVITIES
Increase (decrease) in restricted cash 342 (3)
Purchase of property and equipment (30) (133)
Increase (decrease) in deferred development
costs - net 283 470
Decrease (increase) in due to/from related
parties - net (12) 20
---------- ----------
Net Cash Provided By Investing
Activities 583 354
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock and
other equity transactions - 250
Issuance of debenture and draws on line
of credit 1,438 1,493
Payments on line-of-credit and long-term
debt (194) (365)
---------- ----------
Net Cash Provided by Financing Activities 1,244 1,378
---------- ----------
Net Increase (Decrease) in Cash and Cash
Equivalents (104) 709
CASH AND CASH EQUIVALENTS
At beginning of period 1,067 623
---------- ----------
At end of period $ 963 $ 1,332
========== ==========
The accompanying notes are an integral part of these condensed financial
statements.
CASINO RESOURCE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1 Basis of Presentation
The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting solely of normal recurring
adjustments) which, in the opinion of management, are necessary for a fair
statement of results for the interim periods. The balance sheet for September
30, 1996 and the statements of operations and cash flows for the six months
and three months ended March 31, 1996 have been restated.
Certain reclassifications of prior period amounts have been made to conform
to current period presentation.
The results of operations for the three-month period ended March 31, 1997
are not necessarily indicative of the results to be expected for the full
year.
NOTE 2 Debt
The Company's debt at March 31, 1997 consists primarily of a first lien
mortgage on its Grand Hinckley Inn ($2,647,739); a first lien mortgage on
the Country Tonite Theatre ($7,511,752); and a working capital line-of-credit
owing to Grand Casinos, Inc. of $289,410. The Company also has outstanding
draws totalling $50,000 against a line of credit with a bank.
On January 31, 1997, the Company issued a 6% $1,500,000 debenture
maturing in two years, payable at the Company's option in cash or
Casino Resource Corporation common stock, in connection with the Company's
acquisition of its interest in New Palace Casino, LLC. The note has been
discounted to provide for an effective interest rate of 10%.
NOTE 3 Capital Stock
On April 3, 1997, the shareholders of the Company ratified the
1997 Long-Term Incentive and Stock Option Plan under which 500,000 shares of
the Company's common stock are reserved for issuance.
NOTE 4 Deferred Development Costs
Deferred development costs consist principally of externally incurred
charges principally related to a casino project in Tunisia and the Pokagon
Indian Gaming award in Indiana and Michigan.
NOTE 5 Supplemental Disclosure of Cash Flow Information
Cash expended during the three months ended March 31, 1997 and 1996 for
interest was $266,000 and $294,000, respectively. The Company has
federal and state tax loss carryforwards of approximately $11.0 million.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following is management's discussion and analysis of certain significant
factors which have affected the Company's financial position and operating
results during the periods included in the accompanying condensed
consolidated financial statements.
SIX MONTHS ENDED MARCH 31, 1997 COMPARED TO SIX MONTHS ENDED MARCH 31, 1996
CONSOLIDATED
The Company's revenues for the six months ended March 31, 1997 were
$5,935,000, an increase of $874,000 or 17% from $5,061,000 in
the prior year period. Of the increase, $819,000 or 93% was provided by the
entertainment segment with the hospitality segment accounting for the
remaining increase of $55,000.
ENTERTAINMENT
Country Tonite Production Show
Country Tonite Production Show revenues totalled $1,451,000 for the six
months ended March 31, 1997 (including $71,000 eliminated in consolidation),
an increase of $354,000 from the comparable fiscal 1996 period revenues of
$1,097,000. The increase in revenues is due principally to the Country
Tonite Show appearing at the Biloxi Grand Theatre from late December, 1996
to early March, 1997. Operating income increased to $291,000 for the
six months ended March 31, 1997 (including $71,000 eliminated in
consolidation) from $203,000 in the comparable prior year period.
Operating expenses (including project, general and administrative costs)
increased to $1,158,000 for the six months ended March 31, 1997 from
$894,000 in the prior year period due principally to the Biloxi show
production expenses.
Country Tonite Theatre - Branson
The Country Tonite Theatre in Branson reopened on March 8, 1997,
the beginning of the Branson tourist season. Paid attendance reached 41% at
an average ticket price of $15.94 for the six months ended March 31, 1997
compared to paid attendance of 40% at an average ticket price of $14.03 for
the comparable prior year period. Accordingly, revenues increased $453,000
or 21% from the fiscal 1996 six month total of $2,171,000 to $2,624,000 for
the first six months of fiscal 1997. Operating expenses (including project,
general and administrative expenses) increased $163,000 or 9% to $1,952,000
for the first six months of fiscal 1997 from $1,789,000 in the first six
months of fiscal 1996. Operating income increased by $271,000 or 71% to
$652,000 in the first six months of fiscal 1997 from $381,000 in the first
six months of fiscal 1996. The marketing efforts at the Country Tonite
Theatre and its acceptance in the market have resulted in an increase in
attendance and revenues. Economies of scale at higher paid occupancy levels
have resulted in operating expenses increasing at a slower pace.
Country Tonite Theatre-Pigeon Forge
The Country Tonite Theatre in Pigeon Forge opened for business on March 21,
1997. Revenues for the six months and three months ended March 31, 1997
totalled $82,000. Operating expenses for the periods totalled $128,000
(including $71,000 eliminated in consolidation) generating an operating loss
of $46,000.The Company anticipated an operating loss during this start-up
period.
HOSPITALITY
Grand Hinckley Inn
For the six months ended March 31, 1997, revenues for the Grand Hinckley
Inn totaled $1,848,000, an increase of $55,000 from revenues of $1,793,000
for the six months ended March 31, 1996. Average occupancy rate totalled
80% in the first six months of fiscal 1997 compared to 83% in the first six
months of fiscal 1996. The decrease in occupancy was more than offset by an
increase in the average daily room rate from $54.00 in the first six months
of fiscal 1996 to $60.47 in the first six months of fiscal 1997. Operating
costs totaled $637,000 for the six months ended March 31, 1997 compared to
$509,000 for the comparable 1996 period, an increase of $128,000.
The increase in operating expenses was due principally to higher real estate
taxes and higher levels of profit sharing with Grand Casino Hinckley.
GENERAL AND ADMINISTRATIVE
The Company's general and administrative expenses aggregated $1,031,000
for the six months ended March 31, 1997 compared to $1,181,000 for the
comparable 1996 period. The decrease resulted primarily from lower legal
and professional fees.
GAMING
On February 5, 1997, the Company sold its interest in the Palace Casino
back to its joint venture partner. A combination of events including cash
commitments to other projects under development and the fact that the Company
could not manage the facility until its corporate officers and board
members were found suitable, a process which could have taken several
additional months, contributed to the Company's decision to sell its
interest in the Palace Casino.
In connection with the sale, the Company's escrow deposit of $400,000 was
refunded and, in addition, the Company will receive proceeds of $1,250,000
for the $1,500,000 debenture (issued at closing of the purchase) with
$1,000,000 payable upon transfer of the ownership interest (received May,
1997) and $250,000 payable without interest in two years. The $250,000
receivable was discounted to an effective interest rate of 10%. A loss of
approximately $387,000 was recorded in the six months and three months ended
March 31, 1997 relating to the sale of the Company's interest in the Palace.
The loss of $771,000 for the six months and the three months ended March 31,
1996 relates to the Company's abandonment of it's first attempt to acquire
the Palace Casino in February, 1996.
OTHER
Interest expense totalled $545,000 for the six months ended March 31, 1997
compared to $941,000 for the 1996 period. The decrease was due to a
lower level of indebtedness and a $278,000 charge in the quarter ended March
31, 1996 representing the discount upon conversion of subordinated debentures.
THREE MONTHS ENDED MARCH 31,1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996
CONSOLIDATED
The Company's revenues for the three months ended March 31, 1997 were
$2,185,000, an increase of $384,000 or 21% from revenues of $1,801,000
recorded in the prior year period. Of the increase, $359,000 or 93%
was provided by the entertainment segment with the hospitality segment
accounting for the remaining increase of $25,000.
ENTERTAINMENT
Country Tonite Production Show
Country Tonite Production Show revenues totaled $905,000 for the quarter
ended March 31, 1997 (including $71,000 eliminated in consolidation), an
increase of $365,000 from the comparable 1996 period revenues of $540,000.
Operating costs (including project, general and administrative) increased
to $734,000 for the quarter ended March 31, 1997 from $454,000 in the prior
year period. The increase in revenues and operating costs is the result of
the Country Tonite Show appearing at the Biloxi Grand Theatre from late
December, 1996 to early March, 1997. Operating income increased from $87,000
in the quarter ended March 31,1996 to $174,000 for the 1997 quarter
(including $71,000 eliminated in consolidation) principally as a result of
the Biloxi engagement.
Country Tonite Theatre - Branson
The Country Tonite Theatre in Branson was closed for the off-season for most
of the second quarter, having reopened on March 8, 1997, the beginning
of the tourist season in Branson. Revenues for the quarter ended March 31,
1997 totalled $409,000 a increase of $70,000 from the comparable 1996 quarter
total of $339,000. The increase can be attributed to an earlier opening date.
Operating costs for the quarter ended March 31, 1997 totalled $621,000 an
increase of $73,000 from the comparable 1996 period total of $548,000. The
increase is also due principally to an earlier start date in 1997.
HOSPITALITY
Grand Hinckley Inn
For the three months ended March 31, 1997, revenues for the Grand Hinckley
Inn totalled $ 946,000, an increase of $25,000 from revenues of $921,000 for
the comparable 1996 quarter. Average occupancy fell from 90% in the second
fiscal quarter of 1996 to 84% for the second quarter of fiscal 1997. The
decrease in occupancy was more than offset by an increase in the average daily
room rate from $51.00 in the fiscal 1996 period to $58.00 in the 1997 fiscal
period. Operating costs totalled $654,000 for the three months ended March 31,
1997 compared to $554,000 for the comparable 1996 period, an increase of
$77,000. The increase in operating expenses was due principally to higher
levels of profit sharing with Grand Casino Hinckley.
GENERAL AND ADMINISTRATIVE
The Company's general and administrative expenses totalled $542,000 for the
three months ended March 31, 1997 compared to $630,000 for the three months
ended March 31, 1996. The decrease is due principally to lower legal and
professional fees.
OTHER
Interest expense for the three months ended March 31, 1997 totalled $278,000
compared to $609,000 for the 1996 quarter. The decrease is due to lower
levels of indebtedness and a $278,000 charge in the 1996 quarter for
discount upon conversion of subordinated debentures.
RECENT ACCOUNTING PRONOUNCEMENTS
The FASB has issued SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets Being Disposed of," which provides
guidance on how and when impairment losses are recognized on long-lived
assets. This statement, when adopted, is not expected to have a material
impact on the Company.
The FASB has issued SFAS No. 123, "Accounting for Stock-Based Compensation,"
which establishes a fair value based method of accounting for stock-based
compensation plans. This statement provides a choice to either adopt the
fair value based method of accounting or continue to apply APB Opinion No.
25, which would require only disclosure of the pro forma net income and
earnings per share, determined as if the fair value based method has been
applied. The Company plans to continue to apply APB Opinion No. 25 and
will provide the necessary footnote disclosure required by SFAS No.123.
In February, 1997, the Financial Accounting Standards Board issued SFAS
No. 129, "Earnings per Share". The new method simplifies the methods for
computing earnings per share and requires presentation of two new amounts,
basic and diluted earnings per share. The Company will be required to adopt
this pronouncement beginning with the quarter ending December 31, 1997.
Earlier adoption is not permitted.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents decreased $104,000 to $963,000 at March 31, 1997
from $1,067,000 at December 31, 1996. The Company's principal source of
funds during the three months ended March 31, 1997 were funds provided by
operations and $400,000 from the return of the Palace purchase escrow
deposit.
The Company's principal use of funds during the second quarter of fiscal
1997 consisted of additions to deferred development costs of $122,000,
payments of notes payable and long-term debt totalling $194,000 and capital
expenditures of $30,000. The Company collected $1,013,000 due from the
sale of its minority interest in New Palace Casino, LLC in May, 1997.
The Company expects that available cash and cash from future operations will
be sufficient to meet the capital expenditures, debt service and working
capital requirements of its existing businesses. The Company will need to
raise at least $1,000,000 to meet the near term capital requirements of
the Tunisia Casino. The sources of such funding have not yet been identified
and cannot be assured.
Collection of notes receivable totalling $1,232,000 related to the warrant
exercise originally due in January and December 1996 were extended by
written agreement to December, 1997. The due date is subject to acceleration
if the Company stock price exceeds certain levels. Litigation filed to
collect monies due under the original agreement was dropped.
CAPITAL EXPENDITURES
Capital expenditures by the Company were $30,000 for the three months ended
March 31, 1997 compared to $133,000 for the comparable period in the prior
year. The decrease was principally attributable to lower equipment purchases
at the Company's theater in Branson.
SEASONALITY
The Company expects its hotel operations will be affected by seasonal
factors,including holidays, weather and travel conditions. The theatre
operations in Branson, Missouri and Pigeon Forge, Tennessee, will also be
affected by seasonal factors and, in addition, will be closed from
mid-December through mid-March. This period is historically when theatres
like the Company's normally close in Branson and Pigeon Forge.
IMPACT OF INFLATION
Management does not believe that inflation has had any significant adverse
impact on the Company's financial condition or results of operations for the
periods presented. An increase in the rate of inflation could adversely
affect the Company's future operations and expansion plans.
PART II - OTHER INFORMATION
Item 1.Legal Proceedings
The Company is party to various legal proceedings as described in its
Annual Report on Form 10-KSB for the year ended September 30, 1996.
There have been no further developments regarding such proceedings during
the three months ended March 31, 1997, except as described below.
The Company commenced an arbitration action with the Arbitration Association
in Minneapolis, Minnesota against Cunningham, Hamilton and Quiter, PA (CHQ),
the architect it retained in connection with construction of the Biloxi Star
Theater. On December 30, 1994, the architect firm CHQ commenced a suit in a
Mississippi State Court seeking a foreclosure on a mechanics lien it had
filed on the Biloxi Theater project in the amount of $321,000 which sum the
Company escrowed. On December 26, 1996, the Arbitration Association
announced the Company was entitled to an award of approximately $142,000,
which sum was a portion of previously escrowed $321,000. The decision
resulted in a gain to the Company of approximately $117,000
In 1995, a suit was brought against the Company in Federal District Court
of New Jersey, which venue was later transferred to the Federal District Court
for Southern Mississippi. Plaintiff(Gelb Productions,Inc, a New Jersey
corporation) asserts it had a contract with Company to provide eight
professional boxing events at the Company's former Biloxi Star Theater.
The complaint was thereafter amended by plaintiff to reflect additionally
allegations that defendant tortuously harmed plaintiff's business reputation
and maliciously interfered with existing and prospective economic
relationships. The total claims asserted are for $500,000 in compensatory
damages, punitive damages, and attorneys fees and additional costs and other
relieve the court may deem just and proper. The Company's general liability
insurance carrier has taken up the defense of the Company.
James and Prudence Barnes, two former officers of a subsidiary of the
Company have brought suit in State District Court, Clark County, Nevada
against the Company in connection with their employment termination in
June 1995. No specific amount of damages have been claimed, however the
plaintiffs have informally indicated recently that they would entertain a
settlement offer of between $250,000 and $350,000. The Company intends to
vigorously defend this matter.
In March 1996, PDC, a Minnesota limited liability company, and two of its
officers filed suit against the Company and Harrah's Entertainment, in
the Fourth Judicial District Court of Minnesota and Michigan, which venue
was later dropped, alleging defamation, violation of the Lanham Act,
violation of the Michigan Consumer Protection Act, tortuous interference with
its business relations and prospective economic advantage, as well as false
light invasion of privacy in connection with the Pokagon Indian Gaming Award.
Under the Lanham Act, Plaintiffs are claiming a right to treble damages.
The plaintiff seeks compensatory damages and has not claimed a specific
amount of damages, but claim such damages exceed $50,000. The plaintiff also
seeks recovery of their attorney's fees. The Company's general liability
carrier has taken up the defense of the Company. The Company intends to
vigorously defend this matter.
On November 13, 1995, Casino Resorts, Inc., a Minnesota Corporation,
commended an action in the State District Court for The Fourth Judicial
District of Minnesota against Monarch and the Company alleging breach of
contract against Monarch and tortuous interference with a contractual
business relationship against the Company. The plaintiff seeks
compensatory damages and has not claimed a specific amount of damages,
but claim such damages exceed $50,000. The plaintiff also seeks reimbursement
of costs and expenses. This matter came before the Fourth Judicial District
Court of Minnesota, on December 9, 1996, for hearing on motions by the
Company and Monarch for summary judgment. On January 22, 1997, the Company's
motion for summary judgment on plaintiff's claim of tortuous interference
was granted and plaintiff's claim against the Company was dismissed.
Additionally, Monarch's motion of summary judgment on plaintiff's claim for
breach of contract was granted and plaintiff's claim against it was dismissed
.Casino Resorts, Inc. filed an appeal with the Minnesota Appellant Court on
May 7, 1997 claiming that there are factual issues which must be resolved by
a jury. The Company intends to vigorously defend itself in this matter.
The Company has received notice that the action of Cunningham, Hamilton,
Quiter, P.A. against John J Pilger(CEO of the Company) in Jackson County
Circuit Court, Mississippi originally set in abeyance pending completion of
arbitration proceedings, is now reconstituted. Cunningham alleges that the
Company owes CHQ approximately $40,000 for services rendered in 1994.
The Company denies these charges and plans to vigorously defend itself in
this matter.
Item 2.Exhibits and Reports on Form 8-K
A)Exhibits
Exhibit 27 - Financial Data Schedule
B)The following Forms 8-K have been filed during the three months ended
March 31, 1997:
1) A report on Form 8-K was filed on February 2, 1997 announcing the grant
of a use permit and gaming license to New Palace Casino LLC.
2) A report on Form 8-K was filed on February 24, 1997 announcing the
Company's sale of its interest in New Palace Casino LLC.
SIGNATURES
In accordance with requirements of the Exchange Act, the registrant caused
this report to be signed on behalf by the undersigned, hereunto duly
authorized.
CASINO RESOURCE CORPORATION
Date: May 15, 1997 s/ John J. Pilger
John J. Pilger, President & CEO
Date: May 15, 1997 s/ Maurice P. Gaudet
Maurice P. Gaudet, Chief Financial Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Casino Resource Corporation's quarterly report to shareholders for
the quarter ended March 31, 1997 and is qualified in its entirety by
reference to such financial statements
</LEGEND>
<RESTATED>
<MULTIPLIER> 1000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 3-MOS
<FISCAL-YEAR-END> SEP-30-1997 SEP-30-1997
<PERIOD-START> OCT-01-1996 JAN-01-1997
<PERIOD-END> MAR-31-1997 MAR-31-1997
<CASH> 963 963
<SECURITIES> 0 0
<RECEIVABLES> 1,567 1,567
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 3,253 3,253
<PP&E> 17,751 17,751
<DEPRECIATION> (3,126) (3,126)
<TOTAL-ASSETS> 22,355 22,355
<CURRENT-LIABILITIES> 2,660 2,660
<BONDS> 0 0
0 0
0 0
<COMMON> 100 100
<OTHER-SE> 8,167 8,167
<TOTAL-LIABILITY-AND-EQUITY> 22,355 22,355
<SALES> 5,935 2,272
<TOTAL-REVENUES> 5,935 2,272
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<TOTAL-COSTS> 5,698 3,517
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<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 545 278
<INCOME-PRETAX> (308) (967)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (308) (967)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (308) (967)
<EPS-PRIMARY> (.3) (.10)
<EPS-DILUTED> (.3) (.10)
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