<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
/X/ QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1999
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO .
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COMMISSION FILE NO.: 0-25244
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TRANS WORLD GAMING CORP.
(Exact name of small business issuer as specified in its charter)
NEVADA 13-3738518
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE PENN PLAZA, SUITE 1503 10119-0002
NEW YORK, NY (Zip Code)
(Address of principal executive offices)
Issuer's telephone number, including area code: (212)563-3355
--------------------
Check whether the Registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. YES / / NO /X/
Shares of the Registrant's Common Stock, par value $.001, outstanding
as of August 20, 1999: 3,364,000
Transitional Small Business Disclosure Format
(check one: YES / / NO /X/)
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<PAGE>
TRANS WORLD GAMING CORP. AND SUBSIDIARIES
FORM 10-QSB
FOR THE QUARTER ENDED MARCH 31, 1999
INDEX
PART 1 - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Page
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<S> <C>
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1999 1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE 2
INCOME (LOSS) FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE 3
MONTHS ENDED MARCH 31, 1999 AND 1998
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 5
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 8
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 8
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 9
ITEM 4. SUBSMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 9
ITEM 5. OTHER INFORMATION 9
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 9
</TABLE>
<PAGE>
TRANS WORLD GAMING CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
March 31, 1999
(in thousands, except for per share data)
<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS:
Cash $ 1,386
Accounts receivable, less allowance for doubtful accounts of $273 93
Prepaid expenses and other current assets 1,233
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TOTAL CURRENT ASSETS 2,712
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PROPERTY AND EQUIPMENT, less accumulated depreciation and amortization of $592 4,077
--------
OTHER ASSETS:
Goodwill and other intangible assets, less accumulated
amortization of $2,518 11,883
Investment in affiliate 75
Deposits and other assets 484
--------
12,442
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$ 19,231
--------
--------
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Short-term debt $ 1,000
Accounts payable 2,730
Accrued expenses and other current liabilities 2,591
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TOTAL CURRENT LIABILITIES 6,321
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LONG-TERM LIABILITIES:
Long-term debt 17,800
Other long-term liabilities 5,377
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23,177
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COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT:
Preferred stock, $.001 par value, 2,000 shares authorized,
none issued
Common stock $.001 par value, 50,000 shares authorized,
3,364 shares issued and outstanding 3
Additional paid-in capital 9,136
Stock warrants outstanding 5,237
Accumulated other comprehensive income 634
Accumulated deficit (25,277)
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TOTAL STOCKHOLDERS' DEFICIT (10,267)
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$ 19,231
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</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1
<PAGE>
TRANS WORLD GAMING CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS) (Unaudited) Three Months Ended
March 31, 1999 and 1998
(in thousands, except for per share data)
<TABLE>
<CAPTION>
1999 1998
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<S> <C> <C>
REVENUES $ 4,715 $ 1,569
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COSTS AND EXPENSES
Cost of revenues 2,455 988
Depreciation and amortization 789 101
Selling, general and administrative 1,787 210
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5,031 1,299
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INCOME (LOSS) FROM OPERATIONS (316) 270
-------- --------
OTHER INCOME (EXPENSE):
Interest expense (880) (255)
Foreign exchange gain (loss) (187)
Other (3)
-------- --------
(1,070) (255)
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NET INCOME (LOSS) $ (1,385) $ 15
-------- --------
-------- --------
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic 3,364 3,044
-------- --------
-------- --------
EARNINGS (LOSS) PER COMMON SHARE
Basic $ (0.41) $ 0.00
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-------- --------
COMPREHENSIVE INCOME (LOSS)
NET INCOME (LOSS) $ (1,385) $ 15
OTHER COMPREHENSIVE INCOME, foreign currency
translation adjustment 522
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COMPREHENSIVE INCOME (LOSS) $ (863) $ 15
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</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2
<PAGE>
TRANS WORLD GAMING CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended March 31, 1999 and 1998
(in thousands)
<TABLE>
<CAPTION>
1999 1998
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES $ 53 $ 7
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CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of 21st Century Resorts and Casino de Zaragoza (11,850)
Purchases of property and equipment (385)
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NET CASH USED IN INVESTING ACTIVITIES (385) (11,850)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt issuance costs (1,452)
Proceeds from short-term debt 775
Payments of short-term debt (56)
Proceeds from long-term debt 17,000
Payments of long-term debt (1,320)
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NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (56) 15,003
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EFFECT OF EXCHANGE RATE CHANGES ON CASH (181)
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NET INCREASE (DECREASE) IN CASH (569) 3,160
CASH
Beginning of period 1,955 198
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End of period $ 1,386 $ 3,358
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</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3
<PAGE>
TRANS WORLD GAMING CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(IN THOUSANDS)
1. Unaudited Statements.
The accompanying condensed consolidated financial statements of Trans
World Gaming Corp. (the "Company" or "TWG") as of March 31, 1999 and
for the three months ended March 31, 1999 and 1998 are unaudited and
reflect all adjustments of a normal and recurring nature to present
fairly the financial position, results of operations and cash flows for
the interim periods. These unaudited condensed, consolidated financial
statements have been prepared by the Company pursuant to the
instructions to Form10-QSB. Pursuant to such instructions, certain
financial information and footnote disclosures normally included in
such financial statements have been condensed or omitted.
These unaudited condensed, consolidated financial statements should be
read in conjunction with the audited, consolidated financial statements
and notes thereto, together with management's discussion and analysis
of financial condition and plan of operations, contained in the
Company's Annual Report on Form 10-KSB for the year ended December 31,
1998. The results of operations for the three months ended March 31,
1999 are not necessarily indicative of the results for the entire year
ending December 31, 1999.
2. Basic earnings (loss) per common share is computed by dividing net
income (loss) by the weighted average number of common shares
outstanding during the period. Diluted earnings (loss) per common share
incorporates the dilutive effect of common stock equivalents on an
average basis during the period. The Company's common stock equivalents
currently include stock options and warrants. Dilutive earnings (loss)
per common share has not been presented for the three month periods
ended March 31, 1999 and 1998 since the inclusion of common stock
equivalents either did not have a material effect on basic earnings
(loss) per common share or would have been antidilutive.
3. Segment information listed below reflects the two principal business
units of the Company during the three months ended March 31, 1999. Each
segment is managed according to the products or services that are
provided to the respective customers and information is reported on the
basis of reporting to the Company's chief operating decision maker.
<TABLE>
<CAPTION>
GAMING TRUCKSTOP OTHER CONSOLIDATED
------ --------- ----- ------------
<S> <C> <C> <C> <C>
Revenues $ 3,035 $ 1,478 $ 202 $ 4,715
Interest expense 689 144 47 $ 880
Depreciation and amortization 697 70 22 $ 789
</TABLE>
During the three months ended March 31, 1999, the Company operated
principally in three geographic areas: the United States, the Czech
Republic and Spain. The following table presents information about the
Company by geographic area. There were no material amounts of sales or
transfers among geographic areas.
<TABLE>
<CAPTION>
UNITED CZECH
STATES REPUBLIC SPAIN OTHER ELIMINATIONS CONSOLIDATED
------ -------- ----- ----- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Revenues $ 1,478 $ 2,166 $ 1,070 $ 422 $ (421) $ 4,715
Long-Lived Assets 7 10,224 5,313 417 $ 15,961
</TABLE>
During the three months ended March 31, 1998, the Company's principal
operating segment was the video poker operations, which operated in the
United States. Accordingly, operating segment and geographic segment
information is not presented for 1998.
4
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
RESULTS OF OPERATION
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
The Company's revenues totaled $4.715 million for the three months ended March
31, 1999 compared to $1.569 million for the same period in 1998, an increase of
$3.146 million mostly due to new business acquisitions in the second quarter of
1998. Revenues generated by the Company's international operations were $3.035
million for the three months ended March 31, 1999. Revenues from Louisiana,
mainly at the Gold Coin Video Parlor, decreased by $96,000.
Total operating results show a net loss of $1.385 million for the three months
ended March 31, 1999, representing a $1.400 million decrease from the net income
of $15,000 for the three months ended March 31, 1998. However, the Company's
earnings before interest, taxes, depreciation and amortization ("EBITDA"),
decreased by $87,000 from the three months ended March 31, 1998, totaling
$284,000 for the three months ended March 31, 1999.
On March 31,1998, the Company acquired 21st Century Resorts a.s., ("Resorts"), a
Czech Republic joint stock company, which operates two casinos in the Czech
Republic and is constructing a third. Revenues from Resorts for the three months
ended March 31, 1999 totaled $2.084 million.
On April 17, 1998, the Company acquired Casino de Zaragoza, S.A., ("Casino de
Zaragoza" or "CDZ") a company incorporated in Zaragoza, Spain that holds an
exclusive gaming license in the Region of Aragon. Revenues from CDZ for the
three months ended March 31, 1999 were $951,000.
As a result of the acquisitions of Resorts and CDZ, total costs and expenses
increased from $1.299 million for the three months ended March 31, 1998 to
$5.031 million for the three months ended March 31, 1999, an increase of $3.731
million.
Video poker operations in Louisiana recorded direct costs of $275,000 for the
three months ended March 31, 1999, which increased by 14.6% from the costs of
$240,000 during the comparable 1998 quarter. Retail expenses at the Woodlands
truck stop decreased approximately $165,000, or 32.4%, due primarily to a
decrease in direct costs associated with decreased fuel sales.
Interest expense increased by $625,000 to $880,000 for the three months ended
March 1999 from $255,000 for the comparable quarter in 1998. This increase is
attributable primarily to the $17 million of debt incurred in the March 1998
private placement.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital, defined as current assets minus current
liabilities, decreased $.324 million to a deficit of $3.603 million at March 31,
1999 from a working capital deficit of $3.279 million at December 31, 1998.
The Company believes, although there can be no assurance, that existing cash and
anticipated cash flows from current operations will be sufficient to satisfy its
on-going operations, liquidity and capital requirements for the next twelve
months. However, the Company will require additional debt and/or equity
financing in order to consummate certain planned expansion and acquisitions as
described under "Plan of Operations", below.
5
<PAGE>
PLAN OF OPERATIONS
On April 1, 1998, the Company issued a press release announcing the acquisition
of Resorts. In connection with the announcement, TWG stated that a third casino
in Znojmo, Czech Republic is planned to open during the first quarter of 2000
assuming that all required permissions and approvals are received. The Company
will require financing of approximately $1.8 to $2.0 million to equip the Znojmo
facility. The Company believes, although there can be no assurance, that
financing should be available to the Company and Trans World Gaming
International U.S. Corporation ("TWGI").
On April 17, 1998, the Company issued a press release announcing the acquisition
of 90% of the Casino de Zaragoza. TWG acquired 90% of the outstanding stock of
CDZ for approximately $780,000 and CDZ assumed outstanding debt obligations of
CDZ totaling approximately $4.8 million. The Company anticipates that permission
will be granted by the appropriate Spanish government authorities that will
enable TWG to move to a more favorable location. If the Company decides to
recapitalize, lease, build and equip a facility in a new location, it is
anticipated that it may require financing of approximately $4.0 million. The
Company expects, although there can be no assurance, that financing will be
available to TWG.
In the event that financing is not available for the casino in Znojmo,
recapitalization and build-out of CDZ and the new casino in Zaragoza, it would
have a material adverse effect on the future profitability of TWG.
TWG management will continue to develop marketing and operational strategies
designed to increase attendance and revenues at its existing locations in the
Czech Republic and Spain. The Company has acquired land near the German border
near Ceska Kubice, at Folmava, Czech Republic, and is planning to build a casino
to replace its existing facility in Ceska Kubice. Management believes that the
new location would be more accessible to its main target market in Germany and
will result in improved attendance and play. TWG also plans to transfer excess
slot machines from Ceska Kubice and Rozvadov to its new location in Znojmo,
thereby minimizing investment. Pre-opening advertisements are planned for both
Znojmo and CDZ and gala grand openings are scheduled for each location.
In November 1996, residents in 35 parishes in Louisiana, including the two
parishes in which the Gold Coin and the Toledo Palace are located, voted to
discontinue video poker effective June 30, 1999. Both of the Company's video
poker locations closed as of July 1, 1999.The Company is currently involved in
litigation to overturn the voter referendum. See Part II, Item 1 - "Legal
Proceedings." No assurances can be given that such litigation will be
successful.
At this time, the Company has operations in the Czech Republic, Spain and
Bishkek, Kyrgyzstan, but no U.S. gaming operations.
Management of the Company continues to seek other opportunities both within and
outside of the United States. There can be no assurance that management will be
successful in identifying such opportunities, financing such acquisitions or
investments or implementing such transactions. The failure to so do may have a
material adverse effect upon the Company's financial condition, results of
operations or cash flows.
YEAR 2000 CONVERSION
The Company does not believe that the Year 2000 conversion as it relates to
computer applications that perform data intensive calculations beyond December
31, 1999 will have a material adverse effect on the Company's operations.
The Company uses non-customized, "off-the-shelf" accounting software programs,
subscribes to a payroll processing service and maintains banking relationships
with a major banking institution, all of which have indicated that the Year 2000
Conversion issue as it relates to the Company has been resolved or that they are
Year 2000 compliant with minor adjustments in process. The Company's contingency
plan is to acquire new accounting software, change payroll service companies and
change banking institutions in advance of the Year 2000 if the current suppliers
do not demonstrate Y2K compliance.
6
<PAGE>
NOTE ON FORWARD-LOOKING INFORMATION
This Form 10-QSB contains certain forward-looking statements. For this purpose,
any statements contained in this Form 10-QSB that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the foregoing, words such as "may," "will," "expect," "believe," "anticipates,"
"estimates," or "continue" or comparable terminology or the negative thereof are
intended to identify certain forward-looking statements. These statements by
their nature involve substantial risks and uncertainties, both known and
unknown, and actual results may differ materially from any future results
expressed or implied by such forward-looking statements. The Company undertakes
no obligation to publicly update or revise any forward-looking statements
whether as a result of new information, future events or otherwise.
7
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On or about November 6, 1997, the Company was sued for breach of contract by
Monarch Casinos, Inc. of Louisiana and Michael A. Edwards in the 15th Judicial
District Court, Lafayette Parish, Louisiana, Case No. 97-5037B. Mr. Edwards
claimed compensation charges of approximately $2.2 million and punitive charges
of $11.1 million and alleged that the Company breached a management contract
dated September 21, 1994. The lawsuit was settled for a cash payment of $100,000
on May 15, 1999. The final order of dismissal with full prejudice which
terminated the litigation and disposed of all claims in the lawsuit was issued
by the United States District Court of Louisiana on May 24, 1999.
On January 25, 1997 (prior to the Company's acquisition of 90% of CDZ), the
directors of CDZ filed an application in Court of First Instance number 11 of
Zaragoza to declare CDZ in temporary receivership. Temporary receivership was
granted on June 23, 1997. On April 17, 1998 (the date of the Company's
acquisition of 90% of CDZ), CDZ signed a composition with creditors, most
notably the DGA, the Spanish Social Security Authorities and the City Council
of Alfajarin ("Spanish Taxing Authorities"), which set the terms of payment to
the Spanish Taxing Authorities and other creditors for debts existing as of
January 25, 1997. The composition with the Spanish Taxing Authorities and other
creditors resulted in a debt reduction of approximately $1.7 million. This
reduction was accounted for as a reduction of goodwill.
In addition, in 1998, DGA granted the Company a deferral of approximately
$1.0 million in taxes on all of 1997 and some of 1998 gaming winnings.
Furthermore, in April 1998, the Company reached an understanding with the
Spanish Social Security Authorities to defer approximately $1.4 million related
to all debts generated in 1997 and the first quarter of 1998.
On May 22, 1998, the Company entered into a settlement relating to the Prime
Agreement. (See Item 1 of the Form 10KSB for December 31, 1998 - "Description of
Business - General Development of Business").
The Company currently is involved as a plaintiff, through its Chrysolith
affiliate, in litigation challenging the Louisiana Voter Mandate. (See Part I.,
Item 1 of the Form 10KSB for December 31, 1998 - "Description of Business
Regulations and Licensing -Louisiana Gaming Reform").
The Company is not currently involved in any other material legal proceeding nor
was it involved in any other material litigation during the quarter and March
31, 1999.
ITEM 2. CHANGES IN SECURITIES
(a) - (d) None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
The Company has, from time to time, been in technical default of certain amended
indentures issued in connection with the Resorts acquisition ("Amended
Indentures"). The Company has relied upon the forbearance and waivers from a
majority interest of the holders of the senior notes issued pursuant to such
amended indentures. Value Partners, Ltd., a Texas limited partnership ("Value
Partners") represents a majority in interest of the holders of the senior notes.
The Company has borrowed other amounts from Value Partners from time to time
(some of which have been in technical default for which forbearance or waivers
have been granted) and may seek to borrow additional funds, or obtain equity
investments, from Value Partners in the future.
During the quarter ended March 31, 1999, the Company was in technical default
of, and had not timely paid a $1.0 million loan from Value Partners, which was
due on September 15, 1998 (the "Value Partners Loan") and is currently
negotiating an extension of the Value Partners Loan. On July 30, 1999, the
Company received from Value Partners a waiver of such default and a waiver of
the cross defaults on the Amended Indentures, until January 1, 2000 (except for
future payment defaults on the Amended Indentures) by the majority in interest
of the holders of the senior notes. Value Partners also granted an extension of
the Value Partners Loan until January 1, 2000 with the understanding that the
Company and Value Partners will work in good faith to renegotiate the loan terms
prior to August 31, 1999. A default by the Company on this loan (or any loan)
would result in a default on all of the Company's debt instruments and would
have a material adverse effect on the Company's financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
None.
8
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ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 10-QSB
a. Exhibits
<TABLE>
<CAPTION>
ITEM NO. ITEM METHOD OF FILING
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<S> <C> <C>
3.1 Articles of Incorporation Incorporated by reference to Exhibit 3.1
contained in the registration statement on
Form SB-2 (File No. 33-85446-A).
3.2 By-laws Incorporated by reference to Exhibit 3.2
contained in the registration statement on
Form SB-2 (File No. 33-85446-A).
4.1 Specimen Common Stock Certificate Incorporated by reference to Exhibit 4.1
contained in the registration statement on
Form SB-2 (File No. 33-85446-A).
4.2 Specimen Redeemable Common Stock Purchase Incorporated by reference to Exhibit 4.2
Warrant contained in the registration statement on
Form SB-2 (File No. 33-85446-A).
4.3 Form of Warrant Agreement Incorporated by reference to Exhibit 4.3
contained in the registration statement on
Form SB-2 (File No. 33-85446-A).
4.4 Confidential Private Placement Memorandum dated Incorporated by reference to Exhibit 4.4
June 17, 1996 contained in Form 10-KSB for the fiscal year
ended December 31, 1996. (File No. 0-25244)
4.5 Supplement No. 1 dated January 14, 1997 to Incorporated by reference to Exhibit 4.5
Confidential Private Placement Memorandum dated contained in Form 10-KSB for the fiscal year
June 17, 1996 ended December 31, 1996. (File No. 0-25244)
4.6 Indenture dated as of November 1, 1996 Incorporated by reference to Exhibit 4.6
between the Company and Trans World Gaming contained in Form 10-KSB for the fiscal year
of Louisiana, Inc., as Issuer, and U.S. Trust ended December 31,1996. (File No. 0-25244)
Company of Texas, N.A., as Trustee
4.7 Form of 12% Secured Convertible Senior Bond Incorporated by reference to Exhibit 4.7
due June 30, 1999 contained in Form 10-KSB for the fiscal year
ended December 31, 1996. (File No. 0-25244)
4.8 Form of Warrant to Purchase Common Stock Incorporated by reference to Exhibit 4.8
Dated July 1, 1996 contained in Form 10-KSB for the fiscal year
ended December 31, 1996. (File No. 0-25244)
4.9 Form of Warrant for Purchase of Shares of Incorporated by reference to Exhibit 4.9
Common Stock dated January 1, 1997 contained in Form 10-KSB for the fiscal year
ended December 31, 1996. (File No. 0-25244)
4.10 Form of Non-Negotiable Promissory Note dated Incorporated by reference to Exhibit 4.10
January 1, 1997 contained in Form 10-KSB for the fiscal year
ended December 31, 1996. (File No. 0-25244)
4.11 First Amended Senior Secured Promissory Note Incorporated by reference to Exhibit 4.11
dated December 19, 1997 contained in Form 10-KSB for the fiscal year
ended December 31, 1997 filed on March 30,
1998. (File No. 0-25244)
4.12 Form of Warrant for Purchase of Shares of Incorporated by reference to Exhibit 4.12
Common Stock dated January 15, 1998 contained in Form 10-KSB for the fiscal year
ended December 31, 1997 filed on March 30,
</TABLE>
9
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<TABLE>
<CAPTION>
ITEM NO. ITEM METHOD OF FILING
- -------- ---- ----------------
<S> <C> <C>
1998. (File No. 0-25244)
4.13 Lenders Waiver and Option Agreement dated Incorporated by reference to Exhibit 4.13
March 9, 1998 contained in Form 10-KSB for the fiscal year
ended December 31, 1997 filed on March 30,
1998. (File No. 0-25244)
4.14 Indenture dated March 31, 1998 among the Incorporated by reference to Exhibit 4(I)
Company, TWG International U.S. Corporation, contained in the Form 8-K filed on April 14,
TWG Finance Corp. and U.S. Trust Company of 1998 (File No. 0-25244)
Texas, N.A.
4.15 Series C Warrant to Purchase Common Stock Incorporated by reference to Exhibit 4(II)
dated March 31, 1998 contained in the Form 8-K filed on April 14,
1998 (File No. 0-25244)
4.16 Indenture dated March 31, 1998 between TWG Incorporated by reference to Exhibit 4(III)
International U.S. Corporation and U.S. Trust contained in the Form 8-K filed on April 14,
Company of Texas, N.A. 1998 (File No. 0-25244)
4.17 Consent to Amend Indenture, Bonds and Warrants Incorporated by reference to Exhibit 4(IV)
dated March 25, 1998 by and between the contained in the Form 8-K filed on April 14,
Company, Trans World Gaming of Louisiana Inc., 1998 (File No. 0-25244)
U.S. Trust Company of Texas, N.A., and certain
individuals
4.18 First Amended Indenture dated March 31, 1998 Incorporated by reference to Exhibit 4(V)
among the Company, TWGLa and U.S. Trust Company contained in the Form 8-K filed on April 14,
of Texas, N.A. 1998 (File No. 0-25244)
4.19 Series A Warrant to Purchase Common Stock dated Incorporated by reference to Exhibit 4(VI)
March 31, 1998 contained in the Form 8-K filed on April 14,
1998 (File No. 0-25244)
4.20 Series B Warrant to Purchase Common Stock Incorporated by reference to Exhibit 4(VII)
dated March 31, 1998 contained in the Form 8-K filed on April 14,
1998 (File No. 0-25244)
4.21 Agreement to Amend Warrants dated March 31, Incorporated by reference to Exhibit 4(VIII)
1998 among the Company and the named Holders contained in the Form 8-K filed on April 14,
1998 (File No. 0-25244)
4.22 Series D Warrant to Purchase Common Stock Incorporated by reference to Exhibit 4(IX)
dated March 31, 1998 contained in the Form 8-K filed on April 14,
1998 (File No. 0-25244)
4.23 Lender's Waiver dated July 30, 1999 Filed herewith
10.1 Agreement for Exchange of Shares dated July 12, Incorporated by reference to Exhibit 10.1
1994, between the Company and the contained in the registration statement on
shareholders of Lee Young Enterprises, Inc. Form SB-2 (File No. 33-85446-A).
10.2 Asset Purchase Agreement dated as of September Incorporated by reference to Exhibit 10.2
21,1994, between the Company and Prime contained in the registration statement on
Properties, Inc. Form SB-2 (File No. 33-85446-A).
10.3 Agreement of Sale dated as of September 21, Incorporated by reference to Exhibit 10.3
1994,between the Company and Prime Properties, contained in the registration statement on
Inc. Form SB-2 (File No. 33-85446-A).
10.4 Form of Lease between Prime Properties, Inc. Incorporated by reference to Exhibit 10.4
and the Company. contained in the registration statement on
Form SB-2 (File No. 33-85446-A).
10.5 Agreement dated September 21, 1994, among Incorporated by reference to Exhibit 10.5
Chrysolith, LLC, Prime Properties, Inc., contained in the registration statement on
Monarch Casinos, Inc. of Louisiana, Form SB-2 (File No. 33-85446-A).
("Monarch") and the Company.
10.6 Asset Purchase Agreement dated September 21, Incorporated by reference to Exhibit 10.6
1994, between Chrysolith L.L.C. and Monarch contained in the registration statement on
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
ITEM NO. ITEM METHOD OF FILING
- -------- ---- ----------------
<S> <C> <C>
1994, between Chrysolith L.L.C. and Monarch contained in the registration statement on
Form SB-2 (File No. 33-85446-A).
10.7 Lease (with option) dated May 10, 1994 among Incorporated by reference to Exhibit 10.7
Lula Miller, Inc., Charles A. Jones III and contained in the registration statement on
Kelly McCoy Jones, as Lessor, and Monarch, as Form SB-2 (File No. 33-85446-A).
Lessee.
10.8 Offer to Purchase dated October 4, 1994, among Incorporated by reference to Exhibit 10.8
Trans World Gaming of Louisiana, Inc., Monarch, contained in the registration statement on
Lula Miller, Inc., Charles A. Jones III and Form SB-2 (File No. 33-85446-A).
Kelly McCoy Jones.
10.9 Memorandum of Agreement dated March 18, 1994, Incorporated by reference to Exhibit 10.9
between the Company and Yves Gouhier and contained in the registration statement on
Camille Costard to acquire shares of Casino Form SB-2 (File No. 33-85446-A).
Cherbourg S.A., as amended (English
translation, except amendment is in French.)
10.10 Shareholder Agreement dated April 7, 1994, Incorporated by reference to Exhibit 10.10
between the Company and Michael A. Edwards, as contained in the registration statement on
the shareholders of Monarch Form SB-2 (File No. 33-85446-A).
10.11 Employment Agreement dated March 6, 1996 Incorporated by reference to Exhibit 10.11
between the Company and Stanley Kohlenberg contained in the Form 10-KSB for the
fiscal year ended December 31, 1995
(File No. 0-25244).
10.12 Employment Agreement between the Company and Incorporated by reference to Exhibit 10.12
Dominick J. Valenzano contained in the registration statement on
Form SB-2 (File No. 33-85446-A).
10.13 1993 Incentive Stock Option Plan Incorporated by reference to Exhibit 10.13
contained in the registration statement on
Form SB-2 (File No. 33-85446-A).
10.14 Form of 41/2% Bridge Note Incorporated by reference to Exhibit 10.14
contained in the registration statement on
Form SB-2 (File No. 33-85446-A).
10.15 Form of 10% Secured Bridge Incorporated by reference to Exhibit 10.15
contained in the registration statement on
Form SB-2 (File No. 33-85446-A).
10.16 Collateral Mortgage relating to the Woodlands Incorporated by reference to Exhibit 10.16
Travel Plaza. contained in the registration statement on
Form SB-2 (File No. 33-85446-A).
10.17 Operating Agreement dated as of December 22, Incorporated by reference to Exhibit 10.17
1994 Gold Coin. contained between the Company and Chrysolith
relating to the in the Form 10-KSB for the
fiscal year ended December 31, 1994
(File No. 0-25244).
10.18 Note in principal amount $75,000 payable by Incorporated by reference to Exhibit 10.18
Monarch (and assumed by the Company). contained in the Form 10-KSB for the fiscal
year ended December 31, 1994 (File No. 0-25244).
10.19 Lease Agreement dated May 1, 1993 between Incorporated by reference to Exhibit 10.19
National Auto/Truck Stops, Inc. and Prime contained in the Form 10-KSB for the fiscal
Properties with respect to the 76 Plaza year ended December 31, 1995 (File No. 0-25244).
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
ITEM NO. ITEM METHOD OF FILING
- -------- ---- ----------------
<S> <C> <C>
10.20 Agreement and General Release dated as of Incorporated by reference to Exhibit 10.20
March 6, 1996 between the Company and contained in the Form 10-KSB for the fiscal
R. K. Merkey. year ended December 31, 1995 (File No. 0-25244).
10.21 Forbearance Agreement dated January 19, 1996 Incorporated by reference to Exhibit 10.21
between the Company and Chrysolith contained in the Form 10-KSB for the fiscal
year ended December 31, 1995 (File No.
0-25244).
10.22 Letter Agreement dated January 30, 1996 between Incorporated by reference to Exhibit 10.22
the Company and Chrysolith regarding contained in the Form 10-KSB for the fiscal
forbearance payments year ended December 31, 1995 (File No. 0-25244).
10.23 Consulting Agreement dated January 1, 1997 Incorporated by reference to Exhibit 10.23
between the Company and Stanley Kohlenberg contains in Form 10-KSB for the fiscal year
ended December 31, 1996 (File No. 0-25244).
10.24 Employment Agreement dated December 26, 1996 Incorporated by reference to Exhibit 10.24
between the Company and Andrew Tottenham contains in Form 10-KSB for the fiscal year
ended December 31, 1996 (File No. 0-25244).
10.25 Employment Agreement date February 1, 1997 Incorporated by reference to Exhibit 10.25
between the Company and Christopher Moore contains in Form 10-KSB for the fiscal year
ended December 31, 1996 (File No. 0-25244).
10.26 Cancellation Agreement dated as of October 3, Incorporated by reference to Exhibit 10.26
1996 between the Company and Mid-City Associates contained in the Form 10-KSB for the fiscal
year ended December 31, 1996 (File No. 0-25244).
10.27 Agreement of Lease dated as of October 2, 1996 Incorporated by reference to Exhibit 10.27
between the Company and Mid-City Associates contained in the Form 10-KSB for the fiscal
year ended December 31, 1996 (File No. 0-25244).
10.28 Stock Purchase Agreement dated as of January 1, Incorporated by reference to Exhibit 10.28
1997 among the Company, Andrew Tottenham contained in the Form 10-KSB for the fiscal
and Robin Tottenham year ended December 31, 1996 (File No. 0-25244).
10.29 Employment Agreement dated April 15, 1997 Incorporated by reference to Exhibit 10.29
between Company and James Hardman contained in Form 10-KSB for the fiscal year
ended December 31, 1997 filed on March 30,
1998. (File No. 0-25244)
10.30 Stock Purchase Agreement dated as of January 20, Incorporated by reference to Exhibit 10.30
1998 between the Company and 21st Century contained in Form 10-KSB for the fiscal year
Resorts ended December 31, 1997 filed on March 31,
1998. (File No. 0-25244)
10.31 Form of the Subscription Agreement for the Incorporated by reference to Exhibit 10.31
Private Placement contained in Form 10-KSB for the fiscal year
ended December 31, 1997 filed on March 31,
1998. (File No. 0-5244)
10.32 Escrow Agreement dated March 17, 1998 among the Incorporated by reference to Exhibit 10.32
Company, TWG Finance Corp., contained in Form 10-KSB for the fiscal year
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
ITEM NO. ITEM METHOD OF FILING
- -------- ---- ----------------
<S> <C> <C>
TWG International U.S. Corporation as Issuer and ended December 31, 1997 filed on March 30,
U.S. Trust Company of Texas, N.A., as Trustee 1998. (File No. 0-25244)
10.33 Consulting Agreement between Chrysolith, L.L.C. Incorporated by reference to Exhibit 10
and Lee Young dated January 1, 1997 contained in the Form 10-QSB for the quarter
ended June 30, 1996 filed on August 14, 1996
(File No. 0-25244)
10.34 Purchase Agreement dated as of April 15, 1997 Incorporated by reference to Exhibit 10.34
among the Company, James R. Hardman, Jr. and contained in the Form 10-Q for the quarter
Multiple Application Tracking System ended March 31, 1997, filed on May 9, 1997
(File No. 0-25244)
10.35 License Agreement dated as of April 15, 1997 Incorporated by reference to Exhibit 10.35
between the Company and James R. Hardman, Jr. contained in the Form 10-Q for the quarter
ended March 31, 1997, filed on May 9, 1997
(File No. 0-25244)
10.36 Loan Agreement dated June 11, 1997 between the Incorporated by reference to Exhibit 10.36
Company and Value Partners contained in the Form 8-K filed on June 17,
1997 (File No. 0-25244)
10.37 $350,000 Senior Promissory Note dated June 11, Incorporated by reference to Exhibit 10.37
1997 contained in the Form 8-K filed on June 17,
1997 (File No. 0-25244)
10.38 Joint Activity Agreement dated March 31, 1997 Incorporated by reference to Exhibit 10.38
between Mr. Mahmud Avdiyev and Tottenham & contained in the Form 8-K filed on June 17,
Co., d/b/a ART marketing Ltd. 1997 (File No. 0-25244)
10.39 Loan Agreement dated October 27, 1997, between Incorporated by reference to Exhibit 10.39
Value Partners, and the Company contained in the Form 10-QSB for the quarter
ended September 30, 1997, filed on November
12, 1997 (File No. 0-25244)
10.40 $262,500 Senior Promissory Note dated October Incorporated by reference to Exhibit 10.40
27, 1997 contained in the Form 10-QSB for the quarter
ended September 30, 1997, filed on November
12, 1997 (File No. 0-25244)
10.41 Warrant to Purchase Common Stock dated Incorporated by reference to Exhibit 10.41
November 27, 1997 contained in the Form 10-QSB for the quarter
ended September 30, 1997, filed on November
12, 1997 (File No. 0-25244)
10.42 Employment Agreement between the Company and Incorporated by reference to Exhibit 10.42
Rami S. Ramadan dated July 12, 1999 contained in the Form 8-K filed on July 13,
1999 (File No. 0-25244)
10.43 Severance Agreement between the Company and Incorporated by reference to Exhibit 10.43
Stanley Kohlenberg dated May 23, 1999 contained in the Form 8-K filed on July 13,
1999 (File No. 0-25244)
10.44 Severance Agreement among the Company, Trans Incorporated by reference to Exhibit 10.44
World Gaming of Louisiana, TWG International contained in the Form 8-K filed on July 13,
U.S. Corporation and TWG Finance Corp. and 1999 (File No. 0-25244)
Dominick J. Valenzano dated July 12, 1999
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
ITEM NO. ITEM METHOD OF FILING
- -------- ---- ----------------
<S> <C> <C>
10.46 Form of Lease Agreement between London Incorporated by reference to Exhibit 10.46
Investments s.r.o. and the Company contained in the Form 10KSB filed on August
3, 1999, (File No.0-25244)
27.1 Financial Data Schedule Filed herewith
</TABLE>
b. Reports on Form 8-K
During the quarter ended March 31, 1999, the Company filed a Periodic
Report on Form 8-K on February 25, 1999. This Periodic Report related to the
resignation of Pannell Kerr Forster PC as the Company's independent auditor and
the selection and appointment of Rothstein Kass & Company, P.C. ("RKC") as the
Company's new independent auditor. RKC agreed to perform an audit of the Company
for the year ended December 31, 1998 and was also appointed to perform an audit
of the Company for the year ending December 31, 1999.
SIGNATURES
In accordance with the requirements of Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
TRANS WORLD GAMING CORP.
Date: August 19, 1999 By: /s/ RAMI S. RAMADAN
-----------------------
Chief Executive Officer
14
<PAGE>
EXHIBIT 4.23
FIRST AMENDMENT AND WAIVER
This First Amendment and Waiver (this "Amendment:") is dated as of July
30, 1999 and is by and between Value Partners, Ltd., a Texas limited partnership
(the "Lender") and Trans World Gaming Corp., a Nevada corporation (the
"Borrower"). Unless otherwise indicated, all capitalized terms used herein have
the respective meaning provided such terms in the Loan Agreement referred to
below.
W I T N E S S E T H
WHEREAS, the Lender and the Borrower are parties to a Loan Agreement
dated as of May 19, 1998; and
WHEREAS, that certain Promissory Note dated May 19, 1998 was issued in
the principal sum of $1,000,000.00 pursuant to the Loan Agreement; and
WHEREAS, subject to and on the terms and conditions set forth in this
Amendment, the parties wish to amend the Loan Agreement and the Promissory Note
and the Lender wishes to grant certain waivers to the Loan Agreement and
Promissory Note, in each case as provided herein;
NOW THEREFORE, it is agreed:
I Amendment to Loan Agreement
1. Section 12 of the Loan Agreement is hereby amended by deleting
"September 15, 1998" in such Section and inserting "January 1, 2000".
II. Amendment to Promissory Note
1. Section 1(c) is amended by deleting "September 15, 1998" in such
section and inserting "January 1, 2000".
III. Waiver
1. Notwithstanding anything to the contrary contained in the Loan
Agreement and the Promissory Note, the Lender hereby waives any default or
event of default that has, in the past arisen, or that may arise in the
future under the Loan Agreement or Promissory Note through and including
January 1, 2000.
IV. Miscellaneous
1. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision or any continuing
or future default of the Loan Agreement or any other loan document except
as provided herein
<PAGE>
2. This Amendment may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. A complete set
of counterparts shall be lodged with the Lender and the Borrower.
3. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF
THE STATE OF NEW YORK.
VALUE PARTNERS, LTD.
/s/
---------------------------------------
Timothy G. Ewing
Managing Partner of Ewing & Partners
General Partner of Value Partners, Ltd.
TRANS WORLD GAMING CORP.
A Nevada Corporation
/s/
---------------------------------------
Rami S. Ramadan
Its: Chief Executive Officer and Chief
Financial Officer
<PAGE>
WAIVER OF CONVENANT VIOLATIONS
TWG Finance Corp., a Nevada U.S. A. corporation, the holder of greater
than 50% in aggregate principal amount of the Securities currently outstanding
(the "Holder") under the Indenture dated March 31, 1998, as supplemented by that
certain First Supplemental Trust Indenture dated October 29, 1998 (the
"Indenture") with TWG International U.S. Corporation, a Nevada, U.S.A.
corporation (the "Issuer"), and U.S. Trust Company of Texas, N.A., as Trustee,
does hereby consent to the following:
1. The Holder, pursuant to Section 5.10 of the Indenture, by notice
to the Issuer and the Trustee, and to the extent permissible under the
Indenture, waives each action or omission by the Issuer which may constitute
default or Event of Default under the Indenture and their respective
consequences under the Indenture through and including January 1, 2000. This
wavier shall not extend to any subsequent or other default or impair any right
consequent thereon. This wavier shall not extend to any provision of the
Indenture regarding payment of principal and/or interest, including the timely
payment thereof. Upon this waiver, any action or omission by the Issuer which
may constitute a default or Event of Default under the Indenture, as set forth
above, shall cease to exist and be deemed to have been cured and not to have
occurred for every purpose of the Indenture.
2. Terms not defined herein are defined as set forth in the
Indenture.
3. This Waiver may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together one said instrument. A complete set of counterparts shall be
lodged with the Issuer, the Trustee and the Holder.
Dated: July 30, 1999
VALUE PARTNERS, LTD. TWG FINANCE CORP.
EWING & PARTNERS, A TEXAS GENERAL PARTNERSHIP
BY: /s/ BY: /s/
----------------------- -----------------------
TIMOTHY G. EWING ANDREW TOTTENHAM
MANAGING PARTNER OF EWING & PARTNERS ITS: PRESIDENT
GENERAL PARTNER OF VALUE PARTNERS, LTD.
THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE ABOVE WAIVER.
U.S. TRUST COMPANY OF TEXAS, N.A.
(TRUSTEE)
BY: /s/
--------------------------------
John C. Stohlmann
Vice President
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF OPERATIONS FOUND ON
PAGE F-3 AND F-4 OF THE COMPANY'S 10KSB/A FOR THE YEAR ENDED DECEMBER 31, 1998
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 1,386
<SECURITIES> 0
<RECEIVABLES> 93
<ALLOWANCES> 0
<INVENTORY> 32
<CURRENT-ASSETS> 2,711
<PP&E> 4,670
<DEPRECIATION> 592
<TOTAL-ASSETS> 19,231
<CURRENT-LIABILITIES> 6,321
<BONDS> 23,177
0
0
<COMMON> 3
<OTHER-SE> (10,270)
<TOTAL-LIABILITY-AND-EQUITY> 19,231
<SALES> 0
<TOTAL-REVENUES> 4,715
<CGS> 0
<TOTAL-COSTS> 5,031
<OTHER-EXPENSES> 189
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 880
<INCOME-PRETAX> (1,385)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,385)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,385)
<EPS-BASIC> (0.41)
<EPS-DILUTED> (0.41)
</TABLE>
