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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
/x/ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Quarterly period ended June 30, 1998
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO .
COMMISSION FILE NO.: 0-25244
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TRANS WORLD GAMING CORP.
(Exact name of registrant 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)
Registrant's telephone number, including area code: (212) 563-3355
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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 /X/ NO / /
Shares of the Registrant's Common Stock, par value $.001, outstanding as
of August 27, 1999: 3,364,286
Transitional Small Business Disclosure Format (check one: YES / / NO /x/)
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TRANS WORLD GAMING CORP. HEREBY AMENDS AND RESTATES IN ITS ENTIRETY THE
FORM 10-QSB FOR THE FISCAL QUARTER ENDED JUNE 30, 1998. THIS AMENDMENT AND
RESTATEMENT IS THE RESULT OF A REVIEW BY OUR INDEPENDENT AUDITORS, ROTHSTEIN
KASS & CO. THE PURPOSE OF THE AMENDMENT IS TO MAKE CORRECTIONS AS DESCRIBED IN
NOTE 5. (ENTITLED "RESTATEMENT OF CERTAIN TRANSACTIONS AS OF JUNE 30, 1998") TO
THE FINANCIAL STATEMENTS APPEARING IN THIS REPORT.
TRANS WORLD GAMING CORP.
FORM 10-QSB/A
FOR THE QUARTER ENDED JUNE 30, 1998
INDEX
PART 1 - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEET (AMENDED) AS OF JUNE 30, 1998
(UNAUDITED). 1
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (AMENDED)(UNAUDITED)
FOR FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1998 AND 1997. 2
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (AMENDED) (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997. 3
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (AMENDED). 4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 5
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 10
ITEM 2. CHANGES IN SECURITIES 11
ITEM 3. DEFAULT UPON SENIOR SECURITIES 12
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS 12
ITEM 5. OTHER INFORMATION 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13
</TABLE>
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FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED STATEMENTS (AMENDED)
TRANS WORLD GAMING CORP.
CONDENSED CONSOLIDATED BALANCE SHEET (AMENDED)
JUNE 30, 1998
(IN THOUSANDS)
(UNAUDITED)
ASSETS
<TABLE>
<S> <C>
CURRENT ASSETS
Cash & equivalents $ 3,766
Accounts/Notes receivable 1,121
Inventories 65
Other current assets 597
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Total current assets 5,549
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PROPERTY AND EQUIPMENT -net 3,083
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OTHER ASSETS
Investment at equity 75
Goodwill 17,931
Deferred costs and other assets 928
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Total other assets 18,934
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TOTAL ASSETS $27,566
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LIABILITIES AND STOCKHOLDERS EQUITY/(DEFICIT)
CURRENT LIABILITIES
Current portion of long term debt $ 1,085
Accounts payable and accrued expenses 3,585
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Total current liabilities 4,670
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LONG TERM DEBT, net of current portion 17,713
LONG TERM DEBT, other long term liabilities 5,817
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23,530
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STOCKHOLDERS EQUITY/(DEFICIT)
Capital stock 3
Additional paid-in-capital 8,896
Stock warrants outstanding 5,237
Accumulated deficit (14,770)
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Total stockholders equity/(deficit) (634)
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TOTAL LIABILITIES AND STOCKHOLDERS EQUITY/(DEFICIT) $27,566
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</TABLE>
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS
1
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TRANS WORLD GAMING CORP.
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (AMENDED)
(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Six months ended Three months ended
June 30, 1998 June 30, 1998
------------------------ ---------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES $6,358 $3,396 $4,789 $1,725
COSTS AND EXPENSES
Cost of revenue 4,845 2,107 3,857 1,114
Administrative 979 595 769 267
Depreciation and Amortization 920 182 802 99
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TOTAL COSTS AND EXPENSES 6,744 2,884 5,428 1,480
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EARNINGS/(LOSS) FROM OPERATIONS (386) 512 (639) 245
Interest expense 1,121 354 838 182
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EARNINGS/(LOSS) BEFORE TAXES (1,507) 158 (1,477) 63
Provision for tax 101 30 101 12
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NET EARNINGS/(LOSS) $(1,608) $ 128 $(1,578) $51
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------- ------ ------- ------
Earnings/(loss) per share - basic $(0.53) $0.04 $(0.52) $0.02
Weighted Average of Common
shares used in computing basic
earnings/(loss) per share 3,044 3,044 3,044 3,044
</TABLE>
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS
2
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TRANS WORLD GAMING CORP.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (AMENDED)
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30
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1998 1997
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<S> <C> <C>
Cash flows used by operating activities $ (370) $ 291
Cash flows used by investing activities (13,396) (314)
Cash flows provided/(used) by financing activities 17,334 (211)
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Net increase/(decrease) in cash 3,568 (234)
Cash - beginning of period 198 489
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Cash - end of period $ 3,766 $ 255
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</TABLE>
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS
3
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TRANS WORLD GAMING CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS (AMENDED)
1. Unaudited Statements.
The accompanying condensed consolidated financial statements (amended)
of Trans World Gaming Corp. (the "Company" or "TWG") as of June 30,
1998 and for the three and six months ended June 30, 1998 and June 30,
1997 are unaudited and reflect all adjustments of a normal and
recurring nature to present fairly the financial position and results
of operation and cash flows for the interim periods. These unaudited
statements have been prepared by the Company pursuant to the rules and
regulations of the Securities and Exchange Commission. Pursuant to such
rules and regulations, certain financial information and footnote
disclosures normally included in such financial statements have been
condensed or omitted.
These financial statements should be read in conjunction with the
audited, consolidated financial statements and notes thereto, together
with management's discussion and analysis or plan of operations,
contained in the Company's Annual Report on Form 10-KSB/A for the year
ended December 31, 1997. The results of operations for the six months
ended June 30, 1998 are not necessarily indicative of the results for
the entire year ending December 31, 1998.
2. Basic earnings (loss) per share is computed by dividing net income
(loss) by the weighted average number of common shares outstanding
during the period. Diluted earnings per 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 per share has not been
presented for the quarters ended June 30, 1998 and 1997 since the
inclusion of common stock equivalents either did not have an effect on
basic earnings per share or would have been antidilutive.
3. During the six months ended June 30, 1998, the Company incurred $17
million in long term debt which was used to finance the acquisition of
21st Century Resorts a.s. ("Resorts") in the Czech Republic, and retire
short-term debt. The Company also acquired 90% of the shares of Casino
de Zaragoza ("CDZ") in Spain and assumed $4.8 million of long term debt
of the CDZ.
4. The Company is involved in a legal proceeding with Monarch Casinos in
Louisiana over an alleged breach of contract by TWG, has negotiated a
settlement by and among TWG, National Auto Truckstops, Inc.
("National") and Prime Properties, Inc. ("Prime") in Lafayette,
Louisiana regarding a franchise dispute between National and Prime.
5. Restatement of Certain Transactions as of June 30, 1998
a. PREVIOUSLY OVERSTATED DEBT AND UNDERSTATED SHAREHOLDERS'
DEFICIT
Of the $17 million principal amount of notes and warrants
issued in the private placement offering in March 1998
("Private Placement"), the Company allocated approximately
$4.7 million as the estimated value of the warrants issued
with the notes. This amount is being amortized as additional
interest expense and an increase to notes payable over the
lives of the notes using the effective interest method until
such notes are repaid or the warrants are converted to equity.
b. RECORDINGS OF THE ACQUISITIONS OF RESORTS AND CDZ
The acquisitions of Resorts and CDZ were erroneously recorded
in the interim consolidated financial statements. Furthermore,
the amortization period of goodwill recorded in connection
with these acquisitions was changed from 15 to 7 years.
4
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c. BALANCE SHEET RECLASSIFICATIONS
Various balance sheet reclassifications were made to conform
to the presentation of the 1998 audited consolidated financial
statements.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
RESULTS OF OPERATION
THREE MONTHS ENDED JUNE 30, 1998 AND 1997
The Company's operations resulted in net loss of $1.6 million for the three
months ended June 30, 1998, representing a $1.7 million decrease from the net
income of $51,000 for the three months ended June 30, 1997. The Company's
earnings before interest, taxes, depreciation and amortization ("EBITDA")
totaled $62,000 for the three months ended June 30, 1998, a decrease of $80,000
for the three months ended June 30, 1997.
Revenues totaled $4.8 million for the three months ended June 30, 1998 compared
to $1.7 million for the same period in 1997, an increase of $3.1 million. Of
such amount, $3.2 million represented revenues from new businesses acquired in
the first and second quarters of 1998, as described below. Video poker revenues
at the Gold Coin video poker parlor (the "Gold Coin") decreased 7%, from
$948,000 to $883,000, for the three months ended June 30, 1997 and 1998,
respectively. Revenues from the Toledo Palace increased 112% from $58,000 to
$122,000, for the respective quarters due to the increase in the number of video
poker devices from 15 to 33 which occurred in June 1997.
Revenues from retail operations at the Woodlands truck stop in Louisiana
decreased 28% from $717,000 for the three months ended June 30, 1997 to $518,000
for the three months ended June 30, 1998, primarily due to lower than expected
fuel sales.
On March 31,1998, the Company acquired Resorts, a Czech Republic joint stock
company, (see - "Liquidity and Capital Resources") which operates two casinos
in the Czech Republic and has the right to build a third. Revenues from Resorts
for the three months ended June 30, 1998 totaled $2.0 million. On April 17,
1998, TWG acquired 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 June 30, 1998 were $1.2 million. Neither Resorts nor CDZ
generated revenues for the Company in the comparable three month period in 1997.
Costs incurred in the operation of the recently acquired casinos for the three
months ended June 30, 1998 in the Czech Republic were $1.5 million and in Spain
totaled $1.6 million. These costs were not incurred in the comparable quarter in
1997.
Total costs and expenses increased from $1.5 million for the three months ended
June 30, 1997 to $5.4 million for the three months ended June 30, 1998, an
increase of $3.9 million of which $3.1 million related directly to the operation
of Resorts and CDZ. Video poker operations in Louisiana recorded direct costs of
$319,000 for the three months ended June 30, 1998, which increased by 14% from
the costs of $279,000 during the comparable 1997 quarter, due primarily to the
costs associated with the increase in the number of video poker devices at the
Toledo Palace.
Retail expenses at the Woodlands truck stop decreased approximately $165,000, or
23%, from $726,000 for the three months ended June 30, 1997 to $561,000 for the
comparable quarter of 1998, due primarily to a decrease in direct costs
associated with decreased fuel sales.
MATS expenses, consisting primarily of labor and travel-related costs, amounted
to $61,000 for the three months ended June 30, 1998 an increase of $27,000 over
the comparable quarter in 1997.
Administrative costs increased $384,000 to $769,000, for the three months ended
June 30, 1998 as compared to $267,000 in the comparable quarter in 1997. Costs
incurred to support the Resorts and CDZ acquisitions totaled $350,000 for the
three months ended June 30, 1998, consisting primarily of legal ($132,000),
audit ($44,000), advertising ($33,000), consulting fees ($30,000) and travel and
administrative support costs ($111,000).
5
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Depreciation and amortization for the three month periods ending June 30, 1998
and June 30, 1997 were $802,000 and $99,000 respectively. The increase was due
primarily to the amortization of goodwill from the investments in the Czech
Republic, Spain, Bishkek and the amortization of deferred debt issuance costs
relating to the Private Placement (see - "Liquidity and Capital Resources"). In
addition, in January, 1998, the President of Azerbaijan ordered the closing of
all of the casinos in Azerbaijan which included the Boxer Casino for which the
Company had a management agreement. Management cannot predict when, or if, the
Boxer Casino will reopen for business. The shutdown resulted in a write-off of
the balance of the investment of $303,000 in the quarter ended June 30, 1998.
Interest expense increased by $656,000 from $182,000 for the three months ended
June 30,1997 to $838,000 for the comparable quarter in 1998. Interest expense in
connection with the Private Placement (see - "Liquidity and Capital Resources")
amounted to $510,000 for the quarter ended June 30, 1998 accounting for a
majority of the increase over the comparable three month period in 1997.
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
The Company's operations resulted in net loss of $1.6 million for the six months
ended June 30, 1998, representing a $1.7 million decrease from the net income of
$128,000 for the six months ended June 30, 1997. The Company's EBITDA totaled
$433,000 for the six months ended June 30, 1998, a decrease of $261,000 compared
to the six months ended June 30, 1997.
Revenues totaled $6.4 million for the six months ended June 30, 1998, compared
to $3.4 million for the same period in 1997, an increase of $3.0 million. Such
amount, $3.2 million represented revenue from the Resorts and CDZ acquisitions.
Video poker revenues at the Gold Coin decreased 5%, from $1.9 million to $1.8
million, for the six months ended June 30, 1997 and 1998, respectively. Revenues
from the Toledo Palace increased 97% from $120,000 to $236,000, for the
respective six month periods due to the increase in the number of video poker
devices.
Revenues from retail operations at the Woodlands truck stop decreased 28% from
$1.4 million for the six months ended June 30, 1997 to $1.0 million for the six
months ended June 30, 1998, primarily due to lower than expected fuel sales.
On March 31,1998, the Company acquired Resorts which operates two operating
casinos in the Czech Republic. Revenues from Resorts for the six months ended
June 30, 1998 totaled $2.0 million. On April 17, 1998, TWG acquired CDZ, which
operates a casino in Zaragoza, Spain. Revenues from CDZ for the six months ended
June 30, 1998 were $1.2 million. Neither Resorts nor CDZ generated revenues for
the Company in the comparable six month period in 1997.
Costs incurred in the operation of the recently acquired casinos for the six
months ended June 30, 1998 in the Czech Republic were $1.5 million and in Spain
totaled $1.6 million. Those costs were not incurred in the comparable period in
1997.
Total costs and expenses increased from $2.9 million for the six months ended
June 30, 1997 to $6.7 million for the six months ended June 30, 1998, an
increase of $3.8 million of which $3.1 million related directly to the operation
of Resorts and CDZ. Video poker operations in Louisiana recorded direct costs of
$619,000 for the six months ended June 30, 1998, an increase of 12% from the
costs of $555,000 during the comparable 1997 period, due primarily to the costs
associated with the increase in the number of video poker devices at the Toledo
Palace.
Retail expenses at the Woodlands truck stop decreased approximately $300,000, or
21%, from $1.4 million for the six months ended June 30, 1997 to $1.1 million
for the comparable 1998 period, due primarily to direct costs associated with
decreased fuel sales.
Consulting and business development costs incurred by the Tottenham & Co.
subsidiary increased $189,000, from $148,000 for the six months ended June
30,1997 to $337,000 for the comparable six month period of 1998, due to
increased travel and related costs incurred in support of the Company's new
business activities in Spain and the Czech Republic.
MATS expenses, consisting primarily of labor and travel-related costs, amounted
to $111,000 for the six months ended June 30, 1998, an increase of $77,000 over
the comparable period in 1997.
6
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Administrative costs increased $384,000, to $979,000, for the six months ended
June 30, 1998 as compared to $595,000 for the comparable period in 1997. Costs
incurred to support the new business acquisitions totaled $350,000 for the six
months ended June 30, 1998, consisting primarily of legal ($132,000), audit
($44,000), advertising ($33,000), consulting fees ($30,000) and travel and
administrative support costs ($111,000).
Depreciation and amortization for the six month periods ending June 30, 1997 and
June 30, 1998 were $182,000 and $920,000 respectively. The increase was due
primarily to the amortization of goodwill from the investments in the Czech
Republic, Spain, Bishkek and the amortization of deferred debt issuance costs
relating to the Private Placement (see - "Liquidity and Capital Resources"). In
addition, in January 1998, the President of Azerbaijan ordered the closing of
all of the casinos in Azerbaijan which included the Boxer Casino for which the
Company had a management contract. The shutdown resulted in a write-off of the
balance of the investment of $303,000 in the quarter ended June 30, 1998.
Management cannot predict when, or if, the Boxer Casino will reopen for
business.
Interest expense increased by $767,000, from $354,000 for the six months ended
June 30,1997 to $1.121 million for the comparable period in 1998. Interest
expense in connection with the Private Placement amounted to $785,000 for the
six months ended June 30, 1998 accounting for the majority of the increase over
the comparable six month period in 1997.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital, defined as current assets minus current
liabilities, increased $1.8 million to $879,000 for the six months ended June
30, 1998 from a working capital deficit of ($0.9 million) at December 31, 1997.
As described below, the Company used the proceeds of certain short term and long
term financings to acquire 21st Century Resorts a.s., a Czech Republic joint
stock company (see - the Form 10KSB/A for the year ended December 31, 1997, Item
1. "Description of Business") and to repay interest-bearing debt. The net
proceeds of the financings, offset by the investments and debt repayments,
resulted in an increase of $3.2 million in cash and equivalents to a balance of
$3.4 million at June 30, 1998.
On October 29, 1997, the Company and Value Partners, Ltd., a Texas limited
partnership, ("Value Partners") executed a loan which was amended on December
19, 1997, under which TWG had the ability to borrow up to $2,538,000 (the "First
Amended Loan Agreement"). As of June 30, 1998, the Company had borrowed
$2,338,000 under this loan, including the Bishkek Note described below, of which
$1,288,000 was repaid on March 31, 1998 from the proceeds of the Private
Placement (as described below) (see - the Form 10KSB/A for the year ended
December 31, 1997, Item 6. "Management's Discussion and Analysis or Plan of
Operations - Liquidity and Capital Resources").
On March 19, 1998, the Company and Value Partners executed a Lender's Waiver and
Option Agreement (the "Waiver") under which the Company borrowed $250,000 (the
"Bishkek Note") to fund the Bishkek Casino transaction. The Bishkek Casino is
located in Krygyz, a former member of the Soviet Union. The Company will repay
the principal and accrued interest in nine equal monthly installments starting
June 1, 1998 from available cash flow, excluding cash flow from the European
casinos. The Company has repaid $27,777 in principal payments through June 30,
1998. As of June 30, 1998, and as of the date hereof, the Company was and is
current on its payments under the Bishkek Note.
On March 31, 1998, the Company, with the assistance of Libra Investments, Inc.,
Los Angeles, California ("Libra") acting as placement agent, borrowed $17.0
million from fourteen sophisticated, accredited investors (the "Investors") in
the Private Placement. The loan is represented by 12% Senior Secured Notes (the
"Notes") issued pursuant to an indenture by and among TWG, TWG International
U.S. Corporation ("TWGI"), TWG Finance Corp. ("TFC") (both wholly-owned
subsidiaries of TWG) and U.S. Trust Company of Texas, N.A. acting as indenture
trustee. The Notes require mandatory prepayments based upon excess cash flow
generated by TWGI from the operation of the Czech casinos acquired in the
Resorts acquisition and bear interest at the rate of 12% per annum. (See - the
Form 8-K and Form 8-K/A filed with the Securities and Exchange Commission on
April 14, 1998 and June 15, 1998, respectively.) The proceeds of the Notes were
used for the net acquisition costs of, and improvements to, Resorts totaling
$12.6 million, to repay the First Amended Loan Agreement in the amount of $1.3
million, for costs and expenses of $1.4 million relating to the Private
Placement and working capital of $1.7 million. The initial payment under the
terms of the Note is due in September 1998. As of June 30, 1998 and as of the
date hereof, the Company was and is current on its payments under the Note.
7
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On May 19, 1998, the Company and Value Partners executed a Loan Agreement (the
"Loan Agreement") under which the Company borrowed $1,000,000 to fund the
purchase of the stock of CDZ (see - "Plan of Operations"). The loan is payable
in full on September 15, 1998 together with accrued interest at the rates of 12%
per annum.
The Company is currently negotiating to raise approximately $4 million from
private investors (the "Capital Raise") in order to recapitalize CDZ, provide
working capital to cover the projected operating losses and to repay the Loan
Agreement to Value Partners described in the paragraph above.
The Company believes, although there can be no assurance, that assuming the
Capital Raise is successful, existing cash and anticipated cash flows from
current operations will be sufficient to satisfy its on-going operational,
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.
PLAN OF OPERATIONS
The Company intends to continue operating the Gold Coin and the Toledo Palace as
they are presently being operated; however, the Company has made available for
sale its Woodlands property, where the Toledo Palace is located.
On December 22, 1994, the Company acquired from Chrysolith LLC, a Louisiana
limited liability company of which the Company owns 49% ("Chrysolith"), and
Prime, a Louisiana corporation, which leased the 76 Plaza, a truckstop in which
the Gold Coin is located from National, certain rights including an 18 year
sub-leasehold interest (the "Sub-Lease"), subject to the terms of an Over-lease
on the 76 Plaza between Prime, as lessee and National, as lessor. Should the
Over-Lease be terminated, the Company could have lost all of its rights under
the Sub-lease and Prime would have lost its establishment license for video
poker in the State of Louisiana. The Company acquired from Prime the right to a
50% interest in the profits of the Gold Coin under the terms of an agreement
under which the Company agreed to pay a total of $6.0 million for such profit
interest (the "Prime Agreement"). The Company's obligation under the Prime
Agreement was evidenced by a note, the final installment of which was paid in
full on December 23, 1997. On November 10, 1997, the Company was advised that on
October 16, 1997, National placed Prime on notice that its rights to occupy the
76 Plaza would terminate on January 23, 1998, due to an alleged breach of the
Over-Lease by Prime. The Company believed that the default by Prime was due, in
part, to the failure of Prime to pay certain sums due to National pursuant to
the Over-Lease. Consequently, on December 23, 1997, the Company filed a Petition
for Concursus in the 15th Judicial District Court, Lafayette Parish, Louisiana,
Case No. 976174-D, and paid the final payment of $292,000 under the Prime Note
into the registry of the court, protesting that such sum was actually due and
owing based on the alleged breach of the Over-Lease by Prime. On or about
December 30, 1997, the Company received notice from Prime that Prime (which was
not aware of the Petition for Concursus) considered the Company in default of
the Sub-lease for the Gold Coin premises and demanded that the Company pay to
Prime an amount equal to approximately $299,513 on or before January 7, 1998 to
cure this alleged default. Upon receipt of this correspondence, the Company
contacted counsel for Prime and notified him of the Company's prior filing. On
or about January 19, 1998, Prime filed in United States District Court, Western
District of Louisiana, Case No. CV98-0076L-0, a Complaint for Damages and
Violation of the Petroleum Marketing Practices Act against National alleging
breaches by National in the franchise agreement between Prime and National and
seeking to enjoin National from terminating the Over-Lease. On or about January
21, 1998, Prime filed a Voluntary Petition in Bankruptcy under Chapter 11 of the
U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Western District of
Louisiana, Case No. 98BK-50087, listing National as the holder of an unsecured
claim of $925,000 (the "National Claim"). (See the Form 10KSB/A for the year
ended December 31, 1997, Item 6, "Management's Discussion and Analysis or Plan
of Operations - Important Factors to Consider".)
As noted above, the Sub-lease for the Gold Coin is subject to the terms and
conditions of the Over-Lease between Prime and National. Although National is
aware of the Company's use of the Gold Coin facilities, National has not yet
granted its written consent to the Sub-lease, as required by the Over-Lease. The
Over-Lease expires September 30, 1999, subject to the right of Prime to extend
the term for up to five successive three-year periods. Prime is not
contractually obligated to the Company to exercise its right to extend the
Over-Lease at the end of its term or any renewal term. In addition, National has
the right to terminate the Over-Lease under certain circumstances, including if
Prime defaults, under the terms of the Over-Lease, or if Prime does not renew a
franchise relationship between National and Prime. The termination of the
Over-Lease upon the expiration of its terms (or any renewal term), or as a
result of a breach by Prime
8
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or otherwise, will result in the termination of the Company's sub-lease for the
Gold Coin gaming facility premises, and any such termination would have a
materially adverse effect on the U.S. operations of the Company.
On March 20, 1998, National filed various motions, as permitted under section
362(d) of the Bankruptcy Code, to lift the automatic stay to permit certain
actions by Prime. On April 13, 1998 the United States Bankruptcy Court granted
National's motions and dismissed Prime's bankruptcy case. Following that
decision, on April 17, 1998, National filed a "Motion for Expedited Hearing on
Motion to Return Possession of Premises to National Auto" in the United States
District Court, Western District of Louisiana, Case No. 98-0076.
On May 22, 1998, the owners of Prime sold their interests to Mr. Lee Young, the
51% member of Chrysolith, LLC. At the same time, National and Prime (under the
new ownership) executed an Amended and Restated Lease Agreement which expires on
December 31, 1999 (the "Lease"). Under the terms of the Lease, National has the
right to terminate the Lease under certain circumstances, including default or
non-renewal of the franchise by Prime. The termination of the Lease upon the
expiration of its term, or as a result of a breach by Prime or otherwise, if
prior to June 30, 1999 will result in the termination of the Company's Video
Poker Placement and Operating Agreement for the Gold Coin gaming facility
premises, and any such termination would have a materially adverse effect on the
U.S. operations of the Company.
On May 22, 1998, the Company negotiated settlements by and among its
wholly-owned subsidiary, Trans World Gaming of Louisiana, Inc. ("TWGLa"),
Chrysolith, Prime and National (the "Settlement"). The terms of the Settlement
were as follows: (i) TWGLa and the former owners of Prime agreed that TWGLa
would make a final settlement payment to said former owners of $450,000, subject
to certain deductions, noted below, (the "Settlement Payment"), (ii) the
National Claim against Prime will be satisfied by liquidating the assets of
Prime, the payment to National of the funds in the registry of the court
(Petition for Concursus file number 976174-D), the payment to National of
available cash in Prime relating to the sale of Prime's truckstop inventory (the
"Prime Assets") and a promissory note from Prime (guaranteed by TWGLa and TWG)
in the principal amount of $239,597 bearing interest at the rate of 10% per
annum payable in four equal monthly installments beginning on June 22, 1998 (the
"National Promissory Note"); (iii) to the extent that the Prime Assets are
insufficient to satisfy the National Claim, TWGLa will reduce the Settlement
Payment by the amount of such deficiency and remit such amount to National; (iv)
the remaining funds of the Settlement Payment first will be used to pay trade
creditors and to reimburse TWGLa for payments made under the National Promissory
Note and any funds remaining after such payments and reimbursements will be paid
to the former owners of Prime; (v) all of the litigation among the parties was
dismissed (see - Part II , Item 1, "Legal Proceedings"); and (vi) all parties
agreed to mutually acceptable releases of all claims and liabilities against the
other.
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 by the third quarter of 1999
assuming that all required permissions and approvals are received prior to
December 31, 1998. The Company will require financing of approximately $8.0
million to build and equip the Znojmo facility. The Company believes, although
there can be no assurance, that financing should be available at terms favorable
to the Company and TWGI.
On April 17, 1998, the Company issued a press release announcing the acquisition
of 90% of the CDZ, that holds an exclusive casino license in the region of
Aragon. TWG acquired 90% of the outstanding stock of CDZ for approximately
$780,000 and assumed outstanding debt obligations of approximately $4.8 million.
TWG currently is negotiating to raise approximately $4.0 million to repay the
Loan Agreement, fund the remaining purchase price, recapitalize CDZ and provide
working capital to cover the projected operating losses. (See "Liquidity and
Capital Resources".) The Company anticipates that permission will be granted by
the appropriate Spanish government authorities that will enable TWG to move CDZ
to a more favorable location. If the Company decides to buy, build and equip its
own facility, it is anticipated that it may require financing of approximately
$7.0 million. The Company expects, although there can be no assurance, that
financing will be available at terms favorable to TWG.
In the event that financing is not available for the casino in Znojmo, the
recapitalization of CDZ and the new casino in Zaragoza, it would have a material
adverse effect on the future profitability of TWG.
On April 19, 1996, a local option bill was passed which required the
residents of each parish in the State of Louisiana to vote on the future of
gambling in their parish. On November 5, 1996, the residents in Lafayette and
Beauregard parishes, where the Company had video poker operations, were among
35 Louisiana parishes that voted to eliminate
9
<PAGE>
video poker (the "Voter Mandate"). The Company is currently involved in
litigation to overturn the Voter Mandate. See Part II, Item 1 - "Legal
Proceedings". No assurances can be given that such litigation will be
successful.
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 and results of
operation.
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.
NOTE ON FORWARD-LOOKING INFORMATION
This Form 10-QSB/A contains certain forward-looking statements. For this
purpose, any statements contained in this Form 10-QSB/A 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.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
BREACH OF MANAGEMENT CONTRACT. 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. This litigation was filed prose, but Mr. Edwards has since
engaged counsel. Mr. Edwards claims compensation charges of approximately $2.2
million and punitive charges of $11.1 million and has alleged that the Company
breached a management contract dated September 21, 1994. On May 6, 1998, Mr.
Edwards filed a First Supplemental and Amending Petition for Breach of Contract
and for Declaratory Relief against the Company. The Company has hired local
litigation counsel and believes that these claims are wholly without merit and
intends to defend this action vigorously.
PRIME/NATIONAL OVER-LEASE. The May 22, 1998 Settlement (see - "Management's
Discussion and Analysis or Plan of Operations - Plan of Operations") provided
that the existing lawsuits between the parties were resolved as follows:
1. Prime Properties, Inc. vs. National Auto/Truckstops, Inc. No.
98-0076 in the United States District Court for the Western
District of Louisiana dismissed with prejudice, each party to
bear its own cost.
2. Trans World Gaming of Louisiana, Inc. vs. Prime Properties and
National Auto/Truckstops, Inc. No. 97-6174 in the Fifteenth
Judicial Court for the Parish of Lafayette, dismissed pursuant
to a consent judgment following the release to National of the
funds deposited in the Registry of the Court.
3. In Re: Prime Properties, Inc., d/b/a Lafayette 76 Auto/Truck
Plaza, No. 98-50087 in the United States Bankruptcy Court for
the Western District of Louisiana, dismissed with prejudice.
(See the Form 10QSB for the quarter ended March 31, 1998, Item 2. "Management's
Discussion and Analysis or Plan of Operations - Plan of Operations").
VOTER MANDATE. The Company, through Chrysolith, has joined with two other video
poker operators in the State of Louisiana in challenging the Voter Mandate
(which prohibits gaming in approximately 35 parishes after June 30, 1999)
10
<PAGE>
in the courts. On January 30, 1998, the Louisiana Supreme Court unanimously
denied without comment a writ application filed by Chrysolith and the other
operators which alleged, among other things, violations of the Louisiana
election code. The writ denial effectively ended the election code challenge to
the video poker referenda. The suit will proceed to federal court on a charge of
federal civil rights violations under Title 42 of the United States Code Section
1983. The Company cannot, as of the date, hereof predict the outcome of this
litigation or when a decision relating hereto will be rendered.
The Company is not currently involved in any other material legal proceeding.
ITEM 2. CHANGES IN SECURITIES
(a) None
(b) None
(c) In connection with the recently completed financing including the
restructure of the Company's long-term debt (see the Form 10-KSB/A for
the year ended December 31, 1997, Item 6. "Management's Discussion and
Analysis or Plan of Operations" - "Liquidity and Capital Resources"),
the Company issued the following series of warrants to purchase the
Company's common stock:
Series A Warrants: Warrants to purchase 960,000 shares of TWG common
stock with an exercise price of $1.00 per share which expire on
December 31, 2005 issued to replace existing warrants in connection
with the issuance of TWG's Senior Bonds dated July 1, 1996. (see the
Form 10-QSB for the quarter ended June 30, 1996, Item 6. "Management's
Discussion and Analysis or Plan of Operations - Liquidity and Capital
Resources").
Series B Warrants: Warrant to purchase 3,200,000 shares of TWG common
stock with an exercise price of $1.50 per share which expire on
December 31, 2005 issued to replace the conversion rights in connection
with the Senior Bonds described above.
Series C Warrants: Warrant to purchase 7,087,452 shares of TWG common
stock with an exercise price of $.01 per share which expire on March
31, 2008 issued pursuant to the Private Placement dated March 16, 1998
(see: Form 10-KSB/A for the year ended December 31, 1997, Item 6.
"Management's Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Capital Resources" above).
Series D Warrants: Warrant to purchase 2,051,912 shares of TWG common
stock with an exercise price of $.01 per share which expire on March
31, 2008 which replace the warrants issued in connection with the June
1996 Baker Bridge Loan (see the Form 10-QSB for the quarter ended June
30, 1996, Item 6. "Management's Discussion and Analysis or Plan of
Operations - Liquidity and Capital Resources").
Series E Warrants: Warrant to purchase 354,374 shares of TWG common
stock with an exercise price of $.01 per share which expire on March
31, 2008 issued pursuant to the Private Placement dated March 16, 1998
(see: Form 10-KSB/A for the year ended December 31, 1997, Item 6.
"Management's Discussion and Analysis or Plan of Operations - Liquidity
and Capital Resources").
ITEM 3. DEFAULT UPON SENIOR SECURITIES
(a) None
(b) None
ITEM 4. SUBMISSION OF MATTERS TO VOTING SECURITY HOLDERS
On May 26, 1998, the Company held its annual meeting of shareholders
for the following purposes, all of which were approved by the requisite
shareholder vote:
1. The election of six directors: FOR WITHHOLD
11
<PAGE>
<TABLE>
<S> <C> <C>
Julio Heurtematte, Jr. 2,678,570 206,120
Stanley Kohlenberg 2,847,070 37,620
Malcomb M.B. Sterrett 2,678,570 206,120
Richard R. Taft 2,847,070 37,620
Andrew Tottenham 2,847,070 37,620
Dominick J. Valenzano 2,847,070 37,620
</TABLE>
2. Adoption of the Company's 1998 Incentive Stock Option Plan to
provide a total of 2 million shares of common stock of the
Company:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN BROKER NON-VOTE
<S> <C> <C> <C>
1,450,280 401,721 22,650 1,010,039
</TABLE>
3. The adjournment of the Annual Meeting to solicit additional
proxies, if necessary:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C>
2,640,274 222,616 21,800
</TABLE>
ITEM 5. OTHER INFORMATION
IMPORTANT DATES RELATING TO STOCKHOLDER PROPOSALS FOR THE 1999 ANNUAL
MEETING OF SHAREHOLDERS
As noted in the Company's definitive Proxy Statement for the Annual
Meeting of Shareholders to be held May 26, 1998 under the caption "Proposals for
the Next Annual Meeting", any proposal which a stockholder of the Company wishes
to have included in the Company's proxy solicitation materials to be used in
connection with the Company's 1999 Annual Meeting of Shareholders, must be
received at the principal executive offices of the Company, One Penn Plaza,
Suite 1503, New York, New York 10119-0002, Attention: Secretary, no later than
December 21, 1998.
If the notice of such proposal is received after December 21, 1998, it
will not be considered timely pursuant to Proxy Rule 14a-8 and such proposal
will not be included in the Company's proxy soliciting materials.
In addition, if a stockholder fails to notify the Company in writing of
a proposal which the stockholder desires to introduce at the 1999 Annual Meeting
of Shareholders on or before March 6, 1998, the proxy utilized by the Company
may confer discretionary authority on the proxies appointed by the Company to
vote with respect to such proposal, without a description of the matter in the
Company's proxy statement and without specific direction from the stockholders
granting such proxies.
ITEM 6. EXHIBITS AND REPORTS ON FORM 10-QSB/A
a. Exhibits
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Item No Item Method of Filing
- -------------------------------------------------------------------------------------------------------------------------
<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
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Item No Item Method of Filing
<S> <C> <C>
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 Incorporated by reference to Exhibit 4.4
dated 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 contained in Form 10-KSB for the fiscal
dated June 17, 1996 year 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
of Louisiana, Inc., as Issuer, and U.S. year ended December 31, 1996. (File No.
Trust Company of Texas, N.A., as Trustee 0-25244)
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 Incorporated by reference to Exhibit 4.10
dated 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 Incorporated by reference to Exhibit 4.11
Note 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, 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. contained in the Form 8-K filed on April
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Item No Item Method of Filing
<S> <C> <C>
Company, TWG International U.S. contained in the Form 8-K filed on April
Corporation, TWG Finance Corp. and U.S. 14, 1998 (File No. 0-25244)
Trust Company of 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
International U.S. Corporation and U.S. 4(III) contained in the Form 8-K filed on
Trust Company of Texas, N.A. April 14, 1998 (File No. 0-25244)
4.17 Consent to Amend Indenture, Bonds and Incorporated by reference to Exhibit 4(IV)
Warrants dated March 25, 1998 by and contained in the Form 8-K filed on April
between the Company, Trans World Gaming of 14, 1998 (File No. 0-25244)
Louisiana, Inc., U.S. Trust Company of
Texas, N.A., and certain individuals
4.18 First Amended Indenture dated March 31, Incorporated by reference to Exhibit 4(V)
1998 among the Company, TWGLa and U.S. contained in the Form 8-K filed on April
Trust Company of Texas, N.A. 14, 1998 (File No. 0-25244)
4.19 First Amended Indenture dated March 31, Incorporated by reference to Exhibit 4(V)
1998 among the Company, TWGLa and U.S. contained in the Form 8-K filed on April
Trust Company of Texas, N.A. 14, 1998 (File No. 0-25244)
4.20 Series A Warrant to Purchase Common Stock Incorporated by reference to Exhibit 4(VI)
dated March 31, 1998 contained in the Form 8-K filed on April
14, 1998 (File No. 0-25244)
4.21 Series B Warrant to Purchase Common Stock Incorporated by reference to Exhibit
dated March 31, 1998 4(VII) contained in the Form 8-K filed on
April 14, 1998 (File No. 0-25244)
4.22 Agreement to Amend Warrants dated March 31,
Incorporated by reference to Exhibit 1998 among
the Company and the named Holders 4(VIII)
contained in the Form 8-K filed on
April 14, 1998 (File No. 0-25244)
4.23 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)
10.1 Agreement for Exchange of Shares dated July Incorporated by reference to Exhibit 10.1
12, 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 Incorporated by reference to Exhibit 10.2
September 21,1994, between the Company and contained in the registration statement on
Prime 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 contained in the registration statement on
Properties, Inc. Form SB-2 (File No. 33-85446-A).
10.4 Form of Lease between Prime Properties, Incorporated by reference to Exhibit 10.4
Inc. 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.
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Item No Item Method of Filing
<S> <C> <C>
10.6 Asset Purchase Agreement dated September Incorporated by reference to Exhibit 10.6
21, 1994, between Chrysolith L.L.C. and contained in the registration statement on
Monarch Form SB-2 (File No. 33-85446-A).
10.7 Lease (with option) dated May 10, 1994 Incorporated by reference to Exhibit 10.7
among Lula Miller, Inc., Charles A. Jones contained in the registration statement on
III and Kelly McCoy Jones, as Lessor, and Form SB-2 (File No. 33-85446-A).
Monarch, as Lessee.
10.8 Offer to Purchase dated October 4, 1994, Incorporated by reference to Exhibit 10.8
among Trans World Gaming of Louisiana, contained in the registration statement on
Inc., Monarch, Lula Miller, Inc., Charles Form SB-2 (File No. 33-85446-A).
A. Jones III and Kelly McCoy Jones.
Memorandum of Agreement dated March 18, Incorporated by reference to Exhibit 10.9
10.9 1994, between the Company and Yves Gouhier contained in the registration statement on
and Camille Costard to acquire shares of Form SB-2 (File No. 33-85446-A).
Casino 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, contained in the registration statement on
as 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 Incorporated by reference to Exhibit 10.12
and 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 Incorporated by reference to Exhibit 10.16
Woodlands Travel Plaza. contained in the registration statement on
Form SB-2 (File No. 33-85446-A).
10.17 Operating Agreement dated as of December Incorporated by reference to Exhibit 10.17
22, 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
</TABLE>
15
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Item No Item Method of Filing
<S> <C> <C>
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
Properties with respect to the 76 Plaza fiscal year ended December 31, 1995 (File
No. 0-25244).
10.20 Agreement and General Release dated as of Incorporated by reference to Exhibit 10.20
March 6, 1996 between the Company and R. K. contained in the Form 10-KSB for the
Merkey. fiscal year ended December 31, 1995 (File
No. 0-25244).
10.21 Forbearance Agreement dated January 19, Incorporated by reference to Exhibit 10.21
1996 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 Incorporated by reference to Exhibit 10.22
between the Company and Chrysolith contained in the Form 10-KSB for the
regarding forbearance payments fiscal 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, Incorporated by reference to Exhibit 10.24
1996 between the Company and Andrew contains in Form 10-KSB for the fiscal
Tottenham 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 Incorporated by reference to Exhibit 10.26
3, 1996 between the Company and Mid-City contained in the Form 10-KSB for the
Associates fiscal year ended December 31, 1996 (File
No. 0-25244).
10.27 Agreement of Lease dated as of October 2, Incorporated by reference to Exhibit 10.27
1996 between the Company and Mid-City contained in the Form 10-KSB for the
Associates fiscal year ended December 31, 1996 (File
No. 0-25244).
10.28 Stock Purchase Agreement dated as of Incorporated by reference to Exhibit 10.28
January 1, 1997 among the Company, Andrew contained in the Form 10-KSB for the
Tottenham and Robin Tottenham fiscal 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
</TABLE>
16
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Item No Item Method of Filing
<S> <C> <C>
1997 between Company and James Hardman year ended December 31, 1997 filed on
March 30, 1998. (File No. 0-25244)
10.30 Stock Purchase Agreement dated as of Incorporated by reference to Exhibit 10.30
January 20, 1998 between the Company and contained in Form 10-KSB for the fiscal
21st Century Resorts year 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 Incorporated by reference to Exhibit 10.32
the Company, TWG Finance Corp., TWG contained in Form 10-KSB for the fiscal
International U.S. Corporation as Issuer year ended December 31, 1997 filed on
and U.S. Trust Company of Texas, N.A., as March 30, 1998. (File No. 0-25244)
Trustee
10.33 Consulting Agreement between Chrysolith, Incorporated by reference to Exhibit 10
L.L.C. 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, Incorporated by reference to Exhibit 10.34
1997 among the Company, James R. Hardman, contained in the Form 10-Q for the quarter
Jr. and 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, Incorporated by reference to Exhibit 10.35
1997 between the Company and James R. contained in the Form 10-Q for the quarter
Hardman, Jr. ended March 31, 1997, filed on May 9, 1997
(File No. 0-25244)
10.36 Loan Agreement dated June 11, 1997 between Incorporated by reference to Exhibit 10.36
the 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 Incorporated by reference to Exhibit 10.37
11, 1997 contained in the Form 8-K filed on June
17, 1997 (File No. 0-25244)
10.38 Joint Activity Agreement dated March 31, Incorporated by reference to Exhibit 10.38
1997 between Mr. Mahmud Avdiyev and contained in the Form 8-K filed on June
Tottenham & Co., d/b/a ART marketing Ltd. 17, 1997 (File No. 0-25244)
10.39 Loan Agreement dated October 27, 1997, Incorporated by reference to Exhibit 10.39
between 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 Incorporated by reference to Exhibit 10.40
October 27, 1997 contained in the Form 10-QSB for the
quarter ended September 30, 1997, filed on
November 12, 1997 (File No. 0-25244)
</TABLE>
17
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Item No Item Method of Filing
<S> <C> <C>
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)
27.1 Financial Data Schedule Filed herewith
</TABLE>
b. Reports on Form 8-K
The Company filed the following reports on Form 8-K during the quarter
ended June 30, 1998:
On April 14, 1998, the Company filed a Current Report on Form 8-K
reporting the acquisition of Resorts in the Czech Republic. The Form 8-K was
amended and filed on Current Report 8-K/A on June 15, 1998, together with the
audited financial statements and pro-forma financials of the Company and
Resorts.
On May 4, 1998, the Company filed a Current Report on Form 8-K
reporting the acquisition of the CDZ in Zaragoza, Spain. The Form 8-K was
amended and filed on Current Report Form 8-K/A on July 1, 1998, together with
the audited financial statements and pro-forma financials of the Company and
CDZ.
18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TRANS WORLD GAMING CORP.
Date: September 3, 1999 By: /s/ RAMI S. RAMADAN
-------------------
Rami S. Ramadan
Chief Executive Officer
19
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