EX-99.1 2 tv510518_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

 

Nevada Gold & Casinos, Inc.

Unaudited Pro Forma Consolidated Financial Statements

 

Effective December 31, 2018, Nevada Gold & Casinos, Inc. (the “Company”) and Nevada Gold & Casinos LV, LLC, a wholly-owned subsidiary of the Company (“NGC LV”), completed the sale of substantially all of their assets related to Club Fortune Casino located in Henderson, Nevada (“Club Fortune”) to Truckee Gaming, LLC (“Truckee”). The sale was effected pursuant to a previously announced Asset Purchase Agreement dated as of June 26, 2018 (the “Asset Purchase Agreement”), by and among Truckee, NGC LV, and the Company.

 

The purchase price was approximately $14.65 million, subject to certain post-closing purchase price adjustments, including a post-closing working capital true-up. A portion of the purchase price was used by the Company to pay in full the outstanding principal and other amounts due under the Company’s credit agreement with Mutual of Omaha Bank.

 

The following unaudited pro forma consolidated statements of operations for the years ended April 30, 2018 and 2017, and for the six months ended October 31, 2018, give effect to the sale of Club Fortune as if it occurred on the first day of the period presented. The unaudited pro forma financial statements are not necessarily indicative of the results that would have been reported had such transactions actually occurred on the date specified, nor are they indicative of the Company’s future results of operations or financial condition. The unaudited pro forma financial statements are based on and should be read in conjunction with, the historical financial statements and notes thereto of the Company and the historical financial statements and notes thereto of the Company.

 

The pro forma adjustments eliminate Club Fortune financial results, record the sale of Club Fortune and the resulting repayment of the related debt, and eliminate expenses that would not have been incurred had the sale of Club Fortune occurred at the beginning of the period presented.

 

 

 

 

Nevada Gold & Casinos, Inc.
Pro Forma Statement of Operations
Six Months Ended October 31, 2018

 

     

Historical

  

Adjustments

  

AJE

 

Pro forma

 
Revenues:                       
  Casino      $23,504,388          $23,504,388 
  Food and beverage        5,009,925            5,009,925 
  Other        720,310            720,310 
    Net revenue        29,234,623            29,234,623 
Expenses:                       
  Casino        11,342,078            11,342,078 
  Food and beverage        4,448,208            4,448,208 
  Other        113,820            113,820 
  Marketing and administrative        8,868,945            8,868,945 
  Facility        885,559            885,559 
  Corporate        2,630,530   $(850,788)  B, C   1,779,742 
  Depreciation and amortization        244,657            244,657 
  Gain on sale of assets        (34,356)   (9,054)  B   (43,410)
    Total operating expenses        28,499,441            27,639,599 
Operating income        735,182            1,595,024 
Non-operating income (expenses):                       
 Interest Income        16,875            16,875 
Interest expense and amortization of loan issue costs        (208,443)   208,443   C   - 
 Loss on extinguishment of debt        -    (77,076)  B   (77,076)
 Change in swap fair value        9,020    (9,020)  C   - 
Income from continuing operations before income tax        552,634            1,534,823 
   Income tax expense        (122,140)   (179,672)  D   (301,812)
Income from continuing operations        430,494            1,233,011 
Income from discontinued operations, net of taxes        56,752    (56,752)  A   - 
Net income       $487,246           $1,233,011 
Per share information:                       
Income from continuing operations per common share - basic and diluted       $0.03           $0.07 
Income from discontinued operations per common share - basic and diluted       $-           $- 
Net income per common share - basic and diluted       $0.03           $0.07 
Basic weighted average number of common shares outstanding        16,848,802            16,848,802 
Diluted weighted average number of common shares outstanding        17,195,775            17,195,775 
                        
A Eliminate income from discontinued operations, net of tax                       
Income from discontinued operations, net of tax  $56,752                   
Cash       $(56,752)             
                        
B  Record the sale:                       
Assets held for sale (excludes cash)       $(13,890,758)             
Liabilities held for sale        925,544              
Bank loan        6,900,000              
Broker fee  $293,760                   
Other fees   53,268                   
Cash to seller        6,672,752              
Restricted cash        732,620              
Cash        (1,678,132)             
(Gain) / loss on sale   (9,054)                  
Swap asset        (143,692)             
Receivable        143,692              
Loan costs        (77,076)             
Loss on extinguishment of debt   77,076                   
                        
C  Reverse expenses May 1 - Oct 31:                       
Interest expense  $(173,056)                  
Amortization of loan costs   (27,684)                  
Swap interest   12,217                   
Swap mark to market   9,020                   
Non-usage loan fee   (19,920)                  
Selling related fees   (1,197,816)                  
Cash       $1,397,239              
                        
D  Record tax effect of adjustments                       
Tax expense  $179,672                   
Deferred income taxes      $(179,672)          

 

 

 

 

Nevada Gold & Casinos, Inc.
Pro Forma Statement of Operations
Year Ended April 30, 2018

 

           A            
     

Historical

  

Club Fortune

  

Adjustments

  

AJE

 

Pro forma

 
Revenues:                            
  Casino       $65,767,827   $(12,227,929)          $53,539,898 
  Food and beverage        13,252,982    (3,222,190)           10,030,792 
  Other        1,978,619    (407,192)           1,571,427 
    Gross revenue        80,999,428    (15,857,311)           65,142,117 
      Less promotional allowances        (6,446,902)   2,299,310            (4,147,592)
        Net revenues        74,552,526    (13,558,001)           60,994,525 
Expenses:                            
  Casino        36,476,733    (6,624,788)           29,851,945 
  Food and beverage        6,801,269    (1,529,761)           5,271,508 
  Other        206,764    (107,691)           99,073 
  Marketing and administrative        20,715,534    (3,373,352)           17,342,182 
  Facility        2,008,090    (206,396)           1,801,694 
  Corporate        3,009,735        $(242,811)  B, C   2,766,924 
  Depreciation and amortization        2,370,752    (1,412,725)           958,027 
  Loss (gain) on sale of assets        7,863         (9,054)  B   (1,191)
  Write downs and other charges        358,807                 358,807 
    Total operating expenses        71,955,547    (13,254,713)           58,448,969 
Operating income        2,596,979    (303,288)           2,545,556 
Non-operating income (expenses):                            
 Interest Income        46,241                 46,241 
 Interest expense and Amortization of loan issue costs        (637,387)        637,387   C   - 
 Loss on extinguishment of debt        -         (104,760)  B   (104,760)
 Change in swap fair value        171,018         (171,018)  C   - 
Income before income tax        2,176,851                 2,487,037 
   Income tax expense        (853,426)        (183,663)  D   (1,037,089)
Net income       $1,323,425                $1,449,948 
Per share information:                            
Net income per common share - basic and diluted       $0.08                $0.08 
Basic weighted average number of common shares outstanding        16,985,532                 16,985,532 
Diluted weighted average number of common shares outstanding        17,350,402                 17,350,402 
                             
A  Eliminate Club Fortune                            
                             
B  Record the sale:                            
Assets held for sale (excludes cash)       $(13,890,758)                  
Liabilities held for sale        925,544                   
Bank loan        6,900,000                   
Broker fee  $293,760                        
Other fees   53,268                        
Cash to seller        6,672,752                   
Restricted cash        732,620                   
Cash        (1,678,132)                  
(Gain) / loss on sale   (9,054)                       
Swap asset        (134,672)                  
Receivable        134,672                   
Loan costs        (104,760)                  
Loss on extinguishment of debt   104,760                        
                             
C  Reverse expenses of fiscal 2018:                            
Interest expense  $(432,918)                       
Amortization of loan costs   (133,829)                       
Swap interest   (39,604)                       
Swap mark to mkt   171,018                        
Non-usage loan fee   (31,036)                       
Selling related fees   (589,839)                       
Cash       $1,056,208                   
                             
D  Record tax effect of adjustments                            
Tax expense  $183,663                        
Deferred income taxes      $(183,663)              

 

 

 

 

Nevada Gold & Casinos, Inc.
Pro Forma Statement of Operations
Year Ended April 30, 2017

 

           A            
       Historical   Club Fortune   Adjustments   AJE  Pro forma 
Revenues:                            
  Casino       $65,838,576   $(12,283,402)          $53,555,174 
  Food and beverage        13,439,326    (3,368,559)           10,070,767 
  Other        2,140,113    (431,208)           1,708,905 
    Gross revenue        81,418,015    (16,083,169)           65,334,846 
      Less promotional allowances        (6,959,066)   2,612,286            (4,346,780)
        Net revenues        74,458,949    (13,470,883)           60,988,066 
Expenses:                            
  Casino        36,488,019    (6,645,654)           29,842,365 
  Food and beverage        6,194,698    (1,175,606)           5,019,092 
  Other        208,090    (123,496)           84,594 
  Marketing and administrative        20,752,103    (3,781,238)           16,970,865 
  Facility        2,126,150    (208,217)           1,917,933 
  Corporate        2,719,003        $347,028   B, C   3,066,031 
  Depreciation and amortization        3,021,280    (1,491,521)           1,529,759 
  Loss (gain) on sale of assets        77,183    (58,796)   (9,054)  B   9,333 
  Write downs and other charges        1,101,472                 1,101,472 
    Total operating expenses        72,687,998    (13,484,528)           59,541,444 
Operating income        1,770,951    13,645            1,446,622 
Non-operating income (expenses):                            
 Interest income        81,011                 81,011 
 Interest expense and Amortization of loan issue        (747,554)        747,554   C   - 
 Loss on extinguishment of debt        -         (238,589)  B   (238,589)
 Change in swap fair value        250,385         (250,385)  C   - 
Income before income tax        1,354,793                 1,289,044 
   Income tax expense        (790,829)        (17,245)  D   (808,074)
Net income       $563,964                $480,970 
Per share information:                            
Net income per common share - basic and diluted       $0.03                $0.03 
Basic weighted average number of common shares outstanding        17,688,229                 17,688,229 
Diluted weighted average number of common shares outstanding        17,990,524                 17,990,524 
                             
A  Eliminate Club Fortune                            
                             
B  Record the sale:                            
Assets held for sale (excludes cash)       $(13,890,758)                  
Liabilities held for sale        925,544                   
Bank loan        6,900,000                   
Broker fee  $293,760                        
Other fees   53,268                        
Cash to seller        6,672,752                   
Restricted cash        732,620                   
Cash        (1,678,132)                  
(Gain) / loss on sale   (9,054)                       
Swap asset        36,346                   
Payable        (36,346)                  
Loan costs        (238,589)                  
Loss on extinguishment of debt   238,589                        
                             
C  Reverse expenses of fiscal 2017:                            
Interest expense  $(510,612)                       
Amort of loan costs   (95,041)                       
Swap interest   (121,861)                       
Swap mark to mkt   250,385                        
Non-usage loan fee   (20,040)                       
Cash       $497,169                   
                             
D  Record tax effect of adjustments                            
Tax expense  $17,245                        
Deferred income taxes      $(17,245)