-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JJuySTVywgJxyyKhnh5zXa9K65RnBu4JiPQ9lVMnvsrcrhdA6WqDUy9SUZmwOFqc rTs9c7U/8ZDb/iAGOKx5cQ== 0001024432-00-000001.txt : 20000215 0001024432-00-000001.hdr.sgml : 20000215 ACCESSION NUMBER: 0001024432-00-000001 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COUNTRY WORLD CASINOS INC CENTRAL INDEX KEY: 0000713443 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990] IRS NUMBER: 133140389 STATE OF INCORPORATION: NV FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-22450 FILM NUMBER: 539126 BUSINESS ADDRESS: STREET 1: 4155 E JEWELL AVE STREET 2: STE 1000 CITY: DENVER STATE: CO ZIP: 80222 BUSINESS PHONE: 3036395001 MAIL ADDRESS: STREET 1: 4155 E JEWELL AVE SUITE 1000 STREET 2: 4155 E JEWELL AVE SUITE 1000 CITY: DENVER STATE: CO ZIP: 80222 10QSB 1 Form 10-QSB SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 1999 Commission file number 0-22450 ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to For quarter ended Commission File Number COUNTRY WORLD CASINOS, INC. (Name of Small Business Issuer in its charter) Nevada 13-3140389 (State of jurisdiction of incorporation) (IRS Employer I.D. Number) 200 Monument Road, Suite 10, Bala Cynwyd, Pennsylvania 19004 (Address of principal executive offices) Registrant's telephone number (610) 617-9990 Check whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act during the past 12 months (or for such shorter period as 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 ___ Indicate the number of shares outstanding of each of the issuer's class of common stock. The Registrant had 61,581,687 shares of its common stock outstanding as of December 31, 1999. COUNTRY WORLD CASINOS, INC. (A DEVELOPMENT STAGE COMPANY) INDEX Part I: FINANCIAL INFORMATION Item 1. Financial Statements Balance Sheet as of December 31, 1999 (Unaudited)..........1 Statements of Operations for the six months ended December 31, 1999 and 1998 and for the period from November 9, 1982 (Date of Inception) through December 31, 1999 (Unaudited)..............................3 Statements of Stockholders' Equity (Unaudited)..............4 Item 2. Management's Discussion and Analysis or Plan of Operation...9 Part II: OTHER INFORMATION Item 1. Legal Proceedings..........................................12 Item 3. Defaults upon Senior Securities............................12 Item 6. Exhibits and Reports on Form 8-K...........................12 Signature Page.......................................................13 COUNTRY WORLD CASINOS, INC. (A DEVELOPMENT STAGE COMPANY) BALANCE SHEET AS OF DECEMBER 31, 1999 (UNAUDITED) Assets: Current Assets: Cash 0 Prepaid Interest 91,935 Prepaid Expenses 15,000 Total Current Assets 106,935 Property and Equipment: Land 6,750,475 Casino Under Development 12,589,884 Furniture and Equipment 38,888 Total 19,379,247 Less: Accumulated Depreciation (38,888) Total Property and Equipment 19,340,359 Other Assets: Deposits 35,000 Total Assets 19,482,294 1 COUNTRY WORLD CASINOS, INC. (A DEVELOPMENT STAGE COMPANY) BALANCE SHEET AS OF DECEMBER 31, 1999 Liabilities and Stockholders' Equity: Current Liabilities: Accounts Payable 1,695,250 Payroll and Property Taxes Payable 167,065 Accrued Expenses 21,600 Notes Payable 9,792,554 Accrued Interest 982,583 Other Current Liabilities 52,296 Total Current Liabilities 12,711,348 Stockholders' Equity: Common Stock, $.001 Par Value, 75,000,000 Shares Authorized, 61,581,687 Issued and Outstanding 61,582 Convertible Preferred Stock, Class B, $.25 Par Value, 5,000,000 Shares Authorized, 600,000 Shares Issued and Outstanding 150,000 Additional Paid-in Capital 11,296,474 Deficit Accumulated During the Development Stage (4,737,109) Total Stockholders' Equity 6,770,946 Total Liabilities and Stockholders' Equity 19,482,294 2 COUNTRY WORLD CASINOS, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF OPERATIONS For the period from November 9, 1982 Three months ended (Date of Inception) December 31, through December 30, 1 9 9 9 1 9 9 8 1 9 9 9 Costs and Expenses: Research and Development Costs $ -- $ -- $ 122,000 Professional Fees - Due to Bankruptcy -- -- 514,756 Management Fee - Related Party -- -- 416,321 General and Administrative Expenses (349,509) 449,105 5,567,642 Depreciation -- -- 65,952 Totals (349,509) 449,105 6,686,671 Other Income (Expense): Interest Income -- -- 109,490 Interest Expense (22,550) (63,570) (392,949) Rental Income -- -- 45,126 Loss on Non-Marketable Securities -- -- (85,000) Write off of Assets -- -- (151,920) Forfeited Deposit -- -- (100,000) Other Income -- -- 735 Totals (22,550) (63,570) (574,518) (Loss) from Continuing Operations Before Discontinued Operations and Extraordinary Item (372,059) (512,675) (7,261,189) Discontinued Operations: Gain on Disposal of Subsidiaries -- -- 389,286 (Loss) from Discontinued Operations -- -- (389,286) Total Discontinued Operations -- -- -- (Loss) Before Extraordinary Item (372,059) (512,675) (7,261,189) Extraordinary Item: Extraordinary Gain on Forgiveness of Debt 2,356,929 -- 2,524,081 Net (Loss) $ 1,984,870 $ (512,675) $(4,737,109) Per Share Data: Net (Loss) Per Common Share $ .03 $ (.01) Weighted Average Number of Shares 61,581,687 54,331,687 See Notes to Financial Statements
3 COUNTRY WORLD CASINOS, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF STOCKHOLDERS' EQUITY Deficit Accumulated Total Preferred Stock Common Stock Additional During the Stock- Series A Series B Subscribed Paid-In Development holders' Shares Amount Shares Amount Shares Amount Shares Amount Capital Stage Equity , November 9, 1982 (Date of Inception) -- $ -- -- $ -- -- $ -- -- $ -- $ -- $ -- $ -- Issuance of Shares for Cash ($.51 Per Share) -- -- -- -- 2,971 15 -- -- 1,510 -- 1,525 Issuance of Common Stock to the Public ($12.50 Per Share) -- -- -- -- 1,474 8 -- -- 644,992 -- 645,000 Deferred Offering Costs -- -- -- -- -- -- -- -- (115,690) -- (115,690) Cancellation of Common Stock -- -- -- -- (800) (4) -- -- 4 -- -- Issuance of Shares for Services ($.18 Per Share) -- -- -- -- 85,714 429 -- -- 14,571 -- 15,000 Issuance of Common Stock at a Discount ($.02 Per Share) -- -- -- -- 1,339,212 6,696 -- -- 13,304 -- 20,000 Capital Contribution -- -- -- -- -- -- -- -- 2,850 -- 2,850 Net Loss for the Period From November 9, 1982 (Date of Inception) Through June 30, 1992 -- -- -- -- -- -- -- -- -- (221,169) (221,169) Balance - June 30, 1992 -- -- -- -- 1,428,571 7,144 -- -- 561,541 (221,169) 347,516 Issuance of Common Stock at a Discount for Services ($.02 Per Share), May 1993 -- -- -- -- 714,287 3,571 -- -- 8,929 -- 12,500 Net Loss for Year Ended June 30, 1993 -- -- -- -- -- -- -- -- -- (373,401) (373,401) Balance - June 30, 1993 - Forward -- $ -- -- $ -- 2,142,858 $10,715 -- $ -- $570,470 $(594,570) $(13,385) See Notes to Financial Statements
4 COUNTRY WORLD CASINOS, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF STOCKHOLDERS' EQUITY Deficit Accumulated Total Preferred Stock Common Stock Additional During the Stock- Series A Series B Subscribed Paid-In Development holders' Shares Amount Shares Amount Shares Amount Shares Amount Capital Stage Equity Balance - June 30, 1993 - Forwarded -- $ -- -- $ -- 2,142,858 $10,715 -- $ -- $570,470 $(594,570) $(13,385) Change in Par Value from $.005 to $.001 -- -- -- -- -- (8,572) -- -- 8,572 -- -- Issuance of Stock for Cash September 1993 ($1.00 Per Share) -- -- -- -- 600,000 600 -- -- 599,400 -- 600,000 Issuance of Stock for Cash August 1993 ($1.00 Per Share) -- -- -- -- 1,500,000 1,500 -- -- 1,498,500 -- 1,500,000 Issuance of Convertible Preferred Stock for Acquisition of Land Valued at $1.00 Per Share Issued August 1993 2,250,000 2,250 -- -- -- -- -- -- 2,247,750 -- 2,250,000 Issuance of Stock to Related Party for Cash and Services Pursuit to Exercise of Options ($1.00 Per Share) -- -- -- -- 250,000 250 -- -- 249,750 -- 250,000 Purchase and Cancellation of Treasury Stock ($1.00 Per Share) -- -- -- -- (125,000) (125) -- -- (124,875) -- (125,000) Issuance of Stock for Cash (140,000 Shares and 60,662 Shares Issued December 1993 and January 1994, Respectively) at $2.50 Per Share -- -- -- -- 200,000 200 -- -- 499,800 -- 500,000 Balance of Common Stock for Acquisition of Land Valued at $1.00 Per Share Issued June 1994 -- -- -- -- 250,000 250 -- -- 249,750 -- 250,000 Issuance of Common Stock for Cash and Services Pursuant to Exercise of Options (75,000 Shares and 20,000 Shares Issued April and June 1994 Respectively at $2.50 Per Share) -- -- -- -- 95,000 95 -- -- 237,405 -- 237,500 Issuance of Common Stock for Services Rendered Valued at $2.50 Per Share, issued April 1994 -- -- -- -- 200,000 200 -- -- 499,800 -- 500,000 Subscription of Common Stock Pursuant to Private Placement Offering ($3.00 Per Share) -- -- -- -- -- -- 262,667 263 787,737 -- 788,000 Net Loss for Year Ended June 30, 1994 -- -- -- -- -- -- -- -- -- (1,490,785) (1,490,785) Balance - June 30, 1994 - Forward 2,250,000 $2,250 -- $ -- 5,113,520 $5,113 262,667 $263 $7,324,059 $(2,085,355) $5,246,330 See Notes to Financial Statements
5 COUNTRY WORLD CASINOS, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF STOCKHOLDERS' EQUITY Deficit Accumulated Total Preferred Stock Common Stock Additional During the Stock- Series A Series B Subscribed Paid-In Development holders' Shares Amount Shares Amount Shares Amount Shares Amount Capital Stage Equity Balance - June 30, 1994 - Forwarded 2,250,000 $2,250 -- $ -- 5,113,520 $5,113 262,667 $263 $7,324,059 $(2,085,355) $5,246,330 Issuance of Common Stock Pursuant to Private Placement Offering - December 1994 ($2.67 Per Share) -- -- -- -- 460,000 460 -- -- 1,229,040 -- 1,229,500 Issuance of Stock for Outstanding Note issued April 20, 1995 ($.20 Per Share) -- -- -- -- 5,000,000 5,000 -- -- 1,009,451 -- 1,014,451 Convert Subscribed Stock to Common and Record Fees -- -- -- -- 262,667 263 (262,667) (263) -- -- -- Net Loss for Year Ended June 30, 1995 -- -- -- -- -- -- -- -- -- (757,659) (757,659) Balance - June 30, 1995 2,250,000 2,250 -- -- 10,836,187 10,836 -- -- 9,562,550 (2,843,014) 6,732,622 Net Loss for Year Ended June 30, 1996 -- -- -- -- -- -- -- -- -- (416,440) (416,440) Balance - June 30, 1996 2,250,000 2,250 -- -- 10,836,187 10,836 -- -- 9,562,550 (3,259,454) 6,316,182 Issuance of Preferred Stock - Class B in Exchange for Related Party Debt ($.25 Per Share) April 1997 -- -- 4,000,000 1,000,000 -- -- -- -- -- -- 1,000,000 Common Stock Issued in Exchange for Debt ($.25 Per Share) April 1997 -- -- -- -- 1,250,000 1,250 -- -- 248,750 -- 250,000 Warrants Issued for 1,000,000 Shares of Common Stock in connection with Norlar, Inc. debt financing (.06 Per Warrant) -- -- -- -- -- -- -- -- 60,000 -- 60,000 Net Loss for Year Ended June 30, 1997 -- -- -- -- -- -- -- -- -- (1,080,391) (1,080,391) Balance - June 30, 1997 2,250,000 $2,250 4,000,000 $1,000,000 12,086,187 $12,086 -- $ -- $9,871,300 $(4,339,845) $6,545,791 Issuance of Common Stock for Services Rendered Valued at $.20 per Share, July 1997 -- -- -- -- 1,000,000 1,000 -- -- 199,999 -- 200,000 Issuance of Common Stock in Exchange for Debt and Services to be Rendered ($.1875 Per Share) September 1997 -- -- -- -- 395,500 396 -- -- 73,761 -- 74,157 Issuance of Common Stock for Services Rendered and Debt Exchange ($.086 Per Share) March 1998 -- -- -- -- 85,000 850 -- -- 72,413 -- 72,263
6 COUNTRY WORLD CASINOS, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF STOCKHOLDERS' EQUITY Deficit Accumulated Total Preferred Stock Common Stock Additional During the Stock- Series A Series B Subscribed Paid-In Development holders' Shares Amount Shares Amount Shares Amount Shares Amount Capital Stage Equity Convert Preferred Stock to Common Stock - April 1998 -- --(4,000,000)(1,000,000)40,000,000 40,000 -- -- 960,000 -- -- Issuance of Stock for Services April 1998 -- -- 100,000 25,000 -- -- -- -- -- -- 25,000 Net Loss for Year Ended June 30, 1998 -- -- -- -- -- -- -- -- -- (1,238,679) (1,238,679) Balance - June 30, 1998 2,250,000 2,250 100,000 25,000 54,331,687 $54,332 -- -- 11,176,474 (5,578,524) 5,679,530 Preferred Stock issued in Exchange for Debt ($.25 per Share) October 1998 -- -- 1,000,000 250,000 -- -- -- -- -- -- 250,000 Net Loss for the Year Ended June 30 Balance - June 30, 1999 2,250,000 2,250 1,100,000 275,000 54,331,687 54,332 -- -- 11,176,474 (6,721,979) 4,786,076 Convert Preferred to Common Stock October 1999 (2,250,000) (2,250) -- -- 2,250,000 2,250 -- -- -- -- -- Convert Preferred to Common Stock November 1999 -- -- (500,000) (125,000) 5,000,000 5,000 -- -- 120,000 -- -- Net Gain for the Six Months ended December 1999 -- -- -- -- -- -- -- -- -- 1,984,870 1,984,870 -- -- 600,000 150,000 61,581,687 61,582 -- -- 11,296,474 (4,737,109) 6,770,946 See Notes to Financial Statements
7 COUNTRY WORLD CASINOS, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF CASH FLOWS For the period from November 9, 1982 (Date of Inception) Six months ended through December 31, December 31, 1 9 9 9 1 9 9 8 1 9 9 9 Operating Activities: Continuing Operations: (Loss) Before Extraordinary Item $ 372,059 $ 512,675 $(7,261,190) Adjustments to Reconcile Net (Loss) to Net Cash (Used for) Operating Activities: Depreciation -- -- 65,952 Amortization of Discount -- -- 60,000 Common Stock Issued for Interest -- -- 14,451 Common Stock Issued for Services -- -- 1,087,500 Loss on Nonmarketable Securities -- -- (85,000) Write off of Loan Receivable -- -- (90,000) Extraordinary Item 2,356,929 -- 2,524,081 Accrued Interest - Related Party -- -- 52,514 Allocation of Management Fees - Related Party -- -- 408,000 Changes in Assets and Liabilities: (Increase) Decrease in: Due from Officers -- -- (93,000) Prepaid Interest -- 15,000 (840,715) Due from Shareholder -- -- (13,233) Increase (Decrease) in: Accounts Payable (2,126,045) 185,886 1,695,250 Payroll and Property Taxes Payable 4,178 4,259 167,065 Accrued Interest 289,849 181,151 982,583 Accrued Expenses -- (4,583) 21,600 Discontinued Operations: Net (Loss) -- -- (389,286) Adjustments to Reconcile Net (Loss)to Net Cash (Used for) Operating Activities: Gain on Disposal of Assets -- -- 389,286 Total Adjustments 524,911 381,713 5,957,044 Net Cash Provided (Used) by Operating Activities - Forward $ 152,852 $ 130,962 $(1,304,146) 8
COUNTRY WORLD CASINOS, INC. (A DEVELOPMENT STAGE COMPANY) ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION CERTAIN STATEMENTS INCLUDED HEREIN OR INCORPORATED BY REFERENCE CONSTITUTE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 (THE "REFORM ACT"). THE COMPANY DESIRES TO TAKE ADVANTAGE OF CERTAIN "SAFE HARBOR" PROVISIONS OF THE REFORM ACT AND IS INCLUDING THIS SPECIAL NOTE TO ENABLE THE COMPANY TO DO SO. FORWARD-LOOKING STATEMENTS INCLUDED OR INCORPORATED BY REFERENCE IN THIS PART INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH WOULD CAUSE THE COMPANY'S ACTUAL RESULTS, PERFORMANCE (FINANCIAL OR OPERATING) OR ACHIEVEMENTS TO DIFFER MATERIALLY FROM THE FUTURE RESULTS, PERFORMANCE (FINANCIAL OR OPERATING) OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD LOOKING STATEMENTS. In June 1999, the Company signed a Letter of Intent with Beverly Hillbillies Gaming Company Inc. and Beverly Hillbillies Gaming Entertainment LLC to enter into a joint venture to finalize development of and finance its Black Hawk, Colorado Casino and Hotel project. The new entity will be titled, "Jethro's Beverly Hillbillies Mansion and Casino", and will be redesigned around the characters, settings, events and theme of the 1960's and '70's television sitcom, The Beverly Hillbillies. Max Baer, Jr., the founder and chairman of Beverly Hillbillies Gaming Entertainment, LLC successfully secured the exclusive master licenses from CBS and Viacom, Inc. to exploit the Beverly Hillbillies theme in connection with gaming and other entertainment venues. Mr. Baer, who is best known for his portrayal of "Jethro Bodine" during the nine year run of the television series, is also planning a facility in Reno. Under the terms of the joint venture, named "Jethro's Black Hawk, LLC," the parties will enter into an operating agreement with each party's participation to be established and set forth in accordance with an equity ownership formula. Beverly Hillbillies Gaming Entertainment, LLC will provide management services for the facility. Financing, financial advisory services and placement agent services will be provided by Westwood Capital, LLC of New York City, New York who is an investment banking firm specializing in structured debt financing and merger and acquisition transactions for companies in the financial services and real estate industries. Additionally, Westwood Capital provides project and corporate financing for companies in the gaming and hospitality industries. During September and October 1999, the Company completed final review of an Admission and Operating Agreement securing the commitment of all parties to bring the project to fruition. Under the aforementioned agreements' terms, Jethro's Black Hawk, LLC will assume all existing secured indebtedness of the Company, begin making the required interest payments as of September 30, 1999, and make full payment of all such indebtedness by March 31, 2000. As of December 31, 1999, the parties have not yet signed such agreements as Beverly Hillbillies Gaming Entertainment LLC has experienced problems in closing on its property for the Reno project. It is anticipated that such closing will finalize during the year 2000 and the agreement will be signed at that time. All parties acknowledge their responsibility to be approved by the Colorado Gaming Commission and will proceed to do so prior to project completion. 9 It is still anticipated that construction will begin sometime in 2000. Although the Company is confident in the abilities of all parties to provide financing and accomplish all the above mentioned goals, there can be no assurance that any of these items will be provided or completed immediately or in the future. Despite its ongoing relationship with Beverly Hillbillies Gaming Entertainment, LLC, the Company is continued to research other means and sources of bringing the project to fruition. To that effect, in December 1999, the Company signed a short term thirty day exclusive agreement with a Florida lending group to secure the necessary funds to complete the project and submitted a proposal to Casinos Austria International to manage or joint venture the proposed facility. Additionally, in November 1999, the Company contracted with Heritage West of Black Hawk, Colorado to locate a joint venture partner, lease or in the extreme, sell the property on terms suitable to the Company. Black Hawk is a picturesque mountain town approximately 40 miles west of Denver. In the past year, July 1998 through June 1999, Black Hawk hosted approximately 3 million visitors and generated over 60% of the state's gaming revenues. The Hotel Casino, on the northern most end of the Black Hawk gaming district, will be in a most highly visible location as it is in a direct line of site to all visitors approaching Black Hawk's Gregory Street intersection on State Highway 119. The Black Hawk and nearby Central City casino market includes many small, privately held gaming facilities that the Company believes offer limited amenities and are characterized by a shortage of convenient on-site parking. There are a few large facilities currently operating with varying levels of services and amenities, as well as new facilities planned. The theme, hospitality, ample parking, modern hotel accommodations and a full line of amenities, will set it apart from, and should give it a competitive advantage over, the other casinos in the Black Hawk/Central City market. The Hotel Casino complex will be designed and constructed pursuant to a guaranteed maximum price agreement which is to be finalized prior to construction. The design and construction team consists of Semple Brown Roberts, P.C., a Denver based architectural firm (the "Architect") and PCL Construction Services, Inc., a multi-million dollar North American construction firm with U.S. headquarters located in Denver. The Architect is the designer of Fitzgerald's Casino in Black Hawk, while the Contractor's gaming credits include the MGM Grand Hotel Casino and Stratosphere Tower in Las Vegas, Nevada, as well as the Chinook Winds Gaming and Convention Center in Lincoln City, Oregon. LIQUIDITY & CAPITAL RESOURCES In March 1996, the Company borrowed $5 million from Kennedy Funding, Inc. The Company issued a Promissory Note effective May 20, 1996 payable at the rate of 15% per annum until May 19, 1997 (the "First Year Interest Obligation") and at a rate of 24% per annum thereafter. Payments of principal and interest are payable as follows: (a) the First Year Interest Obligation was prepaid at closing; (b) commencing on May 19, 1997 and for each month thereafter, the Company is to make interest only payments, in advance, in the amount of 2% of the then existing principal balance due under the Note; and (c) the entire outstanding principal balance, together with all accrued and unpaid interest, if not previously paid, shall be finally due and payable on May 19, 1999. Such loan was not paid and was extended by its new assignee Norlar, Inc., pending completion of the newest financing effort. The holder of the Note may accelerate the due date for the entire balance of principal, interest and other sums due upon maturity in the event of default under the Note. The default rate of interest is 24% during the first loan year and 36% thereafter. The Note is secured by a first deed of trust on the Property. In May 1997, the Company issued a promissory note and second deed of trust on the property to Norlar, Inc. for a maximum of $600,000 (First Norlar Note), or so much thereof as may have been advanced by maker, for payments due on the Kennedy loan and for general corporate purposes. As of December 1999, the Company owed $600,000 on the First Norlar Note. In October 1997, the 10 Company issued a second promissory note (Second Norlar Note) and a fourth deed of trust on the property to Norlar, Inc., again for a maximum of $600,000. As of December 1999, the Company owed $600,000 on the Second Norlar Note. In April 1998, the Company issued a third promissory note (Third Norlar Note) and fifth deed of trust on the property to Norlar, Inc. again for a maximum of $600,000. As of December 1999, the Company owed $600,000 on the Third Norlar Note. In August 1998, the Company issued a fourth promissory note (Fourth Norlar Note) and sixth deed of trust on the property to Norlar, Inc. again for $600,000. As of December 1999, the Company owed $600,000 on the Fourth Norlar note. In January 1999, the Company issued a Fifth Promissory Note (Fifth Norlar Note) and seventh deed of trust on the property to Norlar, Inc., again for $600,000. As of December 1999, the Company owed $600,000 of the Fifth Norlar Note. In July 1999, the Company issued a sixth promissory note (Sixth Norlar Note) and eighth deed of trust on the property to Norlar, Inc. for $1,000,000. As of December 1999, the Company owed $1,000,000 of the Sixth Norlar Note. In addition, for each $100,000 Norlar, Inc. has loaned to the Company, it has authorized the issuance of 500,000 warrants to purchase shares of common stock at $0.20 per share. Norlar, Inc. is a closely-held corporation beneficially owned by Larry Berman and his wife. Mr. Berman is Chairman and Chief Executive Officer of the Company. The loans bear interest at 12% per annum and is to be repaid upon the earlier of the sale of the property, refinance of the property or the financing of the project. In September and October of 1997, PCL Construction Services, Inc. advanced the Company $998,000 to begin the development and design process in advance of funding. As of December 1999, the Company owes PCL Construction approximately $1,250,000, including interest. In July 1998, the Company settled an ongoing dispute with New Allied Development Corporation with regard to a piece of property outside the gaming district in Black Hawk, Colorado. Title to such property was returned to New Allied, therefore reducing the Company's debt by $750,000, plus applicable taxes due. In October 1998, the Company converted $250,000 of debt to the Company's officers into Series B Preferred stock and in October 1999, half was converted into common stock in accordance with its terms. In October 1999, the Company signed a settlement agreement and mutual release finalizing the balance of all ongoing disputes with New Allied Development Corporation and Tommy Knocker Casinos Corporation. Under the terms of the agreement, New Allied and Tommy Knocker converted 2,250,000 shares of Preferred A stock into 2,250,000 shares of common stock and agreed to dismiss all pending appeals in exchange for the company dismissing all pending litigation and appeals. RESULTS OF OPERATIONS The Company has had no revenues from operations. The Company continues to incur losses of approximately $200,000 per month to service the Kennedy Funding Note and other ongoing obligations such as rent and utilities for the Company's corporate office. The Company has had extraordinary gain on forgiveness of debt this fiscal year in the amount of 2,356,929 due to elimination of a development contract booked as debt in 1997 & 1998 and allocation of other development expenses against the cost of engineering and design of the facility. The ability of the Company to achieve revenues in the future will be dependent upon realization of its plans to develop a gaming and hotel complex on the property. 11 COUNTRY WORLD CASINOS, INC. (A DEVELOPMENT STAGE COMPANY) PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K None 12 COUNTRY WORLD CASINOS, INC. (A DEVELOPMENT STAGE COMPANY) SIGNATURES In accordance with the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. COUNTRY WORLD CASINOS, INC. By: /s/ William H. Patrowicz William H. Patrowicz, Secretary & Treasurer Date: February 14, 2000 13 EX-27 2
5 6-MOS JUN-30-2000 DEC-31-1999 0 0 0 0 0 106,935 19,340,359 38,888 19,482,294 12,711,348 0 0 600,000 61,581,687 0 19,482,294 0 0 0 349,509 22,550 0 22,550 (372,059) 0 (372,059) 0 2,356,929 0 1,984,870 .03 .03
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