Document/Exhibit Description Pages Size
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2: EX-1.0 Underwriting Agreement 14± 52K
3: EX-2 Plan of Acquisition, Reorganization, Arrangement, 4± 14K
Liquidation or Succession
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 23, 1998
GLOBAL CASINOS, INC.
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(Exact name of registrant as specified in its charter)
Utah 0-15415 87-0340206
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(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification No.)
incorporation or
organization)
5373 North Union Boulevard, Suite 100, Colorado Springs, Colorado 80918
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (719) 590-4900
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(Former name or former address, if changed since last report)
ITEM 2: DISPOSITION OF ASSETS
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(a) On December 23, 1998, Global Casinos, Inc. (the "Company") completed
the disposition of two separate business operations.
Effective December 23, 1998, the Company completed the disposition
of its discontinued casino operations on the island of Aruba. The Company had
previously announced that the Casino Masquerade located in the Radisson Aruba
Carribean Hotel on the island of Aruba had been closed effective February 28,
1998 in order to undergo renovations. Due to protracted delays in completing
the renovations and other adverse business circumstances, the Company was able
to negotiate an early termination of the remaining term on its casino lease.
Under the terms of the Settlement Agreement with Dutchco N.V., an
Aruban limited liability company, and Aruba Carribean Hotel Limited
Partnership, as landlord, the Company agreed to terminate the lease in
consideration of a cash payment in the amount of $400,000 and the issuance to
the Company of trade credits having an aggregate face value of $600,000.
The trade credits can be used at the Aruba Carribean Hotel (the
"Hotel") for a six year period beginning January 1, 2000 and ending December
31, 2005, usable at the rate of $100,000 per year. The Hotel credits can be
used against room rates as well as food and beverage charges, subject to
certain limitations.
With the consummation of the foregoing Settlement Agreement, all
residual interest in the Company in its discontinued operations in Aruba have
ceased. Miscellaneous items of personal property and gaming equipment have
been moved by the Company from Aruba to its Pelican Casino on the island of
St. Maarten.
The Company continues to own as a wholly owned subsidiary Global
Entertainment Group, N.V., an Aruba Corporation ("Global Entertainment"),
which operated the Aruba Casino, and the Company's consolidated balance sheet
continues to include the liabilities of Global Entertainment notwithstanding
the discontinued operation. The Company hopes to be able to dispose of its
interest in Global Entertainment, although there can be no assurance that it
will be successful in these efforts.
(b) In an unrelated transaction, on December 23, 1998, the Company sold
in a management buy-out 100% of the outstanding shares of Common Stock of its
wholly owned subsidiary, Destination Marketing Services, Inc. ("DMSI"). The
DMSI shares were purchased by William C. Martin, DMSI's President. In
consideration of the shares of DMSI, the Company will receive payments
totaling $20,900 over three years, and will be indemnified against certain
liabilities, including payroll taxes. The effective date of the transaction
was set at October 1, 1998 by agreement.
DMSI is engaged in placing special travel arrangements for groups
and other large parties. The Company acquired DMSI earlier during 1998. DMSI
was never a significant subsidiary of the Company within the meaning of
Regulation 210.11.01(b) under the Securities Exchange Act of 1934, as amended.
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS
---------------------------------
(a) Financial Statements
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Not applicable
(b) Pro Forma Financial Information
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Included herewith are the pro forma Balance Sheet and pro forma
Statements of Operations of the Company giving effect to the discontinuation
and disposition of the Masquerade Casino on the island of Aruba and the
disposition of DMSI.
(c) Exhibits
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Item Title
---- -----
1.0 Settlement Agreement and Mutual Release of Claims
2.0 Stock Purchase Agreement
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GLOBAL CASINOS, INC.
Date: January 8, 1999 By: /s/ Stephen G. Calandrella
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Stephen G. Calandrella, President
GLOBAL CASINOS, INC. and SUBSIDIARIES
CONSOLIDATED PRO FORMA BALANCE SHEET
SEPTEMBER 30, 1998
(unaudited)
[Enlarge/Download Table]
As Assets As
Reported Sold Adjusted
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ASSETS
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Current assets:
Cash $ 497,283 $ 377,942 A $ 875,225
Restricted Cash 140,450 140,450
Accounts receivable:
Trade, net of allowance for doubtful accounts
of $22,384 467,303 467,303
Related parties 5,741 5,741
Inventory 254,325 254,325
Prepaid rent 192,800 192,800
Current portion of notes receivable 60,623 8,875 B 69,498
Marketable securities 6,255 6,255
Other 92,172 92,172
------------- ------------- -------------
Total current assets 1,716,952 386,817 2,103,769
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Land, buildings and equipment:
Land 526,550 526,550
Buildings 4,126,970 4,126,970
Equipment 1,986,893 1,986,893
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6,640,413 - 6,640,413
Accumulated depreciation (1,456,422) (1,456,422)
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5,183,991 - 5,183,991
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Other assets:
Leasehold rights and interests and contract
rights, net of amortization of $1,199,095 2,593,479 (888,199) A 1,705,280
Goodwill, net of amortization of $140,292 2,024,212 2,024,212
Hotel credits 477,769 A 477,769
Notes receivable, net of current portion,
including receivables in default 274,698 12,025 B 286,723
Other assets, net of amortization of $27,385 23,287 23,287
------------- ------------- -------------
4,915,676 (398,405) 4,517,271
------------- ------------- -------------
$11,816,619 $ (11,588) $ 11,805,031
============= ============= =============
GLOBAL CASINOS, INC. and SUBSIDIARIES
CONSOLIDATED PRO FORMA BALANCE SHEET
SEPTEMBER 30, 1998
(unaudited)
(continued)
[Enlarge/Download Table]
As Assets As
Reported Sold Adjusted
------------- ------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $ 641,308 $ (22,058) A $ 619,250
Accrued expenses 1,515,816 1,515,816
Accrued interest, including $54,539 to
related parties 342,611 342,611
Note payable 216,843 216,843
Current portion of long-term debt, including
debt in default and $238,350 to
related parties 2,318,298 2,318,298
Mandatory redeemable convertible Class A
preferred stock, in default 27,500 27,500
Other 40,000 40,000
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Total current liabilities 5,102,376 (22,058) 5,080,318
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Long-term debt, less current portion 2,891,005 2,891,005
Other 12,056 12,056
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2,903,061 - 2,903,061
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Commitments and contingencies
Stockholders' equity:
Preferred stock - convertible, nonvoting;
10,000,000 shares authorized
Class A - $2 par value; 109,000 shares issued
and outstanding 218,000 218,000
Class B - $.01 par value; 329,178 shares
issued and outstanding 3,176 3,176
Common stock - $.05 par value; 50,000,000 shares
authorized; 1,506,741 shares issued and
outstanding 75,226 75,226
Additional paid-in capital 12,439,582 12,439,582
Accumulated deficit (8,924,802) 10,470 A (8,914,332)
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3,811,182 10,470 3,821,652
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$11,816,619 $ (11,588) $ 11,805,031
============= ============= =============
</Table
GLOBAL CASINOS, INC. and SUBSIDIARIES
CONSOLIDATED PRO FORMA BALANCE SHEET
FOR THE THREE MONHTHS ENDED SEPTEMBER 30, 1998
(unaudited)
[Enlarge/Download Table]
As Operations As
Reported Sold Adjusted
-------------- -------------- --------------
Revenues:
Casino $ 1,304,686 $ 1,304,686
Bingo 815,146 815,146
Food and beverage 27,450 27,450
Other 117,356 $ 107,748 9,608
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2,264,638 107,748 2,156,890
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Expenses:
Cost of sales 436,928 436,928
Operating, general, and administrative 1,836,056 317,463 1,518,593
Depreciation and amortization 180,646 1,673 178,973
Gain on disposition of gaming facility 472,515 (472,515)
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2,453,630 791,651 1,661,979
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Loss from operations (188,992) (683,903) 494,911
Other income (expense):
Interest income 7,449 7,449
Interest expense, including $12,445 to related
parties at September 30, 1998 (116,026) (9,570) (125,596)
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(108,577) (9,570) (118,147)
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Net loss (297,569) (693,473) 376,764
Dividends on Class B preferred stock (65,215) (65,215)
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Net loss available to common stockholders $ (362,784) $ (693,473) $ 311,549
============= ============= =============
Earnings (loss) per share - basic and diluted $ (0.24) $ 0.21
============= =============
Weighted average shares outstanding 1,504,461 1,504,461
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GLOBAL CASINOS, INC. and SUBSIDIARIES
EXPLANATORY NOTES TO PRO FORMA ADJUSTMENTS
SEPTEMBER 30, 1998
A On December 23, 1998, the Company received $400,000 as partial settlement
of the Amended and Restated Aruba Caribbean Resort and Casino Lease
Agreement, dated April 22, 1998. The settlement, dated November 17,
1998, is comprised of a $400,000 cash payment and a total of $600,000
room, food, and beverage credits eligible for use commencing January 1,
2000 and ending December 31, 2005. The present value of cash and credits
was $872,534. The effect on the net loss for the three months ended
September 30, 1998 was $10,340, which reflects imputed interest income
relating to the cash received of $5,235 netted against a $15,575 revision
of the present value estimated at June 30, 1998.
B On December 23, the Company sold 100% of its stock in Destination
Marketing Services in a management buy-out. In consideration of the
sale, the Company received a $20,900 promissory note bearing interest at
10% with principal and interest payments of $800 per month commencing
July 1, 1999.
Dates Referenced Herein and Documents Incorporated by Reference
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