UNITED STATES
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 31, 2018

 

 


NEVADA GOLD & CASINOS, INC.
(Exact name of registrant as specified in its charter)

 

 

 

 

Nevada   1-15517   88-0142032
(State or other jurisdiction
of incorporation)
  (Commission
File Number)
  (IRS Employer
Identification Number)
         

133 E. Warm Springs Road, Ste. 102

Las Vegas, Nevada

 

 

  89119
(Address of principal executive offices)       (Zip Code)
         

(702) 685-1000

Registrant’s telephone number, including area code

 

(Former name or former address, if changed since last report.)

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

xSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

Item 2.01 Completion of Acquisition or Disposition of Assets.

 

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 closing of the sale of Club Fortune and the payoff of all amounts due under the Company’s credit agreement with Mutual of Omaha Bank satisfied two of the conditions to the consummation of the transactions contemplated by the previously announced Agreement and Plan of Merger dated as of September 18, 2018 (the “Merger Agreement”), as amended by Amendment No. 1 to Agreement and Plan of Merger dated as of November 29, 2018 (“Amendment No. 1 to Merger Agreement”), by and among the Company, Maverick Casinos LLC, a Nevada limited liability company (“Parent”), and Maverick Casinos Merger Sub, Inc., a Nevada corporation and wholly owned subsidiary of Parent, (“Merger Sub”) including the merger of Merger Sub with and into the Company (the “Merger”), as a result of which the Company will continue as the surviving corporation and a wholly-owned subsidiary of Parent.

 

The foregoing summaries of the Asset Purchase Agreement, the Merger Agreement, as amended by Amendment No. 1 to Merger Agreement, and the transactions contemplated thereby do not purport to be complete and are subject to, and qualified in their entirety by, the full text of (i) the Asset Purchase Agreement, a copy of which was filed as Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2018 filed on July 26, 2018 and is incorporated herein by reference, (ii) the Merger Agreement, a copy of was filed as Exhibit 2.1 under Item 1.01 to the Company’s Current Report on Form 8-K filed on September 18, 2018 and is incorporated herein by reference, and (iii) Amendment No. 1 to Merger Agreement, a copy of which was filed as Exhibit 2.1 under Item 1.01 to the Company’s Current Report on Form 8-K filed on November 30, 2018 and is incorporated herein by reference.

 

Item 8.01 Other Events.

 

The information contained in Item 2.01 of this report is hereby incorporated herein by reference.

 

Forward Looking Statements

 

This report contains forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by use of statements that include, but are not limited to, phrases such as “anticipate,” “believe,” “expect,” “future,” “intend,” “plan,” and similar expressions to identify forward-looking statements. Forward-looking statements include, without limitation, the satisfaction of the conditions to completion the Merger in the anticipated timeframe or at all, the financing of the Merger, risks related to the financing of the Merger, the effect of the announcement of the transactions on the ability of the Company to retain and hire key personnel and maintain relationships with its customers, suppliers, partners, and others with whom it does business, or on its operating results and businesses generally, and the Company’s ability to increase income streams, to grow revenue and earnings, and to obtain additional gaming and other projects. These statements are only predictions and are subject to certain risks, uncertainties, and assumptions, which include, but are not limited to, those identified and described in the Company’s public filings with the United States Securities and Exchange Commission (the “SEC”). You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company does not undertake any obligation to update any forward-looking statements as a result of new information, future developments, or otherwise, except as expressly required by law.

 

 

 

 

Additional Information and Where to Find It

 

In connection with the proposed Merger, the Company has filed a preliminary proxy statement with the SEC. Promptly after filing its definitive proxy statement with the SEC, the Company will mail the definitive proxy statement to each stockholder entitled to vote at the special meeting relating to the proposed Merger. STOCKHOLDERS ARE URGED TO CAREFULLY READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO AND ANY DOCUMENTS INCORPORATED BY REFERENCE THEREIN) AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE PROPOSED MERGER THAT THE COMPANY WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER AND THE PARTIES THERETO. The definitive proxy statement and other relevant materials in connection with the proposed Merger (when they become available) and any other documents filed by the Company with the SEC, may be obtained free of charge at the SEC’s website (www.sec.gov) or, without charge, from the Company by mail or online from the Company’s website at www.nevadagold.com.

 

Participants in the Solicitation

 

The Company and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the Company stockholders with respect to the proposed Merger. Information about the directors and executive officers of the Company is set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2018, filed with the SEC on July 26, 2018. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement and other relevant materials to be filed with the SEC in respect of the proposed Merger.

 

Item 9.01 Financial Statements and Exhibits.

 

(b)Pro Forma Financial Information

 

The unaudited pro forma condensed consolidated statements of operations of the Company for the six months ended October 31, 2018 and the fiscal years ended April 30, 2018 and 2017 are included as Exhibit 99.1 to this report and are incorporated herein by reference.

 

(d)Exhibits.

Exhibit No.   Description

 

99.1Unaudited Pro Forma Consolidated Financial Statements of Nevada Gold & Casinos, Inc.

 

 

 

 

SIGNATURES

 

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.

 

Date: January 7, 2019

 

  NEVADA GOLD & CASINOS, INC.
       
  By: /s/ Michael P. Shaunnessy  
    Name: Michael P. Shaunnessy
    Title: President and Chief Executive Officer
         

 

 

 

 

 

 

EXHIBIT INDEX

 

Exhibit

NumberDescription

 

99.1Unaudited Pro Forma Consolidated Financial Statements of Nevada Gold & Casinos, Inc.

 

 

 

 

 

 

 

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)