Black Gaming, LLC and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
1. Basis of Presentation and Background
The accompanying are the condensed consolidated financial statements of Black Gaming, LLC, (“BG LLC”) which includes the accounts of its wholly owned subsidiaries B & B B, Inc. (doing business as Virgin River Hotel/Casino/Bingo) (“B&BB”) and Virgin River Casino Corporation (“VRCC”) and its wholly owned subsidiary RBG, LLC (doing business as CasaBlanca Resort/Casino/Golf/Spa) (“RBG”) and its wholly owned subsidiary CasaBlanca Resorts, LLC (doing business as Oasis Resort & Casino) (“Resorts LLC”) (collectively, the “Company”). Significant intercompany items and transactions of the Company have been eliminated.
BG LLC was organized in Nevada on August 4, 2006 in anticipation of modifying B&BB’s and VRCC’s organizational structure through a holding company reorganization (“Reorganization”) for VRCC and B&BB. The Reorganization, which included a transfer of B&BB and VRCC shares for membership interests in BG LLC, was completed on December 31, 2006. As a result of the reorganization, the Robert R. Black, Sr. Gaming Properties Trust (the “Black Trust”) owns 99.03% of the membership interests and Glenn Teixeira owns .97% of the membership interests. The members’ liability is limited to the amount of capital contributions they are required to make pursuant to BG LLC’s operating agreement.
Immediately prior to the Reorganization, VRCC acquired, directly and indirectly, an additional aggregate 11.2% ownership in RBG as a result of the following transaction:
VRCC received 100 shares of R. Black, Inc. (“RBI”) from the Black Trust. The Black Trust owns 100% of the outstanding shares of VRCC. The 100 shares of RBI, representing 100% of the outstanding capital stock of RBI, were exchanged for 3.68 shares of VRCC held by the Black Trust, representing 3.68% of the outstanding capital stock of VRCC. RBI does not have any material operations, liabilities or assets other than a 5.47% ownership in RBG. The transfer of shares of RBI to VRCC was accounted for at the historical cost of RBG as RBI and VRCC were under common control.
VRCC received a 3.8% membership interest in RBG from the Black Trust in exchange for 2.57 shares of VRCC held by the Black Trust, representing 2.57% of the outstanding capital stock of VRCC. The transfer of membership interests of RBG to VRCC was accounted for at historical cost as the Black Trust and VRCC were under common control.
VRCC received a 1.92% membership interest in RBG from Glenn Teixeira in exchange for 1.29 shares of VRCC held by the Black Trust, representing 1.29% of the outstanding capital stock of VRCC. The acquisition of the membership interests from RBG from Glenn Teixeira was accounted for at fair value as it was considered an acquisition of a minority interest of a subsidiary. Based upon an internal analysis the fair value of Glenn Teixeira’s interest approximated book value.
The accompanying balance sheet as of December 31, 2006 and the unaudited condensed consolidated financial statements for the three and six month periods ended June 30, 2007 include the accounts of the Company and all of its majority-owned subsidiaries and are maintained in accordance with U.S. generally accepted accounting principles. The transfer of shares of B&BB and VRCC for membership interests in BG LLC and the presentation in the accompanying condensed consolidated financial statements have been accounted for as a reorganization of entities under common control in a manner similar to a pooling-of-interests. Accordingly, the contributed assets and assumed liabilities were recorded at VRCC’s and B&BB’s historical cost basis. Since VRCC and B&BB were under common control, no adjustments in the accompanying condensed consolidated financial statements were necessary to conform to similar accounting policies. The financial statements have been prepared as though the reorganization of entities under common control took place as of the beginning of the periods presented. The acquisition of Glenn Teixeira’s interest was presented as of the date the exchange occurred on December 31, 2006. All significant intercompany balances and transactions as of December 31, 2006 and for the three and six month periods ending June 30, 2007 have been eliminated.
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Black Gaming, LLC and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
1. Basis of Presentation and Background (continued)
Interim Financial Statements – The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management of the Company, all adjustments considered necessary for a fair presentation are included and are of a normal recurring nature. Our results of operations tend to be seasonal in nature and operating results for the three and six months ended June 30, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007.
The balance sheet at December 31, 2006 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2006.
Reclassifications – Certain previously reported amounts in the condensed consolidated financial statements have been reclassified to conform to the current period’s presentation.
2. Discontinued Operations
As part of a strategic plan to dispose of non-core hotel assets, during the fourth quarter of 2006 the Company began marketing for sale approximately 350 acres of land owned by Resorts LLC’s subsidiary, Oasis Recreational Properties, Inc. (“OARI”) located in the state of Arizona immediately adjacent to the city of Mesquite, Nevada. OARI includes the land underlying the Company’s Palms Golf Course and Oasis Gun Club. The Company anticipates it will operate and generate operating cash flows from the golf course and gun club until its disposition. In anticipation of the marketing of the golf course property, on August 17, 2006 Resorts LLC entered into several agreements with WSR, Inc, the former owners of the Oasis Hotel & Casino, to terminate WSR’s remaining rights in the golf course property, among other matters, in exchange for approximately $1.1 million. Pursuant to the agreements, the funds paid to WSR will be used by WSR to remediate the existing environmental liability at the Oasis Hotel & Casino which continues to be an obligation of WSR. The 350 acres of land and certain other assets of OARI met the “held for sale” and “discontinued operations” criteria in accordance with SFAS 144.
The following sets forth the discontinued operations for the three and six months ended June 30, 2007 and 2006 related to OARI’s assets held for sale (in thousands):
| | For the three months ended
June 30, | | For the six months ended
June 30, | |
| | 2007 | | 2006 | | 2007 | | 2006 | |
| | | | | | | | | |
Operating revenues | | $ | 842 | | $ | 944 | | $ | 1,973 | | $ | 2,072 | |
Operating expenses | | 728 | | 780 | | 1,589 | | 1,691 | |
Depreciation | | 45 | | 96 | | 90 | | 191 | |
| | | | | | | | | |
Income from discontinued operations | | $ | 69 | | $ | 68 | | $ | 294 | | $ | 190 | |
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Black Gaming, LLC and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
2. Discontinued Operations (continued)
The following sets forth the assets that are held for sale that are related to the discontinued operations (in thousands):
| | June 30, 2007 | | December 31, 2006 | |
ASSETS | | | | | |
Inventory | | $ | 96 | | $ | 93 | |
Prepaid expenses | | 147 | | 151 | |
Property and equipment, net | | 7,976 | | 8,016 | |
Other assets | | 1,100 | | 1,100 | |
Total assets of discontinued operations | | $ | 9,319 | | $ | 9,360 | |
| | | | | |
LIABILITIES | | | | | |
Accounts payable | | $ | 23 | | $ | 31 | |
Accrued liabilities | | 277 | | 221 | |
Total liabilities of discontinued operations | | $ | 300 | | $ | 252 | |
3. Property and Equipment
Property and equipment (excluding such assets held for sale) consists of the following (in thousands):
| | June 30, 2007 | | December 31, 2006 | |
| | | | | |
Land | | $ | 26,110 | | $ | 26,110 | |
Buildings | | 76,254 | | 74,849 | |
Land and leasehold improvements | | 17,772 | | 16,637 | |
Furniture, fixtures and equipment | | 78,261 | | 75,340 | |
Construction in progress | | 3,300 | | 3,050 | |
| | 201,697 | | 195,986 | |
Less: accumulated depreciation | | (78,855 | ) | (73,823 | ) |
Property and equipment, net | | $ | 122,842 | | $ | 122,163 | |
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Black Gaming, LLC and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
4. Notes Receivable
Notes receivable consist of the following (in thousands):
| | June 30, 2007 | | December 31, 2006 | |
| | | | | |
Vacation interval notes receivable | | $ | 1,150 | | $ | 1,571 | |
Allowance for possible credit losses | | (236 | ) | (342 | ) |
Total notes receivable | | 914 | | 1,229 | |
Less: current portion | | (310 | ) | (349 | ) |
Non-current notes receivable | | $ | 604 | | $ | 880 | |
Notes generated from the sale of vacation intervals generally bear interest at annual rates ranging from 12.75% to 14.75% and have terms of 5 to 7 years. The vacation interval notes receivable are collateralized by the right to use and deeds of trust on the vacation interval sold.
In January of 2006, the Company adopted the provisions of SFAS 152, “Accounting for Real Estate Time-Sharing Transactions.” SFAS 152 amends existing accounting guidance to reference the financial accounting and reporting guidance for real estate time-sharing transactions provided in AICPA Statement of Position 04-02, “Accounting for Real Estate Time-Sharing Transactions.” In determining the allowance for possible credit losses, the Company, in accordance with SFAS 152, uses a technique referred to as static pool analysis, which tracks uncollectible notes receivable based on each year’s sales over the entire life of those notes. The Company considers whether the historical economic conditions are comparable to current economic conditions. If current economic conditions differ from the economic conditions in effect when the historical experience was generated, the Company adjusts the allowance for possible credit losses to reflect the expected effects of current economic conditions on uncollectibility. The Company groups all notes receivables in one pool for analytical purposes based on historical collectibility and customer demographics. As a result of the change in accounting for the allowance for possible credit losses, the Company has recorded in the accompanying statement of operations for the six months ended June 30, 2006, a cumulative effect of a change in accounting principle of $196,000 to increase the allowance for possible credit losses.
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Black Gaming, LLC and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
5. Gaming Equipment Financing
Gaming equipment financing consists of the following (in thousands):
| | June 30, 2007 | | December 31, 2006 | |
| | | | | |
Gaming equipment financing to purchase 478 games, no payments for one year and monthly payments of $251 for 24 months beginning February 2006 | | $ | 1,704 | | $ | 3,139 | |
Gaming equipment financing to purchase 68 games, no payments for one year and monthly payments of $43 for 24 months beginning January 2006 | | 293 | | 534 | |
Gaming equipment financing to purchase 70 games, no payments for one year and monthly payments of $39 for 24 months beginning March 2006 | | 264 | | 550 | |
Gaming equipment financing to purchase 80 games, monthly payments of $18 for 36 months beginning April 2005 | | 241 | | 393 | |
Gaming equipment financing to purchase 64 games, no payments for one year and monthly payments of $26 for 24 months beginning February 2006 | | 179 | | 326 | |
Gaming equipment financing to purchase 38 games, monthly payments of $13 for 36 months beginning April 2005 | | 120 | | 200 | |
Gaming equipment financing to purchase 55 games, no payments for one year and monthly payments of $16 for 24 months beginning January 2006 | | 87 | | 171 | |
Gaming equipment financing to purchase 20 games, no payments for one year and monthly payments of $7 for 36 months beginning April 2005 | | 44 | | 87 | |
Gaming equipment financing. monthly payments of $3 for 36 months beginning January 2005 | | 7 | | 25 | |
Gaming equipment financing to purchase 4 games, monthly payments of $1 for 36 months beginning April 2005 | | 11 | | 18 | |
Gaming equipment financing to purchase 6 games, no payments for one year and monthly payments of $6 for 24 months beginning February 2007 | | 52 | | 66 | |
Gaming equipment financing, monthly payments of $1 for 36 months beginning July 2006 | | 24 | | 29 | |
Gaming equipment financing, no payments for 18 months and monthly payments of $1 for 36 months beginning July 2006 | | 10 | | 90 | |
Gaming equipment financing, no payments for 36 months and a lump sum payment of $95 due January 2008 | | 104 | | 28 | |
| | 3,140 | | 5,656 | |
Less: current portion | | (3,097 | ) | (4,933 | ) |
Gaming equipment financing, long-term portion | | $ | 43 | | $ | 723 | |
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Black Gaming, LLC and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
6. Long-term Debt
Long-term debt consists of the following (in thousands):
| | June 30, 2007 | | December 31, 2006 | |
| | | | | |
Revolving credit facility totaling $15 million with Wells Fargo Foothill at a margin above prime or LIBOR, as defined; collateralized by substantially all assets of the Company as defined | | $ | 3,500 | | $ | — | |
9% senior secured notes, interest payable semiannually, principal due January 15, 2012, callable January 15, 2009 | | 125,000 | | 125,000 | |
12 ¾ % senior subordinated notes, non-cash interest will accrue at an annual rate of 12 ¾ % in the form of increase accreted value until January 15, 2009. Beginning January 15, 2009, interest payable semiannually, principal due January 15, 2013, callable January 15, 2009 | | 54,568 | | 51,298 | |
Total long-term debt | | $ | 183,068 | | $ | 176,298 | |
Revolving Facility
The Wells Fargo Foothill, Inc. credit facility (“Foothill Facility”) is secured by substantially all the assets of the Company. During the life of the Foothill Facility, the Company may borrow up to the lesser of (1) $15.0 million less the Letter of Credit Usage, as defined, less the Bank Product Reserve, as defined, or (2) the Borrowing Base, as defined, less the Letter of Credit Usage. At June 30, 2007, $3.5 million was drawn under the Foothill Facility. Accordingly, the availability under the Foothill Facility at June 30, 2007 was limited to approximately $11.5 million.
Under the terms of the Foothill Facility, interest accrues on the outstanding principal balance at LIBOR plus the LIBOR Rate Margin, which is 3.5%, or the Base Rate, as defined, plus the Base Rate Margin, which is 2%. LIBOR was approximately 5.3% and prime was 8.25% at June 30, 2007. The Foothill Facility also contains certain financial and other covenants. These include a minimum trailing twelve-month Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) of $15,000,000 for the Company and limitations on other indebtedness and capital expenditures, as defined. The Company was in compliance with these covenants at June 30, 2007 and December 31, 2006, respectively. The outstanding balance on the Foothill Facility is a joint and several obligation of the Company.
Senior Secured and Senior Subordinated Notes
In December 2004, VRCC, RBG and B&BB (the “Issuers”) issued $125.0 million of 9% senior secured notes (“Senior Notes”) due on January 15, 2012 and $39.9 million in gross proceeds of 12¾% senior subordinated notes (“Senior Sub Notes”) due January 15, 2013 (collectively the “Notes”). The Notes are joint and several obligations of the Issuers and all current and future subsidiaries of the Issuers.
The Senior Notes pay interest semiannually while the Senior Sub Notes accrue interest in the form of increased accreted value until January 15, 2009, when the carrying book value of the Senior Sub Notes will be $66.0 million. At that point the Senior Sub Notes will pay interest semiannually on the same dates as the Senior Notes.
The indentures governing the Notes (the “Indentures”) contain certain customary financial and other covenants, which limit the Company’s ability to incur additional debt. The Indentures provide that the Company may not incur additional indebtedness, other than specified types of indebtedness, unless the Consolidated Coverage Ratio, as defined, on a pro-forma basis after the incurrence of the additional indebtedness is at least 2.00 to 1.00. As of June 30, 2007, the Company has a Consolidated Coverage Ratio that is less than 2.00 to 1.00 and accordingly has incurred $0 of additional indebtedness as defined.
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Black Gaming, LLC and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
6. Long-term Debt (continued)
The Indentures also contain other covenants which limit the ability of the Issuers and Guarantors, as defined, to pay dividends, redeem stock, or make other distributions, make investments, create certain liens, enter into certain transactions with affiliates, utilize proceeds from asset sales, transfer or sell assets, issue or sell equity interests of subsidiaries and enter into certain mergers and consolidations, as defined in the Indentures. There are no restrictions related to the transfer of funds between the Issuers, Guarantors and their respective subsidiaries. The Issuers were in compliance with these covenants at June 30, 2007 and December 31, 2006.
The Senior Notes are secured by substantially all existing and future assets of the Issuers and the Guarantors, as well as the equity interest of the Guarantors and the equity interests of the Black Trust in the Issuers. The Guarantors are all the wholly owned subsidiaries of the Issuers.
The Senior Notes are subordinated to the security interests of the Foothill Facility. The Senior Sub Notes are subordinate to the Senior Notes and all other indebtedness of the Company.
Interest Rate Swaps
The Company’s interest rate swaps terminated effective June 30, 2006.
7. Related Party Transactions
Virgin River Foodmart, Inc., a Nevada corporation, (“Foodmart”) is owned by Mr. Black and former shareholders of VRCC. Participants in the Company’s slot club program are able to redeem their points for gasoline at the Foodmart. Foodmart charges the Company the retail amount of gas purchased with player points. Charges associated with the point redemption for gasoline at the Foodmart were $8,000, $18,000, $14,000 and $32,000 for the three and six months ended June 30, 2007 and 2006, respectively.
Black & LoBello is a law firm managed by the daughter of Mr. Black. The Company retains Black & LoBello as outside legal counsel, and has paid legal fees for legal services in the amount of $65,000, $167,000, $0 and $82,000 for the three and six months ended June 30, 2007 and 2006, respectively.
Pursuant to the Indenture, Mr. Black is entitled to a management fee for his management of the Company business of up to 5% of EBITDA. The Company expensed $292,000, $583,000, $330,000 and $659,000 during the three and six months ended June 30, 2007 and 2006, respectively, associated with this management fee.
Gaming Research is a consulting firm retained to perform marketing research for the Company. The principal of Gaming Research is the father of the Company’s chief operating officer. Gaming Research received consulting fees of $31,000, $89,000, $41,000 and $91,000 for the three and six months ended June 30, 2007 and 2006, respectively.
Resorts LLC provided management and other services to two related parties that manage and operate the home owners associations of the vacation intervals sold at the property. Included in the accompanying condensed consolidated balance sheet at June 30, 2007 and December 31, 2006, is a receivable for $175,000 and $384,000, respectively, related to amounts owed for those services.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis together with our unaudited condensed consolidated financial statements and the accompanying notes. This discussion contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, including statements regarding our expected financial position, business and financing plans. Some of the forward-looking statements can be identified by the use of forward-looking terms such as “believes,” “expects,” “may,” “will,” “should,” “could,” “seek,” “intends,” “plans,” “estimates,” “anticipates,” or other comparable terms. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statement, including those discussed herein and elsewhere in our Form 10-K for the year ended December 31, 2006, particularly under the heading “Risk Factors.” We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Unless the context indicates otherwise, all references to the “Company”, “Black Gaming”, “we”, “us” and “our” refer to Black Gaming, LLC and its direct and indirect wholly owned subsidiaries, Virgin River Casino Corporation, RBG, LLC, B & B B, Inc., Casablanca Resorts, LLC, Oasis Interval Ownership, LLC Oasis Interval Management, LLC, Oasis Recreational Properties, Inc. and R. Black, Inc.
Overview
We own and operate the CasaBlanca Hotel & Casino (the “Casablanca”), the Oasis Hotel and Casino (the “Oasis”) and the Virgin River Hotel & Casino (the “Virgin River”) in Mesquite, Nevada, which is located approximately 80 miles north of Las Vegas. We own three of the four casinos operating in Mesquite and collectively our properties have a dominant market share in Mesquite. Our properties are well established, each having been in operation for at least ten years, and serve as significant drive-in gaming and resort destinations. Our properties collectively feature over 2,200 slot machines, 72 table games, and 2,200 deluxe hotel rooms, and offer extensive amenities, including championship golf courses, full service spas, a bowling center, movie theaters, restaurants, and banquet and conference facilities. With each of our properties, we leverage our extensive value-oriented amenities and emphasis on slot play to target middle market gaming customers.
Our revenues are primarily derived from gaming revenues, which include revenues from slot machines, table games, live keno, race and sports book wagering and bingo. Gaming revenues are generally defined as gaming wins less gaming losses. In addition, we derive a significant amount of revenue from our hotel rooms and our food and beverage outlets. We also derive revenues from our golf courses, spa facilities, timeshare units, bowling center and other amenities. Promotional allowances consist primarily of free hotel rooms or food and beverages furnished gratuitously to customers. The retail value of such services is included in the respective revenue classifications and is then deducted as promotional allowances. We calculate operating income as net revenues less total operating costs and expenses. Operating income represents only those amounts that relate to our operations and excludes interest income, interest expense, and other non-operating income and expenses.
We are classified as a “flow-through” entity under the partnership or Subchapter S provisions of the Internal Revenue Code of 1986, as amended. Under those provisions, our owners pay or are responsible for reporting our taxable income on their separate returns. Accordingly, a provision for income taxes is not included in our financial data.
We were organized in Nevada on August 4, 2006 in anticipation of modifying B & B B, Inc.’s (“B&BB”) and Virgin River Casino Corporation’s (“VRCC”) organizational structure through a holding company reorganization (“Reorganization”) for VRCC and B&BB. The Reorganization, which included a transfer of B&BB and VRCC shares for membership interests in us, was completed on December 31, 2006. As a result of the reorganization, the Robert R. Black, Sr. Gaming Properties Trust (the “Black Trust”) owns 99.03% of our membership interests and Glenn Teixeira owns .97% of our membership interests. The transfer of shares of B&BB and VRCC for our membership interests has been accounted for as a reorganization of entities under common control in a manner similar to a pooling-of-interests. Accordingly, the contributed assets and assumed liabilities were recorded at VRCC’s and B&BB’s historical cost basis.
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Immediately prior to the Reorganization, VRCC acquired, directly and indirectly, an additional aggregate 11.2% ownership in RBG, LLC (“RBG”) as a result of the following transaction:
· VRCC received 100 shares of R. Black, Inc. (“RBI”) from the Black Trust. The Black Trust owns 100% of the outstanding shares of VRCC. The 100 shares of RBI, representing 100% of the outstanding capital stock of RBI, were exchanged for 3.68 shares of VRCC held by the Black Trust, representing 3.68% of the outstanding capital stock of VRCC. RBI does not have any material operations, liabilities or assets other than a 5.47% ownership in RBG. The transfer of shares of RBI to VRCC was accounted for at the historical cost of RBG as RBI and VRCC were under common control.
· VRCC received a 3.8% membership interest in RBG from the Black Trust in exchange for 2.57 shares of VRCC held by the Black Trust, representing 2.57% of the outstanding capital stock of VRCC. The transfer of membership interests of RBG to VRCC was accounted for at historical cost as the Black Trust and VRCC were under common control.
· VRCC received a 1.92% membership interest in RBG from Glenn Teixeira in exchange for 1.29 shares of VRCC held by the Black Trust, representing 1.29% of the outstanding capital stock of VRCC. The acquisition of the membership interests from RBG from Glenn Teixeira was accounted for at fair value as it was considered an acquisition of a minority interest of a subsidiary. Based upon an internal analysis the fair value of Glenn Teixeira’s interest approximated book value.
On December 20, 2004, VRCC, RBG and B&BB entered into a series of transactions whereby they issued $125.0 million aggregate principal amount of Senior Secured Notes due 2012 and $66.0 million aggregate principal amount at maturity ($39.9 million in gross proceeds) of Senior Subordinated Notes due 2013, and received a $16.0 million equity contribution from the Black Trust and RBI. The proceeds from the above offering were used to purchase the interests held by certain affiliated and unaffiliated shareholders (collectively known as the “Buyout”) for $101.4 million pursuant to the Agreement for Purchase and Sale or Redemption of Equity Interests (“Agreement for Purchase of Equity Interests”) between James A. Black Gaming Properties Trust, Gary W. Black Gaming Properties Trust, Michael T. Black Gaming Properties Trust, Jorco, Inc., Marcus A. Hall, James Ritchie and Barry Moore as Sellers and Robert R. Black, VRCC, and B&BB as Purchasers. As a result of the Buyout, the Black Trust obtained the remaining 80.97% interest in B&BB and 75.0% interest in VRCC. VRCC along with RBI obtained 32.69% of the membership interest in RBG that was being purchased. The remaining proceeds were utilized to repay $64.0 million owed under the then existing credit facility and the $2.0 million promissory note payable to a selling shareholder. As a result of these transactions, the Black Trust and RBI control VRCC, RBG and B&BB. In addition, VRCC, RBG and B&BB are co-issuers on the Senior Secured and Senior Subordinated Notes and all three entities are jointly managed and share resources.
RBG was formed in February 1997 for the purpose of acquiring the assets of Player’s Island Resort in Mesquite, Nevada, currently operating as the CasaBlanca. RBG acquired the CasaBlanca for $30.5 million. In February 2001, RBG formed a subsidiary, Casablanca Resorts, LLC, a Nevada limited-liability company, in order to purchase the assets of the Oasis. RBG acquired the Oasis for $31.7 million. Currently, RBG directly owns and operates the CasaBlanca, and through its wholly-owned subsidiary, owns and operates the Oasis. In May 2001, Casablanca Resorts, LLC formed three subsidiaries—Oasis Interval Ownership, LLC, a Nevada limited-liability company; Oasis Recreational Properties, Inc., a Nevada corporation; and Oasis Interval Management, LLC, a Nevada limited-liability company. Oasis Interval Ownership, LLC and Oasis Interval Management, LLC were formed in connection with the operation and management of time share operations. Oasis Recreational Properties, Inc. owns the recreational facility that is associated with the Oasis.
B&BB was formed in December 1989 in connection with the construction and development of the Virgin River. B&BB operates the hotel casino and owns certain personal property including furniture and fixtures, leasehold improvements and gaming equipment within the casino. VRCC was formed in July 1988 in connection with the construction of the Virgin River. VRCC currently owns the land and buildings associated with the Virgin River as well as the Virgin River Convention Center. VRCC generates income from rents received from B&BB, which operates the Virgin River.
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The Virgin River Convention Center is currently a non-operating casino, which we acquired out of bankruptcy for $6.3 million in November 2000. The Virgin River Convention Center has 12,000 square feet of potential gaming space and 210 hotel rooms. We are presently using the property as a special events facility and for overflow hotel traffic from our other properties. We believe that the Virgin River Convention Center gives us a competitive advantage in the Mesquite market because it allows us the flexibility of opening the casino to meet market demand and to maintain our market share in the future on a cost-effective basis.
In order to offer our customers attractive and modern facilities, we plan to continue to renovate our facilities and add amenities. In particular, in the future, we plan to (i) construct a permanent convention and concert space and redesign the center and pool bar at the CasaBlanca; (ii) finish refurbishing and remodeling the casino interior, coffee shop and lounge at the Virgin River; and (iii) refurbish/remodel the hotel rooms at the Oasis and Virgin River.
Key Performance Indicators
Our operating results are highly dependent on the volume of customers at our properties, which in turn impacts the price we can charge for our hotel rooms and other amenities. We generate a significant portion of our operating income from the gaming and hotel portions of our operations. Key performance indicators in our gaming and hotel operations are as follows:
Gaming revenue indicators – table games drop and slot handle (volume indicators); “win” or “hold” percentage, which is not fully controllable by us. Our normal table games win percentage is in the range of 15% to 18% of table games drop and our normal slot win percentage is in the range of 5% to 7% of slot handle.
Hotel revenue indicators – hotel occupancy (volume indicator); average daily rate (“ADR,” price indicator); revenue per available room (“REVPAR”), a summary measure of hotel results, combining ADR and occupancy rate.
Most of our revenue is essentially cash-based, through customers wagering with cash or paying for non-gaming services with cash or credit cards. Our industry is capital intensive and we rely heavily on the ability of our properties to generate operating cash flow to repay debt financing, fund maintenance capital expenditures and provide excess cash for future development.
Our results of operations tend to be seasonal in nature. During the year ended December 31, 2006, approximately 38% of our operating income (less depreciation and amortization and other non-cash items) was generated in the first quarter and approximately 32% was generated in the second quarter with the remainder being generated during the final half of the year.
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Financial Highlights of Black Gaming, LLC and Subsidiaries
For the three and six months ended June 30, 2007 and 2006 (unaudited) (in thousands)
| | Three months ended June 30, | | % | | Six months ended June 30, | | % | |
| | 2007 | | 2006 | | Change | | 2007 | | 2006 | | Change | |
Casino revenues | | $ | 27,181 | | $ | 26,543 | | 2.4 | % | $ | 56,733 | | $ | 53,618 | | 5.8 | % |
Casino expenses | | 13,144 | | 11,563 | | 13.7 | % | 26,983 | | 23,799 | | 13.4 | % |
Profit margin | | 51.6 | % | 56.4 | % | — | | 52.4 | % | 55.6 | % | — | |
| | | | | | | | | | | | | |
Food and beverage revenues | | $ | 10,737 | | $ | 10,997 | | (2.4 | )% | $ | 21,751 | | $ | 22,243 | | (2.2 | )% |
Food and beverage expenses | | 5,857 | | 6,535 | | (10.4 | )% | 11,821 | | 13,102 | | (9.8 | )% |
Profit margin | | 45.5 | % | 40.6 | % | — | | 45.7 | % | 41.1 | % | — | |
| | | | | | | | | | | | | |
Hotel revenues | | $ | 9,453 | | $ | 9,482 | | (0.3 | )% | $ | 19,802 | | $ | 18,768 | | 5.5 | % |
Hotel expenses | | 1,687 | | 1,975 | | (14.6 | )% | 3,199 | | 4,100 | | (22.0 | )% |
Profit margin | | 82.2 | % | 79.2 | % | — | | 83.8 | % | 78.2 | % | — | |
| | | | | | | | | | | | | |
Other revenues | | $ | 4,520 | | $ | 4,853 | | (6.9 | )% | $ | 9,061 | | $ | 9,554 | | (5.2 | )% |
Other expenses | | 2,686 | | 2,481 | | 8.3 | % | 5,357 | | 4,865 | | 10.1 | % |
| | | | | | | | | | | | | |
Promotional allowances | | $ | 9,783 | | $ | 8,750 | | 11.8 | % | $ | 20,998 | | $ | 17,369 | | 20.9 | % |
Percent of gross revenues | | 18.9 | % | 16.9 | % | — | | 19.6 | % | 16.7 | % | — | |
| | | | | | | | | | | | | |
General and administrative expenses | | $ | 12,044 | | $ | 12,456 | | (3.3 | )% | $ | 24,884 | | $ | 23,431 | | 6.2 | % |
Percent of net revenues | | 28.6 | % | 28.9 | % | — | | 28.8 | % | 27.0 | % | — | |
Three and six months ended June 30, 2007 compared to the three and six months ended June 30, 2006
Consolidated Net Revenues. Consolidated net revenues decreased by 2.4% to $42.1 million for the three months ended June 30, 2007 as compared to $43.1 million for the three months ended June 30, 2006. The decrease was primarily due to a $0.6 million increase in casino revenues, offset by a $0.3 million decrease in food and beverage revenues, a $0.3 million decrease in other revenues and a $1.0 million increase in promotional allowances.
Consolidated net revenues decreased by 0.5% to $86.3 million for the six months ended June 30, 2007 as compared to $86.8 million for the six months ended June 30, 2006. The decrease was primarily due to a $3.1 million increase in casino revenues, a $1.0 million increase in hotel revenues offset by a decrease $0.5 million decrease in food and beverage revenues, a $0.5 million decrease in other revenues and a $3.6 million increase in promotional allowances. During the six months ended June 30, 2007, operations were impacted due to the remodeling of the Virgin River casino interior and the construction necessary to convert the Oasis coffee shop into a Denny’s Restaurant.
Consolidated Operating Income. Consolidated operating income decreased to $2.4 million for the three months ended June 30, 2007 as compared to operating income of $3.8 million for the three months ended June 30, 2006. In addition, our operating income margin decreased to 5.7% of net revenues for the three months ended June 30, 2007 as compared to a margin of 8.8% of net revenues for the three months ended June 30, 2006. The main reason for the decrease in operating income was primarily due to a decrease in consolidated net revenues of $1.0 million, a $1.6 million increase in casino expenses, a $0.2 million increase in other expenses offset by a $0.7 million reductions in food and beverage expenses, $0.3 million reduction in hotel expenses, a $0.4 million decrease in general and administrative expenses and a slight decrease in depreciation and amortization expenses for the three months ended June 30, 2007 as compared to the three months ended June 30, 2006.
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Consolidated operating income decreased to $5.7 million for the six months ended June 30, 2007 as compared to operating income of $8.5 million for the six months ended June 30, 2006. In addition, our operating income margin decreased to 6.6% of net revenues for the six months ended June 30, 2007 as compared to a margin of 9.8% of net revenues for the six months ended June 30, 2006. The main reason for the decrease in operating income was primarily due to a decrease in consolidated net revenues of $0.5 million, a $3.2 million increase in casino expenses, a $0.5 million increase in other expenses, a $1.5 million increase in general and administrative expenses offset by a $1.3 million reduction in food and beverage expenses, a $0.9 million reduction in hotel expenses and a $0.5 million decrease in depreciation and amortization expenses for the six months ended June 30, 2007 as compared to the six months ended June 30, 2006.
Casino. Casino revenues increased 2.4% to $27.2 million for the three months ended June 30, 2007 as compared to $26.5 million for the three months ended June 30, 2006. The increase in casino revenues was due to the increase in slot revenues, which increased $1.2 million between periods, a slight increase in other gaming revenues, specifically in our Keno play offset by a decrease of $0.4 million in table games revenues as compared to the same period in the prior year. Casino profit margin decreased to 51.6% for the three months ended June 30, 2007 as compared to 56.4% for three months ended June 30, 2006. Casino expenses increased 13.7% to $13.1 million for the three months ended June 30, 2007 as compared to $11.6 million for the three months ended June 30, 2006. The increase was attributable to increased taxes and license fees, which increase with increased gaming revenues, in addition to increased expenses attributable to servicing casino guests.
Casino revenues increased 5.8% to $56.7 million for the six months ended June 30, 2007 as compared to $53.6 million for the six months ended June 30, 2006. The increase in casino revenues was due to a $3.3 million increase in slot revenues in the first six months of 2007 compared to the same period in the prior year and a $0.2 million increase in other gaming revenues, primarily driven by Keno play. Table games revenues decreased $0.4 million for the six months ended June 30, 2007 as compared to the same period in the prior year. Casino profit margin decreased to 52.4% for the six months ended June 30, 2007 as compared to 55.6% for six months ended June 30, 2006. Casino expenses increased 13.4% to $27.0 million for the six months ended June 30, 2007 as compared to $23.8 million for the six months ended June 30, 2006. The increase was attributable to increased taxes and license fees, which increase with increased gaming revenues, increased expenses attributable to servicing casino guests and an increase in salaries and benefits for casino employees.
Food and Beverage. Food and beverage revenues decreased by 2.4% to $10.7 million for the three months ended June 30, 2007 as compared to $11.0 million for the three months ended June 30, 2006. Revenues decreased due mainly to a reduction in covers caused by construction at the Virgin River casino and other outlets as well as the closure of the Oasis coffee shop which we converted into a Denny’s Restaurant. Food and beverage expenses decreased by 10.4% to $5.9 million for the three months ended June 30, 2007 as compared to $6.5 million for the three months ended June 30, 2006. The decrease in food and beverage expenses was mainly due to a reduction in covers for the quarter due to construction disruptions and the closure of the Oasis coffee shop. Food and beverage profit margin increased to 45.5% for the three months ended June 30, 2007 as compared to 40.6% for the three months ended June 30, 2006. The increase in food and beverage profit margin is primarily due to increased pricing on reduced covers and the closure of the Oasis coffee shop which produced lower margins.
Food and beverage revenues decreased by 2.2% to $21.8 million for the six months ended June 30, 2007 as compared to $22.2 million for the six months ended June 30, 2006. Revenues decreased due mainly to a reduction in covers caused by construction at the Virgin River casino and other outlets and the closure of the Oasis coffee shop. Food and beverage expenses decreased by 9.8% to $11.8 million for the six months ended June 30, 2007 as compared to $13.1 million for the six months ended June 30, 2006. The decrease in food and beverage expenses was mainly due to a reduction in covers for the period due to construction disruptions as well as the closure of the Oasis coffee shop which was converted into a Denny’s Restaurant. Food and beverage profit margin increased to 45.7% for the six months ended June 30, 2007 as compared to 41.1% for the six months ended June 30, 2006. The increase in food and beverage profit margin is primarily due to increased pricing on reduced covers and the closure of the Oasis coffee shop which produced lower margins.
Hotel. Hotel revenues were $9.5 million for the three months ended June 30, 2007 and 2006. Hotel expenses decreased 14.6% to $1.7 million for the three months ended June 30, 2007 compared to $2.0 million for the three months ended June 30, 2006 primarily due to a decrease in supplies and other miscellaneous expenses associated with
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decreased occupancy. Hotel profit margin increased to 82.2% for the three months ended June 30, 2007 from 79.2% in the prior three month period ended June 30, 2006.
Hotel revenues increased 5.5% to $19.8 million for the six months ended June 30, 2007 as compared to $18.8 million for the six months ended June 30, 2006. Hotel revenues primarily increased due to increases in ADR on reduced occupancy. Hotel expenses decreased 22.0% to $3.2 million for the six months ended June 30, 2007 compared to $4.1 million for the six months ended June 30, 2006 primarily due to a decrease in supplies and other miscellaneous expenses associated with decreased occupancy. As a result of the higher ADR despite decreased occupancy, hotel profit margin increased to 83.8% for the six months ended June 30, 2007 from 78.2% in the prior six month period ended June 30, 2006.
Other Revenues. Other revenues decreased 6.9% to $4.5 million for the three months ended June 30, 2007 as compared to $4.9 million for the three months ended June 30, 2006 due mainly to the bulk time share sale that occurred in the prior year that did not occur in the three month period ended June 30, 2007. Other expenses increased 8.3% to $2.7 million for the three months ended June 30, 2007 as compared to $2.5 million for the three months ended June 30, 2006 due to professional entertainment fees paid for our concert series and to increased costs associated with our timeshare properties.
Other revenues decreased 5.2% to $9.1 million for the six months ended June 30, 2007 as compared to $9.6 million for the six months ended June 30, 2006 due mainly to a bulk time share sale that occurred in the prior year that did not occur in the six month period ended June 30, 2007. Other expenses increased 10.1% to $5.4 million for the six months ended June 30, 2007 as compared to $4.9 million for the six months ended June 30, 2006 due to professional entertainment fees paid for our concert series and to increased costs associated with our timeshare properties.
Promotional Allowances. Promotional allowances increased by 11.8% to $9.8 million for the three months ended June 30, 2007 as compared to $8.8 million for the three months ended June 30, 2006. As a percent of gross revenues, promotional allowances increased to 18.9% for the three months ended June 30, 2007 as compared to 16.9% for the three months ended June 30, 2006 primarily due to increased expenses attributable to servicing casino guests.
Promotional allowances increased by 20.9% to $21.0 million for the six months ended June 30, 2007 as compared to $17.4 million for the six months ended June 30, 2006. As a percent of gross revenues, promotional allowances increased to 19.6% for the six months ended June 30, 2007 as compared to 16.7% for the six months ended June 30, 2006 primarily due to increased expenses attributable to servicing casino guests.
General and Administrative (“G&A”). G&A expenses decreased by 3.3% to $12.0 million for the three months ended June 30, 2007 as compared to $12.5 million for the three months ended June 30, 2006. As a percent of net revenues, G&A expenses decreased to 28.6% for the three months ended June 30, 2007 as compared to 28.9% for the three months ended June 30, 2006. G&A expenses decreased due to a decrease in employee awards, reduced advertising and a reduction in professional fees for the quarter.
G&A expenses increased by 6.2% to $24.9 million for the six months ended June 30, 2007 as compared to $23.4 million for the six months ended June 30, 2006. As a percent of net revenues, G&A expenses increased to 28.8% for the six months ended June 30, 2007 as compared to 27.0% for the six months ended June 30, 2006. G&A expenses increased due to an increase in property taxes, repair and maintenance and utilities costs.
Depreciation and Amortization. Depreciation and amortization expense decreased to $8.3 million for the six months ended June 30, 2007 compared to $8.8 million for the six months ended June 30, 2006 due to a reduction in the depreciable asset base.
Interest Expense. Interest expense increased to $10.2 million for the six months ended June 30, 2007 as compared to $10.0 million for the six months ended June 30, 2006. The increase was due to an increase in outstanding debt amounts.
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Change in Fair Value of Swaps. The interest rate swaps terminated on June 30, 2006. During the six months ended June 30, 2006 the change in fair value of swaps resulted in income of $0.2 million.
Cumulative effect of change in accounting principle. We adopted the provisions of SFAS 152, “Accounting for Real Estate Time-Sharing Transactions.” The adoption of SFAS 152 resulted in an increase in our allowance for possible credit losses of $0.2 million during the six months ended June 30, 2006.
Liquidity and Capital Resources
Cash Flows and Credit Facility
Our primary sources of liquidity and capital resources have been cash flow from operations and our credit facility with Wells Fargo Foothill (the “Foothill Facility”). As of June 30, 2007 and December 31, 2006, cash and cash equivalents were $11.6 million and $11.1 million, respectively.
Operating Activities
Cash provided by operating activities for the six months ended June 30, 2007 was $8.3 million compared to $10.8 million for the six months ended June 30, 2006. The $2.5 million decrease was primarily due to a $3.4 million decrease in operating income (excluding depreciation and amortization expense and other non-cash charges) in addition to changes in operating assets and liabilities of $1.0 million during the six month period ended June 30, 2007 compared to the same period in the prior year.
Investing Activities
Cash used in investing activities for the six months ended June 30, 2007 was $7.4 million compared to $3.9 million for the six months ended June 30, 2006. The majority of cash used for the period ended June 30, 2007 was related to the Virgin River casino floor renovations, Casablanca buffet remodel and other exterior hotel improvements, Oasis room remodels and purchases related to our temporary concert space. For the six months ended June 30, 2006, the majority of cash used in investing activities consisted of capital expenditures for our centralized laundry projects and for the property management and back office computer systems.
Financing Activities
Cash used in financing activities for the six months ended June 30, 2007 was $0.4 million compared to $5.3 million for the six months ended June 30, 2006. For the six months ended June 30, 2007, $1.0 million represented a decrease in the bank overdraft balance, $2.4 million related to payments on gaming equipment financing, $6.0 million related to payments of long term debt and $0.6 million related to change in other assets. These financing outflows were offset by $9.5 million of borrowings on the Foothill Facility. For the six months ended June 30, 2006, $0.5 million represented a decrease in the bank overdraft balance, $5.7 million related to payments on long-term debt associated with the Foothill Facility, equipment financing and time share financing and $2.0 million related to payments on gaming equipment financing. These financing outflows were offset by $3.0 million of borrowings on the Foothill Facility.
Contractual Obligations and Commitments for Black Gaming, LLC
A description of our contractual obligations and commitments can be found in Item 7 of our Form 10-K for the year ended December 31, 2006.
Critical Accounting Policies for Black Gaming, LLC
A description of our critical accounting policies can be found in Item 7 of our Form 10-K for the year ended December 31, 2006.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The following table provides information about our long-term debt at June 30, 2007 (in thousands):
| | Maturity
Date | | Face
Amount | | Carrying
Value | | Estimated
Fair Value | |
| | | | | | | | | |
9% senior secured notes | | January 2012 | | $ | 125,000 | | $ | 125,000 | | $ | 129,538 | |
12 ¾ % senior subordinated notes | | January 2013 | | 66,000 | | 54,568 | | 50,820 | |
Revolving credit facility at an interest rate of 10.25% | | December 2008 | | 15,000 | | 3,500 | | 3,500 | |
Total | | | | $ | 206,000 | | $ | 183,068 | | $ | 183,858 | |
We are also exposed to market risk in the form of fluctuations in interest rates and their potential impact upon our debt. Historically, this market risk was managed by utilizing derivative financial instruments in accordance with established policies and procedures. We evaluate our exposure to market risk by monitoring interest rates in the marketplace, and do not utilize derivative financial instruments for trading purposes. Our derivative financial instruments consisted exclusively of interest rate swap agreements. Interest differentials resulting from these agreements were recorded on an accrual basis as an adjustment to interest expense. As of June 30, 2006, the interest rate swaps contracts ended.
The following table provides information about our financial instruments that are sensitive to changes in interest rates (dollars in thousands):
| | As of June 30, | |
| | 2007 | | 2008 | | 2009 | | 2010 | | 2011 | | Thereafter | | Total | |
| | | | | | | | | | | | | | | |
Long-term debt (including current portion): | | | | | | | | | | | | | | | |
Fixed-rate | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 191,000 | | $ | 191,000 | |
Average interest rate | | 10.14 | % | 10.21 | % | 10.30 | % | 10.30 | % | 10.30 | % | 10.30 | % | 10.14 | % |
Variable-rate | | $ | 3,500 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 3,500 | |
Average interest rate | | 10.25 | % | — | | — | | — | | — | | — | | 10.25 | % |
The gaming equipment financing are agreements that because of their long-term nature we impute interest expense for accounting purposes. Contractually these agreements carry no interest, therefore we believe that there is no exposure to interest rate risk and therefore have excluded those contracts from the presentation above.
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Item 4. Controls and Procedures.
Evaluation of Disclosure Controls
We evaluated the effectiveness of our disclosure controls and procedures as of and for the three months ended June 30, 2007. This evaluation was done with the participation of our management, including our Chief Executive Officer and Chief Financial Officer.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 are recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Limitations on the Effectiveness of Controls
Our management does not expect that our disclosure controls and procedures prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, but not absolute, assurance that the objectives of a control system are met. Further, any control system reflects limitations on resources, and the benefits of a control system must be considered relative to its costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within us have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of a control. Because the design of a control system is based upon certain assumptions about the likelihood of future events, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions as over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.
Conclusions
Based on this evaluation, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of June 30, 2007, and has concluded that they are effective.
Changes in Internal Controls
There were no changes in our internal controls over financial reporting that occurred during our last fiscal quarter, i.e., the quarter ended June 30, 2007, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors.
None.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits.
10.1 | | Executive Employment Agreement dated May 14, 2007 made by Black Gaming, LLC with Jason Goudie, incorporated by reference to registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on May 17, 2007. |
| | |
31.1 | | Certification pursuant to §302 of the Sarbanes-Oxley Act of 2002, Robert R. Black, Sr. |
| | |
31.2 | | Certification pursuant to §302 of the Sarbanes-Oxley Act of 2002, Jason A. Goudie |
| | |
32.1 | | Certification pursuant to §906 of the Sarbanes-Oxley Act of 2002, Robert R. Black, Sr. |
| | |
32.1 | | Certification pursuant to §906 of the Sarbanes-Oxley Act of 2002, Jason A. Goudie |
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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 thereunto duly authorized.
BLACK GAMING, LLC | |
| |
| |
By: | /s/ Jason A. Goudie | | August 14, 2007 |
| Jason A. Goudie | |
| Chief Financial Officer
(Principle Financial Officer) | |
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EXHIBIT INDEX
Exhibit | | | | Page |
Number | | Description | | Number |
10.1 | | Executive Employment Agreement dated May 14, 2007 made by Black Gaming, LLC with Jason Goudie, incorporated by reference to registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on May 17, 2007 | | |
31.1 | | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | |
31.2 | | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | |
32.1 | | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | |
32.2 | | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | |
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