U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the period ended December 31, 2000
Commission file number 0-22450
COUNTRY WORLD CASINOS, INC.
(Name of Small Business Issuer in its charter)
Nevada 13-3140389
(State of jurisdiction of incorporation)(IRS Employer I.D.
Number)
200 Monument Road, Suite 9, Bala Cynwyd, Pennsylvania 19004
(Address of principal executive offices)
Registrant's telephone number (610) 617-9990
Check whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities
Exchange Act during the past 12 months (or for such shorter
period as the Registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90
days. Yes X No ___
Indicate the number of shares outstanding of each of the issuer's
class of common stock. The Registrant had 75,000,000 shares of
its common stock outstanding as of December 31, 2000.
COUNTRY WORLD CASINOS, INC.
(A Development Stage Company)
INDEX
Part I: FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Balance Sheet as of December 31, 2000
Statements of Losses for the six months ended
December 31, 2000 and 1999 and for the period from
November 9, 1982 (Date of Inception) through
December 31, 2000
Statements of Stockholders' Equity for the period
November 9, 1982 (Date of Inception) through
December 31, 2000
Statements of cash flows for the six months ended
December 31, 2000 and 1999 and for the period from
November 9, 1982 (Date of Inception) through
December 31, 2000
Item 2. Management's Discussion and Analysis or Plan of
Operation
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security
Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
COUNTRY WORLD CASINOS, INC.
(A developmental stage company)
BALANCE SHEET
UNAUDITED
December June 30,
31, 2000 2000
ASSETS
CURRENT ASSETS:
Cash $ 22,624 $ -
Prepaid Interest 91,935 91,935
Total Current Assets 114,559 91,935
Property, Plant & Equipment, Net 19,708,519 18,220,670
OTHER ASSETS
Deposits 35,000 35,000
$19,858,078 $18,347,605
LIABILITIES
CURRENT LIABILITIES
Accounts Payable and Accrued
Liabilities 3,059,095 2,551,057
Due to Officers and Parent 468,663 958,594
Other Liabilities 83,796 42,946
Note Payable 998,000 998,000
Note Payable Related Parties 11,333,762 9,699,137
Total Current Liabilities 15,943,316 14,249,734
COMMITMENTS & CONTINGENCIES
STOCKHOLDER'S EQUITY
Series A Preferred Stock, par
value $.001 per share, 25,000,000
shares authorized, 0 shares
outstanding at December 31 and
June 30, 2000 - -
Series B Preferred Stock, par
value $.25 per share, 6,000,000
shares authorized, 5,000,000
shares outstanding at December
31, 2000 and 1,100,000 at June
30, 2000 1,250,000 275,000
Common Stock, par value $.001 per
share, 75,000,000 shares
authorized 75,000,000 shares
outstanding at December 31, 2000
and 54,331,687 at June 30, 2000 75,000 61,582
Additional Paid In Capital 10,377,867 11,296,311
Deficiency accumulated during
development stage (7,788,105) (7,535,022)
Total Stockholder's Equity 3,914,762 4,097,871
$19,858,078 $18,347,605
See accompanying footnotes to the unaudited financial statements
COUNTRY WORLD CASINOS, INC.
(A developmental stage company)
STATEMENTS OF LOSSES
For the
Period
from
November
Three Months Ending Six Months Ending 9, 1982
December 31, December 31, (Date of
Inception)
through
December
2000 1999 2000 1999 31, 2000
Expenses
Research & Development $ - $ - $ - $ - $122,000
General and
Administrative 156,376 161,798 253,133 372,058 7,070,307
Depreciation - - - - 50,419
Interest Expense - - - - 324,427
Total Expenses 156,376 161,798 253,133 372,058 7,567,153
Net Ordinary Income (156,376) (161,798) (253,133) (372,058) (7,567,153)
Other Expense & Income
Interest Income 50 - 50 - 109,490
Other Income - - - - 735
Rental Income - - - - 45,126
Loss on Non-Marketable - - - - (85,000)
Loss on Disposal of
property, improvements &
equipment - - - - (15,533)
Write Off of Loan
Receivable - - - - (90,000)
Forfeited Deposit - - - - (100,000)
Net Other Income 50 - 50 - (135,182)
Loss from continuing
operations before
extraordinary item and
income taxes (156,326) (161,798) (253,083) (372,058) (7,702,335)
Provision from income
taxes (benefit) - - - - -
Loss from continuing
operations before
extraordinary item - - (253,083) (372,058) (7,702,335)
Extraordinary Item
Extraordinary Gain on
Forgiveness of Debt,
Primarily Related Party - - - - 167,152
Net Income (Loss) $(156,326) $(161,798) $(253,083) $(372,058) $(7,535,183)
Loss per common share
(basic and assuming
dilution) $ (0.00) $ (0.00) $ (0.00) $ (0.01) $ (0.78)
Weighted average common
shares outstanding 62,158,819 59,896,904 61,871,813 57,114,296 9,711,067
See accompanying footnotes to the unaudited financial statements
COUNTRY WORLD CASINOS, INC.
(A developmental stage company)
STATEMENTS STOCKHOLDERS' EQUITY
Preferred Stock Common Stock Additional Deficit Total
Series A Class B Subscribed Paid In During Stockholder's
Shares Amount Shares Amount Shares Amount Shares Amount Capital Development Equity
Stage
November 9, 1982 - - - - - - - - - - -
(Date of Inception)
Issuance of shares - - - - 2,971 15 - - 1,510 - 1,525
for Cash
Issuance of Common - - - - 1,474 8 - - 644,992 - 645,001
Stock pursuant to
private placement, net
Deferred offering costs - - - - - - - - (115,690) - (115,690)
Cancellation of common - - - - (800) (4) - - 4 - -
stock
Issuance of shares in - - - - 85,714 429 - - 14,571 - 15,000
exchange for services
Issuance of shares for - - - - 1,339,212 6,696 - - 13,304 - 20,000
cash
Capital contribution - - - - - - - - 2,850 - 2,850
Net loss of the period - - - - - - - - - (221,169) (221,169)
ended June 30, 1992
Balance at June 30, 1992 - - - - 1,428,571 7,144 - - 561,541 (221,169) 347,517
Issuance of shares in - - - - 714,287 3,571 - - 8,929 - 12,500
exchange for services
Net loss of the year - - - - - - - - - (373,401) (373,401)
ended June 30, 1993
Balance at June 30, 1993 - - - - 2,142,858 10,715 - - 570,470 (594,570) (13,384)
Adjustment for change - - - - - (8,572) - - 8,572 - -
in par value from
$.005 to $.001
Issuance of stock for - - - - 1,500,000 1,500 - - 1,498,500 - 1,500,000
cash
Issuance of 2,250,000 2,250 - - - - - - 2,247,750 - 2,250,000
Convertible
Preferred Stock
in exchange for
Land
Issuance of Common - - - - 600,000 600 - - 599,400 - 600,000
Stock for cash
Issuance of Common - - - - 250,000 250 - - 249,750 - 250,000
Stock for Cash and
Services Pursuant
to Exercise of
Options
Acquisition and - - - - (125,000) (125) - - (124,875) - (125,000)
cancellation of
Treasury Stock
Issuance of Stock - - - - 140,000 140 - - 349,860 - 350,000
for Cash
Issuance of Stock - - - - 60,662 60 - - 149,941 - 150,000
for Cash
Issuance of Common - - - - 250,000 250 - - 249,750 - 250,000
Stock in exchange
for Land
Issuance of Common - - - - 95,000 95 - - 237,405 - 237,500
Stock for Cash and
Services Pursuant to
Exercise of Options
Issuance of Common - - - - 200,000 200 - - 499,800 - 500,000
Stock in exchange
for services
Issuance of Common - - - - - - 262,667 263 787,737 - 788,000
Stock Pursuant to
Private Placement
Net Loss of the - - - - - - - - - (1,490,785) (1,490,785)
Period Ending
June 30, 1994
Balance at 2,250,000 2,250 - - 5,113,520 5,113 262,667 263 7,324,060 (2,085,355) 5,246,331
June 30, 1994
Issuance of common - - - - 460,000 460 - - 1,229,040 - 1,229,500
stock pursuant to
Private Placement
offering
Issuance of common - - - - 262,667 263 (262,667) (263) - - 0
stock subscribed
Issuance of Stock to - - - - 5,000,000 5,000 - - 1,009,451 - 1,014,451
Parent in exchange
for debt
Net Loss for year - - - - - - - - - (757,659) (757,659)
ended June 30, 1995
Balance at 2,250,000 2,250 - - 10,836,187 10,836 - - 9,562,550 (2,843,014) 6,732,623
June 30, 1995
Net loss for year - - - - - - - - - (416,440) (416,440)
ended June 30, 1996
Balance at 2,250,000 2,250 - - 10,836,187 10,836 - - 9,562,551 (3,259,454) 6,316,183
June 30, 1996
See accompanying footnotes to the unaudited financial statements
COUNTRY WORLD CASINOS, INC.
(A developmental stage company)
STATEMENTS OF STOCKHOLDERS' EQUITY
(continued)
Preferred Stock Common Stock Additional Deficit Total
Series A Class B Subscribed Paid In During Stockholder's
Shares Amount Shares Amount Shares Amount Shares Amount Capital Development Equity
Stage
Issuance of Preferred - $ - 4,000,000 $1,000,000 - $ - - $ - $ - $ - $1,000,000
Stock - Class B in
exchange for debt
to Parent
Common Stock Issued - - - - 1,250,000 1,250 - - 248,750 - 250,000
in Exchange for
Parent Debt
Warrant to purchase - - - - - - - - 60,000 - 60,000
common stock issued
in exchange for services
Net loss for the year - - - - - - - - - (1,080,391) (1,080,391)
ended June 30, 1997
Balance at 2,250,000 2,250 4,000,000 1,000,000 12,086,187 12,086 - - 9,871,301 (4,339,845) 6,545,792
June 30, 1997
Issuance of Common - - - - 1,000,000 1,000 - - 199,000 - 200,000
Stock in exchange
for services
Issuance of Common - - - - 395,500 396 - - 73,761 - 74,157
Stock in exchange
for debt and services
Issuance of Common - - - - 850,000 850 - - 72,250 - 73,100
Stock for in exchange
for debt and services
Issuance of Stock - - 100,000 25,000 - - - - - - 25,000
in exchange for services
Conversion of Preferred - -(4,000,000)(1,000,000) 40,000,000 40,000 - - 960,000 - -
Stock to Common Stock
Net Loss of Period - - - - - - - - - (1,245,439) (1,245,439)
Ended June 30, 1998
Balance at 2,250,000 $2,250 100,000 $25,000 54,331,687 $54,332 - $ - $11,176,312 $(5,585,284) $5,672,610
June 30, 1998
Preferred Stock - - 1,000,000 250,000 - - - - - - 250,000
issued in
Exchange for Debt
Miscellaneous adjustment - - - - - - - - - 163 163
Net Loss of Period - - - - - - - - - (1,152,361) (1,152,361)
Ended June 30, 1999
Balance at
June 30, 1999 2,250,000 $2,250 1,100,000 $275,000 54,331,687 $54,332 - $ - $11,176,311 $(6,737.482) $4,770,410
Conversion of
preferred to
common stock
(Note F) (2,250,000) (2,250) - - 2,250,000 2,250 - - - - -
Conversion of
preferred stock to
common stock - - (500,000) (125,000) 5,000,000 5,000 - - 120,000 - -
Preferred Stock
Issued in
Exchange for debt
and services - - 500,000 125,000 - - - - - - 125,000
Net Loss for
Period ended
June 30, 2000 - - - - - - - - - (797,538) (797,538)
Balance at
June 30, 2000 - $ - 1,100,000 $275,000 61,581,687 $61,582 - $ - 11,296,311 $(7,535,020) $4,097,872
Common Stock and
Preferred Stock
issued for cash - - 3,900,000 975,000 13,418,313 13,418 - - (918,444) - 69,974
Capital
contributed
by Dartmouth - - - - - - - - - - 69,974
Net Loss Six
months for
period ended
December 31,
2000 - - - - - - - - - (253,084) (253,084)
- $ - 5,000,000 $1,250,000 75,000,000 $75,000 - $ - 10,377,867 $(7,788,104) 3,914,762
See accompanying footnotes to the unaudited financial statements
COUNTRY WORLD CASINOS, INC.
(A developmental stage company)
STATEMENTS OF CASH FLOWS
For the
Period
from
November
Six Months Ending 9, 1982
December 31, (Date of
Inception)
through
December
2000 1999 31, 2000
Cash flows from operating activities:
Net income from operating
activities $ (253,083) $ (372,058) $ (7,955,419)
Adjustments to reconcile net
income to net cash:
Depreciation - - 59,867
Common stock issued in
exchange for interest - - 14,451
Common stock issued in - 7,250 1,184,757
Preferred stock issued in - (127,250) 400,000
Loss on Nonmarketable - - (85,000)
Write off of Loan Receivable - - (90,000)
Extraordinary Item,
Primarily Related Party - - 167,152
Allocation of Management Fees
- Related Party - - 408,000
Change in:
Prepaid expenses and
other assets - - (779,435)
Accounts payable and
accrued expenses 548,888 533,163 3,467,824
Discontinued Operations:
Net (Loss) - - (389,286)
Adjustments to Reconcile
Net (Loss) to Net Cash
Used For) Operating
Activities - - -
Gain on Disposal of
Assets - - 389,286
Net cash from operating activities 295,805 41,105 (3,207,803)
Cash flows used in investing activities:
Acquisition of Property,
improvements and equipment (1,487,849) (1,102,268) (12,091,739)
Deposits & Other - - (62,000)
(Increase) Decrease in
Restricted Cash - - (35,000)
Net cash used in investing
activities (1,487,849) (1,102,268) (12,188,739)
Cash flows (used in)/provided by
financing activities:
Payment of Capital Lease
Obligation - - (4,233)
Proceeds from Long-Term
Borrowings 1,144,694 941,163 10,129,740
Proceeds from Stock and Warrant
Issuance 69,974 120,000 5,290,809
Capital Contribution 988,418 - 2,850
Net cash used in financing
activities 1,214,668 1,061,163 15,419,166
Net increase in cash and cash
equivalents 22,624 - 22,624
Cash and cash equivalents at July 1 - - -
Cash and cash equivalents at December 31 22,624 - 22,624
Supplemental Disclosure of Cash Flow:
Interest Paid
- - 5,761
Common Shares issued for property
- - 250,000
Preferred Shares issued for property
- - 2,250,000
Common Shares issued for services and
debt - 7,250 1,184,757
Preferred Shares issued for services
and debt - (127,250) 400,000
Non Cash Acquisition of property,
improvements, and equipment 1,487,849 1,102,268 6,288,850
Non Cash Proceeds from Notes Payable 1,144,694 941,163 4,564,820
See accompanying footnotes to the unaudited financial statements
COUNTRY WORLD CASINOS, INC
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000
(UNAUDITED)
NOTE A - SUMMARY OF ACCOUNTING POLICIES
GENERAL
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-QSB, and
therefore, do not include all the information necessary for a fair
presentation of financial position, results of operations and cash flows
in conformity with generally accepted accounting principles.
In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the six-month period ended December
31, 2000 are not necessarily indicative of the results that may be
expected for the year ended June 30, 2001. The unaudited condensed
consolidated financial statements should be read in conjunction with the
consolidated June 30, 2000 financial statements and footnotes thereto
included in the Company's SEC Form 10KSB/A.
BASIS OF PRESENTATION
Country World Casinos, Inc., (the "Company" or "Country World") is
incorporated under the laws of the state of Nevada. The Company is engage
in the development of a full service hotel and casino in Blackhawk,
Colorado. As of December 31, 2000, the Company has not commenced
construction of the planned casino, nor has it realized any revenues from
its planned operations. Accordingly, the Company is considered to be in
the development stage.
The Company was a majority owned subsidiary of Holly Holdings, Inc.
("Parent") until May 1997.
Certain prior period amounts have been reclassified for comparative
purposes
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion should be read in conjunction with the Company's
Consolidated Financial Statements and Notes thereto, included elsewhere
within this Report.
DESCRIPTION OF THE COMPANY
The Company is engage in the development of a full service hotel and
casino in Blackhawk, Colorado. Black Hawk is a picturesque mountain town
approximately 40 miles west of Denver. The Company's planned
Hotel/Casino, on the northern most end of the Black Hawk gaming district,
will be in a most highly visible location as it is in a direct line of
site to all visitors approaching Black Hawk's Gregory Street intersection
on State Highway 119. The Black Hawk and nearby Central City casino
market includes many small, privately held gaming facilities that the
Company believes offer limited amenities and are characterized by a
shortage of convenient on-site parking. There are a few large facilities
currently operating with varying levels of services and amenities, as
well as new facilities planned. The theme, hospitality, ample parking,
modern hotel accommodations and a full line of amenities, will set it
apart from, and should give it a competitive advantage over, the other
casinos in the Black Hawk/Central City market.
The planned Hotel/Casino complex will be designed and constructed
pursuant to a guaranteed maximum price agreement, which is to be
finalized prior to construction. The design and construction team
consists of Semple Brown Roberts, P.C., a Denver based architectural firm
(the "Architect") and PCL Construction Services, Inc., a multi-million
dollar North American construction firm with U.S. headquarters located in
Denver. The Architect is the designer of Fitzgerald's Casino in Black
Hawk, while the Contractor's gaming credits include the MGM Grand Hotel
Casino and Stratosphere Tower in Las Vegas, Nevada, as well as the
Chinook Winds Gaming and Convention Center in Lincoln City, Oregon.
Since the Company's purchase of the Black Hawk Property in August 1993,
the Company's activities have focused on obtaining the necessary
financing and making preparations for construction of the casino on the
Property.
FORWARD LOOKING STATEMENTS
CERTAIN STATEMENTS INCLUDED HEREIN OR INCORPORATED BY REFERENCE
CONSTITUTE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995 (THE "REFORM ACT"). THE COMPANY
DESIRES TO TAKE ADVANTAGE OF CERTAIN "SAFE HARBOR" PROVISIONS OF THE
REFORM ACT AND IS INCLUDING THIS SPECIAL NOTE TO ENABLE THE COMPANY TO DO
SO. FORWARD-LOOKING STATEMENTS INCLUDED OR INCORPORATED BY REFERENCE IN
THIS PART INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER
FACTORS WHICH WOULD CAUSE THE COMPANY'S ACTUAL RESULTS, PERFORMANCE
(FINANCIAL OR OPERATING) OR ACHIEVEMENTS TO DIFFER MATERIALLY FROM THE
FUTURE RESULTS, PERFORMANCE (FINANCIAL OR OPERATING) OR ACHIEVEMENTS
EXPRESSED OR IMPLIED BY SUCH FORWARD LOOKING STATEMENTS.
PLAN OF OPERATION
The Company is still in the development stage and is yet to earn revenues
from operations. The Company may experience fluctuations in operating
results in future periods due to a variety of factors including, but not
limited to, the Company's obtaining additional financing for the planned
Casino/ Hotel complex, the securing licenses and compliance with
governmental regulations, grading and construction of the planned
Casino/Hotel site, obtaining the necessary permits and approvals from the
City of Black Hawk for construction of the planned Casino/Hotel, and
other regulatory bodies, procuring gaming equipment on satisfactory
terms, and accomplishing these objectives in a timely manner..
The Company is actively pursing additional equity and debt financing
through discussions with investment bankers and private investors. There
can be no assurance the Company will be successful in its effort to
secure additional financing
RESULTS OF OPERATIONS
The Company has generated no revenues from operations from its
inception. The ability of the Company to generate revenues in the future
will be dependent upon realization of its plans to develop a planned
Casino/Hotel complex. The Company continues to incur losses of
approximately $200,000 per month to service the Company's debt secured by
the real property and improvements in addition to ongoing obligations
such as rent and utilities for the Company's corporate office.
LIQUIDITY & CAPITAL RESOURCES
As of December 31, 2000, the Registrant had a deficit in working capital
of $15,828,757. As a result of the Company's operating losses from its
inception through December 31, 2000, the Registrant generated a cash flow
deficit of $3,207,803 from operating activities. Cash flows used in
investing activities was $12,188,739 during the period November 9, 1982
through December 31, 2000. The Company met its cash requirements during
this period through the private placement of $5,340,835 of the Company's
common and preferred stock and loan proceeds of $9,775,895.
In July 2000, the Company signed a memorandum of understanding with
Dartmouth General Capital Management, Ltd. (Dartmouth), amended in
November 2000, which, if consummated, provide will provide capital of
approximately $15 million to pay the secured and unsecured debt of the
Company and an aggregate of $80 million in financing to begin development
and construction of its planned Black Hawk, Colorado Casino/Hotel
project.
It is anticipated that funding will commence in February 2001.
In exchange for Dartmouth's contribution, the Company has issued the
balance of its authorized but unissued shares of common and preferred
Series B stock to Dartmouth (approximately 13.4 and 3.9 million shares,
respectively) and certain existing Company shareholders contributed 6
million shares of common stock and 500,000 shares of Series B preferred
stock to Dartmouth. Although issued, the Company retains voting rights of
such stock until funded by Dartmouth. If the transaction is consummated,
Dartmouth will have accumulated approximately 50.6% of the voting stock
of the Company.
While Dartmouth is confident in its abilities to provide the financing
described above, there can be no assurance that the transaction and
related financing will be consummated.
While the Company has raised capital to meet its working capital and
financing needs in the past, additional financing is required in order to
meet the Company's current and projected cash flow deficits from
operations and development. The Company is seeking financing in the form
of equity and debt in order to provide the necessary working capital and
construction financing. The Company currently has the Dartmouth
commitment for financing. There are no assurances the Company will be
successful in raising the funds required.
PRODUCT RESEARCH AND DEVELOPMENT
Company-sponsored research and development costs related to both present
and future products are expended in the period incurred. Total
expenditures on research and product development for the period November
9, 1982 (date of inception) through December 31, 2000 were approximately
$ 122,000.
The Company does not anticipate incurring product research costs, but
will however incur development costs during the next 12 months if the
Dartmouth funding is provided.
ACQUISITION OR DISPOSITION OF PLANT AND EQUIPMENT
The Company does anticipate the sale of any significant property, plant
or equipment during the next twelve months. The Company does not
anticipate the acquisition of any significant property, plant or
equipment during the next 12 months, other than computer equipment and
peripherals used in the Company's day-to-day operations. The Company
believes it has sufficient resources available to meet these acquisition
needs.
NUMBER OF EMPLOYEES
During the period ended December 31, 2000, the Company had two (2)
employees. In order for the Company to attract and retain quality
personnel, the Company anticipates it will have to offer competitive
salaries to current and future employees. Subject to obtaining financing
for the construction of the planned Casino/Hotel complex, the Company
anticipates increasing its employment base to ten (10) to fifteen (15)
employees during the next 12 months. As the Company continues to expand,
the Company will incur additional costs for personnel. This projected
increase in personnel is dependent upon the Company generating revenues
and obtaining sources of financing. There are no assurances the Company
will be successful in raising the funds required or generating revenues
sufficient to fund the projected increase in the number of employees.
TRENDS, RISKS AND UNCERTAINTIES
The Company has sought to identify what it believes to be the most
significant risks to its business, but cannot predict whether or to what
extent any of such risks may be realized nor can there be any assurances
that the Company has identified all possible risks that might arise.
Investors should carefully consider all of such risk factors before
making an investment decision with respect to the Company's stock.
Limited operating history; Anticipated Losses; Uncertainly of Future
Results.
The Company has only a limited operating history upon which an evaluation
of the Company and its prospects can be based. The Company's prospects
must be evaluated with a view to the risks encountered by a company in an
early stage of development, particularly in light of the uncertainties
relating to the construction and development of the Casino/Hotel complex
intends to complete and operate and the acceptance of the Company's
business model. The Company will be incurring costs to develop,
introduce and enhance its interactive website, to establish marketing
relationships, to acquire and develop products that will compliment each
other and to build an administrative organization. To the extent that
such expenses are not subsequently followed by commensurate revenues, the
Company's business, results of operations and financial condition will be
materially adversely affected. There can be no assurance that the
Company will be able to generate sufficient revenues from the operation
of the planned Casino/Hotel. The Company expects negative cash flow from
operations to continue for the next 12 months as it continues to seek
financing for the planned Casino/Hotel complex. If cash generated by
operations is insufficient to satisfy the Company's liquidity
requirements, the Company may be required to sell additional equity or
debt securities. The sale of additional equity or convertible debt
securities would result in additional dilution to the Company's
stockholders.
POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS
The Company's quarterly operating results may fluctuate significantly in
the future as a result of a variety of factors, most of which are outside
the Company's control, including but not limited to, financing of the
planned Casio/Hotel facility, construction of the facility, obtaining
necessary licenses and permits for development and construction,
competing entertainment products and locations; seasonal trends; the
amount and timing of capital expenditures and other costs relating to the
planned development of the Company's Casino/Hotel facility; price
competition or pricing changes in the industry; technical difficulties or
system downtime; general economic conditions, and economic conditions
specific to the gaming and hospitality industry. The Company's quarterly
results may also be significantly impacted by the impact of the
accounting treatment of acquisitions, financing transactions or other
matters. Particularly at the Company's early stage of development, such
accounting treatment can have a material impact on the results for any
quarter. Due to the foregoing factors, among others, it is likely that
the Company's operating results will fall below the expectations of the
Company or investors in some future quarter.
LIMITED PUBLIC MARKET, POSSIBLE VOLATILITY OF SHARE PRICE
As of December 31, 2000, the Company's Common Stock is quoted on the
National Quotation Bureau, or the "Pink Sheets" under the ticker symbol
"CWRC" and there are 75,000,000 shares of Common Stock outstanding.
There can be no assurance that a trading market will be sustained in the
future. Factors such as, but not limited to, financing of the planned
Casio/Hotel facility, construction of the facility, obtaining necessary
licenses and permits for development and construction, acquisitions or
strategic alliances entered into by the Company or its competitors,
failure to meet security analysts' expectations, government regulatory
action, and market conditions for gaming and hospitality stocks in
general could have a material effect on the volatility of the Company's
stock price.
In January 2001, the Company file amended 10-KSB's for the years ended
June 30, 1998, June 1999 and June 2000. Additionally, the Company filed
an amended 10-QSB for the period ended September 30, 2000.
Following filing with The Securities and Exchange Commission, the Company
made contact with a market maker who accordingly filed the appropriate
documentation for re-listing on the OTC Bulletin Board.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2 - Changes in Securities and Use of Proceeds
(a) None
(b) None
(c) 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 and reports on Form 8-K
(a) Exhibits
27.1 Financial Data Schedule
(b) Reports on Form 8-K filed during the six months ended
December 31, 2000.
Form 8-K, as filed with the Securities and Exchange
Commission in November 2000 with regard to a change in auditing
firms to be used by the Company.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Country World Casinos, Inc.
Registrant
February 14, 2001 By: /s/ William Patrowicz
Date William Patrowicz
President and
Chief Executive Officer