1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

------------------

FORM 10-KA

AMENDMENT NO. 1

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the fiscal year ended: Commission file number:
APRIL 30, 1998 0-14939

CROWN GROUP, INC.
(Exact name of registrant as specified in its charter)

TEXAS 63-0851141
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

4040 N. MACARTHUR BLVD., SUITE 100, IRVING, TEXAS
(Address of principal executive offices)

75038
(Zip Code)

(972) 717-3423
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par
value $.01 par share

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that 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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

As of August 10, 1998 the aggregate market value of the voting stock held by
non-affiliates (all persons other than executive officers, directors and
holder's of 5% or more of the Registrant's common stock) of the Registrant
(7,516,394 shares) was $26,777,154.

As of August 10, 1998 there were 10,243,731 shares of the Registrant's common
stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the Registrant's Annual Report to Stockholders for the year ended
April 30, 1998 are incorporated by reference into Part II of this report.

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PART II

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The information required by this item is included in the Company's 1998 Annual
Report under the heading "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and such information is incorporated herein
by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements included in the Company's 1998 Annual Report are
incorporated herein by reference.

The Company owns a 49% interest in Casino Magic Neuquen S.A. ("CMN"). CMN's
financial results are not consolidated with the Company, but rather are
accounted for on the equity method. Following are the consolidated financial
statements of CMN as of December 31, 1997 and April 30, 1998 (unaudited)
together with the report of independent public accountants.

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of
Casino Magic Neuquen S.A.:

We have audited the accompanying consolidated balance sheet of Casino Magic
Neuquen S.A. (a majority-owned subsidiary of Casino Magic Corp.) and subsidiary
as of December 31, 1997 and the related consolidated statements of operations,
shareholders' equity, and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Casino Magic Neuquen
S.A. and subsidiary as of December 31, 1997, and the results of their operations
and their cash flows for the year then ended in conformity with generally
accepted accounting principles.

New Orleans, Louisiana Arthur Andersen LLP
March 6, 1998

CASINO MAGIC NEUQUEN S.A.
CONSOLIDATED BALANCE SHEETS

April 30, 1998 December 31,
Assets (Unaudited) 1997
------------ ------------

Cash and cash equivalents $ 2,358,052 $ 1,312,969
Other receivables 394,893 540,326
Inventories 54,501 54,501
------------ ------------

Total current assets 2,807,446 1,907,796

Property and equipment:
Machinery and equipment 1,536,852 1,371,698
Furniture, fixtures and equipment 231,213 219,786
Transportation equipment 74,953 96,733
------------ ------------

1,843,018 1,688,217
Less accumulated depreciation (651,779) (544,074)
------------ ------------

1,191,239 1,144,143

Concession costs, net of accumulated amortization of $3,162,983
and $2,846,685, respectively 8,223,757 8,540,055
Organization and development costs, net of accumulated
amortization of $1,409,754 and $1,277,599, respectively 317,129 522,055
------------ ------------

$ 12,539,571 $ 12,114,049
============ ============

Liabilities and Shareholders' Equity

Accounts payable $ 121,899 $ 67,063
Payroll and payroll taxes 373,114 237,407
Taxes payable 1,326,113 869,820
Other liabilities 295,411 422,016
Payables to Shareholders 134,321 278,332
------------ ------------

Total current liabilities 2,250,858 1,874,638

Notes payable to Shareholders 1,358,182 2,398,050

Minority interest (86) (932)

Shareholders' equity:
Common stock, par value $1.00 per share, 3,917,000
shares authorized, issued and outstanding 3,917,000 3,917,000
Additional paid-in-capital 2,777,957 21,142,000
Premium not yet paid in -- (18,364,043)
Earnings reserved 37,569 37,569
Retained earnings 2,198,091 1,109,767
------------ ------------

Total shareholders' equity 8,930,617 7,842,293
------------ ------------

$ 12,539,571 $ 12,114,049
============ ============

See accompanying notes to consolidated financial statements.

CASINO MAGIC NEUQUEN S.A.
CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited
Four Months Ended
April 30, Year Ended
1998 1997 December 31, 1997
------------ ------------ -----------------

Revenues:
Casino $ 6,078,062 $ 5,411,106 $ 16,241,138
Food and beverage 452,773 460,040 1,183,609
------------ ------------ ------------
6,530,835 5,871,146 17,424,747

Costs and expenses:
Casino 2,929,577 2,845,427 9,042,634
Food and beverage 408,102 348,841 1,042,524
Selling, general and administrative 972,726 1,054,650 2,691,455
Depreciation and amortization 569,952 602,852 1,823,404
------------ ------------ ------------

4,880,357 4,851,770 14,600,017
------------ ------------ ------------

Operating income 1,650,478 1,019,376 2,824,730

Other income (expense):
Interest expense (54,659) (247,926) (652,459)
Interest income 21,465 14,921 35,811
Other (68,816) (98,766) (112,042)
------------ ------------ ------------

(102,010) (331,771) (728,690)

Minority interest (114) 438 960

Income before income taxes 1,548,354 688,043 2,097,000
Provision for income taxes 460,030 232,489 708,679
------------ ------------ ------------

Net income $ 1,088,324 $ 455,554 $ 1,388,321
============ ============ ============

Earnings per share $ 0.28 $ 0.81 $ 1.23
============ ============ ============

Weighted average common shares outstanding 3,917,000 560,000 1,130,230
============ ============ ============

See accompanying notes to consolidated financial statements.

CASINO MAGIC NEUQUEN S.A.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

Total
Additional Retained Shareholders'
Common Paid-In Earnings Legal Equity
Stock Capital (Deficit) Reserve (Deficit)
-------------- ------------ ------------ ------------ ------------

Balance at December 31, 1996 $ 560,000 $ 1,000,000 $ (240,985) $ -- $ 1,319,015

Issuance of common stock 3,357,000 20,142,000 -- -- 23,499,000
Premium not yet paid in -- (18,364,043) -- -- (18,364,043)
Appropriation of retained earnings (37,569) 37,569 --

Net income -- -- 1,388,321 -- 1,388,321
-------------- ------------ ------------ ------------ ------------

Balance at December 31, 1997 3,917,000 2,777,957 1,109,767 37,569 7,842,293
-------------- ------------ ------------ ------------ ------------

Net income (unaudited) -- -- 1,088,324 -- 1,088,324
-------------- ------------ ------------ ------------ ------------

Balance at April 30, 1998 (unaudited) $ 3,917,000 $ 2,777,957 $ 2,198,091 $ 37,569 $ 8,930,617
============== ============ ============ ============ ============

See accompanying notes to consolidated financial statements.

CASINO MAGIC NEUQUEN S.A.
CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited
Four Months Ended
April 30, Year Ended
1998 1997 December 31, 1997
----------- ----------- -----------------

Operating activities:
Net income $ 1,088,324 $ 455,554 $ 1,388,321
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation and amortization 569,952 602,852 1,823,404
Minority interest 846 512 178
Changes in assets and liabilities:
Receivables 145,433 (151,461) (429,385)
Inventories -- -- (20,389)
Accounts payable and accrued liabilities (7,196) (1,142,100) (1,034,649)
Taxes payable 456,293 193,525 725,856
----------- ----------- -----------
Net cash provided (used) by operating activities 2,253,652 (41,118) 2,453,336
----------- ----------- -----------

Investing activities:
Purchase of equipment (79,766) (19,975) (545,297)
Organization and development costs (16,058) -- (203,159)
----------- ----------- -----------
Net cash used by investing activities (95,824) (19,975) (748,456)
----------- ----------- -----------

Financing activities:
Issuance of common stock -- -- 5,134,957
Payables to shareholders (1,176,683) (1,016,856) (7,739,411)
Other proceeds from issuance of debt 63,938 209,347 317,797
----------- ----------- -----------
Net cash used by financing activities (1,112,745) (807,509) (2,286,657)
----------- ----------- -----------

Increase (decrease) in cash and cash equivalents 1,045,083 (868,602) (581,777)
Cash and cash equivalents at beginning of period 1,312,969 1,894,746 1,894,746
----------- ----------- -----------

Cash and cash equivalents at end of period $ 2,358,052 $ 1,026,144 $ 1,312,969
=========== =========== ===========

See accompanying notes to consolidated financial statements.

CASINO MAGIC NEUQUEN S.A.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND APRIL 30, 1998 (UNAUDITED)

1. HISTORY AND DESCRIPTION OF BUSINESS

In December 1994 Casino Magic Corp. ("CMC"), a United States based casino
company, was the successful bidder pursuant to an international call for bids to
manage and operate two casino properties owned by the Province of Neuquen,
Argentina (the "Province"). Pursuant to the bid requirements, CMC was then
required to form a new corporation to become a party to the concession contract
with the Province. Accordingly, in December 1994 CMC formed Casino Magic Neuquen
S.A. (the "Company") to manage and operate the Province's two casinos located in
the cities of Neuquen and San Martin de los Andes (collectively, the "Casinos").
The Casinos are managed pursuant to an exclusive twelve-year concession contract
that provides for certain renewal options (see Note 3). The Company was a 99.9%
majority-owned subsidiary of the CMC until June 1997 (see below and Note 8). The
Company began operating the Casinos in January 1995.

On June 2, 1997 Crown Group, Inc. ("Crown"), a United States based holding
company, acquired 49% of the common stock of the Company, as well as interests
in certain other assets and contracts related to the Company, from the CMC. From
that date the Company is owned 51% by CMC and 49% by Crown (collectively the
"Shareholders").

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates. The consolidated financial
statements include the accounts of Casino Magic Neuquen S.A. and its 99.9%
majority-owned subsidiary, Casino Magic Support Services S.A. ("CMSS"). All
significant intercompany accounts and transactions have been eliminated.
References to the Company include its subsidiary.

Cash and Cash Equivalents

The Company considers cash and all highly liquid investments with an original
maturity of three months or less to be cash equivalents.

Casino Revenues

In accordance with industry practice, the Company recognizes as casino revenues
the net win from gaming activities, which is the difference between gaming wins
and losses.

Property and Equipment

Property and equipment are stated at cost. Expenditures for additions, renewals
and improvements are capitalized. Costs of repairs and maintenance are expensed
as incurred. Depreciation of property and equipment is computed using the
straight-line method over five years.

Concession Costs

Costs incurred to enter into the concession contract with the Province have been
capitalized and are being amortized over the twelve-year initial term of the
contract.

Organization and Development Costs

The Company incurred certain costs in connection with the organization and
development of the Company's business. These costs are being amortized using the
straight-line method over three years.

Common Stock

As of December 31, 1997 and April 30, 1998 the Company had 3,917,000 shares of
its common stock outstanding, of which 60,000 shares were registered. The
remaining shares are in the process of being registered.

Foreign Currency Translation

The Company keeps its accounting records in Argentine pesos, the legal tender in
the Republic of Argentina. The Company's financial statements have been
translated from its functional currency (Argentine pesos) into U.S. dollars in
accordance with Statement of Financial Accounting Standards No. 52 "Foreign
Currency Translation" ("SFAS No. 52") issued by the Financial Accounting
Standards Board. In general, SFAS No. 52 requires that assets and liabilities be
translated based upon the prevailing exchange rate in effect on the balance
sheet date. Revenues, expenses, gains and losses are translated based upon the
average exchange rate during the period. All throughout the periods presented
the prevailing exchange rate between the Argentine peso and the U.S. dollar was
1.00 to 1.00.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled.

Recent Accounting Pronouncements

Accounting for Start-up Costs. During April 1998, the Accounting Standards
Executive Committee of the AICPA issued Statement of Position 98-5 ("SOP"),
"Reporting on the Costs of Start-Up Activities." The SOP requires costs of
start-up activities and organization costs to be expensed as incurred. The SOP
is effective for financial statements for fiscal years beginning after December
15, 1998.

Accounting for Derivative Instruments and Hedging Activities. In June 1998, the
Financial Accounting Standards Board issued Statement of Financial Accounting
Standards No. 133 ("SFAS 133"), "Accounting for Derivative Instruments and
Hedging Activities". The Statement establishes accounting and reporting
standards requiring that every derivative instrument (including certain
derivative instruments embedded in other contracts) be recorded in the balance
sheet as either an asset or liability measured at its fair value. The Statement
requires that changes in the derivative's fair value be recognized currently in
earnings unless specific hedge accounting criteria are met. Special accounting
for qualifying hedges allows a derivative's gains and losses to offset related
results on the hedged item in the income statement, and requires that a company
must formally document, designate, and assess the effectiveness of transactions
that receive hedge accounting. SFAS 133 is effective for fiscal years beginning
after June 15, 1999 and must be applied to instruments issued, acquired, or
substantively modified after December 31, 1997. The Company does not expect the
adoption of this accounting pronouncement to have a material effect on its
financial position or results of operations.

3. CONCESSION CONTRACT

On December 21, 1994 the Company entered into a concession contract (the
"Concession") with the Province which provides the Company with the exclusive
right to operate the Casinos, and any other casino located in the Province which
is within a 50 kilometer radius of either of the Casinos. The Company is
required to operate, manage, maintain and repair the Casinos and related
facilities during the term of the Concession. The Company may provide ancillary
goods and services related to the operation of the Casinos.

The twelve-year initial term may be extended by the Province at its option for a
period of up to ten years, provided the Company requests such extension two
years prior to the end of the initial term. Furthermore, should the Company,
individually or jointly with others, invest $5 million or more in hotel
infrastructure in the Province, the Concession term will automatically be
extended for a minimum of five additional years.

Pursuant to the Concession, the Company is required to pay the Province a
monthly rental equal to the greater of (i) $220,000, which amount will be
reduced $40,000 in the event the Company ceases to use the Neuquen facility in
the operation of the Neuquen casino, or (ii) five percent of the monthly average
net gaming revenue for the immediately preceding calendar year. In addition, the
Company pays the Province a tax of 2% of its net gaming revenue. The Province
has guaranteed the Company that no additional municipal or provincial taxes will
be levied on the Company's operations, and that existing municipal or provincial
taxes will not be increased. The Concession is not assignable and a transfer of
more than 49% of the Company's common stock is not permitted without the consent
of the Province.

4. TRANSACTIONS WITH SHAREHOLDERS

The Shareholders provide services to the Company under various agreements. Under
the Technical Assistance Agreement the Shareholders provide the Company with
certain expertise, technology, information and know-how in the course of
operating the Casinos for a fee equal to 3% of revenue. Under the Trademark and
Trade Name License Agreement, the Shareholders grant the Company a non-exclusive
license to use the trade name "Casino Magic" and related symbols and logotypes
in connection with the operation of the Casinos for a fee equal to 2% of
revenue. The Shareholders also lease certain slot machine equipment to the
Company for a fee of $44,000 per month. A summary of expenses incurred by the
Company pursuant to the above agreements are as follows:

Four Months Ended
April 30,
Year Ended -------------------------
December 31, 1997 1998 1997
----------------- ---------- ----------

Technical assistance $ 533,021 $ 199,067 $ 178,623
Royalties for trade name 355,348 132,700 119,082
Lease of slot machines 528,000 176,000 176,000
---------- ---------- ----------

$1,416,369 $ 507,767 $ 473,705
========== ========== ==========

Pursuant to Crown's Purchase of 49% of the Company and certain other assets as
described in Note 1, and as set forth in the purchase agreement of such shares,
the above mentioned commissions should be distributed as from June 1997 between
CMC and Crown in the following way:

- Technical Assistance Agreement: 83.6% to CMC and 16.4% to Crown
- Trademark and Trade Name License Agreement: 51% to CMC and 49% to Crown
- Slot machines lease Agreement: 51% to CMC and 49% to Crown

5. PAYABLES TO SHAREHOLDERS

The Company has certain payables to the Shareholders. The majority of
such monies due pertain to a loan made by CMC to the Company to fund the initial
cost of the Concession. Such loan is in the form of a note payable, which is due
no later than December 27, 2006, and bears interest at a rate equal to the prime
rate in the United States as published in the Wall Street Journal. Pursuant to
such loan the Company incurred interest expense of $652,459 during the year
ended December 31, 1997. In addition, the Company has accumulated non-interest
bearing balances due to the Shareholders as a result of the various agreements
with the Shareholders and other advances made by the Shareholders. The total
balances due to the Shareholders by the Company as of December 31, 1997 and
April 30, 1998 were as follows:

December 31, 1997 April 30, 1998
----------------- --------------

Payables to Shareholders $ 278,332 $ 134,321
Notes payable to Shareholders 2,398,050 1,358,182
------------ ------------

$ 2,676,382 $ 1,492,503
============ ============

Pursuant to Crown's Purchase of 49% of the Company and certain other assets as
described in Note 1, and as set forth in the purchase agreement of such shares,
the payables described above are due 51% to CMC and 49% to Crown.

6. INCOME TAXES

The provisions for income taxes were as follows:

Four Months Ended
April 30,
Year Ended -----------------------------
December 31, 1997 1998 1997
----------------- ------------ ----------

Current $ 708,679 $ 460,030 $ 232,489
Deferred - - -
----------- ------------ ----------

$ 708,679 $ 460,030 $ 232,489
============ ============ ==========

7. LITIGATION

Customs Authority

On February 15, 1996 the Argentina Customs Authority ("Customs Authority"), by
means of an injunction, attempted to stop the Company from using its slot
machines located in the Neuquen casino facility. The Customs Authority demanded
the Company file certain documentation with respect to imported slot machines
including the number of slot machines, unit prices and the accounting treatment.
In response to such demand, on February 19, 1996, the Company filed with the
Customs Authority the requested documentation.

Presently the Customs Authority is determining whether the Company's valuation
of imported slot machines was proper for purposes of import taxes. Management of
the Company does not believe the resolution of this matter will have a material
adverse effect on the Company.

Cities of Neuquen and San Martin de los Andes

In July 1996 the cities of Neuquen and San Martin de los Andes modified certain
of their respective municipal ordinances in order to impose a $1 cover charge on
each person entering the Casinos. Historically the Company has not collected
cover charges. In response, the Company filed various actions with the court
stating that such cover charge is unconstitutional and that it violates the
Concession, in that the Concession provides that the Province will guarantee the
Company that there will not be any new or additional taxes relative to the
Company's operation of the Casinos during the Concession term.

As of December 31, 1997 the total estimated claim by the cities of Neuquen and
San Martin de los Andes amounted to approximately $870,000 for which the Company
has made no provision. Management of the Company does not believe the resolution
of this matter will have a material adverse effect on the Company.

Pursuant to the purchase agreement between Crown and the CMC, CMC has agreed to
reimburse the Company for certain costs and expenses in connection with the
litigation previously described. In particular, CMC will reimburse the Company
for (i) any fine, penalty or other assessment paid by the Company in connection
with the dispute with the Customs Authority, and (ii) an amount equal to the
unpaid cover charges for all periods prior to June 2, 1997 to the extent such
cover charges are paid by the Company. CMC and Crown also entered into a
shareholders' agreement which provides, among other things, that certain
material corporate actions require the approval of both CMC and Crown.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)(1). FINANCIAL STATEMENTS AND ACCOUNTANT'S REPORT

The following Crown Group, Inc. financial statements and accountant's
report included in the Company's 1998 Annual Report are incorporated
herein by reference in Item 8 of this report:

Report of Independent Accountants

Consolidated Balance Sheets as of April 30, 1997 and 1998

Consolidated Statements of Operations for the fiscal years ended
April 30, 1996, 1997 and 1998

Consolidated Statements of Cash Flows for the fiscal years ended
April 30, 1996, 1997 and 1998

Consolidated Statements of Stockholders' Equity for the fiscal
years ended April 30, 1996, 1997 and 1998

Notes to Consolidated Financial Statements

The following Casino Magic Neuquen S.A. financial statements are
included in Item 8 of this report:

Report of Independent Public Accountants

Consolidated Balance Sheets as of December 31, 1997 and April 30,
1998 (unaudited)

Consolidated Statements of Operations for the year ended December
31, 1997 and the unaudited four months ended April 30, 1998 and
1997

Consolidated Statements of Shareholders Equity for the year ended
December 31, 1997 and the unaudited four months ended April 30,
1998

Consolidated Statements of Cash Flows for the year ended December
31, 1997 and the unaudited four months ended April 30, 1998 and
1997

Notes to Consolidated Financial Statements

(a)(2). FINANCIAL STATEMENT SCHEDULES

Schedule I - Condensed Financial Information of Crown Group, Inc.
(Parent Company Only)

The other financial statement schedules are omitted since the required
information is not present, or is not present in amounts sufficient to
require submission of the schedules, or because the information
required is included in the consolidated financial statements and notes
thereto.

(a)(3). EXHIBITS

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13

EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ ----------------------

2.1 Purchase Agreement dated as of May 31, 1997 by and among the Company
and Casino Magic Corp. ("Casino Magic"). (11)

2.2 Stock Purchase Agreement dated as of February 1, 1998 by and among
Paaco Automotive Group, Inc., Premium Auto Acceptance Corporation,
Larry Lange, Daniel Chu, Ted Lange and Crown Group, Inc. (13)

2.3 Stock Purchase Agreement dated February 3, 1998 by and among Van P.
Finger and Crown Group, Inc. (13)

3.1 Articles of Incorporation of the Company (formerly SKAI, Inc.). (3)

3.1.1 Articles of Merger of the Company and SKAI, Inc. filed with the
Secretary of State of the State of Alabama on September 29, 1989. (3)

3.1.2 Articles of Merger of the Company and SKAI, Inc. filed with the
Secretary of State of the State of Texas on October 10, 1989. (3)

3.1.3 Articles of Amendment filed with the Secretary of State of the State
of Texas on October 7, 1993. (8)

3.1.4 Articles of Amendment filed with the Secretary of State of the State
of Texas on October 5, 1994. (8)

3.1.5 Articles of Amendment filed with the Secretary of State of the State
of Texas on October 2, 1997. (14)

3.2 By-Laws dated August 24, 1989. (4)

4.1 Specimen stock certificate. (9)

4.2 Form of Registration Rights Agreement dated January 5, 1994 by and
between the Company and Dabney-Resnick, Inc. (8)

4.2.1 Form of Stock Purchase Warrant dated January 5, 1994 allowing
Dabney-Resnick, Inc. to purchase shares of common stock of the
Company. (8)

4.3 Form of Registration Rights Agreement dated January 5, 1994 by and
between the Company and Sun Life Insurance Company of America, Inc.
(8)

4.3.1 Form of Stock Purchase Warrant dated January 5, 1994 allowing Sun Life
Insurance Company of America, Inc. to purchase shares of common stock
of the Company. (8)

4.4 Form of Stock Purchase Warrant dated March 18, 1994 granting
Dabney-Resnick, Inc. the right to purchase 120,000 shares of Common
Stock of the Company. (8)

4.5 Stock Purchase Warrant dated October 6, 1994 granting Don Farris the
right to purchase 50,000 shares of Common Stock of the Company. (8)

4.6 Stock Purchase Warrant dated June 2, 1994 granting Gerard M. Jacobs
the right to purchase 50,000 shares of Common Stock of the Company.
(8)

4.7 Loan and Security Agreement by and among Finova Capital Corporation,
Paaco Automotive Group, Inc. and Premium Auto Acceptance Corporation
including the Eighth Amended and Restated Schedule to Loan and
Security Agreement and the Eighth Amended and Restated Promissory
Note. (14)

10.1 1986 Incentive Stock Option Plan. (2)

13
14

10.1.1 Amendment to 1986 Incentive Stock Option Plan adopted September 27,
1990. (5)

10.2 1991 Non-Qualified Stock Option Plan. (6)

10.3 1997 Stock Option Plan. (12)

10.4 Form of Indemnification Agreement between the Company and Edward R.
McMurphy, Mark D. Slusser, T.J. Falgout, III, David J. Douglas, J.
David Simmons, Gerald L. Adams, Robert J. Kehl, Gerard M. Jacobs and
Michael B. Cloud. (7)

10.5 Form of Severance Agreement dated July 2, 1996 between the Company and
Edward R. McMurphy, T.J. Falgout, III and Mark D. Slusser. (10)

10.6 Shareholders' Agreement dated as of May 31, 1997 between the Company
and Casino Magic. (11)

10.7 Shareholders' Agreement dated as February 1, 1998 by and among Larry
Lange, Daniel Chu, Ted Lange and Crown Group, Inc. (13)

13.1 Annual Report to Stockholders for the fiscal year ended April 30,
1998. (1)

21.1 Subsidiaries of Crown Group, Inc. (14)

23.1 Consent of Independent Accountants. (1)

23.2 Opinion of Independent Accountants on Financial Statement Schedule.
(14)

23.3 Consent of Independent Public Accountants. (1)

24.1 Power of Attorney of Edward R. McMurphy. (14)

24.2 Power of Attorney of Tilman J. Falgout, III. (14)

24.3 Power of Attorney of David J. Douglas. (14)

24.4 Power of Attorney of J. David Simmons. (14)

24.5 Power of Attorney of Gerald L. Adams. (14)

24.6 Power of Attorney of Gerard M. Jacobs. (14)

24.7 Power of Attorney of Robert J. Kehl. (14)

27.1 Financial Data Schedule. (14)

- -------------------

(1) Filed herewith.

(2) Previously filed as an Exhibit to the Company's Registration Statement on
Form 10, as amended (No. 0-14939) and incorporated herein by reference.

(3) Previously filed as an Exhibit to the Company's Quarterly Report on Form
10-Q for the quarter ended October 31, 1989 and incorporated herein by
reference.

14
15

(4) Previously filed as an Exhibit to the Company's Annual Report on Form
10-K for the year ended April 30, 1990 and incorporated herein by
reference.

(5) Previously filed as an Exhibit to the Company's Annual Report on Form
10-K for the year ended April 30, 1991 and incorporated herein by
reference.

(6) Previously filed as an Exhibit to the Company's Annual Report on Form
10-K for the year ended April 30, 1992 and incorporated herein by
reference.

(7) Previously filed as an Exhibit to the Company's Quarterly Report on Form
10-Q for the quarter ended July 31, 1993 and incorporated herein by
reference.

(8) Previously filed as an Exhibit to the Company's Registration Statement on
Form S-1, as amended, initially filed with the Securities and Exchange
Commission on May 31, 1994 (No. 33-79484) and incorporated herein by
reference.

(9) Previously filed as an Exhibit to the Company's Annual Report on Form
10-K for the year ended April 30, 1994 and incorporated herein by
reference.

(10) Previously filed as an Exhibit to the Company's Quarterly Report on Form
10-Q for the quarter ended January 31, 1997 and incorporated herein by
reference.

(11) Previously filed as an Exhibit to the Company's Current Report on Form
8-K dated June 2, 1997 and incorporated herein by reference.

(12) Previously filed as an Exhibit to the Company's Registration Statement on
Form S-8, as amended, initially filed with the Securities and Exchange
Commission on October 20, 1997 (No. 333-38475) and incorporated herein by
reference.

(13) Previously filed as an Exhibit to the Company's Current Report on Form
8-K dated February 1, 1998 and incorporated herein by reference.

(14) Previously filed as an Exhibit to the Company's Annual Report on Form
10-K for the year ended April 30, 1998 and incorporated herein by
reference.

(b) REPORTS ON FORM 8-K

During the fiscal quarter ended April 30, 1998 the Company filed reports on Form
8-K and 8-K/A as follows:

EVENT
FORM DATE DESCRIPTION OF EVENT
- ------------------ --------------------- -------------------------------------------------------------

8-K February 1, 1998 Acquisition of 53% of Paaco and 80% of Precision.
8-K/A February 1, 1998 Amendment No. 1 to Form 8-K dated February 1, 1998
including the financial statements of Paaco and pro-forma
financial information of the Company.
8-K April 15, 1998 Ownership of Inktomi stock.

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16

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

CROWN GROUP, INC.

Dated: January 12, 1999 By: /s/ Mark D. Slusser
-------------------------------------
Mark D. Slusser
Vice President Finance and
Chief Financial Officer
(principal financial and
accounting officer)

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17

SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF CROWN GROUP, INC. (PARENT COMPANY ONLY)

CONDENSED BALANCE SHEET
APRIL 30, 1998

Assets:
Cash and cash equivalents $ 5,030,861
Marketable equity securities 4,742,180
Receivables from subsidiaries 4,640,718
Investment in subsidiaries 17,590,658
Investment in CMN and related assets, net 6,606,114
Other 688,329
------------

$ 39,298,860
============

Liabilities and stockholders' equity:
Accounts payable and accrued liabilities $ 373,165
Payables to subsidiaries 2,641,637
Deferred tax liability 1,251,805
------------
Total liabilities 4,266,607
------------

Stockholders' equity 35,032,253
------------

$ 39,298,860
============

CONDENSED STATEMENT OF OPERATION
FOR THE YEAR ENDED APRIL 30, 1998

Revenues:
Interest income $ 1,081,583
Interest income from subsidiaries 387,615
Interest, fees and rentals from CMN 680,697
Other 388,827
------------
2,538,722
------------
Costs and expenses:
Selling, general and administrative 2,924,675
Interest expense 13,444
Depreciation and amortization 557,318
------------
3,495,437
------------
Other income:
Equity in earnings of CMN 926,598
Equity in loss of subsidiaries (25,341)
Gain on sale of securities 38,258
------------
939,515
------------

Loss before income taxes (17,200)
Benefit for income taxes 365,295
------------

Net income $ 348,095
============

See accompanying notes to condensed financial information.

SCHEDULE I (CONTINUED)

CROWN GROUP, INC. (PARENT COMPANY ONLY)
CONDENSED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED APRIL 30, 1998

Operating activities:
Net income $ 348,095
Adjustments to reconcile net income to net cash
used by operating activities:
Depreciation and amortization 557,318
Amortization of discount (252,765)
Deferred income taxes 305,341
Gain on sale of assets (373,999)
Gain on sale of securities (38,258)
Equity in earnings of CMN (926,598)
Equity in loss of subsidiaries 25,341
Changes in assets and liabilities, net of transactions:
Other 86,139
Accounts payable and accrued liabilities (169,203)
Income taxes payable (271,525)
-------------
Net cash used by operating activities (710,114)
-------------

Investing activities:
Purchase of assets (788,784)
Sale of assets 2,191,861
Purchase of securities (5,551,714)
Sale of securities 3,772,792
Advances to subsidiaries (4,618,220)
Repayments from subsidiaries 13,732,772
Collection of notes receivable 1,050,750
Formation of Concorde (2,000,800)
Purchase of CMN and related assets (7,000,001)
Purchase of Paaco (9,174,212)
Purchase of Precision and M&S (4,032,389)
-------------
Net cash used by investing activities (12,417,945)
-------------

Financing activities:
Issuance of common stock 93,282
Purchase of common stock (3,052,322)
-------------
Net cash used by financing activities (2,959,040)
-------------

Decrease in cash and cash equivalents (16,087,099)
Cash and cash equivalents at: Beginning of year 21,117,960
-------------

End of year $ 5,030,861
=============

See accompanying notes to condensed financial information.

SCHEDULE I (CONTINUED)

CROWN GROUP, INC. (PARENT COMPANY ONLY)
NOTES TO CONDENSED FINANCIAL INFORMATION

A - GUARANTEES

Crown Group, Inc. ("Crown") has made the following guarantees with respect
to its subsidiaries:

Amount
Facility Drawn at Maximum
Debtor Amount April 30, 1998 Guarantee
------ ------ -------------- ---------

Concorde $20 million $11.1 million $5.0 million
Home Stay 5.4 million -- 5.4 million

In addition, Crown has entered into a reimbursement agreement with the
minority shareholders of Paaco who have guaranteed Paaco's debt with a
specific lender. At April 30, 1998 the amount of debt guaranteed by such
minority shareholders was approximately $26 million. To the extent such
minority shareholders pay monies pursuant to such guaranties, Crown has
agreed to reimburse the minority shareholders 65% thereof.

B - ELIMINATION OF BALANCES AND TRANSACTIONS WITH SUBSIDIARIES

As of April 30, 1998 the following balances were eliminated in the
consolidated financial statements of Crown:

Receivables from subsidiaries $ 4,640,718
Investments in subsidiaries 17,590,658
Payables to subsidiaries 2,641,637

For the year ended April 30, 1998 the following transactions were eliminated
in the consolidated financial statements of Crown:

Interest income $ 387,615

EXHIBIT INDEX