-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VrkykcZIRWgiyxONyHx3nBU5BBfFj2ai/s9B9KeD8NQiOU+N5/OOaqElaFjdtA+b CR/u7WiIA7ucCYXqliGwJQ== 0000316128-01-500005.txt : 20010704 0000316128-01-500005.hdr.sgml : 20010704 ACCESSION NUMBER: 0000316128-01-500005 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010703 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OASIS RESORTS INTERNATIONAL INC /NV CENTRAL INDEX KEY: 0000316128 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 480680109 STATE OF INCORPORATION: NV FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: SEC FILE NUMBER: 000-09476 FILM NUMBER: 1674881 BUSINESS ADDRESS: STREET 1: 3753 HOWARD HUGHES PARKWAY SUITE 200 CITY: LAS VEGAS STATE: NV ZIP: 89109 BUSINESS PHONE: 7028923742 MAIL ADDRESS: STREET 1: 3753 HOWARD HUGHES PARKWAY SUITE 200 CITY: LAS VEGAS STATE: NV ZIP: 89109 FORMER COMPANY: FORMER CONFORMED NAME: FLEXWEIGHT CORP DATE OF NAME CHANGE: 19920703 10QSB/A 1 ori123100_a.txt AMENDED 10QSB FOR OASIS 12/31/00 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-QSB/A Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended December 31, 2000 Commission File No. 0-9476 OASIS RESORTS INTERNATIONAL INC. - ------------------------------------------------------------------------------ (Exact name of registrant as specified in its charter) Nevada 48-0680109 ------------------------------- --------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) 3753 Howard Hughes Parkway, Suite 200, Las Vegas, Nevada 89103 - -------------------------------------------------------- ----------- (Address of principal executive offices) (Zip Code) (702) 892-3742 - ------------------------------------------------------------------------------ (Registrant's telephone number, including area code) 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 shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of capital stock, as of the latest practicable date. Common Stock $.001 par; 17,772,762 shares as of February 15, 2001 OASIS RESORTS INTERNATIONAL INC. INDEX Page PART I Item 1. Financial Statements Consolidated Balance Sheet as of December 31, 2000 (unaudited)...... 2 Consolidated Statements of Operations for the Three and Six Months Ended December 31, 2000 and 1999 (unaudited)........... 3 Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2000 and 1999 (unaudited)...................... 4 Notes to Consolidated Financial Statements ......................... 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations......................................... 6 PART II Item 1. Legal Proceedings................................................... 8 Item 2. Changes In Securities............................................... 8 Item 3. Defaults Upon Senior Securities..................................... 8 Item 4. Submission Of Matters To A Vote Of Security Holders................. 8 Item 5. Other Information................................................... 8 Item 6. Exhibits And Reports On Form 8-K.................................... 8 Signatures.......................................................... 9 1 OASIS RESORTS INTERNATIONAL, INC. Consolidated Balance Sheet December 31, 2000 (Unaudited) ASSETS Cash and cash equivalents $ 34,000 Accounts receivable, net of allowance for Doubtful accounts of $96,000 482,000 Inventory 180,000 Marketable securities 560,000 Other current assets 104,000 ------------ Total current assets 1,360,000 Property and equipment, net 143,000 Lease deposit 150,000 Land held for development 3,700,000 Investment, at cost 2,000,000 Acquisition advances 2,250,000 Other 381,000 ------------ Total assets $ 9,984,000 ============ LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 1,814,000 Due Lessor 4,699,000 Accrued liabilities 755,000 Current portion of notes payable 500,000 ------------ Total current liabilities 7,768,000 Notes payable, net of current portion 3,400,000 Due to NuOasis 118,000 ------------ Total liabilities 11,286,000 ------------ Commitments and contingencies Stockholders' deficit: Preferred stock, par value $0.001; 25,000,000 shares authorized, no shares issued and outstanding - Common stock, par value $0.001; 75,000,000 shares authorized, 17,772,762 shares issued and outstanding 18,000 Additional paid-in capital 38,879,000 Accumulated deficit (31,206,000) Accumulated other comprehensive loss (2,993,000) Notes receivable from Resorts (6,000,000) ------------ Total stockholders' deficit (1,302,000) ------------ Total liabilities and stockholders' deficit $ 9,984,000 ============
See accompanying notes to these condensed consolidated financial statements 2 OASIS RESORTS INTERNATIONAL INC. Condensed Statements of Operations For the Three and Six Months Ended December 31, 2000 and 1999 (Unaudited)
Three Months Ended Six Months Ended, December 31, December 31, ------------------------ ------------------------ 2000 1999 2000 1999 ----------- ----------- ----------- ----------- Revenues $ 1,101,000 $ 1,476,000 $ 2,800,000 $ 3,484,000 Cost of revenues 1,202,000 1,309,000 2,722,000 3,037,000 ----------- ----------- ----------- ----------- Gross profit (101,000) 167,000 78,000 447,000 ----------- ----------- ----------- ----------- Selling, general and administrative expenses 206,000 185,000 1,062,000 414,000 Impairment of long-lived assets 150,000 - 1,890,000 - ----------- ----------- ----------- ----------- Income (loss) from operations (457,000) (18,000) (2,874,000) 33,000 Interest and other 91,000 96,000 179,000 192,000 ----------- ----------- ----------- ----------- Net Loss (548,000) (114,000) (3,053,000) (159,000) ----------- ----------- ----------- ----------- Other comprehensive income (loss): Unrealized loss on marketable securities (2,415,000) 131,000 (3,277,000) - Foreign currency translation adjustment (224,000) (100,000) 65,000 - ----------- ----------- ----------- ----------- Comprehensive loss $(3,187,000) $ (83,000) $(6,265,000) $ (159,000) =========== =========== =========== =========== Basic and diluted net loss per common share $ (.18) $ (.01) $ (.39) $ (.03) =========== =========== =========== =========== Weighted average common shares included in basic and fully diluted shares outstanding 17,772,762 7,336,450 16,033,545 5,263,577 =========== =========== =========== ===========
See accompanying notes to these condensed consolidated financial statements 3 OASIS RESORTS INTERNATIONAL INC. Condensed Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2000 and 1999 (Unaudited)
Six Months Ended December 31, 2000 1999 ----------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $(3,053,000) $ (159,000) Adjustments to reconcile net loss to net cash provided (used) by operating activities: Depreciation and amortization 6,000 5,000 Common stock issued for services rendered 356,000 - Impairment of lease deposit 1,890,000 - Increases (decreases) in changes in assets and liabilities: Accounts receivable 3,000 (339,000) Inventory 15,000 (3,000) Other assets (221,000) Accounts payable (6,000) (349,000) Accrued expenses 134,000 (166,000) Due Lessor 659,000 1,000,000 ----------- ---------- Net cash provided by operating activities (217,000) (11,000) ----------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Advances (repayments) from NuOasis (514,000) - ----------- ---------- Net cash used by financing activities (514,000) - ----------- ---------- Foreign currency effect on cash 65,000 - ----------- ---------- Net increase (decrease) in cash (666,000) (11,000) ----------- ---------- Cash and cash equivalents, beginning of period 700,000 52,000 ----------- ---------- Cash and cash equivalents, end of period $ 34,000 $ 41,000 =========== ========== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid during the period for: Interest $ - $ -
See accompanying notes to these condensed consolidated financial statements 4 OASIS RESORTS INTERNATIONAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2000 (Unaudited) Note 1 - Organization and History Oasis Resorts International, Inc. (formerly Flexweight Corporation, a Kansas Corporation) was originally incorporated under the name Flexweight Drill Pipe Company in 1958. Oasis Resorts International Inc., herein referred to as "Oasis" acquired certain assets and operations in Tunisia, North Africa on November 19, 1998, in a reverse acquisition. Oasis and its subsidiaries (collectively the "Company") develop and operate resort hotel and gaming operations, primarily in Tunisia, North Africa, and held undeveloped land in Oasis, Nevada. Due to the Company's deteriorated financial condition, significant uncertainties exist regarding the Company's ability to continue operating its Tunisian operations. See Note 2 for further information. On April 1, 2000, the Company entered into an agreement to acquire 60% of the voting capital stock of Cleopatra Hammamet Limited ("CHL") from an unrelated party for 750,000 shares of its common stock valued at $2,250,000. The common shares of the Company were delivered to the unrelated party; however, due to certain regulatory and tax considerations, the transaction has not been completed. Management of the Company is prepared to negotiate a settlement with the Tunisian government to satisfy certain taxes and assessments. Management is currently in the process of securing financing to satisfy the settlement, as well as provide working capital for the casino operations. Management is currently seeking $2 million to complete the acquisition of CHL. Note 2 - Going Concern Considerations The Company has recurring losses from operations, and at December 31, 2000, the Company has a working capital deficit of $6.4 million. The Company has certain marketable securities which have declined in value, substantially increasing the working capital deficit in excess of $9.9 million. The Company requires approximately $6 million of immediate working capital to service certain past-due trade creditors of the Le Palace Hotel & Resort and it will require additional capital to meet obligations as they become due during the next 12 months. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans with respect to these matters are as follows: 1. Acquire the Le Palace Hotel and the adjacent complex in Cap Gammarth (collectively the "Cap Gammarth Complex"), which excludes the Cap Gammarth Casino. By acquiring the property, management expects to eliminate approximately $4.7 million dollars of accrued rental payments to Societe Touristique Tunisie-Golfe ("STTG" or "Lessor") for operation of the Le Palace Hotel. Management has tendered an offer to acquire the Cap Gammarth Complex for approximately $18.0 million. The Company has obtained a financing commitment that it believes is adequate to fund the acquisition of and complete the development of this real property, as well as pursue the acquisition of similar properties. Management has been informed that STTG has tentatively accepted the Company's offer to purchase the Cap Gammarth Complex but to date, has not received a formal acceptance. The Le Palace Hotel currently is generating positive cash flow before the accrual of rent. Management believes that the cash flow from operations will be sufficient to service the current operating liabilities if the acquisition is successful. There are no assurances that the acquisition of the Cap Gammarth Complex will be completed. 2. Regarding the acquisition of CHL, management of the Company is prepared to negotiate a settlement with the Tunisian government to satisfy certain taxes and assessments. Management is currently in the process of securing financing to satisfy the settlement, as well as provide working capital for the casino operations. Management is currently seeking $2 million to complete the acquisition of CHL. There are no assurances that the acquisition of CHL will be completed. 5 3. Should the acquisition of the Cap Gammarth Complex and CHL not be completed, management intends to continue to seek a legal reprieve based upon the fact that the parties have been unable to negotiate a long term solution. The Lessor is currently seeking an injunction to remove CWI from the Le Palace Hotel. In the event management is unsuccessful in its arbitration or legal actions, or fails to pay the past-due rent payments, the Company will in all likelihood lose its rights to operate the Le Palace Hotel. 4. Finally, management intends to pursue collection of its judgment against Societe D'Animation et de Loisirs Touristique, a Tunisian corporation ("SALT"). Management is currently attempting to seek collection by perfecting its claim in the Tunisian courts. Management believes that it will successfully perfect its judgement, which is expected to result in the Company foreclosing on the interest of SALT and the individual defendants' equity ownership of SALT. There are no assurances that such financing will be consummated on terms favorable to the Company, if at all, nor that the Company will be successful in collecting on its judgment against SALT. No adjustments have been made to the accompanying consolidated financial statements as a result of these uncertainties. If management is unsuccessful in obtaining the necessary financing to acquire the Cap Gammarth Complex, they will abort their interest in the Le Palace Hotel. Additionally, management may abort its investment CHL. Note 3 - Marketable Securities On December 29, 1999, the Company entered into an agreement with an unrelated entity to acquire common stock of Virtual Gaming Technology, Inc. ("VGAM") in exchange for common stock of the Company, the number of shares of which were to be determined at a later date. On August 31, 2000, the Company's board of directors approved the exchange whereby the Company would issue 4,802,032 shares of its newly issued common stock for 1,200,508 shares of VGAM. The transaction closed on August 31, 2000. The Company valued the securities at approximately $3,803,000 based on the closing price of the Company's common stock on August 31, 2000, net of a discount of 20%, for blockage, since the shares of VGAM are thinly traded. At December 31, 2000, these shares were included in marketable securities at a value of approximately $306,000. The difference between the value of the shares at December 31, 2000 and the cost of the shares of approximately $3.2 million has been reflected as a component of stockholders' equity and other comprehensive loss. Note 4 - Lease Deposit The Company is required to maintain a lease deposit totaling $3 million for the benefit of the Lessor of the Le Palace Hotel. In fiscal 1998, the Company pledged 200,000 shares of its common stock as collateral for the required lease deposit. In February 2000, the Company issued 550,000 shares of its common stock valued at $2,000,000 to provide additional security under the lease agreement. At December 31, 2000, the value of the Company's common stock held by CWI for the lease deposit on the Le Palace Hotel declined to $150,000. Based on this impairment, the Company recorded $1,890,000 as a charge to operations in the first half of fiscal 2001. Based on the value of such shares of common stock, the Company may be required to deposit additional collateral. 6 ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Presentation The historical financial information presented has been adjusted to give effect to the reverse merger as described in Note 1 to the financial statements. Results of Operations - Six Months Ended December 31, 2000 Compared to Six Months Ended --------------------------------------------------------------- December 31, 1999 ----------------- Revenues for the first half of fiscal 2001 were $2.8 million which were approximately $684,000 below the revenues of the fiscal 2000 period. The revenues were entirely due to the operations of the Le Palace Hotel Tunisia. The decline in revenues is due to 3 factors: 1) the Tunisian Dinar declined approximately 22% between the period, 2) the timing of a religious holiday effected fiscal 2001 occupancy more than fiscal 2000 and 3) another 5 star hotel recently opened in the area attracting business travelers. Typically, during the winter months, the Company's fiscal second quarter and third quarter, hotel occupancy is limited to primarily business travelers. To date, the hotel has not been able to realize its potential due the failure of the developer to complete certain amenities at the hotel, the Cap Gammarth Casino and the surrounding properties associated with the complex. Total cost of revenues were $2.7 million in the current six months compared to $3.0 million in the fiscal 2000 period. This decline in costs is related to the lower revenues during the period. Only minimal expenditures are being made to operate the hotel. Selling, general and administrative costs increased $648,000 primarily due to costs associated with both the on-going arbitration with STTG and bringing the financial reporting current, as well as certain increases in labor and management costs. The Company also recorded an impairment of the value of the lease deposit of $1,890,000 in the current period based on the decline in value of the Oasis stock on deposit. Quarter Ended December 31, 2000 Compared to Quarter Ended December 31, 1999 --------------------------------------------------------------------------- Revenues for the second quarter of fiscal 2001 were $1,101,000 which was $375,000 below the revenues of the fiscal 2000 second quarter. The revenues were entirely due to the operations of the Le Palace Hotel Tunisia. The decline in revenues is due to 3 factors: 1) the Tunisian Dinar declined approximately 22% between the fiscal 2001 quarter and the fiscal 2000 quarter, 2) the timing of a religious holiday effected fiscal 2001 occupancy more than fiscal 2000 and 3) another 5 star hotel recently opened in the area attracting business travelers. Typically, during the winter months, the company's fiscal second quarter and third quarter, hotel occupancy is limited to primarily business travelers. after currency translation, although revenue in Tunisian dinar was higher in the first quarter of fiscal 2001 vs. fiscal 2000. The revenues were entirely due to the operations of the Le Palace Hotel Tunisia. To date, the hotel has not been able to realize its potential due the failure of the developer to complete certain amenities at the hotel, the Cap Gammarth Casino and the surrounding properties associated with the complex. Total cost of revenues were $1.2 million in the current quarter compared to $1.3 million in the fiscal 2000 second quarter. Only minimal expenditures are being made to operate the hotel. Selling, general and administrative costs increased $21,000 due to arbitration related expenses and the cost of bringing the financial reporting current. The Company also recorded an additional impairment of the value of the lease deposit of $150,000 in the fiscal second quarter, in addition to the $1,740,000 recorded in the first quarter based on the decline in value of the Oasis stock on deposit. 7 Liquidity and Capital Resources The Company's working capital resources during the period ended December 31, 2000 were provided by utilizing the cash on hand at June 30, 2000 and from the operations of the Le Palace Hotel & Casino. The LePalace Hotel has been generating positive cash flow as it has not been paying rent to the lessor. The Company has experienced recurring net losses, has limited liquid resources, and negative working capital. Management's intent is to continue searching for additional sources of capital and new casino gaming and hotel management opportunities. In the interim, the Company intends to continue operating with minimal overhead and key administrative functions being provided by consultants. It is estimated, based upon its historical operating expenses and current obligations, that the Company may need to utilize its common stock for future financial support to finance its needs during fiscal 2001. Accordingly, the accompanying consolidated financial statements have been presented under the assumption the Company will continue as a going concern. See Notes to Financial Statements for further discussion. The Company had a cash balance of approximately $34,000 at December 31, 2000. The Company has no commitments for capital expenditures or additional equity or debt financing and no assurances can be made that its working capital needs can be met. Management has tendered an offer to acquire the Cap Gammarth Complex for approximately $18.0 million. The Company has obtained a financing commitment that it believes is adequate to fund the acquisition of and complete the development of this real property, as well as pursue the acquisition of similar properties. Management has been informed that STTG has tentatively accepted the Company's offer to purchase the Cap Gammarth Complex but to date, has not received a formal acceptance. 8 PART II: OTHER INFORMATION Item 1. Legal Proceedings The Company knows of no significant changes in the status of the pending litigation or claims against the Company as described in Form 10-KSB for the Company's fiscal year ended June 30, 2000. Item 2. Changes in Securities 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: None (b) Reports on Form 8-K: None 9 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. OASIS RESORTS INTERNATIONAL INC. Dated: July 3, 2001 By: /s/ Leonard J. Roman ------------------------------ Leonard J. Roman Principal Accounting Officer and Director 10 -----END PRIVACY-ENHANCED MESSAGE-----