8-K/A

UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

(Amendment No. 2)

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 13, 2016

FULL HOUSE RESORTS, INC.

(Exact name of registrant as specified in its charter)

Delaware	1-32583	13-3391527
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

4670 S. Fort Apache Road, Suite 190 Las Vegas, Nevada	89147
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (702) 221-7800

N/A

(Former name or former address,

if changed since last report)

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

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

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

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

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

Item 2.01         Completion of Acquisition or Disposition of Assets

Explanatory Note

This Amendment No. 2 to Current Report on Form 8-K/A (this "Amendment No. 2") of Full House Resorts, Inc. (the "Company"), amends and supplements the Company's original Current Report on Form 8-K ("Initial Form 8-K") filed with the Securities and Exchange Commission on May 13, 2016 (Film No. 161647827) as amended by Amendment No. 1 to Current Report on Form 8-K/A ("Amendment No. 1") filed on May 18, 2016 (Film No. 161660718). The Initial Form 8-K reported under Item 2.01 that the Company completed the acquisition of Bronco Billy's Casino and Hotel ("Bronco Billy's") in Cripple Creek, Colorado (the "Transaction"). Amendment No. 1 included each of the material agreements relating to the amendment and restatement of the Company's first and second lien credit facilities as an exhibit.

This Amendment No. 2 provides the financial statements and unaudited pro forma financial information as required by Item 9.01 of Form 8-K, which were excluded from the Initial Form 8-K in reliance on paragraph (a)(4) of Item 9.01 of Form 8-K.

No other modification to the Company's Initial Form 8-K or Amendment No. 1 is being made by this Amendment No. 2.

Forward-Looking Statements

All of the pro forma financial and other information and other statements included in Item 9.01 of this Amendment No. 2, other than historical information or statements of historical fact, are “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the Company’s current expectations and are subject to uncertainty and changes in circumstances. These forward-looking statements include, among others, all of the pro forma financial information, the notes related thereto, and the statements regarding the Company’s expectations with respect to the Transaction. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements made herein. These risks and uncertainties include the Company’s ability to integrate the operations of Bronco Billy's and other anticipated benefits of the Transaction, and the risk factors disclosed in the Company’s most recent Annual Report on Form 10-K, which the Company filed with the SEC on March 30, 2016. Forward-looking statements reflect the Company’s analysis as of the date of this Amendment No. 2 and the Company does not undertake to revise these statements to reflect subsequent developments, except as required under the federal securities laws. Readers are cautioned not to place undue reliance on any of these forward-looking statements.

Item 9.01         Financial Statements and Exhibits

(a)	Financial Statements of Business Acquired
	The audited financial statements of Pioneer Group, Inc. and Subsidiary for the fiscal years ended December 31, 2015 and 2014 and the related independent auditor's report are included as Exhibit 99.1. Additionally, the unaudited financial statements of Pioneer Group, Inc. and Subsidiary as of March 31, 2016 and December 31, 2015, and for the three months ended March 31, 2016 and 2015, are included as Exhibit 99.2.
(b)	Pro Forma Financial Information
	The unaudited pro forma financial statements for the fiscal year ended December 31, 2015 and the interim period ended March 31, 2016, and the notes thereto, reflecting the Transaction, are included as Exhibit 99.3.

(d)	Exhibits
	23.1	Consent of BKD, LLP, as independent auditor for Pioneer Group, Inc. and Subsidiary.
	99.1	Pioneer Group, Inc. and Subsidiary audited financial statements for the fiscal years ended December 31, 2015 and 2014.
	99.2	Pioneer Group, Inc. and Subsidiary unaudited financial statements as of March 31, 2016 and December 31, 2015, and for the three months ended March 31, 2016 and 2015.
	99.3	Unaudited pro forma condensed combined balance sheet as of March 31, 2016, unaudited pro forma condensed combined statements of operations for the year ended December 31, 2015 and the three months ended March 31, 2016 and the notes thereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Full House Resorts, Inc.
Date: July 29, 2016	/s/ Lewis A. Fanger
	Lewis A. Fanger, Senior Vice President, Chief Financial Officer & Treasurer

EXHIBIT INDEX

Exhibit No.	Description
23.1	Consent of BKD, LLP, as independent auditor for Pioneer Group, Inc. and Subsidiary.
99.1	Pioneer Group, Inc. and Subsidiary audited financial statements for the fiscal years ended December 2015 and 2014.
99.2	Pioneer Group, Inc. and Subsidiary unaudited financial statements as of March 31, 2016 and December 31, 2015, and for the three months ended March 31, 2016 and 2015.
99.3	Unaudited pro forma condensed combined balance sheet as of March 31, 2016, unaudited pro forma condensed combined statements of operations for the year ended December 31, 2015 and the three months ended March 31, 2016 and the notes thereto.

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT AUDITOR 

Board of Directors

Full House Resorts, Inc.

Las Vegas, Nevada

We consent to the incorporation by reference in Registration Statement Nos. 333-203046 and 333-204312 of Full House Resorts, Inc. on Form S-8 of our report dated April 19, 2016, relating to the financial statements of Pioneer Group, Inc. and Subsidiary as of and for the years ended December 31, 2015 and 2014, which appears in this Form 8-K/A. 

/s/ BKD, LLP

Colorado Springs, Colorado

July 29, 2016 

EX-99.1

Exhibit 99.1

Pioneer Group, Inc. and Subsidiary

Independent Auditor's Reports and Consolidated Financial Statements

December 31, 2015 and 2014

Pioneer Group, Inc. and Subsidiary

December 31, 2015 and 2014

Contents

Independent Auditor's Report	1
Consolidated Financial Statements
Balance Sheets	3
Statements of Earnings	5
Statements of Shareholders' Equity	6
Statements of Cash Flows	7
Notes to Financial Statements	8
Independent Auditor's Report on Supplementary Information	16
Supplementary Information
Consolidating Statement of Earnings Segregated by Licensee/Subsidiary Information - 2015	17

Independent Auditor's Report

Board of Directors

Pioneer Group, Inc. and Subsidiary

Cripple Creek, Colorado

We have audited the accompanying consolidated financial statements of Pioneer Group, Inc. and Subsidiary (collectively, the Company), which comprise the related consolidated balance sheets as of December 31, 2015 and 2014, and the related consolidated statements of earnings, shareholders' equity and cash flows for the years then ended, and the related notes to the financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Board of Directors

Pioneer Group, Inc. and Subsidiary

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Pioneer Group, Inc. and Subsidiary as of December 31, 2015 and 2014, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

/s/ BKD, LLP

Colorado Springs, Colorado

April 19, 2016

2

Pioneer Group, Inc. and Subsidiary

Consolidated Balance Sheets

December 31, 2015 and 2014

Assets
	2015			2014
Current Assets
Cash and cash equivalents	$	2,906,770		$	3,109,435
Other receivables	421,208			328,704
Prepaids and other	228,485			229,721
Casino inventories	144,974			119,104
Total current assets	3,701,437			3,786,964
Property and Equipment, at Cost
Furniture and equipment	14,949,208			14,427,580
Buildings and improvements	14,207,330			13,549,621
	29,156,538			27,977,201
Less: accumulated depreciation and amortization	(18,483,049		)	(17,131,118		)
	10,673,489			10,846,083
Land	7,919,126			7,919,126
	18,592,615			18,765,209
Other Assets
Real estate inventories	150,000			150,000
Equity method investment	59,585			—
Related party note receivable	30,000			30,000
Deferred loan costs, net of accumulated amortization; 2015 - $86,528 and 2014 - $76,358	35,509			45,679
	275,094			225,679
	$	22,569,146		$	22,777,852

See Notes to Consolidated Financial Statements

3

Pioneer Group, Inc. and Subsidiary

Consolidated Balance Sheets (Continued)

December 31, 2015 and 2014

Liabilities and Shareholders' Equity
	2015			2014
Current Liabilities
Accounts payable	$	816,313		$	939,945
Related party payables	7,003			30,543
Accrued wages and benefits	668,993			485,167
Other accrued liabilities	1,570,642			1,389,740
Current portion of long-term debt	1,252,917			1,252,720
Total current liabilities	4,315,868			4,098,115
Long-term Obligations, Net of Current Portion
Long-term debt	2,958,514			3,706,431
Total long-term liabilities	2,958,514			3,706,431
Total liabilities	7,274,382			7,804,546
Shareholders' Equity
Common stock (no par value, 2,500 shares authorized; 1,000 shares issued; 806 shares outstanding at December 31, 2015 and 2014)	1,260,579			1,260,579
Retained earnings	16,883,193			16,561,735
	18,143,772			17,822,314
Less common stock in treasury - at cost; 194 shares at December 31, 2015 and 2014	(2,849,008		)	(2,849,008		)
	15,294,764			14,973,306
	$	22,569,146		$	22,777,852

See Notes to Consolidated Financial Statements

4

Pioneer Group, Inc. and Subsidiary

Consolidated Statements of Earnings

Years Ended December 31, 2015 and 2014

	2015			2014
Operating Revenues
Casino	$	27,704,239		$	25,731,445
Food and beverage, net of cost of sales of $2,125,203 and $2,062,785 in 2015 and 2014, respectively	2,194,472			1,735,792
Hotel	380,771			208,580
Other, net of cost of sales of $176,023 and $156,912 in 2015 and 2014, respectively	348,748			238,546
Total operating revenues	30,628,230			27,914,363
Less cash promotional allowances	5,261,180			5,346,345
Less noncash promotional allowances	2,979,150			2,547,399
Net revenues	22,387,900			20,020,619
Operating Expenses
Operating departments	12,074,669			10,905,364
Selling, general and administrative	5,967,294			4,913,695
Depreciation and amortization	1,854,002			1,659,116
Loss on disposal of assets	11,511			37,026
Other operating expense	21,152			112,281
Total operating expenses	19,928,628			17,627,482
Income from Operations	2,459,272			2,393,137
Nonoperating Income (Expense)
Interest income	3,855			879
Interest expense	(139,708		)	(165,513		)
Other expense	(1,959		)	(105,830		)
Total nonoperating income (expense)	(137,812		)	(270,464		)
Net earnings	$	2,321,460		$	2,122,673

See Notes to Consolidated Financial Statements

5

Pioneer Group, Inc. and Subsidiary

Consolidated Statements of Shareholders' Equity

Years Ended December 31, 2015 and 2014

	Common Stock			Retained			Treasury Stock
	Shares	Amount		Earnings			Shares	Amount			Total
Balance as of January 1, 2014	1,000	$	1,260,579	$	15,839,065		194	$	(2,849,008	)	$	14,250,636
Net earnings	—	—		2,122,673			—	—			2,122,673
Distributions to shareholders	—	—		(1,400,003		)	—	—			(1,400,003		)
Balance as of December 31, 2014	1,000	1,260,579		16,561,735			194	(2,849,008		)	14,973,306
Net earnings	—	—		2,321,460			—	—			2,321,460
Distributions to shareholders	—	—		(2,000,002		)	—	—			(2,000,002		)
Balance as of December 31, 2015	1,000	$	1,260,579	$	16,883,193		194	$	(2,849,008	)	$	15,294,764

See Notes to Consolidated Financial Statements

6

Pioneer Group, Inc. and Subsidiary

Consolidated Statements of Cash Flows

Years Ended December 31, 2015 and 2014

	2015			2014
Operating Activities
Net earnings	$	2,321,460		$	2,122,673
Items not providing (requiring) cash
Net loss on disposal of property and equipment	11,511			37,026
Depreciation and amortization	1,854,002			1,659,116
Real estate inventory impairment loss	—			100,000
Changes in
Receivables	(92,504		)	90,507
Prepaids and other assets	11,406			(99,564		)
Inventories	(25,870		)	(1,967		)
Accounts payable	(67,509		)	(190,996		)
Accrued liabilities	364,728			(102,678		)
Net cash provided by operating activities	4,377,224			3,614,117
Investing Activities
Acquisition of property and equipment	(1,772,582		)	(651,198		)
Advances made on related party notes receivable	—			(30,000		)
Purchase of equity method investment	(59,585		)	—
Proceeds from sales of property and equipment	—			1,410
Net cash used in investing activities	(1,832,167		)	(679,788		)
Financing Activities
Distributions paid to shareholders	(2,000,002		)	(1,400,003		)
Principal payments on long-term debt	(1,247,720		)	(1,252,537		)
Proceeds from long-term debt	500,000			—
Net cash used in financing activities	(2,747,722		)	(2,652,540		)
Net Increase (Decrease) in Cash and Cash Equivalents	(202,665		)	281,789
Cash and Cash Equivalents, Beginning of Year	3,109,435			2,827,646
Cash and Cash Equivalents, End of Year	$	2,906,770		$	3,109,435
Supplemental Cash Flows Information
Cash paid for interest	$	141,483		$	169,298
Additions to fixed assets through increase to accounts payable	$	176,119		$	255,782

See Notes to Consolidated Financial Statements

7

Pioneer Group, Inc. and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

Note 1:    Organization and Summary of Significant Accounting Policies

Organization

Pioneer Group, Inc. operates three casinos located in Cripple Creek, Colorado. Pioneer Group, Inc. is organized under the laws of the State of Nevada. The casino and restaurant operating under the name of Bronco Billy's Casino (Bronco Billy's) began operations during October 1991. In July 1998, a second casino separately licensed as Buffalo Billy's Casino (Buffalo Billy's) began operations. That same year Buffalo Billy's opened its steakhouse. In April 2008, a third casino separately licensed under the name Billy's Casino (Billy's) began operations, with its restaurant beginning operations in May 2008.

Pioneer Group, Inc. purchased 100% of Elk Grove Village, LLC during 2003, from three shareholders of Pioneer Group, Inc. Elk Grove Village, LLC was formed under the laws of the State of Colorado and operates under a limited liability company agreement. Elk Grove Village, LLC was acquired for the purpose of improving, developing, selling and otherwise using land in Woodland Park, Colorado. Elk Grove Village, LLC was to initially construct 34 townhomes on the land. As of December 31, 2015, 12 of the 34 townhomes have been constructed, of which all 12 have been sold. Unless dissolved earlier, the term of Elk Grove Village, LLC is 50 years, or until February 12, 2051.

Cripple Creek is one of three cities in the State of Colorado permitted to have limited stakes gaming. Limited stakes gaming is defined in Colorado as the use of slot, keno and video poker machines, craps, roulette and the card games blackjack and poker, each with a maximum single bet up to one hundred dollars. Casinos in Cripple Creek draw patrons primarily from the Colorado Springs and Pueblo, Colorado areas and, to a lesser extent, from the greater Denver, Colorado metropolitan area. Cripple Creek is a mountain tourist town and its gaming market is subject to seasonal fluctuations. Typically, Pioneer Group, Inc.'s gaming revenues are greater in the summer tourist season and are lower from October through April. As all of Pioneer Group, Inc.ís casino operations are located in Cripple Creek, the casinos are exposed to conditions that are specific to Colorado and the Cripple Creek market. These conditions include complications caused by weather.

Casino operations are subject to extensive regulation in the State of Colorado by the Colorado Limited Gaming Control Commission. Management believes that Pioneer Group, Inc.ís procedures for supervising casino operations and recording casino and other revenues comply, in all material respects, with the applicable regulations in Colorado.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Pioneer Group, Inc. and Elk Grove Village, LLC (collectively, the Company). All significant intercompany transactions and balances have been eliminated.

8

Pioneer Group, Inc. and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. At December 31, 2015 and 2014, cash and cash equivalents consisted primarily of cash on hand and demand deposits subject to immediate withdrawal. The Company is required by Colorado Gaming Regulations to maintain cash and cash equivalents in an amount sufficient to protect the Company's patrons against defaults in gaming debts owed by the Company.

At December 31, 2015, the Company's cash accounts at financial institutions exceeded federally insured limits by approximately $182,000.

Other Receivables

Other receivables consist primarily of returned checks and amounts contained in redemption kiosks within the facility. If necessary, the Company provides an allowance for doubtful accounts, which is based on a review of outstanding receivables, historical collection information and existing economic conditions. Accounts past due more than 120 days are considered delinquent. Delinquent receivables are written off based on individual credit evaluation and specific circumstances of the customer.

Property and Equipment

Property and equipment are recorded at cost and are being depreciated and amortized on the straight-line method over their estimated useful lives. Leased property under capital leases is amortized over the shorter of the lives of the respective leases or over the service lives of the assets for those leases which substantially transfer ownership. Interest incurred on debt outstanding related to expansion and during the construction period has been capitalized. Capitalized interest is included in building and improvements.

The estimated useful lives are as follows:

	Years
Leased property and equipment	5 - 30
Furniture and equipment	5
Buildings and improvements	30 - 40

Real Estate Inventories

Real estate inventories recorded by Elk Grove Village, LLC include five undeveloped real estate lots that are carried at the lower of cost or market. The Company reviews this inventory for possible impairment on an annual basis. No impairment losses were recognized in 2015. An impairment loss of $100,000 was recognized in 2014 based on the declines in the real estate market for this type of property. This loss is included in other expense in the accompanying 2014 consolidated statement of earnings. Fair value was determined by comparing listing and sales prices of comparable properties to the carrying value of the real estate inventory.

9

Pioneer Group, Inc. and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

Deferred Loan Costs

Costs incurred in conjunction with the issuance of long-term debt are being amortized over the respective lives of the issues on a straight-line basis.

Impairment of Long-lived Assets

The Company reviews long-lived assets for possible impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. If there is an indication of impairment, which is estimated as the difference between anticipated undiscounted future cash flows and carrying value, the carrying amount of the asset is written down to its estimated fair value by a charge to operations. Fair value is estimated based on the present value of estimated future cash flows using a discount rate commensurate with the risk involved. Estimates of future cash flows are inherently subjective and are based on management's best assessment of expected future conditions.

Slot Club Liability

The Company has a slot club for its preferred players. To earn "points," slot club members insert a special card into slot, keno and video poker machines while playing in Bronco Billy's, Buffalo Billy's and Billy's casinos. Based on their point totals, members may receive cash. The Company accrues the cost of cash points as such points are earned by members of the slot club and expenses the complementary points as they are redeemed. The slot club liability of $375,542 and $387,635 as of December 31, 2015 and 2014, respectively, is included in other accrued liabilities on the balance sheets.

Outstanding Gaming Chip Liability

When customers exchange cash for gaming chips, the Company has a liability for the face amount of the chips as long as they are outstanding and not redeemed or won by the house. That liability is established by determining the difference between the total chips placed in service and the actual inventory of chips in custody or under the control of the casino. The outstanding gaming chip liability of $122,835 and $139,667 as of December 31, 2015 and 2014, respectively, is included in other accrued liabilities on the balance sheets.

Tokens and Chips

The cost of tokens and chips used in casino play are expensed as incurred.

Casino Revenue Recognition

Casino revenue is the net win from gaming activities, which is the difference between gaming wins and losses.

10

Pioneer Group, Inc. and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

Promotional Allowances

Food and beverage revenues include the retail value of complimentary food and beverage provided gratuitously to patrons. The retail value of the promotional allowances is deducted to arrive at net revenues. Promotional allowances also include the value of coupons redeemed and the value of complimentary services and/or cash rebates to customers based on the volume of the customers' gaming activity.

Income Taxes

The Company's shareholders have elected to have the Company's income taxed as an "S" Corporation under provisions of the Internal Revenue Code and a similar section of the Nevada income tax law. Therefore, taxable income or loss is reported to the individual shareholders for inclusion in their respective tax returns and no provision for federal and state income taxes is included in these statements. Elk Grove Village, LLC's net earnings or losses are taxed at the member level and Pioneer Group, Inc. was the sole member of Elk Grove Village, LLC as of 2015 and 2014. With a few exceptions, the Company is no longer subject to U.S. federal, state and local or non-U.S. income tax examinations by tax authorities for years before 2011.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain reclassifications have been made to the 2014 consolidated financial statements to conform to the 2015 consolidated financial statement presentation. These reclassifications had no effect on net earnings.

Subsequent Events

Subsequent events have been evaluated through the date of the Independent Auditor's Report, which is the date the financial statements were available to be issued.

11

Pioneer Group, Inc. and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

Note 2: Pending Sale of the Company's Casino Operations

On September 27, 2015, the Company entered into a Purchase and Sale Agreement to sell certain assets related to the casino operations of the Company and the buyer has agreed to assume certain liabilities related to the casino operations. As of April 19, 2016, the sale has not closed.

Note 3: Inventories

The Company records casino food, beverage and merchandise inventories at the lower of cost or market using the first-in, first-out method. The components of casino inventories as of December 31 are as follows:

	2015		2014
Food and beverage	$	112,599	$	91,635
Merchandise and other	32,375		27,469
	$	144,974	$	119,104

Real estate inventories consist of the following as of December 31:

	2015		2014
Land	$	93,326	$	93,326
Land improvements	56,674		56,674
	$	150,000	$	150,000

12

Pioneer Group, Inc. and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

Note 4: Long-term Debt

Long-term debt consists of the following as of December 31:

	2015			2014
Nevada State Bank note (A)	$	4,075,000		$	4,820,000
Note payable (B)	136,431			139,151
	4,211,431			4,959,151
	(1,252,917		)	(1,252,720		)
	$	2,958,514		$	3,706,431

(A) A reducing revolving note held by a bank with a maximum commitment of $5,000,000 and $6,250,000 as of December 31, 2015 and 2014, respectively. The commitment is reduced by $625,000 semi-annually. Principal payments are required to reduce the outstanding principal balance to be consistent with the reduction in maximum commitment. In addition, monthly interest-only payments are required. The interest rate was set at 7.376% until July 1, 2012. On July 1, 2012, per the terms of the agreement, the rate was adjusted to 2.823% which was 1.90% in excess of the LIBOR/Swap rate on July 1, 2012. That rate is fixed until July 1, 2017, at which time it will be adjusted to a rate of 1.90% in excess of the lender's five-year LIBOR/Swap rate index, as defined in the agreement. As of December 31, 2015 and 2014, the note contained no prepayment penalties. All outstanding principal and accrued interest is due July 1, 2019; the debt is collateralized by the Company's assets and deeds of trust and is personally guaranteed by certain shareholders.

The note contains various covenants related to the parties of the agreements, including a maximum funded debt to EBITDA ratio of no greater than 3.50 to 1.00, annual capital expenditures of no less than 2% and no more than 8% of the Company's net revenues for the immediately prior year and a fixed charge coverage ratio of at least 1.10 to 1.00. Management believes the Company was in compliance with all financial covenants as of December 31, 2015.

(B) Due February 15, 2037; payable $1,031 monthly; including interest at 7.00%; secured by real property.

Maturities of long-term debt as of December 31, 2015 are as follows:

2016	$	1,252,917
2017	1,253,128
2018	1,253,354
2019	328,596
2020	3,856
Thereafter	119,580
	$	4,211,431

13

Pioneer Group, Inc. and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

Note 5: Operating Leases

The Company leases a building, parking lots and equipment under short- and long-term operating leases expiring at various dates through January 2019. The building lease contains renewal options for periods up to 18 years and requires the Company to pay all executory costs (property taxes, maintenance and insurance).

Future minimum lease payments at December 31, 2015 were:

2016	$	233,127
2017	48,127
2018	29,627
2019	20,357
	$	331,238

Rent expense under the operating leases totaled $222,265 and $132,000 for the years ended December 31, 2015 and 2014, respectively.

Note 6: Significant Estimates and Concentrations

Cash and Cash Equivalents

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents; however, the Company places its cash and cash equivalents with high credit quality institutions, primarily with banks located in the State of Colorado, to limit its credit exposure. The State of Colorado does not permit the extension of credit for gaming purposes.

Note 7: Pension Plan

The Company participates in a defined contribution 401(k) retirement plan (the Plan). Employees who are eligible for the Plan must have completed one year of service (1,000 hours) and be at least 21 years of age. Participants may contribute a maximum of 100% of their annual wages to the Plan, subject to IRS limits. The Company may make discretionary contributions to the Plan. For the years ended December 31, 2015 and 2014, the Company made discretionary contributions to the Plan of $22,036 and $14,729, respectively.

14

Pioneer Group, Inc. and Subsidiary

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

Note 8: Related-party Transactions

As of December 31, 2015 and 2014, total billings for management fees were $180,000 and $144,000, respectively. Management fees are paid to certain shareholders of the Company.

A note receivable was issued in December 2014 to a shareholder for $30,000 for a term of 18 months. Interest is payable monthly at 10% per annum, while the full principal amount is due at the end of the 18-month term.

Accounts payable to employees was $7,003 and $30,543 as of December 31, 2015 and 2014, respectively.

Note 9: Commitments and Contingencies

General Litigation

The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated balance sheets, statements of earnings and cash flows of the Company.

Medical Plan

The Company participates in a self-funded medical plan administered by Pioneer Group, Inc. It pays all medical claims up to $80,000 for 2015 and 2014, per employee for each fiscal year. Stop-loss coverage has been purchased, which covers medical claims in excess of $80,000 per employee for 2015 and 2014, and which limits the plan's aggregate self-insurance exposure to the amount of $1,039,288, or 100% of the Monthly Aggregate Attachment Point for the first month of the policy period times 12, whichever is greater, for each policy year.

All claims are processed by a third-party administrator (Meritain). The estimated liability for outstanding claims of $205,698 and $87,701 as of December 31, 2015 and 2014, respectively, is reported on the consolidated balance sheets in accrued wages and benefits.

Legislation

There can be no assurances that any gaming initiatives will not be proposed in the future and, if passed, will not have a material adverse impact on the Company's financial position, results of operations or cash flows.

15

Supplementary Information

Independent Auditor's Report

on Supplementary Information

Board of Directors

Pioneer Group, Inc. and Subsidiary

Cripple Creek, Colorado

Our audit of the 2015 financial statements was conducted for the purpose of forming an opinion on the financial statements as a whole. The Consolidating Statement of Earnings Segregated by Licensee/Subsidiary Information listed in the table of contents is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.

/s/ BKD, LLP

Colorado Springs, Colorado

April 19, 2016

Pioneer Group, Inc. and Subsidiary

Consolidating Statement of Earnings

Segregated by Licensee/Subsidiary

Year Ended December 31, 2015

	Elk Grove Village, LLC			Bronco Billy's Casino			Buffalo Billy's Casino			Billy's Casino			Eliminations			Total
Operating Revenues
Casino	$	—		$	16,209,454		$	6,445,813		$	5,048,972		$	—		$	27,704,239
Food and beverage, net of cost of sales	—			1,141,704			654,700			398,068			—			2,194,472
Hotel	—			380,771			—			—			—			380,771
Other, net of cost of sales	—			198,523			89,323			60,902			—			348,748
Total operating revenues	—			17,930,452			7,189,836			5,507,942			—			30,628,230
Less cash promotional allowances	—			3,119,682			1,229,819			911,679			—			5,261,180
Less noncash promotional allowances	—			1,673,477			666,610			639,063			—			2,979,150
Net revenues	—			13,137,293			5,293,407			3,957,200			—			22,387,900
Operating Expenses
Operating departments	—			7,339,587			2,225,645			2,509,437			—			12,074,669
Selling, general and administrative	—			3,652,414			1,267,275			1,047,605			—			5,967,294
Depreciation and amortization	—			1,177,216			379,610			297,176			—			1,854,002
Loss (gain) on disposal of assets	—			6,289			(191		)	5,413			—			11,511
Other operating expense	—			16,057			2,807			2,288			—			21,152
Total operating expenses	—			12,191,563			3,875,146			3,861,919			—			19,928,628
Income from Operations	—			945,730			1,418,261			95,281			—			2,459,272
Nonoperating Income (Expense)
Interest income	—			9,317			3,755			2,937			(12,154		)	3,855
Interest expense	(12,154		)	(81,355		)	(32,707		)	(25,646		)	12,154			(139,708		)
Other expense	(1,959		)	—			—			—			—			(1,959		)
Total nonoperating income (expense)	(14,113		)	(72,038		)	(28,952		)	(22,709		)	—			(137,812		)
Net earnings (loss)	$	(14,113	)	$	873,692		$	1,389,309		$	72,572		$	—		$	2,321,460

17

EX-99.2

Exhibit 99.2

Pioneer Group, Inc. and Subsidiary

Unaudited Consolidated Financial Statements

As of March 31, 2016 and December 31, 2015

And for the Three Months Ended March 31, 2016 and March 31, 2015

Pioneer Group, Inc. and Subsidiary

As of March 31, 2016 and December 31, 2015

and for the Three Months Ended March 31, 2016 and March 31, 2015

Contents

Consolidated Financial Statements (Unaudited)
Balance Sheets	1
Statements of Earnings	3
Statements of Shareholders' Equity	4
Statements of Cash Flows	5
Notes to Financial Statements	6

Pioneer Group, Inc. and Subsidiary

Consolidated Balance Sheets (Unaudited)

Assets
	March 31, 2016			December 31, 2015
Current Assets
Cash and cash equivalents	$	3,059,680		$	2,906,770
Other receivables	384,033			421,208
Prepaids and other	427,048			228,485
Casino inventories	133,850			144,974
Total current assets	4,004,611			3,701,437
Property and Equipment, at Cost
Furniture and equipment	14,611,420			14,949,208
Buildings and improvements	14,234,075			14,207,330
	28,845,495			29,156,538
Less: accumulated depreciation and amortization	(18,588,481		)	(18,483,049		)
	10,257,014			10,673,489
Land	7,919,126			7,919,126
	18,176,140			18,592,615
Other Assets
Real estate inventories	150,000			150,000
Equity method investment	60,566			59,585
Related party note receivable	30,000			30,000
Deferred loan costs, net of accumulated amortization of $89,070 and $86,528	32,967			35,509
	273,533			275,094
	$	22,454,284		$	22,569,146

See notes to consolidated financial statements.

1

Pioneer Group, Inc. and Subsidiary

Consolidated Balance Sheets (Unaudited) (Continued)

Liabilities and Shareholders' Equity
	March 31, 2016			December 31, 2015
Current Liabilities
Accounts payable	$	1,278,296		$	816,313
Related party payables	32,684			7,003
Accrued wages and benefits	595,407			668,993
Other accrued liabilities	1,374,704			1,570,642
Current portion of long-term debt	1,252,207			1,252,917
Total current liabilities	4,533,298			4,315,868
Long-term Obligations, Net of Current Portion
Long-term debt	2,638,513			2,958,514
Total long-term liabilities	2,638,513			2,958,514
Total liabilities	7,171,811			7,274,382
Shareholders' Equity
Common stock (no par value, 2,500 shares authorized; 1,000 shares issued; 806 shares outstanding)	1,260,579			1,260,579
Retained earnings	16,870,902			16,883,193
	18,131,481			18,143,772
Less common stock in treasury - at cost	(2,849,008		)	(2,849,008		)
	15,282,473			15,294,764
	$	22,454,284		$	22,569,146

See notes to consolidated financial statements.

2

Pioneer Group, Inc. and Subsidiary

Consolidated Statements of Earnings (Unaudited)

	Three months ended March 31,
	2016			2015
Operating Revenues
Casino	$	5,795,795		$	5,440,204
Food and beverage	1,051,915			930,593
Hotel	104,649			57,293
Other	67,379			59,331
	7,019,738			6,487,421
Less promotional allowances	1,109,515			982,709
Net revenues	5,910,223			5,504,712
Operating Expenses
Casino	2,178,978			1,899,525
Food and beverage	1,333,027			1,190,129
Hotel	43,109			33,627
Other	10,693			9,973
Acquisition costs	49,385			—
Selling, general and administrative	1,702,543			1,516,768
Depreciation and amortization	462,903			393,146
Loss on disposal of assets	8,761			4,650
Total operating expenses	5,789,399			5,047,818
Income from Operations	120,824			456,894
Nonoperating Income (Expense)
Interest income	3,724			3,864
Interest expense	(32,819		)	(37,448		)
Other expense	(4,019		)	—
Total nonoperating income (expense)	(33,114		)	(33,584		)
Net earnings	$	87,710		$	423,310

See notes to consolidated financial statements.

3

Pioneer Group, Inc. and Subsidiary

Consolidated Statements of Shareholders' Equity (Unaudited)

	Common Stock			Retained			Treasury Stock
	Shares	Amount		Earnings			Shares	Amount			Total
Balance as of January 1, 2016	1,000	$	1,260,579	$	16,883,193		194	$	(2,849,008	)	$	15,294,764
Net earnings	—	—		87,710			—	—			87,710
Distributions to shareholders	—	—		(100,001		)	—	—			(100,001		)
Balance as of March 31, 2016	1,000	$	1,260,579	$	16,870,902		194	$	(2,849,008	)	$	15,282,473

See notes to consolidated financial statements.

4

Pioneer Group, Inc. and Subsidiary

Consolidated Statements of Cash Flows (Unaudited)

	Three months ended March 31,
	2016			2015
Operating Activities
Net earnings	$	87,710		$	423,310
Items not providing (requiring) cash
Net loss on disposal of assets	8,761			4,650
Depreciation and amortization	462,903			393,146
Changes in
Receivables	37,175			70,930
Prepaids and other assets	(196,021		)	(648,114		)
Inventories	11,124			20,918
Accounts payable	481,914			428,193
Accrued liabilities	(269,524		)	197,116
Net cash provided by operating activities	624,042			890,149
Investing Activities
Acquisition of property and equipment	(49,439		)	(55,818		)
Net change in equity method investment	(981		)	—
Net cash used in investing activities	(50,420		)	(55,818		)
Financing Activities
Distributions paid to shareholders	(100,001		)	(350,001		)
Principal payments on long-term debt	(320,711		)	(415,662		)
Proceeds from long-term debt	—			300,000
Net cash used in financing activities	(420,712		)	(465,663		)
Net Increase in Cash and Cash Equivalents	152,910			368,668
Cash and Cash Equivalents, Beginning of Year	2,906,770			3,109,435
Cash and Cash Equivalents, End of Year	$	3,059,680		$	3,478,103
Supplemental Cash Flows Information
Cash paid for interest	$	32,819		$	37,448
Additions to fixed assets through increase to accounts payable	$	5,750		$	—

See notes to consolidated financial statements.

5

Pioneer Group, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

Note 1:    Organization and Summary of Significant Accounting Policies

Organization

Pioneer Group, Inc. operates three casinos located in Cripple Creek, Colorado. Pioneer Group, Inc. is organized under the laws of the State of Nevada. The casino and restaurant operating under the name of Bronco Billy's Casino (Bronco Billy's) began operations during October 1991. In July 1998, a second casino separately licensed as Buffalo Billy's Casino (Buffalo Billy's) began operations. That same year, Buffalo Billy's opened its steakhouse. In April 2008, a third casino separately licensed under the name Billy's Casino (Billy's) began operations, with its restaurant beginning operations in May 2008.

Pioneer Group, Inc. purchased 100% of Elk Grove Village, LLC during 2003, from three shareholders of Pioneer Group, Inc. Elk Grove Village, LLC was formed under the laws of the State of Colorado and operates under a limited liability company agreement. Elk Grove Village, LLC was acquired for the purpose of improving, developing, selling and otherwise using land in Woodland Park, Colorado. Elk Grove Village, LLC was to initially construct 34 townhomes on the land. As of March 31, 2016, 12 of the 34 townhomes have been constructed, of which all 12 have been sold. Unless dissolved earlier, the term of Elk Grove Village, LLC is 50 years, or until February 12, 2051.

Cripple Creek is one of three cities in the State of Colorado permitted to have limited stakes gaming. Limited stakes gaming is defined in Colorado as the use of slot, keno and video poker machines, craps, roulette and the card games blackjack and poker, each with a maximum single bet up to one hundred dollars. Casinos in Cripple Creek draw patrons primarily from the Colorado Springs and Pueblo, Colorado areas and, to a lesser extent, from the greater Denver, Colorado metropolitan area. Cripple Creek is a mountain tourist town and its gaming market is subject to seasonal fluctuations. Typically, Pioneer Group, Inc.'s gaming revenues are greater in the summer tourist season and are lower from October through April. As all of Pioneer Group, Inc.'s casino operations are located in Cripple Creek, the casinos are exposed to conditions that are specific to Colorado and the Cripple Creek market. These conditions include complications caused by weather.

Casino operations are subject to extensive regulation in the State of Colorado by the Colorado Limited Gaming Control Commission. Management believes that Pioneer Group, Inc.'s procedures for supervising casino operations and recording casino and other revenues comply, in all material respects, with the applicable regulations in Colorado.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Pioneer Group, Inc. and Elk Grove Village, LLC (collectively, the Company). All significant intercompany transactions and balances have been eliminated.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. At March 31, 2016, cash and cash equivalents consisted

6

Pioneer Group, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

primarily of cash on hand and demand deposits subject to immediate withdrawal. The Company is required by Colorado Gaming Regulations to maintain cash and cash equivalents in an amount sufficient to protect the Company's patrons against defaults in gaming debts owed by the Company.

At March 31, 2016, the Company's cash accounts at financial institutions exceeded federally insured limits by approximately $405,000.

Other Receivables

Other receivables consist primarily of returned checks and amounts contained in redemption kiosks within the facility. If necessary, the Company provides an allowance for doubtful accounts, which is based on a review of outstanding receivables, historical collection information and existing economic conditions. Accounts past due more than 120 days are considered delinquent. Delinquent receivables are written off based on individual credit evaluation and specific circumstances of the customer.

Property and Equipment

Property and equipment are recorded at cost and are being depreciated and amortized on the straight-line method over their estimated useful lives. Leased property under capital leases is amortized over the shorter of the lives of the respective leases or over the service lives of the assets for those leases which substantially transfer ownership. Interest incurred on debt outstanding related to expansion and during the construction period has been capitalized. Capitalized interest is included in building and improvements.

The estimated useful lives are as follows:

	Years
Leased property and equipment	5 - 30
Furniture and equipment	5
Buildings and improvements	30 - 40

Real Estate Inventories

Real estate inventories recorded by Elk Grove Village, LLC include five undeveloped real estate lots that are carried at the lower of cost or market. The Company reviews this inventory for possible impairment on an annual basis. No impairment losses were recognized in the periods January 1, 2016 to March 31, 2016 and January 1, 2015 to March 31, 2015.

Deferred Loan Costs

Costs incurred in conjunction with the issuance of long-term debt are being amortized over the respective lives of the issues on a straight-line basis.

7

Pioneer Group, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

Impairment of Long-lived Assets

The Company reviews long-lived assets for possible impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. If there is an indication of impairment, which is estimated as the difference between anticipated undiscounted future cash flows and carrying value, the carrying amount of the asset is written down to its estimated fair value by a charge to operations. Fair value is estimated based on the present value of estimated future cash flows using a discount rate commensurate with the risk involved. Estimates of future cash flows are inherently subjective and are based on management's best assessment of expected future conditions.

Slot Club Liability

The Company has a slot club for its preferred players. To earn "points," slot club members insert a special card into slot, keno and video poker machines while playing in Bronco Billy's, Buffalo Billy's and Billy's casinos. Based on their point totals, members may receive cash. The Company accrues the cost of cash points as such points are earned by members of the slot club and expenses the complementary points as they are redeemed. The slot club liability of $378,561 as of March 31, 2016 and $375,542 as of December 31, 2015, is included in other accrued liabilities on the balance sheets.

Outstanding Gaming Chip Liability

When customers exchange cash for gaming chips, the Company has a liability for the face amount of the chips as long as they are outstanding and not redeemed or won by the house. That liability is established by determining the difference between the total chips placed in service and the actual inventory of chips in custody or under the control of the casino. The outstanding gaming chip liability of $122,835 as of March 31, 2016 and December 31, 2015, is included in other accrued liabilities on the balance sheets.

Tokens and Chips

The cost of tokens and chips used in casino play are expensed as incurred.

Casino Revenue Recognition

Casino revenue is the net win from gaming activities, which is the difference between gaming wins and losses.

Promotional Allowances

Food and beverage revenues include the retail value of complimentary food and beverage provided gratuitously to patrons. The retail value of the promotional allowances is deducted to arrive at net revenues. Promotional allowances also include the value of coupons redeemed and the value of complimentary services and/or cash rebates to customers based on the volume of the customers' gaming activity.

8

Pioneer Group, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

Income Taxes

The Company's shareholders have elected to have the Company's income taxed as an "S" Corporation under provisions of the Internal Revenue Code and a similar section of the Nevada income tax law. Therefore, taxable income or loss is reported to the individual shareholders for inclusion in their respective tax returns and no provision for federal and state income taxes is included in these statements. Elk Grove Village, LLC's net earnings or losses are taxed at the member level and Pioneer Group, Inc. was the sole member of Elk Grove Village, LLC. With a few exceptions, the Company is no longer subject to U.S. federal, state and local or non-U.S. income tax examinations by tax authorities for calendar years before 2011.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Note 2: Inventories

The Company records casino food, beverage and merchandise inventories at the lower of cost or market using the first-in, first-out method. The components of casino inventories are as follows:

	March 31, 2016		December 31, 2015
Food and beverage	$	103,769	$	112,599
Merchandise and other	30,081		32,375
	$	133,850	$	144,974

9

Pioneer Group, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

Real estate inventories consist of the following:

	March 31, 2016		December 31, 2015
Land	$	93,326	$	93,326
Land improvements	56,674		56,674
	$	150,000	$	150,000

Note 3: Long-term Debt

Long-term debt consists of the following as of March 31, 2016:

	March 31, 2016			December 31, 2015
Nevada State Bank note (A)	$	3,760,000		$	4,075,000
Note payable (B)	130,720			136,431
	3,890,720			4,211,431
Less: Current portion	(1,252,207		)	(1,252,917		)
	$	2,638,513		$	2,958,514

(A) A reducing revolving note held by a bank with a maximum commitment of $5,000,000 as of March 31, 2016. The commitment is reduced by $625,000 semi-annually. Principal payments are required to reduce the outstanding principal balance to be consistent with the reduction in maximum commitment. In addition, monthly interest-only payments are required. The interest rate was set at 7.376% until July 1, 2012. On July 1, 2012, per the terms of the agreement, the rate was adjusted to 2.823% which was 1.90% in excess of the LIBOR/Swap rate on July 1, 2012. That rate is fixed until July 1, 2017, at which time it will be adjusted to a rate of 1.90% in excess of the lender's five-year LIBOR/Swap rate index, as defined in the agreement. As of March 31, 2016 and December 31, 2015, the note contained no prepayment penalties. All outstanding principal and accrued interest is due July 1, 2019; the debt is collateralized by the Company's assets and deeds of trust and is personally guaranteed by certain shareholders.

The note contains various covenants related to the parties of the agreements, including a maximum funded debt to EBITDA ratio of no greater than 3.50 to 1.00, annual capital expenditures of no less than 2% and no more than 8% of the Company's net revenues for the immediately prior year and a fixed charge coverage ratio of at least 1.10 to 1.00. Management believes the Company was in compliance with all financial covenants as of March 31, 2016.

Subsequent to March 31, 2016, this note was paid in full in conjunction with the sale transaction. See Note 9.

(B) Due February 15, 2037; payable $1,031 monthly; including interest at 7.00%; secured by real property. Subsequent to March 31, 2016, this note was paid in full.

10

Pioneer Group, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

Maturities of long-term debt as of March 31, 2016 are as follows:

Period April 1, 2016 to March 31, 2017	$	1,252,207
Period April 1, 2017 to March 31, 2018	1,253,128
Period April 1, 2018 to March 31, 2019	1,253,354
Period April 1, 2019 to March 31, 2020	13,596
Period April 1, 2020 to March 31, 2021	3,856
Thereafter	114,579
	$	3,890,720

Note 4: Operating Leases

The Company leases a building, parking lots and equipment under short- and long-term operating leases expiring at various dates through January 2019. The building lease contains renewal options for periods up to 18 years and requires the Company to pay all executory costs (property taxes, maintenance and insurance).

Future minimum lease payments at March 31, 2016 are as follows:

Period April 1, 2016 to March 31, 2017	$	217,058
Period April 1, 2017 to March 31, 2018	33,558
Period April 1, 2018 to March 31, 2019	18,558
Total minimum lease payments	$	269,174

Rent expense under the operating leases totaled $34,931 and $36,736 for the periods January 1, 2016 to March 31, 2016 and January 1, 2015 to March 31, 2015, respectively.

Note 5: Significant Estimates and Concentrations

Cash and Cash Equivalents

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents; however, the Company places its cash and cash equivalents with high credit quality institutions, primarily with banks located in the State of Colorado, to limit its credit exposure. The State of Colorado does not permit the extension of credit for gaming purposes.

11

Pioneer Group, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

Note 6: Pension Plan

The Company participates in a defined contribution 401(k) retirement plan (the Plan). Employees who are eligible for the Plan must have completed one year of service (1,000 hours). Participants may contribute a maximum of 100% of their annual wages to the Plan, subject to IRS limits. The Company may make discretionary contributions to the Plan. For the periods January 1, 2016 to March 31, 2016 and January 1, 2015 to March 31, 2015, the Company made discretionary contributions to the Plan of $5,149 and $8,587, respectively.

Note 7: Related-party Transactions

For the periods January 1, 2016 to March 31, 2016 and January 1, 2015 to March 31, 2015, total billings for management fees were $45,000. Management fees are paid to certain shareholders of the Company.

As of March 31, 2016 and December 31, 2015, the Company has a note receivable from a shareholder for $30,000 for a term of 18 months. Interest is payable monthly at 10% per annum, while the full principal amount is due June 2016.

Accounts payable to employees was $32,684 as of March 31, 2016 and $7,003 as of December 31, 2015.

Note 8: Commitments and Contingencies

General Litigation

The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated balance sheets, statements of earnings and cash flows of the Company.

Medical Plan

The Company participates in a self-funded medical plan administered by Pioneer Group, Inc. It pays all medical claims up to $80,000, per employee for each fiscal year. Stop- loss coverage has been purchased, which covers medical claims in excess of $80,000 per employee, and which limits the plan's aggregate self-insurance exposure to the amount of $1,039,288, or 100% of the Monthly Aggregate Attachment Point for the first month of the policy period times 12, whichever is greater, for each policy year.

All claims are processed by a third-party administrator (Meritain). The estimated liability for outstanding claims of approximately $205,000 as of March 31, 2016 and December 31, 2015, is reported on the consolidated balance sheets in accrued wages and benefits.

12

Pioneer Group, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

Legislation

There can be no assurances that any gaming initiatives will not be proposed in the future and, if passed, will not have a material adverse impact on the Company's financial position, results of operations or cash flows.

Note 9: Subsequent Events

On May 13, 2016, the Company sold substantially all of the assets and transferred substantially all of the liabilities related to its casino and hotel operations to Full House Resorts, Inc. Upon closing of the sale, the Company paid its note to Nevada State Bank in full.

13

EX-99.3

Exhibit 99.3

Unaudited Pro Forma Condensed Combined Financial Information 

Full House Resorts, Inc. (the "Company"), through its wholly-owned subsidiary FHR-Colorado, LLC, acquired Bronco Billy's Hotel and Casino ("Bronco Billy's") from Pioneer Group, Inc. for approximately $31.1 million on May 13, 2016. The acquisition was financed primarily through a $35 million increase in our term loan facilities.

The following unaudited pro forma condensed combined financial information, including the unaudited pro forma condensed combined balance sheet and unaudited pro forma condensed combined statements of operations as of and for the three months ended March 31, 2016, and for the year ended December 31, 2015, were derived by adjusting the historical financial statements of the Company to give effect to the acquisition of Bronco Billy's and the related financing transactions.  The adjustments are based on currently available information and, therefore, the actual adjustments may differ from the pro forma adjustments. The unaudited pro forma condensed combined balance sheets are presented as if the transaction had occurred on March 31, 2016, and the unaudited pro forma condensed combined statements of operations are presented as if the transaction had occurred on January 1, 2015. 

The unaudited pro forma financial information has been prepared by our management and the assumptions and estimates underlying the unaudited adjustments are described in the accompanying notes. They should be read together with the Company's historical consolidated financial statements, which are included in the Full House Resorts, Inc. 2015 Annual Report on Form 10-K filed on March 30, 2016, the latest quarterly report on Form 10-Q filed on May 5, 2016, and Pioneer Group, Inc. and Subsidiary's historical information included herein. 

FULL HOUSE RESORTS, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of March 31, 2016
(In thousands)
	Historical
	Full House Resorts, Inc.		Pioneer Group, Inc. & Subsidiary		Pro Forma Adjustments			Notes	Pro Forma Combined
ASSETS
Current assets
Cash and equivalents	$	13,115	$	3,060	$	3,615		(a)	$	19,790
Restricted cash	569		—		—				569
Accounts receivable, net	1,271		384		(153		)	(b)	1,502
Prepaids, inventories and other	4,246		561		(305		)	(b)	4,502
Acquisition deposit	2,500		—		(2,500		)	(b)	—
	21,701		4,005		657				26,363
Property and equipment, net	97,401		18,176		(1,982		)	(c)	113,595
Other long-term assets
Goodwill	16,480		—		4,649			(e)	21,129
Intangible assets, net	2,202		—		9,300			(d)	11,502
Deposits and other	639		273		(273		)	(j)	528
					(111		)	(p)
	19,321		273		13,565				33,159
Total assets	$	138,423	$	22,454	$	12,240			$	173,117
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	3,910	$	1,311	$	(1,011	)	(b)	$	4,210
Accrued payroll and other	6,837		1,970		(265		)	(b)	8,542
Deferred tax	985		—		—				985
Current portion of long-term debt	4,500		1,252		(1,252		)	(f)	2,250
					(2,250		)	(f)
Current portion of capital lease obligation	346		—		—				346
Total current liabilities	16,578		4,533		(4,778		)		16,333
Warrant liability	—		—		574			(g)	574
Long-term debt, net of current portion	59,476		2,638		30,449			(f)	94,677
					2,250			(f)
					(136		)	(i)
Capital lease obligation, net of current portion	5,673		—		—				5,673
Deferred tax	446		—		—				446
Total long-term liabilities	82,173		7,171		28,359				117,703

FULL HOUSE RESORTS, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of March 31, 2016
(In thousands)
(Continued)
	Historical
	Full House Resorts, Inc.			Pioneer Group, Inc. & Subsidiary			Pro Forma Adjustments			Notes	Pro Forma Combined
Commitments and contingencies
Stockholders’ equity
Common stock	2			1,261			(1,261		)	(k)	2
Additional paid-in capital	46,278			—			—				46,278
Treasury stock	(1,654		)	(2,849		)	2,849			(k)	(1,654		)
Retained earnings	11,624			16,871			(17,707		)	(k)	10,788
Total stockholders' equity	56,250			15,283			(16,119		)		55,414
Total liabilities and stockholders' equity	$	138,423		$	22,454		$	12,240			$	173,117

See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information.

FULL HOUSE RESORTS, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
For the three months ended March 31, 2016
(In thousands, except per share data)
	Historical
	Full House Resorts, Inc.			Pioneer Group, Inc. & Subsidiary			Pro Forma Adjustments			Notes	Pro Forma Combined
Revenues
Casino	$	29,130		$	5,796		$	—			$	34,926
Food and beverage	6,229			1,052			—				7,281
Hotel	1,965			105			—				2,070
Other operations	739			67			—				806
Gross Revenues	38,063			7,020			—				45,083
Less: Promotional allowances	(6,056		)	(1,110		)	—				(7,166		)
Net Revenues	32,007			5,910			—				37,917
Operating Costs and Expenses
Casino	14,685			2,179			—				16,864
Food and beverage	1,966			1,333			—				3,299
Hotel	202			43			—				245
Other operations	303			11			—				314
Selling, general and administrative	11,340			1,702			(45		)	(l)	12,997
Project development, acquisition costs and other	287			58			(110		)	(n)	235
Depreciation and amortization	1,693			463			(28		)	(c)	2,128
	30,476			5,789			(183		)		36,082
Operating Income	1,531			121			183				1,835
Other (Expense) Income, Net
Interest expense, net of capitalized interest	(1,762		)	(33		)	(1,595		)	(h)	(3,390		)
Other	—			—			4			(j)	4
	(1,762		)	(33		)	(1,591		)		(3,386		)
Income (Loss) Before Income Taxes	(231		)	88			(1,408		)		(1,551		)
Income tax expense	99			—			87			(m)	186
Net Income (Loss)	$	(330	)	$	88		$	(1,495	)		$	(1,737	)
Basic and diluted loss per share	$	(0.02	)	n/a			n/a				$	(0.09	)
Basic and diluted weighted average number of common shares outstanding	18,969			n/a			n/a				18,969

See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information.

FULL HOUSE RESORTS, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
For the year ended December 31, 2015
(In thousands, except per share data)
	Historical
	Full House Resorts, Inc.			Pioneer Group, Inc. & Subsidiary			Pro Forma Adjustments			Notes	Pro Forma Combined
Revenues
Casino	$	111,920		$	27,704		$	(3,821	)	(o)	$	135,803
Food and beverage	25,222			2,194			2,271			(o)	29,687
Hotel	6,675			381			32			(o)	7,088
Other operations	3,811			349			24			(o)	4,184
Gross Revenues	147,628			30,628			(1,494		)		176,762
Less: Promotional allowances	(23,040		)	(8,240		)	3,642			(o)	(27,638		)
Net Revenues	124,588			22,388			2,148				149,124
Operating Costs and Expenses
Operating departments	—			12,075			(12,075		)	(o)	—
Casino	57,157			—			7,813			(o)	64,970
Food and beverage	8,992			—			5,199			(o)	14,191
Hotel	1,243			—			205			(o)	1,448
Other operations	1,325			21			23			(o)	1,369
Project development, acquisition costs and other	894			12			355			(o)	465
							(796		)	(n)
Selling, general and administrative	42,040			5,967			619			(o)	48,446
							(180		)	(l)
Depreciation and amortization	7,893			1,854			(115		)	(c)	9,632
	119,544			19,929			1,048				140,521
Operating Income	5,044			2,459			1,100				8,603
Other expense, net
Interest expense, net of capitalized interest	(6,715		)	(140		)	(5,459		)	(h)	(12,331		)
							(17		)	(o)
Other	12			2			14			(j), (o)	28
	(6,703		)	(138		)	(5,462		)		(12,303		)
Income (Loss) Before Income Taxes	(1,659		)	2,321			(4,362		)		(3,700		)
Income tax (benefit) expense	(342		)	—			348			(m)	6
Net Income (Loss)	$	(1,317	)	$	2,321		$	(4,710	)		$	(3,706	)
Basic and diluted loss per share	$	(0.07	)	n/a			n/a				$	(0.20	)
Basic and diluted weighted average number of common shares outstanding	18,938			n/a			n/a				18,938

See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information.

FULL HOUSE RESORTS, INC.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

1.BASIS OF PRESENTATION

The historical financial statements have been adjusted to give pro forma effect to events that are (i) directly attributable to the business combination, (ii) factually supportable, and (iii) with respect to the unaudited pro forma condensed combined statements of operations, expected to have a continuing impact on the combined results following the business combination.

The business combination was accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. As the acquirer for accounting purposes, the Company has preliminarily estimated the fair value and useful lives of the acquired assets and assumed liabilities of Bronco Billy's, and conformed the accounting policies of Bronco Billy's to its own accounting policies.

The pro forma condensed combined financial statements do not necessarily reflect what the combined company's financial condition or results of operations would have been had the acquisition occurred on the dates indicated. They also may not be useful in predicting the future financial condition and results of operations of the combined company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

The combined pro forma financial information does not reflect the realization of any expected cost savings or other synergies from the acquisition of Bronco Billy's.

2.DESCRIPTION OF ACQUISITION & FINANCING

On May 13, 2016, we completed our acquisition of Bronco Billy's Casino and Hotel in Cripple Creek, Colorado from Pioneer Group, Inc. for approximately $31.1 million, inclusive of an estimated -$1.6 million working capital adjustment and property cash of $2.7 million (the "Acquisition"). The Acquisition was financed primarily through a $35 million increase in our Second Lien Credit Facility and included substantially all of the assets of Pioneer Group, Inc., which included the three licensed operations known as Bronco Billy's Casino, Buffalo Billy's Casino and Billy's Casino.

Concurrent with the Acquisition, we executed an amended and restated First Lien Credit Facility ("Amended and Restated First Lien Credit Facility") with Capital One Bank, N.A., ("Capital One"), which includes a First Term Loan of $45 million and Revolving Loan of $2 million, a maturity date of May 2019, and an interest rate based on the greater of LIBOR or 1.0%, plus a margin rate of 3.75%. The margin rate of 3.75% shall be increased by 50 basis points if the Company does not refinance the Amended and Restated First Lien Credit Facility by May 13, 2017. Additionally, the margin rate shall be increased by 50 basis points if the Company does not raise at least $5 million of gross equity proceeds by May 13, 2017. Concurrent with the Acquisition, we also executed an amended and restated Second Lien Credit Facility ("Amended and Restated Second Lien Credit Facility") with ABC Funding, LLC, which includes a term loan facility increase from $20 million to $55 million; a maturity date of either November 2022 or six months after the maturity of the Amended and Restated First Lien Credit Facility, whichever occurs earlier; and an interest rate between 12.5% and 13.5%, depending on the total leverage of the Company.

As part of the Amended and Restated Second Lien Credit Facility, the Company granted the second lien lenders warrants representing 5% of the outstanding common equity of the Company, as determined on a fully-diluted basis. The warrants include an exercise price of $1.67, have an expiration date of May 13, 2026 and provide the second lien lenders with certain rights as defined, including registration rights and put rights.

3. PRELIMINARY PURCHASE PRICE ALLOCATION

We are required to allocate the purchase price to acquired tangible assets, identifiable intangible assets, and assumed liabilities based on their fair values. Management has not yet finalized its valuation analysis, and therefore the allocation of the purchase price is still preliminary and subject to change.

The following table reflects the preliminary allocation of the purchase price to the acquired tangible assets, identifiable intangible assets, and assumed liabilities, with the excess recorded as goodwill.

As of May 13, 2016
(In thousands, unaudited)
Cash and equivalents	$	2,682
Other current assets	256
Property and equipment	16,194
Identifiable intangible assets	9,300
Goodwill	4,649
Total assets	33,081
Current liabilities	2,005
Total liabilities	2,005
Net assets acquired	$	31,076

4. NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

(a) Reflects excess funds that were deposited at closing. Such amount represents the difference between the $35 million of proceeds from the additional debt financing, as discussed in Note 2, and the remaining costs to acquire Bronco Billy's. The excess funds are also net of $0.6 million of acquisition and financing-related costs paid at closing or thereafter.

(b) Reflects working capital adjustments based on the preliminary purchase price allocation as of the acquisition date, as shown in Note 3, and the application of the acquisition deposit to the purchase price.

(c) Reflects a $2.0 million adjustment to decrease the basis in the acquired property, plant and equipment to an estimated fair value of $16.2 million. The estimated useful lives range from 2 years to 39 years. The estimated reduction of depreciation expense was $115,000 for the year ended December 31, 2015, and $28,000 for the three months ended March 31, 2016.

(d) Reflects the provisional adjustment of intangible assets acquired by the Company to their estimated fair values. As part of the preliminary valuation analysis, the Company identified intangible assets, including gaming licenses and trade names. The gaming licenses and trade names were determined to have estimated values of $7.5 million and $1.8 million, respectively. The estimated fair value of identifiable intangible assets is determined primarily using the "income approach", which requires a forecast of all future cash flows. Both the gaming licenses and trade names are estimated to have indefinite useful lives.

(e) Reflects a $4.6 million provisional adjustment to record estimated goodwill associated with the acquisition, as shown in Note 3.

(f) Reflects the Amended and Restated First and Second Lien Credit Facilities, which closed concurrent with the Acquisition. The Amended and Restated Second Lien Credit Facility was increased by $35 million to fund the Acquisition, as discussed in Note 2. The net increase in debt includes the following:

(In thousands, unaudited)
Issuance of additional term debt proceeds, net of debt issuance costs and discount for warrants	$	32,952
Decrease for Pioneer Group's debt not assumed in Acquisition	(3,755		)
Pro forma adjustments to debt, net	$	29,197

(g) Reflects the adjustment to record the warrant liability, as discussed in Note 2. The change in fair value of the warrants within the statements of operations included herein were not considered.

(h) Reflects the net increase in interest expense due to (i) additional interest on the Amended and Restated First and Second Lien Credit Facilities that were executed to finance the Acquisition, and (ii) the amortization of debt issuance costs and discount.

(In thousands, unaudited)
	Year Ended December 31, 2015			Three months ended March 31, 2016
Elimination of interest expense of Pioneer Group, Inc. debt	$	157		$	34
Estimated interest expense on new debt*	(4,725		)	(1,407		)
Amortization of new debt issuance costs and discount	(891		)	(222		)
Pro forma adjustments to interest expense, net	$	(5,459	)	$	(1,595	)

* Includes additional interest related to the $35 million of additional second lien debt using an estimated interest rate of 13.5% for both periods presented. For the first lien debt, we used an estimated interest rate of 4.75% and 5.25% for the periods ended December 31, 2015 and March 31, 2016, respectively.

(i) Reflects the Company's repayment at closing of assumed debt as part of the Acquisition.

(j) Reflects the elimination of items which were not purchased or assumed in the Acquisition.

(k) Reflects the elimination of the historical equity of Pioneer Group, Inc., and $0.8 million of non-recurring transaction and third-party loan modification expenses not reflected in the historical income statements presented herein.

(l) Reflects the elimination of consulting fees which were incurred under the prior ownership and will not continue.

(m) Reflects the adjustment to income tax expense based on the estimated federal rate of 34% and the Colorado state income tax rate of 5%. The tax calculations also include state income tax expense for other states included within the Company's consolidated operations.

(n) Reflects the elimination of non-recurring transaction expenses incurred of $0.8 million for the year ended December 31, 2015, and $0.1 million for the quarter ended March 31, 2016.

(o) Represents reclassification adjustments to conform to Full House Resorts Inc.'s presentation.

(p) Reflects the expensing of non-recurring third-party loan modification expenses.