WINDSOR WOODMONT BLACK HAWK RESORT CORP - 10-Q Quarterly Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2002

or

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

For the transition period from

Commission File Number: 0-31737

WINDSOR WOODMONT BLACK HAWK RESORT CORP.
(Exact name of registrant as specified in its charter)

Colorado 75-2740870
(State of incorporation) (I.R.S. Employer Identification No.)

111 Richman St., Black Hawk, Colorado 80422
(Address of principal executive offices) (Zip Code)

(303)582-3600
(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 such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

[X] Yes [ ] No

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

WINDSOR WOODMONT BLACK HAWK RESORT CORP.
FORM 10-Q
INDEX

Part I -- FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets, September 30, 2002 (unaudited) and December 31, 2001 2

Condensed Consolidated Statements of Operations for the three months and nine months ended
September 30, 2002 and 2001 (unaudited) 3

Condensed Consolidated Statement of Comprehensive Loss for the three months and nine months
Ended September 30, 2002 and 2001 (unaudited) 4

Condensed Consolidated Statements of Redeemable Preferred Stock and Stockholders'
Equity for the period from December 31, 1998 through September 30, 2002 (unaudited) 5

Condensed Consolidated Statements of Cash Flows for the three months and nine months ended
September 30, 2002 and 2001 (unaudited) 6

Notes to Consolidated Financial Statements 7 - 10

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 - 13

Part II - OTHER INFORMATION

Item 1. Legal Proceedings 14 - 15

Item 2. Changes in Securities and Use of Proceeds 15

Item 3. Defaults Upon Senior Securities 15

Item 4. Submission of Matters to a Vote of Security Holders 15

Item 5. Other Information 15

Item 6. Exhibits and Reports on Form 8-K 15 - 16

WINDSOR WOODMONT BLACK HAWK RESORT CORP.
CONSOLIDATED BALANCE SHEETS

SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2

WINDSOR WOODMONT BLACK HAWK RESORT CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS

SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3

WINDSOR WOODMONT BLACK HAWK RESORT CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4

WINDSOR WOODMONT BLACK HAWK RESORT CORP.
CONSOLIDATED STATEMENTS OF REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY

SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

5

WINDSOR WOODMONT BLACK HAWK RESORT CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS

SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

6

WINDSOR WOODMONT BLACK HAWK RESORT CORP.

NOTES TO FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION AND ORGANIZATION

Windsor Woodmont Black Hawk Resort Corp., a Colorado corporation (the
"Company") was incorporated on January 9, 1998. Windsor Woodmont, LLC (the
"LLC") was formed as a limited liability company, under the laws of the state of
Colorado, on July 17, 1997. These companies were formed for the purpose of
developing an integrated limited stakes gaming casino, entertainment and parking
facility in Black Hawk, Colorado (the "Project"), which opened December 20,
2001. Prior to December 20, 2001, the Company and the LLC were development stage
enterprises.

The Company was a wholly owned shell company subsidiary of the LLC with
no significant assets, liabilities or operating activity. In connection with the
financing transactions in 2000 described in Note 2, the LLC contributed all of
its assets and liabilities to the Company in exchange for stock of the Company
and the contribution has been accounted for as a recapitalization of entities
under common control whereby the assets and liabilities are recorded at the
historical cost basis of the LLC. The Company has substantially completed the
Project, and is currently operating the Project, which is managed by Hyatt
Gaming Management, Inc. ("Hyatt Gaming"). The LLC's ownership in the Company was
subsequently reduced through the refinancing of the LLC's debt by conversion
into the Company's common stock and the issuance of additional common stock for
cash.

The financial information at September 30, 2002, and for the three
months and nine months ended September 30, 2002 and 2001 is unaudited. The
financial statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. The Company is
currently without an independent auditor and this Form 10-Q has not been
reviewed by an independent audit firm as required by Rule 10-01(d) of Regulation
S-X. In the opinion of management, all adjustments, consisting of normal
recurring adjustments, considered necessary for a fair presentation have been
included. The results of operations for the three months and nine months ended
September 30, 2002 are not necessarily indicative of the results that will be
achieved for the entire year.

These financial statements should be read in conjunction with the
Annual Report on Form 10-KSB for the fiscal year ended December 31, 2001.

Certain reclassifications have been made to the 2001 financial
statements to conform to the 2002 presentation which have no effect on
previously reported net income.

2. GOING CONCERN CONSIDERATIONS

On September 13, 2002, the Company reported that it was invoking its
right to delay the interest payments due on September 15, 2002 under its $100
million principal amount 13% First Mortgage Notes due 2005 (the "Notes") and its
$7.5 million principal amount 15.5% Second Mortgage Notes due 2010 (the "Second
Mortgage Notes"), pursuant to the applicable agreements between the Company and
its debt holders.

On October 15, 2002, the Company failed to make the interest payments
initially due on September 15, 2002, that it had elected to defer until October
15, 2002 on the Notes and the Second Mortgage Notes. The Company's failure to
pay the interest on the Notes and the Second Mortgage Notes constituted an
"Event of Default" under the applicable agreements.

On October 23, 2002, the Company received notice from SunTrust Bank,
Trustee for a majority in principal amount of the currently outstanding Notes,
that the Notes were due and payable immediately. Pursuant to the terms of the
indenture, the Trustee may pursue any and all remedies available to collect the
full amount of principal, interest and premium, if any, due on the Notes.

On November 7, 2002, (the "Filing Date"), the Company filed a voluntary
petition for relief under Chapter 11 of the United States Bankruptcy Code
("Bankruptcy Code"), in the United States Bankruptcy Court for the District of
Colorado ("Bankruptcy Court" or "Court")(Case No .02-28089ABC, the "Case"). On
November 1, 2002, SunTrust Bank, as Trustee for the registered holders of the
Company's 13% First Mortgage Notes and 13% Series B First Mortgage Notes under
an indenture dated March 14, 2000 obtained a court order for the appointment of
a receiver ("Receiver"). From November 1,

7

WINDSOR WOODMONT BLACK HAWK RESORT CORP.

NOTES TO FINANCIAL STATEMENTS

2002 until the Filing Date, the Company's business had been operated by the
Receiver. However, following the filing of the bankruptcy petition, the
Receiver's authority to operate the business was automatically stayed and the
Company is operating the business under the jurisdiction of the Bankruptcy Court
and in accordance with the applicable provisions of the Bankruptcy Code.

The Company intends to utilize the Chapter 11 process to reorganize
its financial and operational affairs with the goal of preserving and enhancing
the assets of the Company for the benefit of creditors and shareholders. The
Company expects the business to operate as usual, our valued employees to be
retained, and for our post-bankruptcy obligations to be satisfied.

One of the primary reasons for filing under the Code was the Company's
inability to generate sufficient operating profits to enable it to meet its debt
obligations as they became due. The outstanding principal of, and accrued
interest on, all long-term debt of the Company became immediately due and
payable as a result of the commencement of the Case. However, the vast majority
of the claims in existence at the Filing Date are stayed (deferred) while the
Company continues to manage the business.

Generally, pre-Filing Date claims against the Company will fall into
two categories: secured and unsecured, including certain contingent or
unliquidated claims. Under the Code, a creditor's claim is treated as secured
only to the extent of the value of the collateral securing such claim, with the
balance of such claim being treated as unsecured. Unsecured and partially
secured claims do not accrue interest after the Filing Date. A fully secured
claim, however, does accrue interest after the Filing Date until the amount due
and owing to the secured creditor, including accrued interest after the Filing
Date, is equal to the value of the collateral securing such claim. The amount
and validity of pre-Filing Date contingent or unliquidated claims, although
presently unknown, ultimately may be established by the Court or by agreement of
the parties. As a result of the Case, additional pre-Filing Date claims and
liabilities may be asserted, some of which may be significant. No provision has
been included in the accompanying financial statements for such potential claims
and additional liabilities that may be filed on or before a date to be fixed by
the Court as the last day to file proofs of claims.

The Company is currently operating under the jurisdiction of Chapter 11
of the Code and the Court, and the continuation of the Company as a going
concern is contingent upon, among other things, its ability to restructure
successfully, including refinancing its debts, and the ability of the Company to
general sufficient cash to fund future operations. There can be no assurance in
this regard.

The Company's objective is to achieve the highest possible recoveries
for all creditors and shareholders, consistent with the Company's ability to pay
and to continue the operation of the Company's business. However, there can be
no assurance that the Company will be able to attain these objectives or to
achieve a successful reorganization. Further, there can be no assurance that the
liabilities of the Company will not be found to exceed the fair value of their
assets. This could result in claims being paid at less than 100% of their face
value and the equity of the Company's shareholders being diluted or cancelled.

Under the Code, the rights of, and ultimate payments to pre-Filing Date
creditors and shareholders may be substantially altered from their contractual
terms. At this time, it is not possible to predict the outcome of the Case, in
general, or the effect of the Case on the business of the Company or on the
interests of creditors and shareholders.

The Company anticipates that substantially all liabilities of the
Company as of the Filing Date will be resolved under one or more plans of
reorganizations to be proposed and voted on in the Case in accordance with the
provisions of the Code. Although the Company intends to file and seek
confirmation of such a plan or plans, there can be no assurance as to when the
Company will file such a plan or plans, or that such plan or plans will be
confirmed by the Court and consummated.

The accompanying financial statements have been prepared assuming the
Company will continue as a going concern basis, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business. However, as a result of the filing of the Case, such realization of
assets and liquidation of liabilities are subject to a significant number of
uncertainties.

8

WINDSOR WOODMONT BLACK HAWK RESORT CORP.

NOTES TO FINANCIAL STATEMENTS

3. NOTES PAYABLE
Notes payable consisted of the following at September 30, 2002 and December 31,
2001:

As described in Note 2 above, all of the Company's long-term debt became
immediately due and payable as a result of the commencement of the Case,
accordingly, long-term debt balances have been reclassified to current
maturities.

Substantially all of the Company's assets are pledged as collateral for
long-term debt.

4. WARRANTS ISSUED ON COMMON STOCK

Warrants issued in connection with the Company's various financing
transactions (see Note 3), contain a "put option" permitting the warrant holder
to redeem the warrant for cash. The value of the warrants were provided by the
Company's placement agent, U.S. Bancorp Libra. The warrants issued with the
first mortgage notes and second mortgage notes were valued at $1.64 million and
$160,000, respectively. The warrants issued with the Series B preferred stock
were valued at $1.37 million. The value of warrants issued to U.S. Bancorp Libra
was $383,000. Due to the cash based put option features of the warrants, the
total warrant value has been recorded as a liability in the accompanying
consolidated balance sheet and recorded at fair value each reporting period. As
of September 30, 2002 and December 31, 2001 a liability for the fair market
value of the warrants of $713,720 and $3,568,600, respectively, was recorded in
the accompanying consolidated balance sheet with the corresponding non-operating
income resulting from the reduction in fair market value at June 30, 2002 from
December 31, 2001 in the amount of $2,854,880 was recorded in the accompanying
consolidated statement of operations for the nine months ended September 30,
2002.

5. REORGANIZATION EXPENSES

Reorganization related expenses of $209,000 were incurred during the
three months and nine months ended September 30, 2002. Such costs include costs
incurred for legal, financial advisor services received in connection with our
debt restructuring efforts. Such costs also include travel related expenses and
other costs directly related to our debt restructuring efforts.

6. COMMITMENTS AND CONTINGENCIES

Gaming Regulation Licensing

The Company's ability to conduct gaming operations in the State of
Colorado is subject to the licensability and qualifications of the Company and
its common stockholders. The Company received the required gaming licenses on
September 20, 2001. Additionally, upon receipt of a gaming license, such
licensing and qualifications are reviewed periodically by the gaming authorities
in Colorado and there are no guarantees such licenses will be renewed. The
Company received the required gaming license renewals on September 26, 2002.

9

WINDSOR WOODMONT BLACK HAWK RESORT CORP.

NOTES TO FINANCIAL STATEMENTS

Management Agreement

On February 2, 2000, the Company entered into a management agreement
which was amended on March 14, 2000 (the "Management Agreement") with Hyatt
Gaming, which, in exchange for a fee, will manage the casino operations. The
management fee will be equal to a basic fee of 3% of the adjusted gross receipts
and an incentive fee equal to 5% of the earnings before interest, taxes,
depreciation and amortization for the appropriate fiscal year. The incentive fee
shall be paid only to the extent earnings before interest, taxes, depreciation
and amortization is positive and will be subordinated in payment to the notes
issued in the private placement. The Management Agreement can be terminated by
either party upon delivery of written notice if certain major gaming license
related events transpire.

Success Fee

The Company has agreed to pay Daniel P. Robinowitz, the Company's
former Chairman of the Board, President and Chief Executive Officer of the
Company, a "success fee" of up to $800,000. The success fee will be paid if
funds, as defined, are available. Accordingly, no costs have been accrued under
this agreement as of September 30, 2002.

Legal Proceedings

The Company is involved in certain legal proceedings, claims and
litigation, including those described below. The results of legal proceedings
cannot be predicted with certainty. For further information concerning legal
proceedings, please see Part II, Item 1. Legal Proceedings.

Environmental Issues

The Project is located in a 400-square mile area that has been
designated by the United States Environmental Protection Agency ("EPA") as the
Clear Creek/Central City National Priorities List Superfund Site under the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"),
as a result of hazardous substance contamination caused by historical mining
activity in Black Hawk. This is a broad national priorities list site, within
which the EPA has identified several priority areas of contamination from
historical mining activities, including draining mines and mine dumps, for
active investigation and/or remediation. To date, the EPA has not identified the
Project site as being within a priority area nor has it identified contamination
from the Project site to require remediation.

The Company has been informed that the Superfund Division of the
Colorado Department of Public Health and the Environment ("CDPHE"), working with
the EPA, has sampled surface water in or near North Clear Creek near where a
portion of the Project site called Silver Gulch discharges surface water into
North Clear Creek. The Company has been informed that based on the results of
those samples, the EPA and the Colorado Superfund Division have expressed
preliminary concern that soil and rock associated with historic mining
operations in Silver Gulch may be a source of contamination to North Clear
Creek. Subsequent to these initial concerns the Company placed an impervious cap
over mine tailings in Silver Gulch and continues to perform surface water
monitoring.

The Project site could be among properties suspected of being a source
of contamination. If investigation or remediation of the Project site were
required, the Company could incur substantial expense.

10

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

The following discussion should also be read in conjunction with the
Annual Report on Form 10-KSB for the fiscal year ended December 31, 2001.

FORWARD-LOOKING STATEMENTS

Certain of the information contained in this Form 10-Q should be
considered "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, that reflect the Company's current
views with respect to current events and financial performance. Such forward
looking statements are and will be, as the case may be, subject to many risks,
uncertainties and factors relating to the Company's operations and business
environment which may cause the actual results of the Company to be materially
different from any future results, express or implied, by such forward-looking
statements. Factors that could cause actual results to differ materially from
these forward-looking statements include, but are not limited to, the following:
the ability of the Company to continue as a going concern; the Company's ability
to obtain court approval with respect to motions in the Chapter 11 proceeding
prosecuted by it from time to time; the ability of the Company to develop,
prosecute, confirm and consummate a plan of reorganization with respect to the
Chapter 11 case; risks associated with third parties seeking and obtaining court
approval to terminate or shorten the exclusivity period for the Company to
propose and confirm a plan of reorganization, for the appointment of a Chapter
11 trustee or to convert the case to a Chapter 7 case; the ability of the
Company to obtain and maintain normal terms with vendors and service providers;
the Company's ability to maintain contracts that are critical to its operations;
the ability to terminate undesirable executory contracts and unexpired leases,
the potential adverse impact of the Chapter 11 cases on the Company's liquidity
or results of operations; the ability of the Company to fund and execute its
business plan; the ability of the Company to attract, motivate and/or retain key
executives and associates; and the ability of the Company to attract and retain
customers; demand for gaming in the market in which the Company operates;
economic conditions; labor costs; financing costs; security-related costs;
competitive pressures; weather conditions; government legislation and
regulation; and other risks and uncertainties listed from time to time in the
Company's reports to the United States Securities and Exchange Commission. Other
factors and assumptions not identified above are also involved in the
preparation of forward-looking statements, and the failure of such other factors
and assumptions to be realized may also cause actual results to differ
materially from those discussed. The Company assumes no obligation to update
such estimates to reflect actual results, changes in assumptions or changes in
other factors affecting such estimates other than as required by law.

Similarly, these and other factors, including the terms of any
reorganization plan ultimately confirmed, can affect the value of the Company's
various pre-petition liabilities, common stock and/or other equity securities.
No assurance can be given as to what values, if any, will be ascribed in the
bankruptcy proceedings to each of these constituencies. Accordingly, the Company
urges that the appropriate caution be exercised with respect to existing and
future investments in any of these liabilities and/or securities.

OVERVIEW

Management believes the Company's liquidity and capital resources will
be sufficient to maintain its normal operations at current levels and does not
anticipate any adverse impact on its operations, customers and employees.
However, costs previously incurred and which will be incurred in the future in
connection with restructuring the Company's debt obligations and bankruptcy
proceedings have been and will continue to be substantial and there can be no
assurance that the Company will be able to successfully restructure its
indebtedness or that its liquidity and capital resources will be sufficient to
maintain its normal operations during the restructuring period.

The Company is currently operating under the jurisdiction of Chapter 11
of the Code and the Court, and the continuation of the Company as a going
concern is contingent upon, among other things, its ability to restructure
successfully, including refinancing its debts, and the ability of the Company to
general sufficient cash to fund future operations. There can be no assurance in
this regard.

The following discussion should be read in conjunction with, and is
qualified in its entirety by, the condensed consolidated financial statements of
Windsor Woodmont Black Hawk Resort Corp., including the respective notes thereto
and other financial information included elsewhere in this report.

RESULTS OF OPERATIONS

Prior to the opening of the casino on December 20, 2001 we were in the
development stage. Prior to March 17, 2000 all costs were borne by Windsor
Woodmont, LLC, and such costs were reimbursed with proceeds of the first
mortgage

11

notes offering and related transactions. The Company's operating results are
subject to significant business, economic, regulatory and competitive
uncertainties and contingencies, many of which are beyond our control.

As operations commenced on December 20, 2001, the Company does not have
historical operating results for comparable purposes other than interest expense
on its outstanding indebtedness, net of interest capitalized, and interest
income on its invested cash balances. Management had planned a "soft" opening
for the casino. The properties grand opening multi-media advertising and
marketing campaign was launched on January 29, 2002.

Three Months Ended September 30, 2002 and Nine Months Ended September 30, 2002

The Company's Management Agreement with Hyatt Gaming Management, Inc.
("Hyatt") vests the management and operation of the casino in Hyatt. The results
of such operations to date have failed to meet the budgeted revenues and
operating margins. Consequently, management believes that Hyatt's operation of
the Company's casino is not generating adequate cash flow for the Company to be
able to pay its debt service obligations when they become due. See Liquidity and
Capital Resources.

Total revenue for the three months ended September 30, 2002 was
$19,522,967, $18,347,586 net of promotional allowances. This included
$17,004,014 in casino revenue, $2,221,838 in food and beverage revenue, and
$297,115 of other revenue. Total revenue for the nine months ended September 30,
2002 was $54,566,320, $51,689,368 net of promotional allowances. This included
$48,085,043 in casino revenue, $5,704,672 in food and beverage revenue, and
$776,605 of other revenue.

Casino operating expenses for the three months ended September 30, 2002
totaled $9,997,442, including $2,910,766 in state and local gaming taxes and
device fees. Casino operating expenses for the nine months ended September 30,
2002 totaled $28,420,619, including $9,491,756 in state and local gaming taxes
and device fees. The operating expenses consist principally of salaries, wages
and benefits, marketing costs, and other operating expenses of the casino.

Food and beverage expenses for the three months ended September 30,
2002 totaled $2,030,628, including $1,242,235 in cost of goods sold. Food and
beverage expenses for the nine months ended September 30, 2002 totaled
$5,778,997, including $3,466,608 in cost of goods sold. Other food and beverage
expenses consist principally of salaries, wages and benefits, and other
operating expenses of the food and beverage operations.

Other operating expenses for the three months ended September 30, 2002
totaled $503,789. Other operating expenses for the nine months ended September
30, 2002 totaled $1,498,186. Other operating expenses consist of salaries, wages
and benefits, contract entertainment expense, and other operating expenses.

General and administrative expenses for the three months ended
September 30, 2002 totaled $2,531,809. General and administrative expenses for
the nine months ended September 30, 2002 totaled $8,145,057. General and
administrative expenses consist of salaries, wages and benefits, utilities,
insurance, property taxes, legal and professional expenses, maintenance and
repairs, cleaning supplies, and other operating expenses.

Reorganization expenses for the three months and nine months ended
September 30, 2002 totaled $209,111. Such costs include costs for legal,
financial advisor services received in connection with our debt restructuring
efforts. Such costs also include travel related expenses and other costs
directly related to our debt restructuring efforts.

Management fees are amounts paid to Hyatt under the Management
Agreement, and consist of two components: a base management fee, which is
payable currently, and an incentive fee which is payable annually if certain
financial ratios are met. The base management fee for the three months ended
September 30, 2002 totaled $531,199. The base management fee for the nine months
ended September 30, 2002 totaled $1,450,554. The incentive management fee for
the three months ended September 30, 2002 totaled $190,614. The incentive
management fee for the nine months ended September 30, 2002 totaled $408,582.
Based on operating results to date, the required financial ratios are not
expected to be met, and the incentive management fee, while accrued currently,
will not be payable this year.

Depreciation and amortization expense for the three months ended
September 30, 2002 totaled $2,111,700. Depreciation and amortization expense for
the nine months ended September 30, 2002 totaled $6,265,153. These expenses
relate to property and equipment from the date placed in service.

12

Interest expense for the three months ended September 30, 2002 totaled
$4,766,322, including $416,757 in amortization of debt issuance costs. Interest
expense for the nine months ended September 30, 2002 totaled $14,360,743,
including $1,247,607 in amortization of debt issuance costs. As operations
commenced on December 20, 2001, interest capitalization ceased, and therefore
there was no interest capitalized during the three months or nine months ended
September 30, 2002.

Three Months Ended September 30, 2001 and Nine Months Ended September 30, 2001

The Company did not have any historical operating results other than
interest expense on the Company's outstanding indebtedness, interest income on
the Company's restricted cash and short-term investments, start up costs, and
the capitalization of certain costs.

General and administrative expenses represent salaries and project
development services which were not capitalized to our casino project. We
capitalized salaries which, in management's opinion, are directly attributable
to the development of our casino.

Start up costs are expensed as incurred. The start up costs for the
three months and nine months ended September 30, 2001 were incurred by the
Company in accordance with the provisions of the management agreement with
Hyatt.

Interest charges for the three months ended September 30, 2001 totaled
$4,057,912, including $342,249 in amortization of debt issuance costs. Of this
total, $3,080,100 was capitalized and $977,812 was expensed.

Interest charges for the nine months ended September 30, 2001 totaled
$12,126,130, including $1,031,174 in amortization of debt issuance costs. Of
this total, $7,549,679 was capitalized and $4,576,451 was expensed.

LIQUIDITY AND CAPITAL RESOURCES

During the year ended December 31, 2001, we completed a $20.8 million
financing to purchase furniture, fixtures and equipment for our casino, and we
completed a $3.0 million financing from the issuance of special improvement
district bonds by the Black Hawk Business Improvement District.

During the year ended December 31, 2000, we completed debt financing
totaling $107.5 million, a series B preferred stock offering totaling $3.0
million and a common stock offering totaling $4.0 million, net of commissions
paid. We also converted $7.4 million face amount of notes payable to common
stock, and had $1.65 million in accrued interest forgiven. In addition, we
reduced accounts payable and accrued expenses a total of $3.7 million utilizing
$2.9 million in series A preferred stock and $0.8 million of common stock issued
to Windsor Woodmont, LLC.

The Company meets its working capital requirements from internally
generated cash flow from operations, and does not have any other external
sources of cash to provide funds to meet its obligations. As discussed above in
Footnote 1, the Company did not make its required interest payments on September
15, 2002 on its First Mortgage Notes and its Second Mortgage Notes.

As discussed above, the Company filed a voluntary petition for relief
under Chapter 11 of the United States Bankruptcy Code. In addition to the cash
requirements necessary to fund ongoing operations, the Company anticipates that
it will incur significant professional fees and other restructuring costs in
connection with the reorganization. As a result of the uncertainty surrounding
the Company's current circumstances, it is difficult to predict the Company's
actual liquidity needs and sources at this time. However, based upon current and
anticipated levels of operations, management believes that its liquidity and
capital resources will be sufficient to maintain all of its normal operations at
current levels and does not anticipate any adverse impact on its operations,
customers or employees. Costs previously incurred and to be incurred in the
future in connection with the reorganization have been and will continue to be
substantial and, in any event, there can be no assurance that the Company will
be able to reorganize its indebtedness or that its liquidity and capital
resources will be sufficient to maintain its normal operations during the
reorganization period.

At September 30, 2002, total cash, cash equivalents and short-term
investments, including restricted cash, was $10,367,629, compared to $21,159,850
at December 31, 2001.

13

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are involved in certain legal proceedings, claims and litigation,
including those described below. Further, we may become involved in other such
proceedings in the future. The results of legal proceedings cannot be predicted
with certainty.

On November 7, 2002, the Company filed a voluntary petition for relief
under Chapter 11 of the United States Bankruptcy Code, in the United States
Bankruptcy Court for the District of Colorado (Case No. 02-28089ABC). For
additional information, please See Note 1 above.

On July 6, 2001, Paul, Hastings, Janofsky & Walker, a Los Angeles and
New York Based law firm, which acted as issuers counsel for the Company in
securing the $107,500,000 financing for the Company's casino project, filed suit
in Los Angeles County Court seeking damages of approximately $470,000 in legal
fees and costs in connection with securing the financing. This case has been
settled for a total of $150,000, $50,000 of which has been paid, and the balance
of $100,000 which is due on December 20, 2002.

On August 1, 2001, First Place LLC ("First Place") filed a lawsuit in
the Gilpin County District Court against the Company asserting that it had an
ownership interest in approximately 6,300 square feet of property upon which our
casino is built and operating. First Place is seeking a declaratory judgment
adjudicating the respective interests of it and the Company in this strip of
property. The Company referred the issue to its title insurance company, First
American Title, which is defending and has agreed to indemnify the Company
pursuant to a $33,500,000 owners title insurance policy. A trial was conducted
in the case from June 18 to June 20, 2002. At the conclusion of the trial, the
court determined that First Place has an ownership interest in approximately
3,000 square feet of the property in dispute and that the Company owns at least
a one-half interest in the balance of the property in dispute. The Court's
ruling further acknowledged that the Court was not resolving all issues and
claims between the parties given the limited issues raised in the case. The
Court ruling has not yet been reduced to writing and finalized. Although the
ultimate outcome of the disputes with First Place cannot be predicted,
management does not believe that an adverse result would have a material adverse
impact on our financial condition, liquidity or results of operations, given the
existence and availability of a significant title insurance policy.

On October 22, 2001, GF Gaming ("GF"), a gaming company operating a
casino in Central City, Colorado filed an appeal with the Colorado Gaming
Commission challenging the issuance of licenses to the Company and Hyatt Gaming
on the grounds that the Colorado Gaming Commission failed to consider whether
the casino facility met the historic architecture intent of the Colorado gaming
laws. In December, 2001, the Colorado Gaming Commission dismissed the appeal
based upon lack of standing and lack of jurisdiction. In February 2002, GF filed
a notice of appeal to continue its challenge in the Colorado Court of Appeals.
The Company intends to vigorously defend this appeal and believes that the Court
of Appeals will uphold the Colorado Gaming Commission's ruling. An adverse
decision would have a material adverse effect on our financial condition,
liquidity and results of operations.

PCL Construction Services, Inc. ("PCL") acted as the general contractor
for the Company in the construction of the Black Hawk Casino by Hyatt project.
The substantial completion date for the project was originally to have been
October 29, 2001 and was subsequently amended by change order to November 15,
2001. In fact, construction of the casino was not at a point where the casino
could open for business until December 20, 2001. PCL has submitted a pay
application to the Company seeking payment of what PCL believes to be a majority
of the balance due on the contract - approximately $1,240,000 in the form of
cost to complete and approximately $3,600,000 in retainage as of December 31,
2001. In addition to these amounts, the Company and PCL have disagreed over the
scope and proper amount of certain additional change notices and change orders.
The precise amount in dispute over change notices and change orders has not yet
been quantified by the parties. On February 15, 2002, the Company wrote PCL a
letter advising PCL that PCL's pay applications would not be processed until
such time as PCL had completed the project, including all required punch list
items, until there had been final resolution of any further issues relative to
change orders and change notices, and until PCL and the Company had reached an
agreement relative to the amount of the Company's setoffs and claims for project
mismanagement and completion delay by PCL. PCL and approximately twelve of PCL's
subcontractors have sent the Company notice of intent to file liens and recorded
mechanic's liens. In late May, 2002, the Company initiated litigation against
PCL seeking damages for PCL's misrepresentations and nondisclosures in
conjunction the performance of this job, resulting, among other things, in a
delayed opening and loss of revenues. In mid-June, 2002 PCL initiated separate
litigation against the Company seeking to foreclose on its mechanic's lien and
for breach of contract. A third separate case for breach of contract against PCL
and foreclosure of mechanic's lien against the Company, has been filed by
Sturgeon Electric, one of PCL's largest subcontractors. All three of these cases
have been consolidated. Given that these cases have only recently been filed

14

and no discovery has been conducted, it is not possible to predict the outcome
of this litigation. Management believes that it is possible that a significant
adverse decision could have material adverse effect on our financial condition,
liquidity or results of operations.

The architect for the Company's casino was Paul Steelman Design
("PSD"). PSD claims it is owed approximately $200,000 in additional fees for the
project. The Company claims PSD has been paid in full. The Company has an
affirmative claim against PSD for breach of the architectural services contract
and for professional errors and omissions in the services provided. The Company
and PSD have entered into a Dispute Resolution Agreement under which the
respective claims of the Company and PSD will be resolved by mediation in
February, 2003, to be followed by binding arbitration in July, 2003, if
necessary. The outcome of these proceedings will not have a material adverse
affect on the Company's financial condition or operations.

Item 2. Changes in Securities and Use of Proceeds

Not Applicable.

Item 3. Defaults Upon Senior Securities

The Company has $100 million principal amount 13% First Mortgage Notes
due 2005 (the "Notes") and $7.5 million principal amount 15.5% Second Mortgage
Notes due 2010 (the "Second Mortgage Notes"). The Company invoked its right,
pursuant to the applicable agreements with the debt holders, to deferred the
interest payment due on September 15, 2002 until October 15, 2002. The Company
failed to make the interest payments on October 15, 2002. The Company's failure
to pay the interest on the Notes and the Second Mortgage Notes constituted an
"Event of Default" under the applicable agreements. On October 23, 2002, the
Company received notice from SunTrust Bank, Trustee for a majority in principal
amount of the currently outstanding Notes, that the Notes were due and payable
immediately. As of September 30, 2002, the total amount of Notes in default was
$ 99,189,152 and Second Mortgage Notes in default was $ 9,718,800. Pursuant to
the terms of the indenture, the Trustee may pursue any and all remedies
available to collect the full amount of principal, interest and premium, if any,
due on the Notes.

Item 4. Submission of Matters to a Vote of Security Holders

Not Applicable

Item 5. Other Information

Not Applicable

Item 6. Exhibits and Reports on Form 8-K

Reports on Form 8-K

Form 8-K filed on September 13, 2002, reporting that the Company was
invoking its right to delay the interest payments due on September 15, 2002
under its $100 million principal amount 13% First Mortgage Notes due 2005 (the
"Notes") and its $7.5 million principal amount 15.5% Second Mortgage Notes due
2010 (the "Second Mortgage Notes"), pursuant to the applicable agreements
between the Company and its debt holders.

Form 8-K filed on October 15, 2002, reporting the Company failed to
make the interest payments initially due on September 15, 2002, that it had
elected to defer until October 15, 2002 on the Notes and the Second Mortgage
Notes. The Company's failure to pay the interest on the Notes and the Second
Mortgage Notes constituted an "Event of Default" under the applicable
agreements.

Form 8-K filed on October 23, 2002, reporting the Company received
notice from SunTrust Bank, Trustee for a majority in principal amount of the
currently outstanding Notes, that the Notes are due and payable immediately.
Pursuant to the terms of the indenture, the Trustee may pursue any and all
remedies available to collect the full amount of principal, interest and
premium, if any, due on the Notes.

Form 8-K filed on November 8, 2002 reporting that on November 7, 2002
(the Filing Date"), the Company filed a voluntary petition for relief under
Chapter 11 of the United States Bankruptcy Code (Bankruptcy Code) in the United
States Bankruptcy Court for the District of Colorado (Case No .02-28089ABC). On
November 1, 2002, SunTrust Bank, as

15

Trustee for the registered holders of the Company's 13% First Mortgage Notes and
13% Series B First Mortgage Notes under an indenture dated March 14, 2000
obtained a court order for the appointment of a receiver ("Receiver"). From
November 1, 2002 until the Filing Date, the Company's business had been operated
by the Receiver. However, following the filing of the bankruptcy petition, the
Receiver's authority to operate the business was automatically stayed and the
Company is operating the business under the jurisdiction of the Bankruptcy Court
and in accordance with the applicable provisions of the Bankruptcy Code.

Exhibits

Exhibit 99.1 Certification of Officers Pursuant to 18 U.S.C. 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.

SIGNATURES

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

Date: November 14, 2002

WINDSOR WOODMONT BLACK HAWK RESORT CORP.

/s/ Jerry L. Dauderman
----------------------------------------
Chairman of the Board and Chief
Executive Officer

16

CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jerry Dauderman, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Windsor
Woodmont Black Hawk Resort Corp.;

2. Based on my knowledge, this Quarterly Report does not contain
any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light
of the circumstances under which such statements were made,
not misleading with respect to the period discovered by this
Quarterly Report;

3. Based on my knowledge, the financial statements, and other
financial information included in this Quarterly Report,
fairly present in all material respects the financial
condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
Quarterly Report;

4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to
ensure that material information relating to the
registrant, including its consolidated subsidiaries,
is made known to us by others within those entities,
particularly during the period in which this report
is being prepared;

b) evaluated the effectiveness of the registrant's
disclosure control and procedures as of a date within
90 days prior to the filing date of this Quarterly
Report (the "Evaluation Date") and;

c) presented in this Quarterly Report our conclusions
about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the audit
committee of registrant's board of directors (or persons
performing the equivalent function):

a) all significant deficiencies in the design or
operation of internal controls which could adversely
affect the registrant's ability to record, process,
summarize and report financial data and have
identified for the registrant's auditors any material
weaknesses in internal controls, and

b) any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal controls; and

6. The registrant's certifying officers and I have indicated in
this Quarterly Report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.

Date: November 14, 2002 /s/ Jerry Dauderman
---------------------------------
Jerry Dauderman, Chairman and CEO

17

CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael L. Armstrong, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Windsor
Woodmont Black Hawk Resort Corp.;

2. Based on my knowledge, this Quarterly Report does not contain
any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light
of the circumstances under which such statements were made,
not misleading with respect to the period discovered by this
Quarterly Report;

3. Based on my knowledge, the financial statements, and other
financial information included in this Quarterly Report,
fairly present in all material respects the financial
condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
Quarterly Report;

4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to
ensure that material information relating to the
registrant, including its consolidated subsidiaries,
is made known to us by others within those entities,
particularly during the period in which this report
is being prepared;

b) evaluated the effectiveness of the registrant's
disclosure control and procedures as of a date within
90 days prior to the filing date of this Quarterly
Report (the "Evaluation Date") and;

c) presented in this Quarterly Report our conclusions
about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the audit
committee of registrant's board of directors (or persons
performing the equivalent function):

a) all significant deficiencies in the design or
operation of internal controls which could adversely
affect the registrant's ability to record, process,
summarize and report financial data and have
identified for the registrant's auditors any material
weaknesses in internal controls, and

b) any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal controls; and

6. The registrant's certifying officers and I have indicated in
this Quarterly Report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.

Date: November 14, 2002 /s/ Michael L. Armstrong
--------------------------------------------
Michael L. Armstrong, Chief Financial Officer

18

INDEX TO EXHIBITS