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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended: Commission file number:
APRIL 30, 1997 0-14939
CROWN CASINO CORPORATION
(Exact name of registrant as specified in its charter)
TEXAS 63-0851141
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4040 N. MACARTHUR BLVD., SUITE 100, IRVING, TEXAS
(Address of principal executive office)
75038
(Zip Code)
(972) 717-3423
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, par
value $.01 par
share
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
As of August 8, 1997 the aggregate market value of the voting stock held by
non-affiliates (all persons other than executive officers, directors and
holder's of 5% or more of the Registrant's common stock) of the Registrant
(7,465,186 shares) was $19,362,826.
As of August 8, 1997 there were 9,925,785 shares of the Registrant's common
stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the Registrant's Annual Report to Stockholders for the year ended
April 30, 1997 are incorporated by reference into Part II of this report, and
portions of the Registrant's definitive Proxy Statement for its Annual Meeting
of Stockholders to be held in 1997 are incorporated by reference into Part III
of this report, with the exception of information regarding executive officers
required under Item 10 of Part III, which information is included in Part I,
Item 1.
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PART I
ITEM 1. BUSINESS
FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for certain forward-looking statements. Certain information included in this
Form 10-K and other materials filed or to be filed by the Company with the
Securities and Exchange Commission (as well as information included in oral
statements or other written statements made or to be made by the Company)
contains statements that are forward-looking, such as statements relating to
plans for future expansion and other business development activities as well as
capital spending, financing sources and the effects of regulation and
competition. Such forward-looking information involves important risks and
uncertainties that could significantly affect anticipated results in the future
and, accordingly, such results may differ from those expressed in any
forward-looking statements made by or on behalf of the Company. These risks
and uncertainties include, but are not limited to, those relating to the
development of Concorde's mortgage lending business, competition, dependence on
existing management, the stability of Argentina's government, currency exchange
rate fluctuations, the repatriation of funds from Argentina, domestic or global
economic conditions, changes in foreign or domestic tax laws or the
administration of such laws and changes in gaming or lending laws or
regulations.
GENERAL AND HISTORY
Crown Casino Corporation ("Crown" or the "Company") is a holding company which
presently owns 79% of Concorde Acceptance Corporation ("Concorde"), a sub-prime
mortgage lender, and 49% of Casino Magic Neuquen S.A. ("CMN"), a casino
operator in the Province of Neuquen, Argentina. Crown also owns 100% of Gaming
Entertainment Management Services, Inc. ("GEMS") which owns an 18.6 acre tract
of land in the gaming district of Las Vegas, Nevada. GEMS has entered into a
contract to sell the Las Vegas land for $15.25 million. The Company is
presently focusing on (i) the acquisition or development of other casino
gaming properties in Argentina, (ii) the development and expansion of
Concorde's mortgage based lending business, and (iii) the potential acquisition
or development of other businesses unrelated to casino gaming or mortgage based
lending.
Since its inception in 1983 through June 1993 the Company was principally
engaged in various facets of the cable and related programming businesses.
During fiscal 1992 management determined the Company's programming business had
become increasingly competitive from a profit margin standpoint and future
growth was limited. As a result, in late fiscal 1992 the Company sold the
majority of its programming business and began exploring new business
opportunities. In June 1993 the Company made the decision to enter the gaming
business, and, as a result, proceeded to sell the balance of its cable assets.
From June 1993, with the acquisition of 100% of St. Charles Gaming Company,
Inc. ("SCGC"), until November 1996 the Company's primary business focus was
that of owning, operating and developing casino gaming properties. SCGC owns
and operates a riverboat gaming casino located in Calcasieu Parish, Louisiana
which had been in the development stage until opening in July 1995. In June
1995 the Company sold a 50% interest in SCGC to Louisiana Riverboat Gaming
Partnership ("LRGP") and in May 1996 sold its remaining 50% interest in SCGC to
Casino America, Inc. ("Casino America").
In November 1996 the Company decided to cease pursuing gaming opportunities in
the United States and began pursuing business opportunities in fields unrelated
to casino gaming. As a result, in June 1997 the Company, along with certain
newly hired management personnel, formed Concorde. Concorde is in the business
of originating, purchasing, servicing and selling sub-prime mortgage loans
which are secured primarily by first and second liens on residential
properties. These loans are expected to be sold in privately negotiated
transactions as well as to institutional investors in the secondary market
through securitization programs.
Also in June 1997 the Company acquired a 49% interest in CMN from Casino Magic
Corp. ("Casino Magic"). CMN operates casinos in the cities of Neuquen and San
Martin de los Andes ("San Martin") in the Province of Neuquen, Argentina under
an exclusive concession contract.
GAMING BUSINESS
DEVELOPMENT
In June 1993 the Company completed the acquisition of 100% of the outstanding
common stock of SCGC, a Louisiana corporation,
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which had received preliminary approval from the Louisiana Riverboat Gaming
Commission to construct and operate a riverboat gaming casino. In March 1994
SCGC received a license from the Louisiana Riverboat Gaming Enforcement
Division of the Office of State Police. In January 1995 SCGC made the
strategic decision to relocate the site for its planned Louisiana riverboat
casino from St. Charles Parish (near New Orleans) to Calcasieu Parish in the
southwest part of the state near the Texas border. In July 1995 SCGC's
riverboat casino opened for business in Calcasieu Parish, Louisiana, as an Isle
of Capri(SM) themed property.
In June 1995 the Company sold a 50% interest in SCGC to LRGP, a joint venture
then owned 50% by Casino America and 50% by Louisiana Downs, Inc. The purchase
price consisted of (i) a five-year $20 million non-recourse note (the "LRGP
Note"), (ii) $1 million cash, and (iii) a non-detachable five-year warrant to
purchase 416,667 shares of Casino America common stock at $12 per share. In
connection with this transaction, in June 1995, the Company recorded a gain
before income taxes of approximately $21.5 million.
In May 1996 the Company sold its remaining 50% interest in SCGC to Casino
America for (i) 1,850,000 shares of Casino America common stock, (ii) the
exchange of the $20 million LRGP Note for LRGP Note A ("Note A") and LRGP Note
B ("Note B"), each in the principal amount of $10 million, and (iii) an
additional non-detachable five-year warrant to purchase up to another 416,667
shares of Casino America common stock at an exercise price of $12 per share.
In connection with this transaction, in May 1996, the Company recorded a gain
before income taxes of approximately $14.9 million. During fiscal 1997 Note A
was paid off, and the Company sold Note B and its 1,850,000 shares of Casino
America common stock for cash.
In December 1993 the Company acquired 100% of the outstanding common stock of
GEMS, a Nevada corporation, which was organized for the purpose of developing a
hotel and casino in Las Vegas, Nevada. GEMS' primary asset was its option to
purchase an 18.6 acre tract of land in the gaming district of Las Vegas. In
June 1994 the option was exercised and the land was purchased for $10 million.
In November 1996 the Company determined not to develop a hotel and casino on
such property but rather to sell the land. In April 1997 the Company entered
into an agreement, subject to certain conditions, to sell its Las Vegas land
for $15.25 million. Closing is expected in September 1997.
In June 1997 the Company acquired 49% of the capital stock of CMN, as well as
interests in certain other assets and contracts related to CMN, from Casino
Magic for a purchase price of $7 million. CMN operates casinos in the cities
of Neuquen and San Martin in the Province of Neuquen, Argentina under an
exclusive concession contract that expires in 2007, but can be extended by CMN
for an additional five years under certain circumstances. The interests in
certain other assets and contracts include (i) a demand promissory note in the
amount of $4,226,473 issued by CMN, (ii) a 16.4% interest in a certain
management agreement relating to CMN, and (iii) a 49% interest in (a) slot
machines and a related lease agreement, and (b) a certain royalty agreement
relating to CMN.
The Company believes there will be additional opportunities to acquire or
develop casinos in Argentina as the country continues to privatize its
provincial run casinos.
CASINO MAGIC NEUQUEN
General
CMN operates casinos in the cities of Neuquen and San Martin in the Province of
Neuquen, Argentina. Prior to 1995 these casinos were operated by the
provincial government. In January 1995 CMN entered into a twelve-year
exclusive concession contract to operate these casinos. The concession
contract can be extended by CMN for an additional five years under certain
circumstances. CMN is owned 51% by Casino Magic and 49% by the Company.
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Location, Facilities and Operations
The Province of Neuquen is located approximately 400 miles east of Buenos
Aires in central Argentina. The Neuquen facility, which is leased by CMN from
the Province of Neuquen, is located at the Neuquen International Airport
approximately 15 miles from downtown Neuquen City. This facility has
approximately 1,000 dedicated parking spaces available to its patrons, and has
an additional 3,000 parking spaces available at the adjacent airport. The San
Martin facility is leased from a third party and is located in the center of
the city. Certain information regarding the Neuquen and San Martin casinos is
as follows:
Neuquen San Martin
------- ----------
Total square feet 37,000 2,500
Gaming square feet 28,125 1,875
Slot machines 342 55
Table games 48 10
Revenues (in millions):
Calendar 1995 $12.1 $1.0
Calendar 1996 14.0 1.9
Management is in the process of installing additional slot machines at the
properties (50 at Neuquen and 25 at San Martin). The casinos are open seven
days a week generally from 10:00 p.m to 5:00 a.m. Monday through Thursday, 5:00
p.m. to 5:00 a.m. on Friday, and 2:00 p.m. to 5:00 a.m. on Saturday and Sunday.
Peak admission occurs around 1:00 a.m. The casinos offer slot machines, table
games, food, beverages and gift items, as well as live entertainment at the
Neuquen casino on weekends. Table games include roulette, black jack, punto y
banca and big six.
Market and Marketing Strategy
Greater Neuquen City has a population of approximately 220,000 with an
estimated 600,000 people living within 120 miles while San Martin has a
population of approximately 17,000 with an estimated 150,000 people living
within 120 miles. Neuquen is one of the wealthiest Argentine provinces per
capita, principally due to energy production. The Province of Neuquen holds
approximately 40% of Argentina's proven oil and gas reserves. San Martin is
located in the Andes Mountains near one of the country's largest ski resorts,
and is well known for its trout and salmon fly fishing.
CMN's marketing strategy has been to provide the customer with an American
style gaming atmosphere. Most casinos in Argentina have a European style
gaming atmosphere. European style casinos tend to be more formal, oftentimes
with casino dealers dressed in tuxedos, little or no emphasis on slot play and
rarely provide live entertainment. Since taking over operating control of the
Neuquen and San Martin casinos in early 1995 CMN has substantially increased
the number of slot machines (from 89 in March 1995 to 384 currently),
eliminated admission fees, reduced the price of food and beverages, encouraged
a casual dress code and provided live entertainment for free on the weekends.
As a result of these changes, CMN has dramatically increased the customer count
and revenues of its two casinos.
Concession Contract
In January 1995 CMN entered into a twelve-year concession contract with the
Province of Neuquen providing CMN with the exclusive right to develop and
operate all gaming activities within 50 kilometers (31 miles) of each of the
Neuquen and San Martin casinos, within the boundaries of the Province, during
the concession term. The concession term will automatically be extended an
additional five years in the event CMN individually, or jointly with others,
invests at least $5 million in lodging infrastructure. The transfer of the
ownership of the concession is subject to the approval of the Province.
In connection with the granting of the concession contract CMN paid a one-time
concession fee of $9 million to the Province of Neuquen. CMN also pays the
Province $220,000 per month as a combination tax/rent payment. If CMN decides
to move from the Neuquen casino location, which is currently being leased from
the Province, it will receive a $40,000 per month reduction in its payment to
the Province. The monthly tax/rent payment is subject to increase in the event
annual net gaming revenues exceed $52.8 million.
In addition, CMN is obligated to pay all applicable federal and provincial
taxes including a 2% provincial tax on net gaming revenue, and a 33% federal
income tax on earnings. Pursuant to the concession, the Province of Neuquen
guarantees that no additional municipal or provincial taxes will be levied on
CMN's operations, and that existing provincial and municipal taxes will not be
increased.
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Shareholders' Agreement
In connection with the Company's 49% purchase of CMN, the Company and Casino
Magic entered into a shareholders' agreement (the "Shareholders' Agreement")
which provides, among other things, that in the event either the Company or
Casino Magic desires to sell its interest in CMN such shareholder must first
offer to sell its interest to the other shareholder under the terms and
conditions provided in the Shareholders' Agreement. Except as expressly
permitted by the Shareholders' Agreement, neither the Company nor Casino Magic
may sell, assign, or otherwise transfer or encumber any part of the CMN stock
owned by either of them without the written consent of the other shareholder.
As required by the Shareholders' Agreement CMN has four directors on its board,
two of which are appointed by the Company and the other two are appointed by
Casino Magic. The Shareholders' Agreement requires the unanimous approval of
all shareholders prior to authorizing certain corporate actions. Those actions
requiring unanimous CMN shareholder approval include matters pertaining to (i)
the issuance or purchase of CMN stock, (ii) amendments to CMN's articles of
incorporation or by-laws, (iii) a liquidation or merger, (iv) the sale of a
substantial portion of CMN's assets, (v) material or related party contracts,
(vi) incurring debt, and (vii) amendments to the concession contract with the
Province of Neuquen.
The Shareholders' Agreement also provides that the Company and Casino Magic may
jointly develop additional casinos in Argentina on mutually satisfactory terms,
and that neither the Company nor Casino Magic may own, operate or obtain any
material benefit from another casino in Argentina without the prior written
consent of the other shareholder.
Competition
CMN's two casinos are currently the only operating casinos in the Province of
Neuquen. Since the concession contract restricts competition within 50
kilometers (31 miles) of CMN's two casinos, CMN does not experience significant
competition in its primary market area. There are, however, approximately 44
government-operated casino properties throughout the country, including a
casino in Chipolletti, across the Rio Negro River from the City of Neuquen in
the Rio Negro Province, and a second casino in the Rio Negro Province
approximately 30 miles southeast of the City of Neuquen. The Company's
concession with the Province of Neuquen is the second out of twelve which have
been or are expected to be awarded under the Argentine government's casino
privatization program.
Regulation
The Province of Neuquen enacted a casino privatization program in order for it
to issue the twelve-year exclusive concession contract to CMN to operate the
Neuquen and San Martin casinos. These two casinos are the only casinos in the
Province of Neuquen. The casinos had previously been operated by the
provincial government. The Ministry of Finance of Argentina has adopted a
modified regulatory system for casinos, based on the regulatory system utilized
by the State of Nevada, and such regulatory system is being administered by the
Province of Neuquen. Such modified regulatory system provides rules and
regulations relating to, among other things, (i) the suitability of officers,
directors and significant shareholders, (ii) maintenance of effective controls
over operating and financial practices, and (iii) the submission of financial
reports. CMN can not predict what effect the enactment of other laws,
regulations or pronouncements that relate to casino gaming may have on the
operations of CMN.
REQUIRED DIVESTITURE OF COMMON STOCK
The Articles of Incorporation of the Company provide that any shareholder of
the Company who is found to be unsuitable by any gaming regulatory authority
with jurisdiction over the Company's operations, may, in the discretion of the
Board of Directors, be required to divest the shares of Company stock owned by
such person within forty-five (45) days from the date on which the Company
notifies the disqualified holder of the regulatory authority's determination of
unsuitability, or the Company will have the right to purchase such stock at a
price equal to its fair market value, as defined in the Articles of
Incorporation, less twenty-five percent (25%).
In addition, the Articles of Incorporation require that the Company maintain
compliance under the federal Merchant Marine Act of 1936 and the federal
Shipping Act of 1916, as amended, restricting the amount of shares of Company
common stock which may be held by non-U.S. citizens. The Company may require
foreign persons to divest their shares of Company common stock in accordance
with the provisions of the Articles of Incorporation in the event that the
Company determines that it is in violation of either of these Acts.
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MORTGAGE BUSINESS
GENERAL
In June 1997 the Company, along with certain newly hired management personnel,
formed Concorde. Concorde is in the business of originating, purchasing,
servicing and selling sub-prime mortgage loans which are secured primarily by
first and second liens on residential properties. These loans are expected to
be sold in privately negotiated transactions as well as to institutional
investors in the secondary market through securitization programs.
Concorde focuses on lending to individuals who have impaired or unsubstantiated
credit histories and/or unverifiable income. Loans made to these individuals
do not qualify for purchase by government-sponsored agencies such as the
Federal Home Loan Mortgage Association and the Federal Home Loan Mortgage
Corporation, and thus are sometimes referred to as non-conforming or sub-prime
mortgage loans. Such loans generally provide higher yields than conforming
loans. The principal differences between conforming loans and non-conforming
loans include the applicable loan-to-value ratios, the credit and income
histories of the mortgagors, the documentation required for approval of the
mortgagors, the type of properties securing the mortgage loans, the loan sizes,
and the mortgagors' occupancy status with respect to the mortgaged properties.
Second mortgage loans are made to borrowers owning single-family homes for the
purpose of debt consolidation, home improvements, education and a variety of
other purposes. These loans generally provide a higher interest rate yield
than first mortgage loans, and are secured by a second lien on the property.
Management believes the sub-prime mortgage loan industry is fragmented and
operates inefficiently compared to the conforming loan industry, and as a
result, higher interest rate yields are available to sub-prime mortgage lenders
even after considering a higher rate of loan defaults. Management also
believes the sub-prime mortgage loan industry is less cyclical than the
conforming loan industry because the sub-prime mortgage borrower is more
"payment" sensitive rather than "interest rate" sensitive. In addition, the
federal tax code's preferential treatment of the interest expense deduction for
home mortgage loans makes it financially advantageous for many individuals to
convert their credit card and other consumer loans into a mortgage loan.
LOAN ORIGINATIONS AND PURCHASES
Concorde began originating and purchasing mortgage loans in July 1997.
Concorde originates loans through a network of independent retail mortgage
brokers and directly through telemarketing and direct mail programs. Concorde
also purchases mortgage loans from a network of wholesale loan brokers and
correspondents, including banks and thrift institutions. Loans purchased from
wholesale loan brokers and correspondents typically require Concorde to pay a
premium, whereas Concorde does not pay premiums on loans originated through
retail mortgage brokers.
Prior to purchasing loans through wholesale loan brokers and correspondents,
Concorde reviews the loan packages to determine whether the packages are
complete and adhere to Concorde's underwriting guidelines. Depending on the
size of the pool of loans purchased, Concorde may engage a third-party
underwriter to reunderwrite the loans, verify the borrower's employment status,
determine the quality of the appraisal and assign a credit grade. Concorde
also analyzes the financial condition of the mortgage banker, which includes a
review of the mortgage bankers' licenses and financial statements. Upon
approval, Concorde typically requires each mortgage banker to enter into a
purchase and sale agreement that contains customary representations and
warranties regarding the loans such mortgage banker will sell to Concorde.
UNDERWRITING
Concorde's underwriting guidelines are provided to mortgage loan brokers and
mortgage bankers so they can create loan applications or bulk purchase packages
which meet such guidelines. Upon receipt of a completed loan package from a
mortgage loan broker, Concorde's underwriting staff reviews the package, which
includes the loan application, a current appraisal of the underlying collateral
property, a preliminary title report and a credit report to determine if the
proposed loan meets its underwriting guidelines. To assess the credit quality
of each loan, Concorde's underwriters consider various factors, including the
appraised value of the collateral property, the applicant's debt payment
history, credit profile and employment status, and the combined debt ratio and
loan-to-value ratio upon completion of the proposed mortgage loan. Personal
circumstances including divorce, family illnesses or deaths and temporary job
loss due to layoffs and corporate downsizing often impair an applicant's credit
record. On an exception basis mortgage loans may be made to individuals whose
credit profile does not conform to Concorde's guidelines, but only with the
approval of an officer of Concorde. Concorde does not delegate underwriting
authority to any broker or correspondent.
Property appraisals for loans originated or purchased by Concorde are conducted
by licensed, independent appraisers who are
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approved by Concorde. Upon receipt of the appraisal, Concorde's underwriting
staff reviews the value of the underlying collateral based upon a full review
of the appraisal. Concorde selects its appraisers based on professional
experience, education, membership in related professional organizations and
experience with the appraiser. For wholesale and correspondent loans
purchased, Concorde will typically request a second appraisal if the original
appraisal was completed by an appraiser who is not acceptable to Concorde.
Prior to funding a loan, Concorde's underwriting staff determines the
applicant's creditworthiness and ability to service the loan. Verification of
personal financial information, credit history, and employment history is
required prior to closing the loan. Concorde has established classifications
with respect to its borrowers based upon the credit profile of such borrower
and certain other borrower characteristics. Each loan applicant is placed into
one of four letter ratings ("A" through "D", with sub-ratings within each
category), depending upon a number of factors including the applicant's credit
history and employment status. Terms of loans made by Concorde, as well as the
maximum loan-to- value ratio and debt service-to-income ratio (calculated by
dividing fixed monthly debt payments by gross monthly income), vary depending
upon the classification of the borrower. Borrowers with lower credit ratings
generally pay higher interest rates and loan origination fees. The criteria
currently used by Concorde in classifying loan applicants is described below.
Generally, loan applicants are required to have two years of employment with
their current employer or two years of similar business experience.
Verification of information regarding the first mortgage, if any, is also
required, including balance, status and whether local taxes, interest,
insurance and assessments are included in the applicant's monthly payment. All
taxes and assessments not included in the payment are required to be verified
as current. Upon successful completion of the underwriting process, the
closing of the loan is scheduled with an independent closing attorney or title
company who is responsible for closing the loan in accordance with Concorde's
closing procedures.
CONCORDE'S GENERAL UNDERWRITING GUIDELINES
A B C D
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Mortgage credit (last 12 Maximum of two 30- Maximum of three Maximum of four Maximum of four 30-
mo.) day late payments 30-day late 30-day late day late payments
and no 60-day payments and no payments and one and one 60-day late
delinquencies. 60-day 60-day late payment, and no
delinquencies. payment. 120-day
delinquencies.
Non-mortgage credit (last 12 Account paid as Maximum of 35% of Maximum of 50% of Maximum of 66% of
mo.) agreed. Maximum of accounts with 30- accounts with accounts with
25% of accounts day late payments derogatory credit, derogatory credit,
with 30-day late and one 60-day and one 90-day and no 120-day late
payments, and no late payment. late payment. payments. Charge-
60-day late Small charge-offs, Charge-offs, offs, collections
payments. Nominal collections or collections and and judgements
isolated charge- judgements. judgements allowed allowed on a case-
offs, collections on a case-by-case by-case basis.
or judgements. basis.
Bankruptcy filings Two years since Two years since Must be Must be discharged,
discharged. discharged. discharged, active active Chapter 13
Chapter 13 allowed.
allowed.
Maximum debt service-to-
income ratio 50% 55% 55% 55%
Maximum loan-to-value ratio
(1):
Owner-occupied 90% 90% 85% 70%
Non-owner occupied 85% 80% 75% 55%
(1) Reductions in the maximum loan-to-value ratio are made for (i) the
residence being a second or vacation home, condominium, townhouse,
two-to-four family residence, or located in a rural area, and (ii)
the borrower qualifying under alternative documentation or a
non-income based qualification.
As described above, Concorde uses the foregoing categories and characteristics
as underwriting guidelines only. On a case-by-case basis, Concorde's
underwriters may determine that the prospective mortgagor warrants a risk
category upgrade, a debt service-to-income ratio exception, a pricing
exception, a loan-to-value exception or an exception from certain requirements
of a particular risk category. An upgrade or exception may generally be
allowed if the application reflects certain compensating factors, including
among others: a low loan-to-value ratio; a maximum of one 30-day late payment
on all mortgage loans during the last twelve months; stable employment; and the
length of residence in the subject property. Accordingly, Concorde may
classify certain mortgage loan applications in a more favorable risk category
than other mortgage loan applications that, in the absence of such compensating
factors, would only satisfy the criteria of a less favorable risk category.
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LOAN SERVICING AND COLLECTIONS
Servicing involves, among other things, collecting payments, applying such
payments of principal and interest to the appropriate loan, ensuring the
underlying collateral is properly insured, preparing reports relative to such
loans and enforcing the lender's rights with respect to the loans, including,
recovering delinquent payments, instituting foreclosures and liquidating the
underlying collateral. Management believes that servicing Concorde's own
portfolio enhances certain operating efficiencies and provides an additional
and profitable revenue stream that is less cyclical than the business of
originating and purchasing loans. Concorde's servicing portfolio is subject to
reduction by normal monthly payments, prepayments and foreclosures. In
general, revenue from Concorde's loan servicing portfolio may be adversely
affected as interest rates decline and loan prepayments increase. In some
states in which Concorde operates, prepayment fees may be limited or prohibited
by applicable law.
Concorde sends borrowers a monthly billing statement ten days prior to the
monthly payment due date. Although borrowers generally make loan payments
within ten to fifteen days after the due date (the "grace period"), if a
borrower fails to pay the monthly payment within the grace period, Concorde
commences collection efforts by notifying the borrower of the delinquency. If
the loan remains unpaid, Concorde will contact the borrower to determine the
cause of the delinquency and to obtain a commitment to cure the delinquency at
the earliest possible time.
As a general matter, if efforts to obtain payment have not been successful, a
pre-foreclosure notice will be sent to the borrower shortly after the due date
of the next subsequently scheduled installment, providing 30 days' notice of
the impending foreclosure action. During the 30-day notice period, collection
efforts continue. However, if no substantial progress has been made in
collecting delinquent payments from the borrower, foreclosure proceedings will
begin. Generally, Concorde will have commenced foreclosure proceedings when a
loan is 45 to 60 days delinquent.
Loans originated or purchased by Concorde are secured by mortgages, deeds of
trust, security deeds or deeds to secure debt, depending upon the prevailing
practice in the state in which the property securing the loan is located.
Depending on local law, foreclosure is effected by judicial action or
nonjudicial sale, and is subject to various notice and filing requirements. In
general, the borrower, or any person having a junior encumbrance on the real
estate, may cure a monetary default by paying the entire amount in arrears plus
other designated costs and expenses incurred in enforcing the obligation during
a statutorily prescribed reinstatement period. Generally, state law controls
the amount of foreclosure expenses and costs, including attorneys' fees, which
may be recovered by a lender. After the reinstatement period has expired
without the default having been cured, the borrower or junior lienholder no
longer has the right to reinstate the loan and must pay the loan in full to
prevent the scheduled foreclosure sale.
Although foreclosure sales are typically public sales, frequently no
third-party purchaser bids in excess of the lender's lien because of the
difficulty of determining the exact status of title to the property, the
possible deterioration of the property during the foreclosure proceedings and a
requirement that the purchaser pay for the property in cash or by cashier's
check. Thus, it is likely the lender will purchase the property from the
trustee or referee for an amount equal to the principal amount outstanding
under the loan, accrued and unpaid interest and the expenses of foreclosure.
Depending upon market conditions and loan-to-value ratios, the ultimate
proceeds from the sale of the collateral may not equal Concorde's investment in
the property.
LOAN SALES AND SECURITIZATIONS
It is Concorde's plan to sell the majority of the loans it originates and
purchases either through wholesale loan sales or through securitization
transactions. Loans will be sold periodically to provide Concorde with greater
flexibility and operating leverage than that of a traditional portfolio lender.
Concorde will periodically evaluate which method of loan disposition is most
advantageous, with the manner of disposition varying from time to time
depending upon prevailing market conditions. Loans sold on a wholesale basis
are done so to third party institutions on a non-recourse basis for cash with
servicing rights released. Securitizations, on the other hand, are loan sales
in which the lender continues to be exposed to some prepayment and credit risk
as long as the underlying loan portfolio remains outstanding.
Generally, in a securitization transaction, a lender sells mortgage loans it
has originated or purchased to a special purpose trust. The trust issues
mortgage passthrough certificates. The senior certificates, which typically
carry a coupon well below the weighted average coupon of the underlying
mortgage loans, are sold in an offering and the lender retains the
interest-only and residual certificates, which are amortized over the estimated
average life of the loan portfolio. The cash flow realized from these interest
only and residual certificates is subject to the prepayment and loss
characteristics of the underlying loans. These interest only and residual
certificates are valued at the time of the securitization. The valuation takes
into account certain loss and prepayment assumptions, servicing and other fees
to be paid and discounts the projected future net cash flow stream to its
present value. Thus, to the extent loss and prepayment rates exceed the
original assumptions used in recording the interest-only and residual
certificates, the value of such certificates will be reduced.
7
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Typically the special purpose trust has the benefit of a financial guaranty
policy from a monoline insurance company, which insures the timely payment of
interest and the ultimate payment of principal of the investor certificate.
Loan losses first reduce the amounts otherwise available to the interest-only
and residual certificate holders and thereafter, if necessary, the monoline
insurance company will pay any further losses experienced by the holders of the
senior certificates.
REGULATION
The operations of Concorde are subject to extensive regulation, supervision and
licensing by federal, state and local government authorities. Regulated
matters include, without limitation, loan origination, credit activities,
maximum interest rates and finance and other charges, disclosure to customers,
the terms of secured transactions, the collection, repossession and
claims-handling procedures utilized by Concorde, multiple qualification and
licensing requirements for doing business in various jurisdictions and other
trade practices.
Concorde's loan origination activities are subject to the laws and regulations
in each of the states in which those activities are conducted. Concorde's
activities as a lender are also subject to various federal laws including,
among others, the Truth in Lending Act ("TILA"), the Real Estate Settlement
Procedures Act ("RESPA"), the Equal Credit Opportunity Act of 1974, as amended
("ECOA"), the Home Mortgage Disclosure Act and the Fair Credit Reporting Act of
1970, as amended ("FCRA").
The TILA and Regulation Z promulgated thereunder contain disclosure
requirements designed to provide consumers with uniform, understandable
information with respect to the terms and conditions of loans and credit
transactions in order to give them the ability to compare credit terms. TILA
also guarantees consumers a three-day right to cancel certain credit
transactions including loans of the type originated by Concorde. Management of
Concorde believes that it is in compliance with TILA and Regulation Z in all
material respects.
In September 1994, the Riegle Community Development and Regulatory Improvement
Act of 1994 (the "Riegle Act") was enacted. Among other things, the Riegle Act
made certain amendments to TILA. The TILA Amendments, which became effective
in October 1995, generally apply to mortgage loans with (i) total points and
fees upon origination in excess of the greater of eight percent of the loan
amount or $400, or (ii) an annual percentage rate of more than ten percentage
points higher than comparably maturing U.S. treasury securities. Loans covered
by the TILA Amendments are known as "Section 32 loans."
The TILA Amendments impose additional disclosure requirements on lenders
originating Section 32 loans and prohibit lenders from originating Section 32
loans that are underwritten solely on the basis of the borrower's home equity
without regard to the borrower's ability to repay the loan. In accordance with
the TILA Amendments, Concorde applies underwriting criteria that takes into
consideration the borrower's ability to repay the loan.
The TILA Amendments also prohibit lenders from including prepayment fee clauses
in Section 32 loans to borrowers with a debt-to-income ratio in excess of 50%.
In addition, a lender that refinances a Section 32 loan previously made by such
lender will not be able to enforce any prepayment penalty clause contained in
such refinanced loan. The TILA Amendments impose other restrictions on Section
32 loans, including restrictions on balloon payments and negative amortization
features.
Concorde is also required to comply with the ECOA, which prohibits creditors
from discriminating against applicants on the basis of race, color, sex, age or
marital status. Regulation B promulgated under ECOA restricts creditors from
obtaining certain types of information from loan applicants. It also requires
certain disclosures by the lender regarding consumer rights and requires
lenders to advise applicants of the reasons for any credit denial. In
instances where the applicant is denied credit or the rate or charge for a loan
increases as a result of information obtained from a consumer credit agency,
another statute, the FCRA, requires the lender to supply the applicant with a
name and address of the reporting agency. Concorde is also subject to RESPA
and is required to file an annual report with the Department of Housing and
Urban Development pursuant to the Home Mortgage Disclosure Act.
In the course of its business, Concorde may acquire properties as a result of
foreclosure. There is a risk that hazardous or toxic waste could be found on
such properties. In such event, under certain state and federal environmental
laws, Concorde could be held responsible for the cost of cleaning up or
removing such waste, and such cost could exceed the value of the underlying
properties.
The laws, rules and regulations applicable to Concorde are subject to
amendment. There are currently various proposed laws, rules and regulations
which, if adopted, could impact Concorde. There can be no assurance that these
proposed laws, rules and regulations, or other such laws, rules or regulations,
will not be adopted in the future which could make compliance much more
difficult or expensive, restrict Concorde's ability to originate, purchase,
broker or sell loans, further limit or restrict the amount
8
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of commissions, interest and other charges earned on loans originated or sold
by Concorde, or otherwise adversely affect the business or prospects of
Concorde.
COMPETITION
The Company is a new entrant in the sub-prime mortgage lending industry, is
small compared to many of its competitors and faces intense competition in the
business of originating, purchasing and selling mortgage loans. Competition in
the industry takes many forms including convenience in obtaining a loan,
customer service, marketing and distribution channels, and amount and term of
the loan. Traditional competitors in the financial services business include
other mortgage banking companies, commercial banks, credit unions, thrift
institutions, credit card issuers and finance companies. Most of these
competitors in the consumer finance business are substantially larger and have
considerably greater financial, technical and marketing resources than
Concorde.
Concorde believes that its competitive strengths include providing prompt,
responsive service and flexible underwriting to independent mortgage brokers.
Concorde's underwriters apply its underwriting guidelines on an individual
basis but have the flexibility to deviate from them when an exception or
upgrade is warranted by a particular loan applicant's situation.
EMPLOYEES
As of July 31, 1997 the Company, including Concorde, employed thirteen persons
full time. None of the Company's employees are covered by a collective
bargaining agreement and the Company believes that its employee relations are
satisfactory. CMN currently employs approximately 250 persons.
EXECUTIVE OFFICERS
The executive officers of the Company are as follows:
NAME AGE POSITION WITH THE COMPANY
- ---- --- -------------------------
Edward R. McMurphy . . . . . 46 Chairman of the Board,
President and Chief Executive Officer
Tilman J. Falgout, III . . . 48 Executive Vice President,
General Counsel and Director
Mark D. Slusser . . . . . . . 39 Chief Financial Officer,
Vice President Finance and Secretary
EDWARD R. MCMURPHY, has served as President of the Company since July 1984 and
as Chief Executive Officer since January 1988. He has been a director of the
Company since its inception in April 1983. Prior to and during his involvement
with the Company, Mr. McMurphy served as President of Marion Properties, Inc.,
a real estate investment and development company, from 1979 to 1986.
TILMAN J. FALGOUT, III, has served as Executive Vice President and General
Counsel of the Company since March 1995 and as a director of the Company since
September 1992. From 1978 through June 1995, Mr. Falgout was a partner in the
law firm of Stumpf & Falgout, Houston, Texas.
MARK D. SLUSSER, has served as Chief Financial Officer of the Company since
October 1989 and as Secretary since April 1990. From 1981 until joining the
Company, Mr. Slusser was employed by Ernst & Young LLP, where he held various
positions in the Audit Department including Senior Manager.
ITEM 2. PROPERTIES
The Company leases approximately 6,000 square feet of office space in Irving,
Texas which is used for the Company's executive offices. The lease expires in
February 2001, and is subject to two three-year renewal options thereafter.
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The Company owns 18.6 acres of land at the southeast corner of the intersection
of Flamingo Road and Arville Street in Las Vegas, Nevada. This property is
presently under contract to be sold, which sale is expected to close in
September 1997.
ITEM 3. LEGAL PROCEEDINGS
On September 21, 1994, an action was filed against the Company and SCGC in the
24th Judicial District Court for the Parish of Jefferson, Louisiana by Avondale
Industries, Inc. ("Avondale"). In this action, Avondale alleges that the
Company was contractually obligated to Avondale for the construction of SCGC's
riverboat vessel based upon a letter of intent (allegedly reaffirming a
previous agreement entered into between Avondale and SCGC). Avondale alleges
that the Company breached a duty to negotiate in good faith toward the
execution of a definitive vessel construction contract. Alternatively,
Avondale alleges that a separate, oral contract for the construction of the
vessel existed and that the Company committed unspecified unfair trade
practices and misrepresentations. Avondale seeks unspecified damages including
"all lost profits and lost overhead" and attorneys fees. Avondale has claimed
its lost profits and lost overhead amount to approximately $2.5 million. The
Company intends to vigorously contest liability in this matter. While no
assurance can be given as to the ultimate outcome of this litigation,
management believes its resolution will not have a material adverse effect on
the Company.
On July 3, 1997 an action was filed against certain officers of Concorde, along
with Concorde and the Company (collectively, the "Defendants") in the 134th
Judicial District Court of Dallas County, Texas by Eagle Capital Corp.
("Eagle"). In this action Eagle alleges that while such officers were employed
by Eagle they disseminated confidential and proprietary information regarding
Eagle to the Company in order to create a competing business. Eagle seeks to
enjoin all Defendants from their alleged possession and use of Eagle's
confidential business information and to recover damages in an unspecified
amount. The Company believes the allegations of this action are without merit
and intends to vigorously contest liability in this matter. While no assurance
can be given as to the ultimate outcome of this litigation, management believes
its resolution will not have a material adverse effect on the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders of the Company during
the fourth quarter ended April 30, 1997.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The information required by this item is included in the Company's 1997 Annual
Report to Stockholders ("1997 Annual Report") under the heading "Common Stock
Information, Dividends and Related Stockholder Matters" and such information is
incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item is included in the Company's 1997 Annual
Report under the heading "Selected Financial Data" and such information is
incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information required by this item is included in the Company's 1997 Annual
Report under the heading "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and such information is incorporated
herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements included in the Company's 1997 Annual Report are
incorporated herein by reference.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
Except as to information with respect to executive officers which is contained
in a separate heading under Item 1 to this Form 10-K, the information required
by Part III of Form 10-K is, pursuant to General Instruction G(3) of Form 10-K,
incorporated by reference from the Company's definitive proxy statement to be
filed pursuant to Regulation 14A for the Company's Annual Meeting of
Stockholders to be held on October 1, 1997. The Company will, within 120 days
of the end of its fiscal year, file with the Securities and Exchange Commission
a definitive proxy statement pursuant to Regulation 14A.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information concerning directors and executive officers of the registrant
is set forth in the Proxy Statement to be delivered to stockholders in
connection with the Company's Annual Meeting of Stockholders to be held on
October 1, 1997 (the "Proxy Statement") under the headings "Election of
Directors" and "Compliance with Section 16(a) of the Securities Exchange Act of
1934," which information is incorporated herein by reference. The name, age
and position of each executive officer of the Company is set forth under the
heading "Executive Officers" in Item 1 of this report.
ITEM 11. EXECUTIVE COMPENSATION
The information concerning executive compensation is set forth in the Proxy
Statement under the heading "Executive Compensation," which information is
incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information concerning security ownership of certain beneficial owners and
management is set forth in the Proxy Statement under the heading "Security
Ownership of Certain Beneficial Owners and Management," which information is
incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information concerning certain relationships and related transactions is
set forth in the Proxy Statement under the heading "Certain Transactions,"
which information is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)(1). FINANCIAL STATEMENTS AND ACCOUNTANT'S REPORT
The following financial statements and accountant's report included in
the Company's 1997 Annual Report are incorporated herein by reference
in Item 8 of this report:
Report of Independent Accountants
Consolidated Balance Sheets as of April 30, 1996 and 1997
Consolidated Statements of Operations for the fiscal years
ended April 30, 1995, 1996 and 1997
Consolidated Statements of Cash Flows for the fiscal years
ended April 30, 1995, 1996 and 1997
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Consolidated Statements of Stockholders' Equity for the fiscal
years ended April 30, 1995, 1996 and 1997
Notes to Consolidated Financial Statements
(a)(2). FINANCIAL STATEMENT SCHEDULES
The financial statement schedules are omitted since the required
information is not present, or is not present in amounts sufficient to
require submission of the schedules, or because the information
required is included in the consolidated financial statements and
notes thereto.
(a)(3). EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ ----------------------
2.1 Purchase Agreement dated as of May 31, 1997 by and among the Company and Casino Magic Corp. ("Casino Magic").
(13)
3.1 Articles of Incorporation of the Company (formerly SKAI, Inc.). (3)
3.1.1 Articles of Merger of the Company and SKAI, Inc. filed with the Secretary of State of the State of Alabama on
September 29, 1989. (3)
3.1.2 Articles of Merger of the Company and SKAI, Inc. filed with the Secretary of State of the State of Texas on
October 10, 1989. (3)
3.1.3 Articles of Amendment filed with the Secretary of State of the State of Texas on October 7, 1993. (8)
3.1.4 Articles of Amendment filed with the Secretary of State of the State of Texas on October 5, 1994. (8)
3.2 By-Laws dated August 24, 1989. (4)
4.1 Specimen stock certificate. (9)
4.2 Form of Registration Rights Agreement dated January 5, 1994 by and between the Company and Dabney-Resnick, Inc.
(8)
4.2.1 Form of Stock Purchase Warrant dated January 5, 1994 allowing Dabney-Resnick, Inc. to purchase shares of common
stock of the Company. (8)
4.3 Form of Registration Rights Agreement dated January 5, 1994 by and between the Company and Sun Life Insurance
Company of America, Inc. (8)
4.3.1 Form of Stock Purchase Warrant dated January 5, 1994 allowing Sun Life Insurance Company of America, Inc. to
purchase shares of common stock of the Company. (8)
4.4 Stock Purchase Warrant dated June 3, 1994, allowing Nomura Holding America, Inc. ("Nomura") to purchase shares
of Common Stock of the Company. (9)
4.4.1 Amendment to Stock Purchase Warrant dated as of December 3, 1994. (8)
4.5 Form of Stock Purchase Warrant dated as of April 15, 1994 allowing the following parties to purchase shares of
Common Stock of the Company: Daniel G. Goggin (38,990 shares), Gerard M. Jacobs (77,981 shares), and The
Hubbard Company, Inc. (77,981 shares). (9)
4.6 Form of Stock Purchase Warrant dated March 18, 1994 granting Dabney-Resnick, Inc. the right to purchase 120,000
shares of Common Stock of the Company. (8)
4.7 Stock Purchase Warrant dated October 6, 1994 granting Don Farris the right to purchase 50,000 shares of Common
Stock of the Company. (8)
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4.8 Stock Purchase Warrant dated June 2, 1994 granting Gerard M. Jacobs the right to purchase 50,000 shares of
Common Stock of the Company. (8)
10.1 1986 Incentive Stock Option Plan. (2)
10.1.1 Amendment to 1986 Incentive Stock Option Plan adopted September 27, 1990. (5)
10.2 1991 Non-Qualified Stock Option Plan. (6)
10.3 Form of Indemnification Agreement between the Company and Edward R. McMurphy, Mark D. Slusser, T.J. Falgout,
III, David J. Douglas, J. David Simmons, Gerald L. Adams, Robert J. Kehl, Gerard M. Jacobs and Michael B.
Cloud. (7)
10.4 Form of Severance Agreement dated July 2, 1996 between the Company and Edward R. McMurphy, T.J. Falgout, III
and Mark D. Slusser. (12)
10.5 Shareholders Agreement dated June 9, 1995 between the Company and LRGP. (10)
10.6 Shareholders' Agreement dated as of May 31, 1997 between the Company and Casino Magic. (13)
10.7 Teaming Agreement dated June 2, 1994 between the Company and Gerard M. Jacobs. (8)
10.8 Lease (South Tract) dated March 24, 1995 by and among Port Resources, Inc. and CRU, Inc. (collectively,
"Landlord"), SCGC and the Company. (10)
10.8.1 Amendment to Lease (South Tract) dated May 3, 1995 by and among Landlord, SCGC, the Company and LRGP. (10)
10.8.2 Second Amendment to Lease (South Tract) dated May 16, 1995 by and among Landlord, SCGC, the Company and LRGP.
(10)
10.9 Lease (North Tract) dated July 17, 1995 by and among Landlord, SCGC and the Company. (11)
10.9.1 Amendment to Lease (North Tract) dated July 17, 1995 by and among Landlord, SCGC, the Company and LRGP. (11)
10.9.2 Second Amendment to Lease (North Tract) dated July 25, 1995 by and among Landlord, SCGC, the Company and LRGP.
(11)
10.10 Lease Agreement dated May 20, 1994 between IGT-North America and SCGC. (9)
10.10.1 Modification of Lease Agreement dated December 23, 1994 between IGT-North America and SCGC. (8)
13.1 Annual Report to Stockholders for the fiscal year ended April 30, 1997. (1)
21.1 Subsidiaries of Crown Casino Corporation. (1)
23.1 Consent of Independent Accountants. (1)
24.1 Power of Attorney of Edward R. McMurphy. (1)
24.2 Power of Attorney of Tilman J. Falgout, III. (1)
24.3 Power of Attorney of David J. Douglas. (1)
24.4 Power of Attorney of J. David Simmons. (1)
24.5 Power of Attorney of Gerald L. Adams. (1)
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24.6 Power of Attorney of Gerard M. Jacobs. (1)
24.7 Power of Attorney of Robert J. Kehl. (1)
27.1 Financial Data Schedule. (1)
- ----------------------
(1) Filed herewith.
(2) Previously filed as an Exhibit to the Company's Registration Statement
on Form 10, as amended (No. 0-14939) and incorporated herein by
reference.
(3) Previously filed as an Exhibit to the Company's Quarterly Report on Form
10-Q for the quarter ended October 31, 1989 and incorporated herein by
reference.
(4) Previously filed as an Exhibit to the Company's Annual Report on Form
10-K for the year ended April 30, 1990 and incorporated herein by
reference.
(5) Previously filed as an Exhibit to the Company's Annual Report on Form
10-K for the year ended April 30, 1991 and incorporated herein by
reference.
(6) Previously filed as an Exhibit to the Company's Annual Report on Form
10-K for the year ended April 30, 1992 and incorporated herein by
reference.
(7) Previously filed as an Exhibit to the Company's Quarterly Report on Form
10-Q for the quarter ended July 31, 1993 and incorporated herein by
reference.
(8) Previously filed as an Exhibit to the Company's Registration Statement
on Form S-1, as amended, initially filed with the Securities and
Exchange Commission on May 31, 1994 (No. 33-79484) and incorporated
herein by reference.
(9) Previously filed as an Exhibit to the Company's Annual Report on Form
10-K for the year ended April 30, 1994 and incorporated herein by
reference.
(10) Previously filed as an Exhibit to the Company's Annual Report on Form
10-K for the year ended April 30, 1995 and incorporated herein by
reference.
(11) Previously filed as an Exhibit to the Company's Quarterly Report on Form
10-Q for the quarter ended July 31, 1995 and incorporated herein by
reference.
(12) Previously filed as an Exhibit to the Company's Quarterly Report on Form
10-Q for the quarter ended January 31, 1997 and incorporated herein by
reference.
(13) Previously filed as an Exhibit to the Company's Current Report on Form
8-K dated June 2, 1997 and incorporated herein by reference.
(b) REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the fourth fiscal quarter ended
April 30, 1997.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
CROWN CASINO CORPORATION
Dated: August 11, 1997 By: /s/ Edward R. McMurphy
-------------------------------
Edward R. McMurphy
President and Chief Executive
Officer (principal executive
officer)
Dated: August 11 1997 By: /s/ Mark D. Slusser
------------------------------------
Mark D. Slusser
Vice President Finance and
Chief Financial Officer
(principal financial and
accounting officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons in the capacities and on the
dates indicated.
Signature Title Date
--------- ----- ----
* Chairman of the Board, President August 11, 1997
- ------------------------------------- and Chief Executive Officer
Edward R. McMurphy
* Executive Vice President, August 11, 1997
- -------------------------------------- General Counsel and Director
Tilman J. Falgout, III
* Director August 11, 1997
- --------------------------------------
David J. Douglas
* Director August 11, 1997
- --------------------------------------
John David Simmons
* Director August 11, 1997
- --------------------------------------
Gerald L. Adams
* Director August 11, 1997
- --------------------------------------
Gerard M. Jacobs
* Director August 11, 1997
- --------------------------------------
Robert J. Kehl
* By /s/ Mark D. Slusser August 11, 1997
--------------------------
Mark D. Slusser
As Attorney-in-Fact
Pursuant to Powers of
Attorney filed herewith
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ ----------------------
13.1 Annual Report of Stockholders for the fiscal year ended April 30, 1997.
21.1 Subsidiaries of Crown Casino Corporation.
23.1 Consent of Independent Accountants.
24.1 Power of Attorney of Edward R. McMurphy.
24.2 Power of Attorney of Tilman J. Falgout, III.
24.3 Power of Attorney of David J. Douglas.
24.4 Power of Attorney of J. David Simmons.
24.5 Power of Attorney of Gerald L. Adams.
24.6 Power of Attorney of Gerard M. Jacobs.
24.7 Power of Attorney of Robert J. Kehl.
27.1 Financial Data Schedule.