NOTE 4. WARRANTS AND OPTIONS
As of December 31, 1999, the company has outstanding 1,500,000 five
year warrants to purchase one share of the company's common stock at an
exercise price of $3.00 by December 11, 2001.
NOTE 5. INVESTMENT BANKER WARRANTS
Effective June 5, 1998, the company contracted with an investment
banker to provide on a non-exclusive basis to the company assistance in
possible mergers, acquisitions and internal capital structuring. The
duration of the contract is for five years. In consideration for these
services, Latin American Casinos, Inc. granted warrants to purchase an
aggregate of 225,000 shares of common stock at the closing bid price of
$1.875 as of June 5, 1998, which can be exercised through June 5, 2003.
Effective February 8, 2000, the Board of Directors reduced the option
price to $1.06, which was the closing price of the stock at that date.
These warrants vest and become irrevocable as follows: 75,000 warrants
with signing of the agreement, 75,000 warrants 180 days after the
signing of the agreement and an additional 75,000 warrants 365 days
after the signing of the agreement.
Read accountants' review report.
9
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LATIN AMERICAN CASINOS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
NOTE 6. INCENTIVE STOCK OPTION PLAN
On June 13, 1994, the Board of Directors adopted the 1994 Stock Option
Plan in which the aggregate number of shares for which options may be
granted under the Plan shall not exceed 1,000,000 shares. The term of
each option shall not exceed ten years from the date of granting (five
years of options granted to employees owning more than 10% of the
outstanding shares of the voting stock of the company). The 1991 plan
became effective on September 30, 1991 and was terminated in March,
1999. The 1994 plan became effective on June 13, 1994 and will
terminate in June, 2004, unless terminated earlier by action of the
Board of Directors. In December, 1995, the company authorized the
issuance under the 1994 Stock Option Plan of 492,500 options at an
exercise price of $2.50 per share to various officers and employees. On
March 6, 1997 the company authorized the issuance of an additional
415,000 options at an exercise price of $2.50 to various officers and
employees. In June, 1999, the company increased the shares allocated to
the plan to 1,500,000. Effective December 31, 1998, the company
ratified the repricing of 872,000 of employee stock options to $1.00
per share and simultaneously authorized the issuance of 85,000 options
at an exercise price $1.00 per share and canceled 10,000 options issued
in 1995 at $2.50 per share.(See Note 11)
11 SUBSEQUENT EVENT
Effective October 3, 2000 the Board of Directors appointed a new
Chairman and Chief Executive Officer, who is to receive 100,000 shares
of the company's common stock and warrants to purchase 750,000 shares
of additional stock at $1.75 per share. In addition, the company issued
in the aggregate 70,000 options in accordance with the company's stock
option plan at $1.75 per share.
ITEM 2. IDENTITY AND BACKGROUND
(a)-(c) This statement is filed by the Augustine Entities with respect
to the shares of Common Stock beneficially owned by the Augustine Entities, all
of which Common Stock is held in the name of Augustine Fund. Augustine Capital
is the general partner of Augustine Fund. The controlling members, directors and
officers of Augustine Capital are John T. Porter, Brian D. Porter, Thomas
Duszynski, David R. Asplund and David M. Matteson. The business address of each
of the Augustine Entities is 141 W. Jackson, Suite 2182, Chicago, IL 60604. The
principal employment of John T. Porter, Brian D. Porter and Thomas Duszynski is
investing in securities, conducted through Augustine Capital and Augustine Fund.
The principal employment of David R. Asplund is trading securities. The
principal employment of David M. Matteson is as an officer of certain of the
Augustine Entities. Augustine Capital is a Delaware limited liability company
and Augustine Fund is an Illinois limited partnership.
This statement is filed by the Devenshire Entities with respect to the
shares of Common Stock beneficially owned by the Devenshire Entities, all of
which Common Stock is held in the name of Devenshire Management. The business
address of each of the Devenshire Entities is 19800 MacArthur Boulevard, Suite
580, Irvine, California 92612. Mr. Sanders is self-employed as a consultant.
This statement is filed by the Alliance Entities with respect to the
shares of Common Stock beneficially owned by the Alliance Entities. The business
address of each of the Alliance Entities is 9800 Camden Hills Avenue, Las Vegas,
Nevada 89145. Mr. Bossung is self-employed as a consultant. |
