T.2 Halt - News Released
(News released; Nasdaq is in communication with issuer to determine that the release, as carried by news media, is complete and accurate.)
Employees
The Company currently has 2 officers and 2 other full-time secretarial and administrative employees involved in corporate administration, accounting and marketing and development. The Company also employs various employees and consultants for gaming, communications, financing, architectural and security and maintenance matters who are engaged to work on either a consulting or part-time basis. Additional personnel may be hired as needed, or on a project by project basis. None of the Company's current employees are represented by
unions, and the Company believes that its employee relations are good.
Item 2. DESCRIPTION OF PROPERTY
The Company's headquarters are located at 1801 Century Park East, Suite 2300, Los Angeles, California 90067 and consists of 2,000 square feet of office
space, which it leases on a month-to-month basis from an unaffiliated party for $8,500 per month. The Company also leases, on a month-to-month basis, certain other office and storage facilities at an aggregate rental of $2,500 per month.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the last quarter of the year ended October 31, 1998, shareholders of the Company approved a 1 for 20 reverse stock split of the shares of the Company's common stock.
General and Administrative expenses decreased $975,747 to $3,043,621 during the year ended October 31, 1998 as compared to $4,019,368 in the corresponding
period in 1997. The majority of the decrease related to travel and entertainment costs which decreased $724,000 to $321,000 for the year ended October 31, 1998
The Chairman of the Board has indicated, if necessary, he would secure up to $200,000 of working
capital to fund operations up through the second quarter of 1999, at which time the Company believes that the financing for MG contracts will be in place.
However, at this time Management feels that these funds are not necessary pending the closing of certain financing agreements.
(Note employees, office costs and size.)
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September 30, 1999
LVEN still hopes to sell former El Rancho property
By David Strow
<strow@lasvegassun.com>
LAS VEGAS SUN
Las Vegas Entertainment Network Inc. said it expects to close on the sale of the El Rancho property on the Strip by today -- but warns that if it fails, the company's ability to stay in business could be in jeopardy.
In the company's quarterly report, filed Sept. 24, LVEN said that a company referred to as "Countryland USA" signed an agreement to purchase the defunct property Aug. 16. Los Angeles-based LVEN does not own the property, but will receive a commission if it is successfully sold.
The deal was originally expected to close by the end of July, but "the agreement between Countryland USA and (El Rancho's owner) did not close as scheduled, and the parties are currently intervening to structure a closing time frame that meets all parties' needs," according to LVEN's filing.
The property is owned by International Thoroughbred Breeders Inc., a defunct company located in Cherry Hill, N.J. All that is known about Countryland is that it is incorporated in Nevada, and that it has lined up $354 million to renovate the El Rancho property, according to previous LVEN filings with the Securities and Exchange Commission.
LVEN is also awaiting the close of a financing deal that would give six trusts a 53 percent stake in the company in exchange for $305 million cash. This transaction will be critical to the future viability of LVEN, the company said.
The deal would be valued at $101.60 per share, nearly $100 above LVEN's current market value. But this deal, also announced in July, has not closed. If it failed to close, LVEN said it would receive a gold certificate valued at $3 million.
LVEN does not have much more time to close on that financing. The company lost $1.28 million, or 26 cents per share, during the quarter ending July 31. It reported no revenues for the quarter.
Over those three months, LVEN spent about $376,000 in cash. That leaves it with a cash reserve of $177,619, as of July 31. If it maintains its average monthly cash burn rate, and doesn't close on any additional financing, the company would run out of funds no later than November. LVEN has been meeting its capital needs partly through loans made by its chairman. As of July 31, he had loaned the company $443,000.
(Company certainly spends a lot of money...)
"As a result, and until financing agreements can be finalized, the company's independent auditors have expressed substantial doubt about the company's ability to continue as a going concern," LVEN's filing stated.
LVEN plans to use about $5.5 million in funds from the proposed deal to finance a buyout of Brazilian company Sulmatic Administradora De Bens Ltd. This deal also has not closed, apparently because of a lack of available funds.
If neither the Sulmatic deal or the El Rancho deal closes, the company said it may fall below the Nasdaq's listing requirements and be dropped from the exchange.
________________________________________________________________________________________________________________________
October 08, 1999
$95 million takeover bid made for LV's Jackpot Enterprises
By David Strow
<strow@lasvegassun.com>
LAS VEGAS SUN
Las Vegas Entertainment Network Inc. today launched an unsolicited $95 million takeover bid for Jackpot Enterprises Inc. of Las Vegas.
LVEN is offering $11 per share in cash, a 27.5 percent premium over Jackpot's opening price this morning. However, LVEN said the tender offer will not be in effect until the company has received approval from the Nevada Gaming Control Board and the Nevada Gaming Commission.
In its tender offer statement, LVEN said it has had no contact with Jackpot or any of its executives prior to announcing the bid.
"We were just notified this morning of the filing of the tender offer, and we are in the process of reviewing the filing," said Jackpot Chief Executive Don Kornstein. He declined further comment.
Last month, Jackpot said it had hired an investment banker to evaluate strategic alternatives for the company in the wake of two failed acquisitions. Kornstein later said that the acquisition of Jackpot was an option the company was examining.
LVEN spokesman Jay Goldberg said the company is pursuing Jackpot because of its strategic fit with slot operations that LVEN acquired in Brazil recently. The Los Angeles-based LVEN now operates 1,200 machines in Brazil, Goldberg said, and intends to expand to more than 50,000 machines.
"(Jackpot) is valuable to us," Goldberg said. "We will be able to use Jackpot's back office, which is huge, to plug in and operate the whole operation."
Goldberg said LVEN received $190 million in cash last month, made available through an investment agreement signed Sept. 29. LVEN today identified the investors as Fred and Kari Cruz of Las Vegas, but revealed no further information on them. Fred Cruz is listed as owner of an entity called "Countryland Wellness Internet Network Trust" in LVEN's filing today.
The agreement gave the Cruzes 12.2 million shares of LVEN stock at $15.80 per share.
Goldberg said LVEN has also closed a previously announced $305 million investment agreement, giving the company nearly $500 million in cash.
Balance sheets filed today by LVEN, however, do not reflect either investment. The balance sheet filed was through July 31, and reflected a cash balance of $177,000.
In the fiscal year ending June 30, Jackpot reported net income of $4.6 million on revenues of $95.7 million. It operates more than 3,900 slot machines scattered throughout Nevada.
As of June 30, Jackpot had working capital of $53 million. On Aug. 19, it boosted those capital reserves with a $13.5 million fee paid by Players International of Atlantic City, compensation for the termination of Players' merger deal with Jackpot.
Jackpot's considerable cash reserves make it a particularly attractive target for LVEN, Goldberg said, and reduce the effective cost of the acquisition to less than $20 million for the company.
By comparison, LVEN reported no revenues through the nine month period ending July 31. Over that period, it recorded a net loss of $5.28 million.
As of midday on Wall Street, no Jackpot shares had been traded, and the stock remained at $8.63. LVEN, however, soared nearly 75 percent in extremely heavy trading. As of 9 a.m., LVEN was trading at $6.31, up $2.69.
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