NEVADA GOLD & CASINOS INC (Form: 10-Q, Received: 09/10/2009 16:04:37)

FORWARD-LOOKING STATEMENTS

Factors that May Affect Future Results

(Cautionary Statements Under the Private Securities Litigation Reform Act of 1995)

Certain information included in this Form 10-Q 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 or its representatives) contains or may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Statements that include the words “may,” “could,” “should,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” or other words or expressions of similar meaning, may identify forward-looking statements. We have based these forward-looking statements on our current expectations about future events. Forward-looking statements include statements that reflect management’s beliefs, plans, objectives, goals, expectations, anticipations, intentions with respect to the financial condition, results of operations, future performance and the business of the Company, including statements relating to our business strategy and our current and future development plans. These statements may also involve other factors which are detailed in the “Risk Factors” and other sections of the Company’s Annual Report on Form 10-K for the year ended April 30, 2009 and other filings with the Securities and Exchange Commission.

Although we believe that the assumptions underlying these forward-looking statements are reasonable, any or all of the forward-looking statements in this report and in any other public statements that are made may prove to be incorrect. This may occur as a result of inaccurate assumptions or as a consequence of known or unknown risks and uncertainties. Many factors discussed in this report will be important in determining the Company’s future performance. Consequently, actual results may differ materially from those that might be anticipated from forward-looking statements. In light of these and other uncertainties, you should not regard the inclusion of a forward-looking statement in this report or other public communications that we might make as a representation by us that our plans and objectives will be achieved, and you should not place undue reliance on such forward-looking statements.

We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Any further disclosures made on related subjects in the Company’s subsequent reports filed with the Securities and Exchange Commission should be consulted.

Part I. Financial Information

Item 1. Consolidated Financial Statements

Nevada Gold & Casinos, Inc.

Consolidated Balance Sheets

	July 31,			April 30,
	2009			2009
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	3,652,917		$	13,834,544
Restricted cash		6,000,000			6,000,000
Accounts receivable		30,534			12,342
Prepaid expenses		567,366			235,847
Income tax receivable		2,170,781			1,872,369
Notes receivable, current portion		-			1,100,000
Other current assets		188,445			46,444
Total current assets		12,610,043			23,101,546

Investments in development projects		125,844			746,024
Investments in development projects held for sale		3,437,932			3,437,932
Notes receivable - development projects, net of current
portion and allowances		1,700,000			1,700,000
Goodwill		8,776,185			5,462,918
Identifiable intangible assets		9,763,000			—
Property and equipment, net of accumulated depreciation
of $2,542,581 and $2,408,595 at July 31, 2009 and
April 30, 2009, respectively		3,746,199			1,091,549
Deferred tax asset		640,669			599,797
Other assets		5,822,569			5,915,220
Total assets	$	46,622,441		$	42,054,986

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	1,281,390		$	846,062
Other accrued liabilities		369,954			197,833
Total current liabilities		1,651,344			1,043,895

Long-term debt, net of current portion		10,000,000			6,000,000
Other liabilities		190,162			44,487
Total liabilities		11,841,506			7,088,382

Commitments and contingencies		—			—

Stockholders' equity:
Common stock, $0.12 par value per share; 50,000,000
shares authorized; 13,935,330 shares issued and
12,939,130 shares outstanding at July 31, 2009
and April 30, 2009, respectively		1,672,240			1,672,240
Additional paid-in capital		19,812,600			19,297,560
Retained earnings		23,513,045			24,213,754
Treasury stock, 996,200 shares at July 31, 2009 and
April 30, 2009, respectively, at cost		(10,216,950	)		(10,216,950	)
Total stockholders' equity		34,780,935			34,966,604
Total liabilities and stockholders' equity	$	46,622,441		$	42,054,986

The accompanying notes are an integral part of these consolidated financial statements.

Nevada Gold & Casinos, Inc.

Consolidated Statements of Operations

(unaudited)

	Three Months Ended
	July 31,			July 31,
	2009			2008
Revenues:
Casino	$	4,185,063		$	1,556,953
Food and beverage		1,113,766			446,725
Management fees		250,000			-
Other		184,034			13,873
Gross revenues		5,732,863			2,017,551
Less promotional allowances		(675,644	)		(397,795	)
Net revenues		5,057,219			1,619,756

Expenses:
Casino		1,910,945			518,055
Food and beverage		833,582			210,142
Marketing and administrative		1,240,779			668,817
Facility		260,848			98,330
Corporate expense		1,431,698			1,237,334
Legal expense		64,293			51,724
Depreciation and amortization		145,167			164,595
Other		83,220			33,115
Total operating expenses		5,970,532			2,982,112
Operating loss		(913,313	)		(1,362,356	)
Non-operating income (expenses):
Loss from unconsolidated affiliates		-			(3,572	)
Loss on sale of assets		-			(6,040	)
Interest income		58,509			479,207
Interest expense		(152,981	)		(406,393	)
Amortization of loan issue costs		(32,209	)		(31,639	)
Loss before income tax benefit		(1,039,994	)		(1,330,793	)
Income tax benefit		339,285			504,689
Net loss	$	(700,709	)	$	(826,104	)

Per share information:
Net loss per common share - basic	$	(0.05	)	$	(0.06	)
Net loss per common share - diluted	$	(0.05	)	$	(0.06	)

Basic weighted average number of shares outstanding		12,939,130			12,939,130

Diluted weighted average number of shares outstanding		12,939,130			12,939,130

The accompanying notes are an integral part of these consolidated financial statements.

Nevada Gold & Casinos, Inc.

Consolidated Statements of Cash Flows

(unaudited)

	Three Months Ended
	July 31,			July 31,
	2009			2008
Cash flows from operating activities:
Net loss	$	(700,709	)	$	(826,104	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		145,167			164,595
Stock-based compensation		515,040			82,915
Amortization of deferred loan issuance costs		32,209			31,639
Loss from unconsolidated affiliates		-			3,572
Loss on sale of assets		-			6,040
Deferred income tax benefit		(40,873	)		(504,689	)
Changes in operating assets and liabilities:
Receivables and other assets		(455,679	)		2,047,632
Accounts payable and accrued liabilities		607,448			(538,645	)
Net cash provided by operating activities		102,603			466,955
Cash flows from investing activities:
Capitalized development costs		(8,073	)		(140,442	)
Collections on notes receivable		1,100,000			1,100,000
Purchase of property and equipment		(11,521,832	)		(33,081	)
Maturity of restricted cash		-			14,000
Net cash provided by (used in) investing activities		(10,429,905	)		940,477
Cash flows from financing activities:
Payments on capital lease		(4,325	)		(2,872	)
Borrowings on line of credit		150,000			-
Net cash provided by (used in) financing activities		145,675			(2,872	)

Net increase (decrease) in cash and cash equivalents		(10,181,627	)		1,404,560
Cash and cash equivalents at beginning of period		13,834,544			1,396,313
Cash and cash equivalents at end of period	$	3,652,917		$	2,800,873
Supplemental cash flow information:
Cash paid for interest	$	151,233		$	519,753
Income tax payments	$	-		$	-

Non-cash investing and financing activities:
Reclass of other asset to assets held for sale	$	-		$	4,601,104
Non-cash purchase of property and equipment	$	4,000,000		$	64,050

The accompanying notes are an integral part of these consolidated financial statements.

Nevada Gold & Casinos, Inc.

Notes to Consolidated Financial Statements

Note 1. Basis of Presentation

The interim financial information included herein is unaudited. However, the accompanying consolidated financial statements include all adjustments of a normal recurring nature which, in the opinion of management, are necessary to present fairly our Consolidated Balance Sheets at July 31, 2009 and April 30, 2009, Consolidated Statements of Operations for the three months ended July 31, 2009 and July 31, 2008, and Consolidated Statements of Cash Flows for the three months ended July 31, 2009 and July 31, 2008. Although we believe the disclosures in these financial statements are adequate to make the interim information presented not misleading, certain information relating to our organization and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted in this Form 10-Q pursuant to Securities and Exchange Commission rules and regulations. These financial statements should be read in conjunction with the audited consolidated financial statements for the year ended April 30, 2009 and the notes thereto included in our Annual Report on Form 10-K. The results of operations for the three months ended July 31, 2009 are not necessarily indicative of the results expected for the full year.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period and disclosure of contingent liabilities. On an ongoing basis, we evaluate our estimates, including those related to bad debts, investments, intangible assets and goodwill, property, plant and equipment, income taxes, insurance, employment benefits and contingent liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

Certain reclassifications have been made to conform prior year financial information to the current period presentation. Those reclassifications did not impact working capital, total assets, total liabilities, net income or stockholders’ equity.

Fiscal Year-End

On April 28, 2008, we changed our fiscal year to end on April 30 th rather than the last Sunday in April. As a result, fiscal year 2009 began on April 28, 2008 and ended April 30, 2009. We believe this fiscal year creates more comparability to other companies in the casino industry. We believe that the three months ended July 31, 2008 and July 31, 2009 provide a meaningful comparison. There are no factors, seasonal or otherwise, that would impact the comparability of information or trends. References in this discussion to the first quarter 2010 represent the three months ended July 31, 2009. References to the first quarter 2009 represent the three months ended July 31, 2008.

Note 2. Critical Accounting Policies

Revenue Recognition

In accordance with gaming industry practice, we recognize casino revenues as the net win from gaming activities, which is the difference between gaming wins and losses. Casino revenues are net of accruals for anticipated payouts of progressive slot jackpots which are recorded as a progressive slot jackpot liability. Revenues from food, beverage, entertainment, and the gift shop are recognized at the time the related service or sale is performed or made.

The retail value of food and beverage and other services furnished to guests without charge is included in gross revenue and deducted as promotional allowances. We record the redemption of coupons and points for cash as a reduction of revenue. These amounts are included in promotional allowances in the accompanying consolidated statements of operations. The estimated cost of providing such complimentary services that is included in casino expense in the accompanying consolidated statements of operations was as follows:

	Three Months Ended
	July 31, 2009		July 31, 2008
Food and beverage	$	199,278	$	168,154
Other		3,365		1,497
Total cost of complimentary services	$	202,643	$	169,651

Fair Value Measurements

In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No. 157 “Fair Value Measurements” (“SFAS No. 157”). SFAS No. 157 defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 applies other accounting pronouncements that require or permit fair value measurements. The FASB has previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, SFAS No. 157 does not require any new fair value measurements. However, for some entities, the application of SFAS No. 157 will change current practice. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007 (the Company’s fiscal year 2009), and interim periods within those years. The Company has assessed the effect of the implementation of this pronouncement on the financial statements and concluded that application of SFAS No. 157 does not materially change current practice.

Fair Value Option for Financial Assets and Liabilities

In February 2007, the FASB issued SFAS No. 159 “The Fair Value Option for Financial Assets and Financial Liabilities, Including an Amendment of FASB Statement No. 115” (“SFAS No. 159”). SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS No. 159 is expected to expand the use of fair value measurement, which is consistent with the FASB’s long-term measurement objectives for accounting for financial instruments. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007 (the Company’s fiscal year 2009). The Company has assessed the effect of implementation of this pronouncement on its financial statements and concluded that application of SFAS No. 159 does not materially change current practice.

Noncontrolling Interests in Consolidated Financial Statements

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51” (“SFAS No. 160”). SFAS No. 160 establishes accounting and reporting standards with respect to the disclosure of a noncontrolling ownership interest in the statement of financial position within equity, the presentation of the share of consolidated net income attributable to the parent and noncontrolling interest on the consolidated statement of income, the accounting treatment of changes in a parent’s ownership interest while the parent retains a controlling interest and the accounting for the deconsolidation of a subsidiary. SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. The Company currently has no noncontrolling ownership interests in consolidated subsidiaries and therefore is not impacted by SFAS No. 160.

New Accounting Pronouncements Issued But Not Yet Adopted

As of July 31, 2009, there were several accounting standards and interpretations that had not yet been adopted by us. Below is a discussion of significant standards that may impact us.

Disclosures About Derivative Instruments and Hedging Activities

In March 2008, the FASB issued SFAS No. 161, "Disclosures About Derivative Instruments and Hedging Activities - an amendment of FASB Statement No. 133" ("SFAS No. 161"). SFAS No. 161 expands the disclosure requirements in SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," regarding an entity's derivative instruments and hedging activities. SFAS No. 161 is effective for the Company's fiscal year beginning May 1, 2009. SFAS No. 161 relates specifically to disclosures, and does not have a material impact on the Company's consolidated financial statements.

The Hierarchy of General Accepted Accounting Principles and The FASB Accounting Standard Codification and the Hierarchy of Generally Accepted Accounting Principles – replacement of FASB Statement No. 162

In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles" ("SFAS No. 162"), which identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements that are presented in conformity with GAAP. In June 2009, SFAS No. 162 was replaced by SFAS No. 168, “The FASB Accounting Standard Codification and the Hierarchy of Generally Accepted Accounting Principles – replacement of FASB Statement No. 162”. SFAS No. 168 will become the source of authoritative U.S. generally accepted accounting principles recognized by FASB. SFAS No. 168 becomes effective for financial statements issued for interim and annual periods ending after September 15, 2009. The Company plans to adopt SFAS No. 168 when it becomes effective. The adoption of SFAS No. 168 will have no material impact on the Company's consolidated financial statements.

Note 3. Restricted Cash

During the three months ended July 31, 2009, we maintained a $6,000,000 Project Fund which use is restricted to be used for future acquisitions.

Note 4. Investments in Unconsolidated Affiliates and Investments in Development Projects

During the three months ended July 31, 2008, we held an investment in an unconsolidated affiliate which was accounted for using the equity method of accounting. As of July 31, 2009, our net ownership interest, investments in and earnings from unconsolidated affiliates were as follows:

	Net Ownership								Equity Loss
	Interest				Investment				Three Months Ended
	July 31,		April 30,		July 31,		April 30,		July 31,		July 31,
Unconsolidated affiliates:	2009		2009		2009		2009		2009		2008
	(Percent)
Buena Vista Development Company, LLC (1)		-		-	$	-	$	-	$	-	$	(3,572	)
Total investments in unconsolidated affiliates					$	-	$	-
Total loss from unconsolidated affiliates									$	-	$	(3,572	)

(1)	This asset was sold in December, 2008.

We also hold investments in various development projects that we consolidate. Our net ownership interest and capitalized development costs in development projects are as follows:

	Net Ownership				Capitalized Development Costs
	Interest				Investment
	July 31,		April 30,		July 31,		April 30,
Development Projects:	2009		2009		2009		2009
	(Percent)

Gold Mountain Development, L.L.C. (1)		100		100	$	3,437,932	$	3,437,932
Other (2)		-		-		125,844		746,024
Total investments– development projects					$	3,563,776	$	4,183,956

(1)	Acquisition and development costs incurred for 270 acres of real property in the vicinity of Black Hawk, Colorado.

(2)	Development cost incurred for other development projects.

Note 5. Notes Receivable

Notes Receivable

Southern Tier Acquisition, LLC and Oneida Entertainment, LLC

On June 14, 2007, we sold our membership interest of American Racing Entertainment, LLC (“American Racing”) to two of our former partners, Southern Tier Acquisition II LLC, (“Southern Tier”) and Oneida Entertainment LLC (“Oneida”). As of April 30, 2009, we had notes receivable from Southern Tier and Oneida which totaled $1,100,000. The notes were bearing interest of 5% per annum. Principal payments of $1,100,000, as well as all outstanding unpaid interest, were paid in full on June 14, 2009.

Notes Receivable - Development Projects

At July 31, 2009, we had notes receivable of $1.7 million related to the development of gaming/entertainment projects.

On a quarterly basis, we review each of our notes receivable to evaluate whether collection is still probable. In our analysis, we review the economic feasibility and the current financial, legislative, and development status of the project. If our analysis indicates that the project is no longer economically feasible, the note receivable will be written down to its estimated fair value. During the third quarter of fiscal 2008, we determined that our ability to collect $859,000 of accrued interest and $1.5 million of the original $3.2 million notes receivable from Big City Capital, LLC (“Big City Capital”) had been impaired. As a result we established a $1.5 million valuation allowance in regards to Big City Capital notes receivable and wrote off the accrued interest. Nine hundred thousand dollars ($900,000) of the Big City Capital notes are guaranteed by an individual independent of us.

The repayment of these loans and accrued interest will be largely dependent upon the ability to obtain financing at each development project and/or the performance of each development project.

Note 6. Long-Term Debt

Our long-term financing obligations are as follows:

	July 31,		April 30,
	2009		2009

$6.0 million promissory note, 10% interest, maturing June 30, 2013	$	6,000,000	$	6,000,000
$4.0 million promissory note, 7% interest, maturing May 12, 2012		4,000,000		-
Total		10,000,000		6,000,000
Less: current maturities		-		-
Total long-term financing obligations	$	10,000,000	$	6,000,000

The $6.0 million promissory note matures June 30, 2013. The interest rate on the note is fixed at 10% through June 2010, then changes to 11% on the unpaid balance for the remainder of the term. The $4.0 million promissory note matures May 12, 2012 and the interest rate is fixed for the term at 7%.

Note 7. Stock-Based Compensation

Information about our share-based plans

Our 1999 Stock Option Plan, as amended (the “Stock Option Plan”), provided for the granting of awards to our directors, officers, employees and independent contractors. The Stock Option Plan expired in January, 2009 and was replaced with a new plan described below. The number of shares of common stock reserved for issuance under the Stock Option Plan was 3,250,000 shares. The plan was administered by the Compensation Committee (the “Committee”) of the Board of Directors. The Committee had discretion under the plan regarding the vesting and service requirements, exercise price and other conditions

On April 14, 2009, the shareholders of the Company approved the Company’s 2009 Equity Incentive Plan (the “2009 Plan”). The number of shares with respect to which awards may be granted under the 2009 Plan is 1,750,000 shares. The 2009 Plan is similar to the 1999 Stock Option Plan in most respects and continues to provide for awards which may be made subject to time based or performance based vesting. Under the 2009 Plan the Committee is authorized to grant the following types of awards:

Stock Options including Incentive Stock Options (“ISO”)

Options not intended to qualify as ISO’s

Stock Appreciation Rights

Restricted Stock Grants.

To date, the Committee has only awarded stock options and restricted stock under both plans. Our practice has been to issue new shares upon the exercise of stock options. Stock option rights granted prior to fiscal year 2006 under the Stock Option Plan generally have 5-year terms and are fully vested and exercisable immediately. Subsequent option rights granted generally have 3, 5 or 10 year terms and are exercisable in three or five equal annual installments, with some options grants providing for immediate vesting for a portion of the grant.

A summary of activity under the Company’s share-based payment plans for the three months ended July 31, 2009 is presented below:

					Weighted
			Weighted		Average		Aggregate
			Average		Remaining		Intrinsic
	Shares		Exercise		Contractual		Value
	(000’s)		Price		Term		($000’s)
Outstanding at April 30, 2009		1,136,000	$	2.54
Granted		430,000		1.25
Exercised		-		-
Forfeited or expired		-		-

Outstanding at July 31, 2009		1,566,000	$	2.18		5.4	$	-

Exercisable at July 31, 2009		1,165,999	$	2.37		6.0	$	-

As of July 31, 2009, there was a total of $87,506 of unamortized compensation related to stock, which cost is expected to be recognized over a weighted-average period of 1.0 years.

Compensation cost for stock options was based on the fair value of each award, measured by applying the Black-Scholes model on the date of grant, using the following weighted-average:

	Three Months Ended
	July 31, 2009		July 31, 2008

Expected volatility		143.5%		87.8%
Expected term		8.0		2.5
Expected dividend yield		-		-
Risk-free interest rate		1.63%		2.35%
Forfeiture rate		-		-

Expected volatility is based on historical volatility on the Company’s stock. The expected term considers the contractual term of the option as well as historical exercise and forfeiture behavior. The risk-free interest rate is based on the rates in effect on the grant date for U.S. Treasury instruments with maturities matching the relevant expected term of the award.

The weighted average grant date fair value of options, granted during the three months ended July 31, 2009 was $1.22.

Note 8. Comprehensive Income (Loss)

Comprehensive income (loss) consists of the following:

	Three Months Ended
	July 31, 2009			July 31, 2008
Net loss	$	(700,709	)	$	(826,104	)
Other comprehensive income (loss)		-			-
Comprehensive loss	$	(700,709	)	$	(826,104	)

Note 9. Computation of Earnings Per Share

The following is presented as a reconciliation of the numerators and denominators of basic and diluted earnings per share computations, in accordance with SFAS No. 128:

	Three Months Ended
	July 31,			July 31,
	2009			2008
Numerator:
Basic and Diluted:
Net loss available to common stockholders	$	(700,709	)	$	(826,104	)

Denominator:
Basic weighted average number of common shares outstanding		12,939,130			12,939,130
Dilutive effect of common stock options and warrants		—			—
Diluted weighted average number of common shares outstanding		12,939,130			12,939,130

Loss per share:

Net loss per common share - basic	$	(0.05	)	$	(0.06	)
Net loss per common share - diluted	$	(0.05	)	$	(0.06	)

For the three months ended July 31, 2009 and July 31, 2008, potential dilutive common shares issuable under options of 1,165,999 and 75,000, respectively, were not included in the calculation of diluted earnings per share as they were anti-dilutive.

Note 10. Segment Reporting

We operate in two major business segments (i) gaming and (ii) non-core. The gaming segment for the period ended July 31, 2009 consists of Colorado Grande Casino and the three Washington mini casinos. For the three months ended July 31, 2008, the gaming segment consists of Colorado Grande Casino and Buena Vista Development.

Summarized financial information for our reportable segments is shown in the following table. The “non-core” column includes corporate-related items, results of insignificant operations, and segment profit (loss) and income and expenses not allocated to reportable segments.

	As of and for the Three Months Ended July 31, 2009
	Gaming			Non-Core			Totals

Net revenue	$	5,057,219		$	-		$	5,057,219
Segment loss		(1,035,225	)		(4,769	)		(1,039,994	)
Segment assets		30,595,024			3,563,049			34,158,073
Depreciation and amortization		144,102			1,065			145,167
Addition to property and equipment		15,247,831			—			15,247,831
Interest expense, net		126,681			—			126,681
Income tax benefit		337,729			1,556			339,285

	As of and for the Three Months Ended July 31, 2008
	Gaming			Non-Core			Totals

Net revenue	$	1,619,756		$	-		$	1,619,756
Segment loss		(1,324,592	)		(6,201	)		(1,330,793	)
Segment assets		32,077,792			3,701,864			35,779,655
Equity investment:
Buena Vista Development Company, L.L.C		151,396			—			151,396
Depreciation and amortization		163,114			1,481			164,595
Addition to property and equipment		97,131			—			97,131
Interest income, net		41,175			—			41,175
Income tax benefit		502,337			2,352			504,689
Loss from Buena Vista Development Company, L.L.C.		(3,572	)		—			(3,572	)

Reconciliation of reportable segment assets to our consolidated totals is as follows:

	July 31,
	2009

Total assets for reportable segments	$	34,158,073
Cash not allocated to segments		9,652,917
Other assets not allocated to segments		2,811,451
Total assets	$	46,622,441

Note 11. Other Assets

Other assets consist of the following at July 31, 2009 and April 30, 2009, respectively:

	July 31, 2009		April 30, 2009
Accrued interest receivable	$	107,289	$	167,731
BVR Receivable		4,000,000		4,000,000
Route 66 Settlement Agreement		1,597,183		1,597,183
Deferred loan issue cost, net		118,097		150,306
Other assets	$	5,822,569	$	5,915,220

Note 12. Commitments and Contingencies

We rent office space in Houston, Texas, under a non-cancelable operating lease which expires on March 31, 2011. Also, we lease (through our wholly-owned subsidiary, Colorado Grande Enterprises, Inc.) a portion of a building in Cripple Creek, Colorado, and an adjacent parking lot, for use in connection with the Colorado Grande Casino facilities. We lease this property at an annual rent of the greate

Nevada		88-0142032
(State or other jurisdiction of Incorporation or organization)		(IRS Employer Identification No.)

50 Briar Hollow
Suite 500W
Houston, Texas	77027
(Address of principal executive offices)	(Zip Code)

Issuer’s telephone number:	(713) 621-2245

		Page

	PART I. FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements
	Consolidated Balance Sheets - July 31, 2009 (unaudited) and April 30, 2009	2
	Consolidated Statements of Operations - Three Months Ended July 31, 2009 (unaudited) and July 31, 2008 (unaudited)	3
	Consolidated Statements of Cash Flows - Three Months Ended July 31, 2009 (unaudited) and July 31, 2008 (unaudited)	4
	Notes to Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	15
Item 4.	Controls and Procedures	15

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	16
Item 1A.	Risk Factors	16
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16
Item 3.	Defaults Upon Senior Securities	16
Item 4.	Submission of Matters to a Vote of Security Holders	16
Item 5.	Other Information	16
Item 6.	Exhibits	16