VANCOUVER, May 30, 2014 /CNW/ - POYDRAS GAMING FINANCE CORP. (formerly
Great Northern Gold Exploration Corporation) (TSX-V: PYD) ("Poydras Gaming" or the "Company") has released financial results of Poydras Specialty Finance Corp. ("Poydras Specialty Finance" or "PSF") for the first quarter ended March 31, 2014. (All amounts expressed in
US Dollars unless otherwise stated.)
First quarter summary
During the first quarter ended March 31, 2014, the Company focused on
its reorganization, reverse takeover with Poydras Specialty Finance and
concurrent funding (together the "RTO") which closed on May 9, 2014.
Poydras Specialty Finance reported a loss of $1,132,671 for the first
quarter, largely due to professional fees of $453,384 related to the
RTO and non-cash expenses of $581,924.
Highlights subsequent to the first quarter
In conjunction with the RTO (See News Release dated May 9, 2014, and
prospectuses dated April 22, 2014 and filed on SEDAR):
Completed funding of CDN$3,345,000 in common equity and US$7,732,000 in
Completed acquisition of 100% of Windy Hill Capital LLC ("Windy Hill"),
which generated EBITDA of $1,679,735 on revenue of $2,034,392 for the
year ended December 31, 2013 for $4,000,000 in total consideration
comprised of: (i) an aggregate of 6,705,409 common shares valued at $1,500,000, (ii) unsecured promissory notes in
the aggregate principal amount of $1,500,000 with a 10% interest rate
and quarterly payments amortized over a three year term beginning six
months from May 9, 2014, and (iii) $1,000,000 in cash. Windy Hill holds
an interest in long-term contracts on 126 gaming machines in operation
at two casinos owned by a US federally recognized tribe in Oklahoma.
Completed the acquisition of the 38.43% minority interest in Poydras
Gaming LLC for $2,600,000 comprised of 5,811,345 common shares valued
at $1,300,000 and $1,300,000 in cash. As a result of the minority
interest acquisition, the Company now owns 100% of the limited
partnership and general partnership interests in Poydras Gaming LLC.
Converted CDN$3,000,000 convertible debentures (the "September 2013
debentures") principal into 30,000,000 common shares of the Company at
the rate of CDN$0.10 per common share.
Subsequent to April 22, 2014, the Company deployed 38 additional slot
machines in its core markets of Oklahoma and California, bringing the
number of deployed machines to 312. The Company also has existing
contracts to allow it the opportunity to place an additional 187 slot
machines in 2014 for a total number of 499 deployed and deployable
machines. (See News Release dated May 29, 2014)
"Now that the RTO and funding is completed we look forward to focusing
on building on our track record of generating strong returns at Windy
Hill by deploying capital to increase our portfolio of slot machine
placements," said Peter Macy, CEO of Poydras Gaming. "We expect
financial results to improve in the second half of 2014 with the
consolidation of Windy Hill into our statements and increased cash flow
from the deployment of the our capital. The completion of the RTO has
provided us with a platform to become a leader in providing financing
solutions to regional casino operators and machine vendors and to
realize on acquisition opportunities in our sector."
During the three months ended March 31, 2014, Poydras Specialty Finance
reported a net loss of $1,132,671 or $0.02 per share on $159,776 of
leasing and financing revenue. The most significant factors driving the
financial results during the current period are (i) loss on valuation
of the September 2013 debentures of $493,112, (ii) professional fees of
$453,384, (iii) depreciation expense of $88,812, (iv) salaries of
$90,000 and (v) financing costs of $98,593. The loss on valuation of
the September 2013 debentures was recorded to recognize a liability for
the increase in the estimated fair value of the September 2013
debentures conversion feature, which is a non-cash liability.
Professional fees were incurred during the process of structuring and
acquiring Great Northern, a Canadian public company target. Financing
costs represent interest expense on the September 2013 debentures and
CDN$3,000,000 September 2013 debentures were converted into equity
concurrently with the RTO, therefore interest expense on these
convertible debentures will not be accruing at the rate of 12% per
annum after May 9, 2014. Loss on valuation of the September 2013
debentures and depreciation expense are non-cash expenses.
As at March 31, 2014, PSF had total assets of $4,296,665 consisting of
cash of $196,970, receivables of $70,107, current prepaid expenses of
$15,008, current prepaid placement fees of $176,256, non-current
prepaid expenses of $31,934, non-current prepaid placement fees of
$1,774,307, gaming equipment of $1,626,876, loan receivable of $397,490
and a loan receivable from PSF II of $7,717.
As at March 31, 2014, PSF had total liabilities of $5,674,563 consisting
of $1,864,587 of current liabilities and $3,809,976 of non-current
liabilities of which $3,731,611 was related to September 2013
debentures which were converted to equity in conjunction with the RTO.
Included in non-current liabilities is a $1,017,416 estimated fair
value of the option for the PSF September 2013 debentures holders to
convert their debentures into common shares of Poydras Gaming, which
does not represent Poydras Specialty Finance's obligation to settle the
debentures in cash upon maturity. The CDN$3,000,000 face value of the
September 2013 debentures were fully converted to equity in conjunction
with the RTO.
Poydras Gaming expects to generate most of its revenue from providing
casinos and machines suppliers with financing for gaming machines and
related capital expenditures in the United States. Currently, the
Company owns or finances gaming machines in Oklahoma and California. In
the short to medium term, Poydras Gaming is looking to expand
operations into Louisiana.
While the Company expects to report additional professional fees and
costs for the RTO in the second quarter of 2014, it expects financial
performance to improve significantly in the 2nd half of 2014, due to the reduction of professional fees, contributions
from Windy Hill (acquired during the 2nd quarter of 2014) and increased
deployment of slot machines related to new and existing agreements. In
addition, Poydras Gaming believes that there are opportunities to grow
by acquiring installed slot machines and leasing operations.
The Company is also pleased to announce that it will be hosting an
investor conference call on Monday, June 2, 2014 at 7:00am Pacific Time
(10:00am Eastern Time). The purpose of this conference call will be to
provide investors with an update of the financial results of the
Company and subsequent events after completion of the RTO.
Representing Poydras Gaming on the conference call will be:
Mr. Peter Macy, Chief Executive Officer
Mr. Adam Kniec, Chief Financial Officer
Mr. Kim Oishi, Member of the Board of Directors
Following the update, a question and answer session will be held. To
participate, the dial-in instructions are as follows:
Monday, June 2, 2014
7:00am Pacific Time / 10:00am Eastern Time
Participant Dial-In Number(s):
North America Toll-Free Dial-In Number:
1 (888) 390-0546
1 (416) 764-8688
1 (778) 383-7413
A Taped Replay will be available until June 9, 2014.
Taped Replay Toll Free Number:
1 (888) 390-0541
Taped Replay Toronto Dial-in Number:
1 (416) 764-8677
Taped Replay Password:
For additional information please see the SEDAR website at www.sedar.com.
About Poydras Gaming Finance Corp.:
Poydras Gaming is focused on leasing and financing gaming machines (such
as slot machines) and related capital expenditures for existing
casinos, new casino developments and gaming machine suppliers in the
United States. It owns and finances slot machines including long-term
lease contracts across four casinos in Oklahoma and a financing
agreement with a gaming machine supplier based out of California.
Additional information about the Company can be found on the SEDAR
website at www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
Certain information in this news release is considered forward-looking
within the meaning of certain securities laws and is subject to
important risks, uncertainties and assumptions. This forward‐looking
information includes, among other things, information with respect to
the Company's beliefs, plans, expectations, anticipations, estimates
and intentions. The words "may", "could", "should", "would", "suspect",
"outlook", "believe", "anticipate", "estimate", "expect", "intend",
"plan", "target" and similar words and expressions are used to identify
forward‐looking information. The forward-looking information in this
news release describes the Company's expectations as of the date of
this news release.
EBITDA (earnings before interest, taxes, depreciation and amortization)
is a financial measure that does not have a standardized meaning under
IFRS. As there is no standardized method of calculating this measure,
Windy Hill's EBITDA may not be directly comparable with similarly
titled measures used by other companies. Poydras considers Windy
Hill's EBITDA to be relevant indicator for measuring trends in
performance and Windy Hill's ability to generate funds to meet its
working capital and capital expenditure requirements. EBITDA is not a
generally accepted earnings measure and should not be considered as an
alternative to net income (loss) or cash flows as determined in
accordance with IFRS.
The results or events anticipated or predicted in such forward-looking
information may differ materially from actual results or events.
Material factors which could cause actual results or events to differ
materially from such forward-looking information include, among others,
risks arising from general economic conditions and adverse industry
The Company cautions that the foregoing list of material factors is not
exhaustive. When relying on the Company's forward-looking information
to make decisions, investors and others should carefully consider the
foregoing factors and other uncertainties and potential events. The
Company has assumed a certain progression, which may not be realized.
It has also assumed that the material factors referred to in the
previous paragraph will not cause such forward-looking information to
differ materially from actual results or events. However, the list of
these factors is not exhaustive and is subject to change and there can
be no assurance that such assumptions will reflect the actual outcome
of such items or factors.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE
REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS NEWS
RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS
SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD‐LOOKING INFORMATION AND
SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE
COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION
AT ANY PARTICULAR TIME.
SOURCE: Poydras Gaming Finance Corp.
For further information:
Peter Macy, CEO
Poydras Gaming Finance Corp.
Phone: (604) 683-8393