8-K 1 pres8k.txt ============================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15 (d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) December 20, 2006 PRESIDENT CASINOS, INC. (Exact Name of Registrant as Specified in Charter) DELAWARE 0-20840 51-0341200 (State of Incorporation) (Commission File No.) (IRS Employer Identification No.) 1000 N. Leonor K. Sullivan Blvd., St. Louis, Missouri 63102 (Address of principal executive officer) (Zip Code) Registrant's telephone number including area code: (314) 622-3000 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ============================================================================ 2 Item 2.01 Completion of Acquisition or Disposition of Assets. On December 20, 2006, President Casinos, Inc., a Delaware corporation (the "Company"), announced that it had completed the sale of all of the outstanding capital stock of its President Casino-Missouri, Inc. ("President Missouri") subsidiary to Pinnacle Entertainment, Inc. (the "Purchaser") for approximately $31.5 million in cash, subject to certain adjustments. In addition to the proceeds from the sale of stock, certain forgiveness of debt was granted by the Purchaser. See "Note 3. Payment and Forgiveness of Debt". President Missouri was a wholly-owned subsidiary of the Company that conducted the Company's St. Louis, Missouri gaming operations. The transaction was consummated pursuant to the terms and conditions of the Riverboat Casino Sale and Purchase Agreement, dated as of February 24, 2006, by and between the Company, President Missouri and the Purchaser (the "Sale Agreement"). Pursuant to the Sale Agreement, the Purchaser acquired from the Company all of the stock of President Missouri. The consideration payable pursuant to the Sale Agreement was determined through arms-length negotiations between the parties to the Sale Agreement. The Company and President Missouri are parties to Chapter 11 bankruptcy proceedings pending in the United States Bankruptcy Court for the Eastern Division of Missouri. In September 2006, the Purchaser completed a tender offer pursuant to which it acquired approximately $62.0 million of allowed claims against the bankruptcy estate of President Missouri. A copy of the Sale Agreement and a press release issued by the Company in connection with the transaction are attached as Exhibits 2 and 99 hereto, respectively, and incorporated herein by reference. Item 9.01. Financial Statements and Exhibits. (a) Not applicable. (b) Pro forma financial information. On December 20, 2006 the Company announced that it had completed the sale of all of the outstanding capital stock of President Missouri to the Purchaser for approximately $31.5 million in cash, subject to certain adjustments. In addition to the proceeds from the sale of stock, certain forgiveness of debt was granted by the Purchaser. See "Note 3. Payment and Forgiveness of Debt". President Missouri was a wholly-owned subsidiary of the Company that conducted the Company's St. Louis, Missouri gaming operations. The transaction was consummated pursuant to the terms and conditions of the Sale Agreement, dated as of February 24, 2006, by and between the Company, President Missouri and the Purchaser. Pursuant to the Sale Agreement, the Purchaser acquired from the Company all of the stock of President Missouri. The consideration payable pursuant to the Sale Agreement was determined through arms-length negotiations between the parties to the Sale Agreement. The Company and President Missouri are parties to Chapter 11 bankruptcy proceedings pending in the United States Bankruptcy Court for the Eastern Division of Missouri. In September 2006, the Purchaser completed a tender offer pursuant to which it acquired approximately $62.0 million of allowed claims against the bankruptcy estate of President Missouri. The results of operations of the Company's St. Louis operations were classified as a discontinued operation in the unaudited consolidated financial statements and notes thereto included in the Company's Quarterly Report on Form 10-Q as of and for the six months ended August 31, 2006 and Annual Report on Form 10-K for the year ended February 28, 2006 in accordance with SFAS No. 1 3 144. As such, there are no pro forma adjustments to continuing operations necessary to reflect the Company's sale of its St. Louis operations for the six months ended August 31, 2006 or the year ended February 28, 2006. The pro forma adjustments to continuing operations are the result of the payment and forgiveness of noteholder outstanding principal and payment of costs associated with the debt. The unaudited pro forma condensed consolidated financial statements have been prepared based upon currently available information, estimates and assumptions that are deemed appropriate by the Company's management. The unaudited pro forma condensed consolidated financial statements are not necessarily indicative of the results that would have been reported had such transaction actually occurred on the dates specified, nor are they indicative of our future results of operations or financial condition. The unaudited pro forma condensed consolidated financial statements are based on and should be read in conjunction with, and are qualified in their entirety by, the historical consolidated financial statements and notes thereto of the Company. The unaudited pro forma condensed consolidated financial statements of the Company set forth below have been are prepared in accordance with Article 11 of Regulation S-X. 2 4 PRESIDENT CASINOS, INC. (DEBTORS-IN-POSSESSION) UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET As of August 31, 2006 (in thousands)

Pro Forma Adjustments -----------------------~~-----------~~ President Casinos, President Inc. Missouri Historical Adjustments Other Pro Forma ~~Inc.~~(aNote 1) ~~Casino~~(bNote 2) ~~Hotel~~(bNote 3) ~~Other~~ As Adjusted -------- -------- -------- --~~------~~ ----------- ASSETS Current assets: Cash and cash equivalents........... $ 1925,~~223~~588 $ 631,~~750~~500 $(a) ~~75,250~~ $(3550,~~713~~680)(cf) $ 21462 3,~~337~~518 (~~1,032~~b) (d201) ~~690~~ (eg) ~~2,114~~ (f561)(h) (458,~~709~~702)(gi) Restricted cash~~...................~~ ~~2,114~~and --cash --equivalents (21,~~114)(f)~~467 -- ~~Restricted~~8,702 ~~short-term~~(i) ~~investments.~~10,169 ~~350~~Assets --of --discontinued 45operations... 39,~~945~~152 (g38,627)(c) ~~46,295~~-- 525 Prepaid expenses and other current assets.................... ~~235~~112 -- --28 --(g) ~~235~~140 --------- --------- --------- --------- ~~---------~~ Total current assets............ 2166,~~922~~319 6(3,~~750~~609) ~~75,250~~ (3651,~~055~~414) 6711,~~867~~296 Property and equipment, net......... 65 -- -- --5 ~~6 Assets of discontinued operations. 86,882 (8,083) (38,769) (2,772)(e) 37,258~~ --------- --------- --------- --------- ~~---------~~ $~~108,810~~ ~~$ (1~~66,~~333)~~324 $ (23,~~865~~609) $(3851,~~827~~414) $~~105~~ 11,~~131~~301 ========= ========= ========= ========= ~~=========~~ LIABILITIES AND STOCKHOLDERS=' EQUITY (DEFICIT) Current liabilities: Accounts payable.................... $ ~~287~~60 $ -- $ --200 $(j) -- $ ~~287~~260 Accrued payroll and benefits........ ~~252~~170 -- -- --170 ~~252~~ Other accrued expenses.............. ~~624~~461 -- --(16)(g) --445 ~~624~~ Liabilities of discontinued operations........................ 515,~~522~~527 ~~259 1,095~~ (~~39,274)(c) 11,520 (~~2,~~082~~046)(ed) --~~-------~~ 3,481 --------- --------- --------- --------- Total current liabilities....... 526,~~685~~218 ~~259 1,095~~ (412,~~356~~046) 12184 4,~~683~~356 Minority interest................... 183,~~673~~669 -- -- ~~-- 18~~3,~~673~~669 --------- --------- --------- --------- ~~---------~~ Total liabilities not subject to compromise................... 719,~~358~~887 ~~-- --~~ (412,~~356~~046) 30184 8,~~014~~025 --------- --------- --------- --------- ~~---------~~ Liabilities subject to compromise.. 9163,~~864~~183 -- --(10,000)(j) --2,503 91(50,~~864~~680)(f) --------- --------- --------- --------- ~~---------~~ Total liabilities................ ~~163~~73,~~222~~070 ~~259 1~~(2,~~095~~046) (4160,~~356~~496) ~~123~~10,~~220~~528 --------- --------- --------- --------- ~~---------~~ Stockholders=' equity (deficit): Common stock........................ 302 -- -- -- 302 Additional paid-in capital.......... 101,729 -- -- -- 101,729 Accumulated equity (deficit)........ (~~156~~108,~~443~~777) (1,~~592~~563)(e) 359,~~386~~800 ~~2,529~~(j) (~~120~~101,~~120~~258) ~~---------~~(157)(g) (561)(h) --------- --------- --------- --------- Total stockholders=' equity (deficit)...................... (546,~~412~~746) (1,~~592~~563) 359,~~386~~082 ~~2,529~~773 ~~(18,089)~~ --------- --------- --------- --------- ~~---------~~ $~~108~~ 66,~~810~~324 $ (13,~~333~~609) $ ~~36,481 $~~(3851,~~827~~414) $~~105~~ 11,~~131~~301 ========= ========= ========= ========= ~~=========~~

See accompanying notes to unaudited pro forma condensed consolidated financial statements. 3 5 PRESIDENT CASINOS, INC. (DEBTORS-IN-POSSESSION) UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS For the Year ended February 28, 2006 (in thousands, except per share data)

Pro Forma Adjustments -----------~~-----------------------~~ President Casinos, Other Pro Forma Inc.~~(a)~~ ~~Casino~~(b)Note ~~Hotel(b~~3) ~~Other~~ As Adjusted -------- -------- -------- ---~~-----~~ ~~---------~~ OPERATING REVENUES - NET........... $ -- $ -- $ -- $ -- $ -- -----~~----~~ --------- --------- ~~--------- ---------~~ OPERATING EXPENSES: Selling, general and administrative................. 12,~~916~~608 -- ~~-- -- 1~~2,~~916~~608 Depreciation and amortization.... 3 -- ~~-- --~~ 3 --------- --------- --------- ~~--------- ---------~~ Total operating expenses..... 12,~~919~~611 -- ~~-- -- 1~~2,~~919~~611 --------- --------- --------- ~~--------- ---------~~ Operating loss................... (12,~~919~~611) -- --(2,611) --OTHER INCOME (~~1,919~~EXPENSE): Interest, ~~net~~income.................... 7269 -- --269 ~~-- 7~~ Reorganization ~~costs~~items, net........~~.....~~ (~~825~~671) 9,800 (j) 9,045 (84)(g) -- -- ----- ~~(825)~~ --------- --------- Total other income (expense).. (402) 9,716 9,314 --------- --------- --------- INCOME (LOSS) BEFORE MINORITY INTEREST AND DISCONTINUED OPERATIONS....................... (23,~~737~~013) --9,716 ~~-- -- (2~~6,~~737)~~703 Minority interest................ ~~(1,020)~~636 -- --636 ~~1,020(c)~~ -- --------- --------- --------- ~~--------- --------- LOSS FROM CONTINUING OPERATIONS.... (3,757) -- -- 1,020 (2,737) --------- --------- --------- --------- ---------~~ INCOME (LOSS) FROM ~~DISCONTINUED~~CONTINUING OPERATIONS............ ~~1,694 (290) 2,051 37,678(d) 41,113 --------- --------- --------- --------- --------- NET INCOME (LOSS)~~...........~~.......~~ $ (23,~~063~~649) $ ~~(290) $ 2~~9,~~051~~716 $ 386,~~698~~067 ~~$ 38,396~~ ========= ========= ========= ~~========= =========~~ Basic and diluted net ~~loss per share from continuing operations $ (0.75) $ (0.54) Basic and diluted net~~ income (loss) per share from ~~discontinued~~continuing operations.......... .~~34 8~~.17 ~~--------- --------- Basic and diluted earnings (loss) per share.................~~ $ (0.4172) $ 71.6321 ~~========= =========~~ Weighted average number of shares outstanding ~~(e)~~........... 5,033 5,033 ========= =========

See accompanying notes to unaudited pro forma condensed consolidated financial statements. 4 6 PRESIDENT CASINOS, INC. (DEBTORS-IN-POSSESSION) UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS For the Six-Month Period ended August 31, 2006 (in thousands, except per share data)

Pro Forma Adjustments -----------~~-----------------------~~ President Casinos, Other Pro Forma Inc.~~(a)~~ ~~Casino~~(b)Note ~~Hotel(b~~3) ~~Other~~ As Adjusted -------- -------- -------- ---~~-----~~ ~~---------~~ OPERATING REVENUES - NET........... $ -- $ -- $ -- $ -- $ -- -----~~----~~ --------- --------- -~~--------~~ ~~---------~~ OPERATING EXPENSES: Selling, general and administrative................. 21,~~899~~167 --20 --(g) ~~-- 2~~1,~~899~~187 Depreciation and amortization.... 51 -- --1 -- 5 --------- --------- --------- -~~--------~~ ~~---------~~ Total operating expenses..... 21,~~904~~168 --20 ~~-- -- 2~~1,~~904~~188 --------- --------- --------- ~~--------- ---------~~ Operating loss................... (21,~~904~~168) --20 ~~-- --~~ (21,~~904~~188) OTHER INCOME: Interest, net.................... 1735 -- --35 ~~-- 17~~ Reorganization ~~costs~~items, net........~~.....~~ 15 9,800 (~~342~~j) 9,683 (132)(g) -- -- ----- ~~(342)~~ --------- --------- Total other income, net.......... 50 9,668 9,718 --------- --------- --------- INCOME (LOSS) BEFORE MINORITY INTEREST AND DISCONTINUED OPERATIONS...................... (31,~~229~~118) --9,648 ~~-- -- (3~~8,~~229)~~530 Minority interest................ ~~(1,306)~~138 -- --138 ~~1,306 (c)~~ -- --------- --------- --------- ~~--------- --------- LOSS FROM CONTINUING OPERATIONS.... (4,535) -- -- 1,306 (3,229) --------- --------- --------- --------- ---------~~ INCOME (LOSS) FROM ~~DISCONTINUED~~CONTINUING OPERATIONS............ ~~1,800 (2,324) 2,694 37,631 (d) 39,061 --------- --------- --------- --------- --------- NET INCOME (LOSS)~~...........~~.......~~ $ (21,~~735~~256) ~~$ (2~~9,~~324)~~648 ~~$ 2~~8,~~694~~392 ~~$ 38,937 $ 35,832~~ ========= ========= ========= ~~========= =========~~ Basic and diluted net ~~loss per share from continuing operations $ (0.90) $ (0.64) Basic and diluted net~~ income (loss) per share from ~~discontinued~~continuing operations.......... .36 ~~7.76 --------- --------- Basic and diluted earnings (loss) per share.................~~ $ (0.5425) $ 71.1267 ========= ========= Weighted average number of shares outstanding ~~(e)~~........... 5,033 5,033 ========= =========

See accompanying notes to unaudited pro forma condensed consolidated financial statements. 5 7 PRESIDENT CASINOS, INC. (DEBTORS-IN-POSSESSION) NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands) Note 1 President Basis of Presentation Historical financial information for the Company as of and for the six months ended August 31, 2006 has been derived from unaudited historical consolidated financial statements included in the Company's Quarterly Report on Form 10-Q as of and for the six months ended August 31, 2006. Historical financial information for the year ended February 28, 2006 has been derived from audited historical consolidated financial statements included in the Company's 2006 Annual Report on Form 10-K. Note 2 Pro Forma Adjustments Disposition of Assets Pro forma adjustments related to the disposition of certain assets of the Company held for sale as a result of discontinued operations of the Company's St. Louis operations. (a) Represents proceeds from the sale of President Missouri's common stock. (b) Represents proceeds from net assets paid by the Purchaser less liabilities paid to the Purchaser of $2,542 and $976 reimbursement from the Purchaser for the purchase of certain gaming equipment. (c) Represents net book value of assets sold of President Missouri at the time of the stock sale. (d) Represents net book value of liabilities of President Missouri at the time of the stock sale of $3,849 and liabilities incurred for professional fees as a result of the sale of $1,803. (e) Represents pro forma loss on the sale of the Company's St. Louis operations. Cash proceeds $ 31,500 ---------- Basis in assets sold (32,236) Estimated professional fees and closing costs (1,763) Reimbursement for newly acquired gaming equipment 976 ---------- (1,523) Income tax expense 40 ---------- Estimated pro forma net loss $ (1,563) ========== 6 8 Note 3. -- Pro Forma Adjustments -- Payment and Forgiveness of Debt and Related Costs (f) Represents repayment of noteholders' outstanding principal. (g) Represents payment of professional fees incurred by and on behalf of the noteholders. (h) Represents payment of professional fees incurred by and on behalf of the Official Committee of Equity Holders. (i) Represents proceeds restricted for payment of creditors. (j) On October 12, 2006, the Company and President Missouri announced that the Company and President Missouri had entered into a Settlement Agreement, dated as of October 10, 2006 (the "Settlement Agreement"), with Pinnacle, the Official Committee and Mr. Wirginis which resolved the dispute between the competing bankruptcy reorganization plans proposed by President Missouri and the Official Committee in President Missouri's Chapter 11 bankruptcy proceedings pending in the Bankruptcy Court. The Settlement Agreement provides that the reorganization plan previously filed by President Missouri will be amended in various respects, including a reduction in the amount to be paid to the holders of the Notes under the plan by $5,000 which will be permanently waived. An additional $5,000 under the Notes has be deferred, and will be payable from one-half of any future amounts in excess of $5,000 recovered by the Company pursuant to certain pending litigation and tax refund claims. The forgiveness of debt of $10,000 is stated net of income taxes of $200. 7 9 SIGNATURES Pursuant to the requirements 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. Dated: December 26, 2006 PRESIDENT CASINOS, INC. By: /s/ Ralph J. Vaclavik ------------------------------------------- Ralph J. Vaclavik, Senior Vice President and Chief Financial Officer 8 10 EXHIBIT INDEX Exhibit Number Description 2 Riverboat Casino Sale and Purchase Agreement entered into as of February 24, 2006, by and among President Casinos, Inc., debtor and debtor-in-possession in a chapter 11 bankruptcy case, Case No. 02-53005 pending in the United States Bankruptcy Court for the Eastern District of Missouri, President Riverboat Casino- Missouri, Inc. and Pinnacle Entertainment, Inc. filed as Exhibit 2 to the Company's Current Report on Form 8-K dated February 24,2006, is incorporated herein by reference. 99 Press Release dated December 20, 2006.

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