Nevada Gold & Casinos Inc. (NYSE MKT:UWN) Q2 2019 Earnings Conference Call - Final Transcript
Dec 14, 2018 • 04:30 pm ET
Please stand by. Good day and welcome to the Nevada Gold & Casinos' Second Quarter 2019 Financial Results Call. Today's conference is being recorded.
At this time, I'd like to turn the conference over to Mr. Preston Graham, Investor Relations. Please go ahead, sir.
Thank you and good afternoon.
We appreciate you joining us today. With me on the call is Mike Shaunnessy, Chief Executive Officer; and Jim Meier, Chief Financial Officer. The purpose of today's call is to review the company's financial results for the second quarter of 2019. Following the company's remarks, there will be an opportunity to ask questions.
(Forward-Looking Cautionary Statements)
With that, I'd like to turn the call over to Nevada Gold's CEO, Mike Shaunnessy. Mike?
Thanks, Preston. Welcome, everyone. First, a quick update on all of our recent developments. As you'll recall, we closed on the sale of the South Dakota route operation on June 30th this year. So our current quarter has no contribution from South Dakota. On June 27th, we signed a definitive agreement to sell Club Fortune to Truckee Gaming for $14.6 million.
Our financials now reflect this property as held for sale. On December 5th, the Nevada Gaming Control Board unanimously recommended approval of this transaction and the matter now moved to the Nevada Gaming Commission for final review on December 20th. We anticipate this transaction will close on December 31st.
On August 3rd, we announced we had entered into exclusive negotiations to sell the company. And on September 18th, we signed a merger acquisition agreement with Maverick Gaming LLC to acquire the company for $2.50 a share in cash. On November 29th, in order to expedite approval by the Washington State Gambling Commission, the company entered into a securities purchase agreement with Maverick.
The company issued and sold to Maverick 890,390 shares of our common stock, representing 5% of the outstanding shares in a private placement for $2.42 a share to closing market price of the last day prior to the issuance. Maverick acquired these shares, which are held in escrow, using the $2 million escrow deposit already made and additional cash.
On December 3rd, we filed preliminary proxy materials with the SEC concerning this transaction. This morning, the SEC notified us that they had no comment on the proxy, but since the preliminary proxy filing, we have been served with three purported class action lawsuits concerning the adequacy of disclosures in the proxy and seeking to enjoying the process. Counsel is in the process of addressing these actions.
Updating operations for the quarter, starting with Washington. Last year in October, we made a strategic shift to convert our Red Dragon property to poker-only. On a consolidated basis, our poker revenue is now consistently generating an incremental $400,000 quarterly, an increase of over 40%. In addition, our Crazy Moose Mountlake Terrace operation, which is located nearby, is now consistently producing an incremental $1.5 million increase in drops on a quarterly basis since this conversion.
During the recent quarter, we saw