<PAGE>
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

          / X /   Annual Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
                  For the fiscal year ended February 28, 2006
                                      or
          /   /  Transition Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                         Commission File Number: 0-20840

                            PRESIDENT CASINOS, INC.
              (Exact name of registrant as specified in its charter)
               Delaware                                  51-0341200
    (State or other jurisdiction of                   (I.R.S. Employer
     incorporation or organization)                  Identification No.)
         1000 N. Leonor K. Sullivan Blvd., St. Louis, Missouri  63102
                      Address of principal executive offices
                                 314-622-3000
               Registrant's telephone number, including area code

      Securities registered pursuant to Section 12(b) of the Act:  None
         Securities registered pursuant to Section 12(g) of the Act:
                       Common Stock, $.06 par value
                     Preferred Stock Purchase Rights

  Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. [ ] Yes [X] No

  Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. [ ] Yes [X] No

  Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  Yes [X]    No [ ]

  Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Registration S-K is not contained herein, and will not be contained, to
the best of the registrant's knowledge, in the definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or
amendment to this Form 10-K. [X]

  Indicate by check mark whether the Registrant is a large accelerated filer,
an accelerated filer or a non-accelerated filer.

Large accelerated filer [ ]  Accelerated filer [ ]  Non-accelerated filer [X]

  Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).  Yes [ ]     No [X]

  As of August 31, 2005, the aggregate market value of the voting stock held
by non-affiliates of the Registrant was approximately $785,973.*

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  As of May 26, 2006, the number of shares outstanding of the Registrant's
Common Stock was approximately 5,033,161.

* Calculated by excluding all shares that may be deemed to be beneficially
owned by executive officers and directors of the Registrant, without conceding
that all such persons are "affiliates" of the Registrant for purposes of the
federal securities laws.

                 DOCUMENTS INCORPORATED BY REFERENCE - None.
<PAGE> 3
                          PRESIDENT CASINOS, INC.
                         (DEBTORS-IN-POSSESSION)
                                FORM 10-K
                                  INDEX
                                                                     Page
                                                                     ----
PART I.

Item 1.  Business.....................................................  3

Item 1A.  Risk Factors................................................ 17

Item 1B.  Unresolved Staff Comments................................... 20

Item 2.  Properties................................................... 20

Item 3.  Legal Proceedings............................................ 20

Item 4.  Submission of Matters to a Vote of Security Holders.......... 22

PART II.

Item 5.  Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities..................... 22

Item 6.  Selected Consolidated Financial Data......................... 22

Item 7.  Management's Discussion and Analysis of Financial
Condition and Result of Operations.................................... 24

Item 7A.  Quantitative and Qualitative Discloses About Market Risk.... 38

Item 8.  Financial Statements and Supplementary Data.................. 39

Item 9.  Changes and Disagreements with Accountants on
Accounting and Financial Disclosure................................... 39

Item 9A.  Controls and Procedures..................................... 39

Item 9B.  Other Information........................................... 39

PART III.

Item 10.  Directors and Executive Officers of the Registrant.......... 40

Item 11.  Executive Compensation...................................... 42

Item 12.  Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters............................ 45

Item 13.  Certain Relationships and Related Transactions.............. 46

Item 14.  Principal Accountant Fees and Services...................... 47

PART IV.

Item 15.  Exhibits and Financial Statement Schedules.................. 48

Signatures............................................................F-55
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Cautionary Statement about Forward Looking Statements and Risk Factors

  This Annual Report on Form 10-K and certain information provided
periodically in writing and orally by the Company's designated officers and
agents contain certain statements which constitute "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.
The terms "Company," "we," "our" and "us" refer to President Casinos, Inc.
The words "expect," "believe," "goal," "plan," "intend," "estimate," and
similar expressions and variations thereof are intended to specifically
identify forward-looking statements.  Those statements appear in this Annual
Report on Form 10-K and the documents incorporated herein by reference, and
include statements regarding the intent, belief or current expectations of the
Company, its directors or its officers with respect to, among other things:

    o   future effects from the Company's filing for Chapter 11 protection
        which occurred in June and July 2002;

    o   our financial prospects and operations;

    o   our financing plans and our ability to meet our obligations under
        our debt obligations and obtain satisfactory operating and working
        capital;

    o   our operating and restructuring strategy;

    o   results of litigation;

    o   effect of changes in accounting due to recently issued accounting
        standards; and

    o   the effect of competition and regulatory developments on our
        current and expected future revenues.

  You are cautioned that any such forward looking statements are not
guarantees of future performance and involve risks and uncertainties, and that
actual results may differ materially from those projected in the forward
looking statements as a result of various factors. The factors that might
cause such differences include, among others, the following:

    o   the likelihood that the Company will be unable to realize a
        sufficient amount from the sale of its St. Louis operations to fully
        discharge its debt;

    o   future operating and net losses that may be incurred by the Company;

    o   the inability of the Company to restructure its debt obligations;

    o   the inability of the Company to obtain sufficient cash from its
        operations and other resources to fund ongoing obligations and
        continue as a going concern;

    o   the ability of the Company to develop, prosecute, confirm and
        consummate one or more plans of reorganization with respect to the
        Chapter 11 cases;

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    o   risks associated with third parties proposing and obtaining
        confirmation of one or more plans of reorganization, or seeking
        and obtaining approval for the appointment of a Chapter 11 trustee
        or converting the cases to Chapter 7 cases;

    o   the ability of the Company to obtain trade credit, and shipments and
        terms with vendors and service providers;

    o   the Company's ability to maintain contracts that are critical to
        its operations;

    o   potential adverse developments with respect to the Company's
        liquidity and results of operations;

    o   developments or new initiatives by our competitors in the markets in
        which we compete;

    o   the Company's stock price;

    o   disruption of operations;

    o   general economic, business and market conditions;

    o   adverse governmental or regulatory changes or actions which could
        negatively impact our operations including federal, state and local
        regulations; and

    o    other factors including those identified in the Company's filings
        made from time-to-time with the Securities and Exchange Commission.

  The Company undertakes no obligation to publicly update or revise forward
looking statements to reflect events or circumstances after the date of this
Annual Report on Form 10-K or to reflect the occurrence of unanticipated
events.

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<PAGE> 6
                                    PART I

Item 1.  Business.

General

  President Casinos, Inc. (the "Company") owns and operates a dockside gaming
casino in St. Louis, Missouri.  Company's gaming facility and operations in
St. Louis are summarized as follows:

    Operating entity                  - President Riverboat Casino-
                                        Missouri, Inc.
    Vessel                            - "Admiral"
    Slots                             -   992
    Gaming tables                     -    29
    Opening of casino without slots   - May 27, 1994
    Opening of casino with slots      - December 9, 1994

  The Company owned and operated gaming facilities in Biloxi, Mississippi,
through the date of the sale by the Company of the assets of its Biloxi
operations on April 15, 2005.  These former operations are summarized as
following:

    Operating entity                  - The President Riverboat Casino-
                                        Mississippi, Inc.
    Vessel                            - "President Casino-Broadwater"
    Opening of casino                 - August 13, 1992
    Opening of replacement facility   - June 30, 1995
    Sale of casino and hotel          - April 15, 2005

  In addition to its former Biloxi gaming operations, the Company owned and
managed certain hotel and ancillary facilities associated with its casino
operations in Biloxi, which were included in the sale of the Biloxi assets.

  The Company was incorporated in the State of Delaware in June 1992 and
completed the initial public offering of its Common Stock in December 1992.
The Company is the successor to businesses operated in St. Louis, Missouri
since 1985 and Biloxi, Mississippi since August 1992.

Substantial Indebtedness; Bankruptcy Proceedings

--Overview

  As used herein, the term "Company" refers to President Casinos, Inc., its
wholly-owned subsidiaries, a 95%-owned limited partnership and a limited
liability company in which a wholly-owned subsidiary of President Casinos,
Inc. owns a Class A ownership interest and in which an entity wholly-owned by
the former Chairman of President Casinos, Inc. owns a Class B unit and has a
preferred right to certain cash flows.  As described below, President Casinos,
Inc. and certain of its subsidiaries are currently in bankruptcy proceedings.

  As a result of the Company's relatively high degree of leverage and the need
for significant capital expenditures at its St. Louis property, the Company
was unable to pay the regularly scheduled interest payments of $6.375 million
which were each due and payable March 15, and September 15, 2000.  Under the
indentures pursuant to which the $75.0 million 13% Senior Exchange Notes (the

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"Senior Exchange Notes") and $25.0 million 12% Secured Notes (the "Secured
Notes" and, collectively with the Senior Exchange Notes, the "Notes") were
issued, an Event of Default occurred on April 15, 2000, and is continuing as
of the date hereof.  Additionally, the Company was unable to pay the $25.0
million principal payment due September 15, 2000 on the Senior Exchange Notes.
The holders of at least 25% of the Senior Exchange Notes and the Secured Notes
were notified of the defaults and instructed the Indenture Trustee to
accelerate the Notes and on August 11, 2000, the holders declared the unpaid
principal and interest to be due and payable.  As of February 28, 2006, the
outstanding principal consists of $46.0 million of Senior Exchange Notes and
$14.7 million of Secured Notes.

  On June 20, 2002, President Casinos, Inc. and its subsidiary, President
Riverboat Casino-Missouri, Inc. ("President Missouri"), which owns and
operates the St. Louis operations, filed voluntary petitions for
reorganization under Chapter 11 of Title 11, United States Code (the
"Bankruptcy Code") in the United States Bankruptcy Court for the Southern
District of Mississippi (the "Mississippi Bankruptcy Court").  On July 9,
2002, President Casinos, Inc.'s subsidiary The President Riverboat Casino-
Mississippi, Inc. ("President Mississippi") filed a voluntary reorganization
petition in the same court.  On July 11, 2002, substantially all of President
Casinos, Inc.'s other operating subsidiaries filed voluntary reorganization
petitions under Chapter 11 in the same Mississippi Bankruptcy Court.
Subsequently, orders were entered by the Mississippi Bankruptcy Court
transferring venue of all of the bankruptcy cases, except President Riverboat
Casino-New York, Inc. ("President New York") and President Broadwater Hotel,
LLC, to the United States Bankruptcy Court for the Eastern District of
Missouri (the "Missouri Bankruptcy Court," and together with the Mississippi
Bankruptcy Court, the "Bankruptcy Courts,") where the latter proceeding is now
pending and being administered.

  The Company and its operating subsidiaries, except President Broadwater
Hotel, LLC and President New York, each continue in possession and use of
their assets as debtors-in-possession.  The Company and its operating
subsidiaries have had their Missouri Bankruptcy Chapter 11 cases
administratively consolidated.

  Prior to any of the cases being transferred to the Missouri Bankruptcy
Court, the Mississippi Bankruptcy Court established "bar dates," all of which
have expired, by which all claimants were required to submit and characterize
claims against the Company.  As part of the Company's Chapter 11
reorganization process, the Company has attempted to notify all known or
potential creditors of the filings for the purpose of identifying certain pre-
petition claims.  In the Company's Chapter 11 cases, substantially all of the
Company's liabilities as of the filing date are subject to adjustment under a
plan of reorganization.  Generally, actions to enforce or otherwise effect
repayment of all pre-petition liabilities as well as all pending litigation
against the Company are stayed while the Company continues its business
operations as debtors-in-possession.  Schedules have been filed by the Company
with the Bankruptcy Courts setting forth the assets and liabilities of the
debtors as of the filing dates as reflected in the Company's accounting
records.  Differences between amounts reflected in such schedules and claims
filed by creditors will be investigated and amicably resolved or adjudicated
before the Bankruptcy Court.  The ultimate amount and settlement terms for
such liabilities are subject to a plan of reorganization.  Under the
Bankruptcy Code, the Company may elect to assume or reject real estate leases,

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employment contracts, personal property leases, service contracts and other
executory pre-petition contracts and unexpired leases, subject to Bankruptcy
Court review.

  The consummation of a plan of reorganization (a "Plan") is the principal
objective of the Company's Chapter 11 filings in the Missouri Bankruptcy
Court.  A Plan would, among other things, set forth the means for satisfying
claims against and interests in the Company, including setting forth the
potential distributions on account of such claims and interests, if any.
Confirmation of a Plan is subject to certain statutory findings by the
Missouri Bankruptcy Court.  Before a Plan may be distributed for balloting the
Court must approve a Disclosure Statement by determining that the Disclosure
Statement adequately describes the Plan.  Subject to certain exceptions as set
forth in the Bankruptcy Code, confirmation of a Plan requires, among other
things, a vote on the Plan by certain classes of creditors whose rights or
interests are impaired under the Plan.  If any impaired class of creditors
does not vote to accept the Plan, but all of the other requirements of the
Bankruptcy Code are met, the proponent of the Plan may seek confirmation of
the Plan pursuant to the "cram down" provisions of the Bankruptcy Code.  Under
these provisions, the Bankruptcy Court may still confirm a Plan
notwithstanding the non-acceptance of the Plan by an impaired class, if, among
other things, no claim or interest receives or retains any property under the
Plan until each holder of a claim senior to such claim or interest has been
paid in full.  There can be no assurance that a Plan will be confirmed by the
Missouri Bankruptcy Court, or that any such Plan will be consummated.

  On April 15, 2005, the Company sold its Biloxi operations for approximately
$82.0 million.  On February 24, 2006, the Company entered into an agreement
with Pinnacle Entertainment, Inc. for the purchase of the stock of President
Missouri for approximately $31.5 million, subject to working capital
adjustments.  Consummation of the transaction was subject to, among other
things, potential over-bid by third parties at an auction to be held under the
Bankruptcy Code. The Company did not receive any qualified third party bids
for its St. Louis operations and, accordingly, the auction was not held.  On
May 26, 2006, the Missouri Bankruptcy Court issued an order approving the sale
of the stock of President Missouri in accordance with the purchase agreement
with Pinnacle Entertainment, Inc.  Final closing of the sale is contingent
upon satisfaction of certain closing conditions, including licensing and
approval of the buyer by the Missouri Gaming Commission. If a sale of the
Company's St. Louis operations is consummated under the agreed upon terms, the
Company would not have any current ongoing business operations. In the event
that following such sale the Company's remaining assets are not sufficient to
discharge its indebtedness and other liabilities and the Company or a third
party is unable to confirm a plan for the reorganization of the Company, the
Company may be forced to liquidate. At this time management is unable to
predict with certainty whether a sale of its St. Louis operations will be
consummated.

  On May 25, 2006, Mr. Wirginis resigned as director, Chairman of the Board
and Vice President-Marine and Development of the Company, and as an officer
and director of the Company's subsidiaries.  Mr. Wirginis has informed the
Company that he may seek the appointment of an equity holder's committee in
the Company's bankruptcy proceedings.  Mr. Wirginis has indicated that the
equity holder's committee, consisting of Mr. Wirginis and other interested
stockholders of the Company, would explore development of an alternative
reorganization plan for the Company, including seeking financing arrangements

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with third parties which would permit the Company to refinance its existing
indebtedness and emerge from its bankruptcy proceedings as an operating gaming
company.  The appointment of an equity holder's committee would be subject to
approval by the Missouri Bankruptcy Court, and any such alternative
reorganization plan for the Company proposed by the equity holder's committee
would require confirmation of the Missouri Bankruptcy Court and the requisite
vote of the Company's creditors and equity holders.  The Company continues to
proceed with the sale of its St. Louis gaming operations to Pinnacle
Entertainment consistent with its obligations under the Purchase Agreement
with Pinnacle Entertainment.  The Company is unable at this time to predict
with certainty whether Mr. Wirginis will seek appointment of an equity
holder's committee or propose an alternative reorganization plan for the
Company, or whether, if proposed, such an alternative reorganization plan
would be confirmed by the Missouri Bankruptcy Court.

  In light of the sale of the Company's Biloxi assets and leasing operations
assets, and the anticipated sale of the St. Louis operations, the Company has
one reportable segment from continuing operations consisting of corporate
administration.  See Note 18 of the accompanying financial statements.  The
descriptions of the Company's business, financial condition and prospects
contained in this Annual Report on Form 10-K are qualified in their entirety
by the foregoing description of the significant risks associated with the
Company's bankruptcy proceedings.

-- Biloxi Casino and Hotel Operations

  President Mississippi, Vegas, Vegas, Inc. ("Vegas, Vegas") and President
Broadwater Hotel, LLC ("PBLLC") (collectively, the "Mississippi Affiliates")
agreed, with the prior approval of the Missouri Bankruptcy Court, to sell
substantially all of the real and personal property associated with the
Company's Biloxi operations (the "Mississippi Properties") to Broadwater
Development, LLP, a Mississippi limited liability partnership (or the assignee
or designee thereof) for $82.0 million.  In connection with the sale, a
certain Sale and Purchase Agreement dated November 15, 2004 was executed by
and among Broadwater Properties, LLC, as purchaser, and the Mississippi
Affiliates, as sellers, as amended by an Amendment to Sale and Purchase
Agreement dated as of November 29, 2004, assigned on or about January 13, 2005
by Broadwater Properties to Broadwater Development, LLP ("BDLLP", and together
with any assignees or designees thereof, the "Mississippi Purchaser"), further
modified by a certain Second Amendment to Sale and Purchase Agreement dated
January 20, 2005 (as modified and amended, the "Mississippi Asset Sale
Agreement").  The Mississippi Asset Sale Agreement further provided that the
Mississippi Affiliates would retain certain excluded assets as therein defined
(the "Mississippi Excluded Assets"), consisting primarily of cash in bank
accounts.   Pursuant to a separate Agreement Concerning Assignment dated March
30, 2005 ("Agreement Concerning Assignment") made by and between the
Mississippi Affiliates, BDLLP and Silver Slipper Casino Venture, LLC, it was
agreed, with the approval of the Bankruptcy Court, that the assets associated
with the Company's Mississippi casino would be transferred at the closing of
the transaction to Silver Slipper on certain terms and conditions therein
stated.

  The sale of the Mississippi Properties closed effective April 15, 2005 and
on May 27, 2005 the Missouri Bankruptcy Court confirmed a Plan of Liquidation
(the "Mississippi Plan of Liquidation") for the Mississippi Affiliates that
was jointly developed by the Company and its creditors AIG SunAmerica Inc. and

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MacKay Shields LLC.  The Mississippi Plan of Liquidation became effective on
June 7, 2005.  Pursuant to the Mississippi Plan of Liquidation, the proceeds
from the sale of the Mississippi Properties, following adjustments required
under the Mississippi Asset Sale Agreement, together with the proceeds from
the liquidation of the Mississippi Excluded Assets, are being distributed to
the creditors of the Mississippi Affiliates, including the holders of the
Company's Notes (the "Noteholders") and to J. Edward Connelly Associates, Inc.
("JECA") and certain assignees of JECA.  JECA, an entity controlled by John E.
Connelly, the Company's former Chairman and Chief Executive Officer, holds a
Class B membership interest in PBLLC.  The Company anticipates that under the
Mississippi Plan of Liquidation, creditors of the Mississippi Affiliates, with
the exception of the Noteholders, will be paid in full, subject to final
determination and settlement of claims and expenses.  On June 7, 2005, the
effective date of the Mississippi Plan of Liquidation, the Company paid $25.6
of indebtedness due to the Noteholders.  Of this amount, $12.6 million was
applied to principal, $12.6 million was applied to accrued interest and $0.4
million to accrued trustee and legal fees incurred by the Noteholders.
Additionally, the Company redeemed $14.4 million of JECA's Class B membership
interest in PBLLC.  During August 2005, the Company made a second distribution
from the proceeds consisting of $1.4 million to the Noteholders and $1.4
million redemption of JECA's Class B membership interest.  During February
2006, the Company made a third distribution from the proceeds consisting of
$350,000 to the Noteholders and $350,000 redemption of JECA's Class B
membership interest.

  JECA has entered into an agreement (the "JECA Proceeds Distribution
Agreement") with John S. Aylsworth, President, Chief Executive Officer, Chief
Operating Officer and Director of the Company, Terrence L. Wirginis, former
Vice President and former Chairman of the Board and Ralph J. Vaclavik, Senior
Vice President and Chief Financial Officer of the Company, pursuant to which
upon receipt of funds by JECA toward payment of the liquidation preference of
its Class B membership interest in PBLLC, JECA would use its best efforts to
pay a percentage of such funds to Messrs. Aylsworth, Wirginis and Vaclavik
based on the total sales proceeds to JECA.  While final distributions under
the Mississippi Plan of Liquidation are subject to final determination and
settlement of claims and expenses, the Company currently estimates that the
proceeds of the sale of the Mississippi Properties will not be sufficient to
repay the Noteholders the outstanding indebtedness under the Notes and, in
addition, will not be sufficient to satisfy JECA's liquidation preference of
its Class B membership interest in PBLLC.  Messrs. Aylsworth, Wirginis and
Vaclavik would be entitled to receive an aggregate of approximately $4.8
million, $4.8 million and $0.3 million, respectively, pursuant to the JECA
Distribution Agreement were the proceeds sufficient to satisfy the Class B
membership interest.  On June 7, 2005, distributions of $3.5 million, $3.5
million and $0.2 million were made to Messrs. Aylsworth, Wirginis and
Vaclavik, respectively, from the $14.4 million Class B membership interest
redemption.  During August 2005, additional distributions of $0.3 million,
$0.3 million and $0.1 million were made to Messrs. Aylsworth, Wirginis and
Vaclavik, respectively, from the $1.4 million Class B membership interest
redemption.  During February 2006, third distributions of $84,688, $84,688 and
$11,250 were made to Messrs. Aylsworth, Wirginis and Vaclavik, respectively,
from the $350,000 Class B membership interest redemption.

  The Mississippi Plan of Liquidation established August 8, 2005 as the
Administrative Bar Date, whereby each person or entity could file a claim
arising on or after July 9, 2002 and before May 25, 2005 for President

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Mississippi, or arising after July 11, 2002 and before May 25, 2005 for Vegas
Vegas and Broadwater Hotel Inc. ("BHI.")  The Company has attempted to notify
its creditors that failure to file a claim against President Mississippi,
Vegas Vegas and/or BHI would result in the claim being forever barred and
discharged.

--St. Louis Casino Operations

  On September 25, 2003, the Company entered into an agreement with Isle of
Capri Casinos, Inc. to sell the assets of its St. Louis operations for
approximately $50.0 million.  On May 4, 2004, the Company and Isle of Capri
Casinos, Inc. announced they had mutually agreed to terminate the agreement.

  On August 9, 2004, the Company entered into an agreement with Penn National
Gaming, Inc. for the purchase of its St. Louis operations.  The agreement was
submitted to the Missouri Bankruptcy Court for review and was amended on
September 17, 2004.  Under the terms of the agreement, the stock of President
Missouri was to be sold for approximately $28.0 million, subject to working
capital adjustments and subject to higher and better offers.  On October 7,
2004, an auction was held in accordance with Section 363 of the Bankruptcy
Code.  Pursuant to an agreement submitted September 30, 2004, Columbia Sussex,
Inc. ("Columbia Sussex") was the winning over-bidder for the St. Louis casino
operations for a purchase price of approximately $57.0 million, subject to
closing adjustments.  The Company and Columbia Sussex entered into a Riverboat
Casino Sale and Purchase Agreement dated as of September 30, 2004 (as amended,
the "President Missouri Sale Agreement").  On October 13, 2004, the Missouri
Bankruptcy Court entered an order approving the sale of the stock of President
Missouri to Columbia Sussex pursuant to the President Missouri Sale Agreement.
The closing of the transaction was contingent upon licensing approval by the
Missouri Gaming Commission of Columbia Sussex and its key officers.  On
October 25, 2005, Columbia Sussex notified the Company that it had withdrawn
its application for licensing with the Missouri Gaming Commission.

  On February 24, 2006, the Company entered into an agreement with Pinnacle
Entertainment, Inc. for the purchase of the stock of President Missouri for
approximately $31.5 million, subject to working capital adjustments.
Consummation of the transaction was subject to, among other things, potential
over-bid by third parties at an auction to be held under the Bankruptcy Code.
The Company did not receive any qualified third party bids for its St. Louis
operations and, accordingly, the auction was not held.  On May 26, 2006, the
Missouri Bankruptcy Court issued an order approving the sale of the stock of
President Missouri in accordance with the purchase agreement with Pinnacle
Entertainment, Inc.  Final closing of the sale is contingent upon satisfaction
of certain closing conditions, including licensing and approval of the buyer
by the Missouri Gaming Commission.  If a sale of the Company's St. Louis
operations is consummated under the agreed upon terms, the Company would not
have any current ongoing business operations.  In the event that following
such sale the Company's remaining assets are not sufficient to discharge its
indebtedness and other liabilities and the Company or a third party is unable
to confirm a plan for the reorganization of the Company, the Company may be
forced to liquidate.  At this time management is unable to predict with
certainty whether a sale of its St. Louis operations will be consummated.

  On May 25, 2006, Mr. Terrence L. Wirginis resigned as director, Chairman of
the Board and Vice President-Marine and Development of the Company, and as an
officer and director of the Company's subsidiaries.  Mr. Wirginis has informed

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the Company that he may seek the appointment of an equity holder's committee
in the Company's bankruptcy proceedings.  Mr. Wirginis has indicated that the
equity holder's committee, consisting of Mr. Wirginis and other interested
stockholders of the Company, would explore development of an alternative
reorganization plan for the Company, including seeking financing arrangements
with third parties which would permit the Company to refinance its existing
indebtedness and emerge from its bankruptcy proceedings as an operating gaming
company.  The appointment of an equity holder's committee would be subject to
approval by the Missouri Bankruptcy Court, and any such alternative
reorganization plan for the Company proposed by the equity holder's committee
would require confirmation of the Missouri Bankruptcy Court and the requisite
vote of the Company's creditors and equity holders.  The Company continues to
proceed with the sale of its St. Louis gaming operations to Pinnacle
Entertainment consistent with its obligations under the Purchase Agreement
with Pinnacle Entertainment.  The Company is unable at this time to predict
with certainty whether Mr. Wirginis will seek appointment of an equity
holder's committee or propose an alternative reorganization plan for the
Company, or whether, if proposed, such an alternative reorganization plan
would be confirmed by the Missouri Bankruptcy Court.

--President Broadwater Hotel, LLC Bankruptcy Proceedings

  PBLLC, a limited liability company in which Broadwater Hotel, Inc., a
wholly-owned subsidiary of the Company ("BHI"), has a Class A ownership
interest, was in default under a $30,000 promissory note and associated $7,000
loan fee incurred in connection with the July 1997 purchase by PBLLC of the
real estate and improvements utilized in the Company's operations in Biloxi,
Mississippi.  On April 19, 2001, PBLLC filed a voluntary petition for
reorganization under Chapter 11 of the Bankruptcy Code in the Mississippi
Bankruptcy Court.  PBLLC continued in possession and use of its assets as a
debtor-in-possession and had an agreement with its secured lender and largest
creditor, approved by the Mississippi Bankruptcy Court, which allowed PBLLC's
use of its cash collateral.

  On October 16, 2001, PBLLC filed its plan of reorganization which would
permit PBLLC to restructure its debt obligations in a manner which was
designed to permit it to continue as a going concern.  Subsequently, on
February 28, 2003, PBLLC filed Modifications to Debtor's Plan of
Reorganization (together with the reorganization plan, the "Modified Plan").
On May 14, 2003, the Mississippi Bankruptcy Court entered an order confirming
the Modified Plan.  The Modified Plan became effective on May 28, 2003 and the
Company initiated consummation of the Modified Plan at that time.  The
Modified Plan provided that the unsecured creditors of PBLLC would receive
100% of their claims.  Under the Modified Plan, the obligations to the secured
lender were modified with respect to the debt amount, the interest rate and
the due date.  On April 15, 2005, the Modified Indebtedness and accrued
interest thereon were fully satisfied by PBLLC from the proceeds of the sale
of the Company's Biloxi assets.

Discontinued Operations

Segments

  Prior to the Company's determination to sell the businesses discussed in the
preceding section, management previously viewed its operations in three
operating segments:  Biloxi Operations, St. Louis Operations and, to a much

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lesser extent, Corporate Leasing Operations, each of which is discussed more
fully below.  Prior to the sale of the Company's Davenport properties in
fiscal 2001, Davenport operations were considered to be a fourth operating
segment.  Revenues, results of operations and identifiable assets of each of
the Company's discontinued operations can be found in Note 10 of the
accompanying consolidated financial statements.

  --St. Louis, Missouri Operations

  In May 1994, the Missouri Gaming Commission licensed the Company to conduct
dockside gaming operations on the Company-owned vessel, "Admiral," in St.
Louis through its wholly-owned subsidiary, President Missouri.  The Company's
initial license was subsequently renewed and was last renewed in April 2006
for a period through May 2008.

  The "Admiral" is approximately 400 feet long, continuously docked north of
the base of the Gateway Arch in Laclede's Landing, at a mooring site subleased
by the Company from the City of St. Louis Port Commission (the "Port
Commission").

  During July 1998, the Company and the City of St. Louis reached an agreement
for the relocation of the "Admiral" approximately 1,000 feet north from its
former location on the Mississippi River.  The new location provides guests
with improved valet service and better ingress/egress including improved
access from major highways into St. Louis.  This site is also less susceptible
to the negative economic impact of high water than the previous mooring site.

  The aggregate cost to relocate the "Admiral" and construct ancillary
facilities was approximately $8.7 million.  Under the terms of the agreement,
the City funded $3.0 million of the relocation costs, $2.4 million of which
amount was financed through bank debt.  The Company paid for the remaining
$5.7 million of relocation costs.  The Company guaranteed repayment of the
bank debt if the City failed to pay the obligation.  On August 2, 2004 the
City paid the outstanding obligation and the Company's guarantee was
concluded.

  Rent under the terms of the mooring site lease consists of base rent plus a
percent of adjusted gross receipts.  The base rent was $27,000 annually
through December 31, 2003 and is subject to rate change every five years based
on the recommendation of the Port Commission.  Effective January 1, 2004, the
annual base rent was adjusted to $29,250.  The percentage rent is 2% of
adjusted gross receipts for any lease year equal to or less than $80.0
million, plus 3% of that portion of adjusted gross receipts for such lease
year which exceed $80.0 million but which are equal to or less than $100.0
million, plus 4% of that portion of adjusted gross receipts for such lease
year, if any, which exceed $100.0 million.

  Competition is intense in the St. Louis market area.  There are presently
four other casino companies operating five casinos in the market area.  Many
of these competitors have significantly greater name recognition and financial
and marketing resources than the Company.  Two of these are Illinois casino
companies operating single casino vessels on the Mississippi River, one across
the Mississippi River from the "Admiral" and the second 20 miles upriver.
There are two Missouri casino companies, each of which operates casino vessels
approximately 20 miles west of St. Louis on the Missouri River.  One company
operates two casinos in Maryland Heights, Missouri and the other company

                                    10

<PAGE> 14
operates one casino in the City of St. Charles, Missouri.  The operator of the
St. Charles casino replaced its facility and reopened with nearly double its
prior gaming positions in August 2002.

  The Missouri Gaming Commission announced that it would consider licensing
additional casinos in the St. Louis market.  In September 2003, the City of
St. Louis and St. Louis County, which are separate political and
geographic subdivisions, announced that they were both issuing requests for
proposals for a new casino in each jurisdiction.

  A project proposed by Pinnacle Entertainment, Inc. was selected and approved
by the City of St. Louis as its recommendation before the Missouri Gaming
Commission.  Its proposal includes a casino two blocks from the "Admiral."
The St. Louis County Council approved a separate Pinnacle Entertainment, Inc.
project in Lemay, Missouri.  Various other gaming companies filed proposals.
On September 1, 2004, the Missouri Gaming Commission approved Pinnacle
Entertainment, Inc. for formal license investigations for both the St. Louis
City and St. Louis County projects.  Each of the proposals submitted requires
significant construction of new infrastructure for the casino and
entertainment complexes.  Pending licensing, it is anticipated that the City
of St. Louis casino development will open in 2007.  Management believes that
the licensing of a new casino or casinos in metropolitan St. Louis would have
a material adverse effect on the Company's financial condition and results of
operations.

  Missouri regulations limit the loss per simulated cruise per passenger by
limiting the amount of chips or tokens a guest may purchase during each two-
hour gaming session to five hundred dollars.  The company that operates
adjacent casinos in Missouri is able to offer guests who reach the two-hour
loss limit the ability to move to the adjacent casino and continue to play.
The lack of a statutory loss limit on Illinois casinos allows them to attract
higher stake players and guests who do not want to be burdened with the
administrative requirements related to the loss limits.

  --Biloxi, Mississippi Operations

  See "Substantial Indebtedness; Bankruptcy Proceedings--Biloxi Operations"
regarding the sale of the Biloxi operations.

 The Company managed its Biloxi gaming operations through its wholly-owned
subsidiary, President Mississippi.  Biloxi is located on the Gulf of Mexico 75
miles east of New Orleans.

  The Company began dockside gaming operations in Biloxi on August 13, 1992.
Prior to July 1997, the Company was party to an operating lease with BH
Acquisition Corporation ("BHAC") for its Biloxi mooring site, parking
facilities, offices and a warehouse.  BHAC was a wholly owned entity of Mr.
Connelly.  In July 1997, President Broadwater Hotel, LLC ("PBLLC"), a limited
liability company in which the Company has a Class A ownership interest, and a
wholly-owned entity of Mr. Connelly which has a Class B ownership interest and
certain preferred rights to certain cash flows, acquired the real estate and
improvements from BHAC for $40.5 million.  The property was comprised of
approximately 260 acres and included a 111-slip marina which contained the
mooring site of the barge "President Casino-Broadwater," two hotels with
approximately 500 rooms and an adjacent 18-hole golf course.

                                    11

<PAGE> 15
  --Leasing Operations

  The Company previously owned the M/V "President Casino-Mississippi" and the
M/V "Surfside Princess."  The M/V "President Casino-Mississippi" was formerly
utilized at the Company's initial Biloxi operations.  The M/V "Surfside
Princess" was chartered to various third parties.

  The M/V "President Casino-Mississippi" and various equipment aboard
collateralized a term note payable which was also personally guaranteed by Mr.
Connelly.  The Company continued to make the quarterly principal and interest
payments on the note prior to the Company's bankruptcy filing.  Under the
terms of the note agreement, $2.1 million principal became due and payable in
August 2002 together with interest and costs (the "Note").  In November 2002,
the lender brought an action against Mr. Connelly for breach of contract under
his personal guarantee.  In December 2003, Mr. Connelly satisfied his personal
guarantee paying the lender $1.2 million.  In January 2003, the Mississippi
Bankruptcy Court granted a motion to relieve the lender from the automatic
stay in order to enforce its rights under the Preferred Fleet Ship Mortgage,
including but not limited to the right of the lender to seize and sell the
assets.  In May 2003, the lender filed a motion with the United States
District Court for the Southern District of Illinois for an order directing
the Clerk of Court to issue a warrant for the arrest of the M/V "President
Casino-Mississippi" pursuant to rules of admiralty and maritime claims.  On
May 20, 2003, the Court executed the warrant, which allowed the vessel to be
seized and sold.  On April 7, 2004, the vessel was auctioned and the lender
offered the highest bid of $0.5 million.

  The Company, President Mississippi, Mr. Connelly and the lender entered into
an agreement whereby the Company would satisfy its obligations under the
indebtedness, and related costs, for $0.8 million.  Additionally, Mr. Connelly
agreed to forego his rights and assignments.  The terms are incorporated in
the Mississippi Plan of Liquidation, which was confirmed May 27, 2005, and
became effective on June 7, 2005.  Subsequently, the Company paid the lender
$0.8 million in satisfaction for its obligations.  Pursuant to the terms of
the agreement between the Company and other parties involved, the Company
wrote down the outstanding obligation by $2.6 million during the fourth
quarter of 2005.

  On March 29, 2001, the Company executed an installment sale agreement for
the M/V "Surfside Princess" (formerly, the "New Yorker").  Under the terms of
the agreement, the Company would receive an aggregate of $9.0 million
principal installment payments over a period of thirty months commencing on
March 29, 2001, which included a final principal balloon payment of $4.4
million due October 2003.  The note bore an annual interest rate of 10.5%.  On
October 3, 2001, the Company terminated the installment sale agreement and
repossessed the M/V "Surfside Princess," due to the inability of the
purchasing party to meet the terms of the agreement.

  During the fourth quarter of fiscal 2003, the Company held a sealed bid
auction of the "Surfside Princess" in accordance with Section 363 of the
United States Bankruptcy Code.  In February 2003, the auction closed and the
winning bid was $1.5 million.  On May 2, 2003, the purchase agreement on the
vessel was consummated, at which time the liens against the vessel attached to
the proceeds from the sale.

                                   12

<PAGE> 16
Former Operations

  On October 10, 2000, the Company sold the assets of its former Davenport,
Iowa casino and hotel operations for aggregate consideration of $58.2 million
in cash.  The Company recognized a gain of approximately $34.5 million on the
transaction.  The Davenport casino operations were managed by the Company's
wholly-owned subsidiary, President Riverboat Casino-Iowa, Inc. ("PRC Iowa"),
which is the general partner of the 95% Company-owned operating partnership,
The Connelly Group, LP ("TCG").  The Blackhawk Hotel operations in Davenport,
which were also sold in the transaction, were managed by a wholly-owned
subsidiary of the Company.

  On April 30, 2001, the Company executed an agreement to sell the assets of
Gateway Riverboat Cruises, the Company's non-gaming cruise operations which
provided dinner cruise, excursion and sightseeing on two riverboats on the
Mississippi River.  The transaction was consummated on July 17, 2001.  The
Company recognized a gain of $0.8 million on the sale of these assets.

Recent Developments

  Effective April 4, 2006, the Board of Directors of the Company removed John
E. Connelly as a director and as the Chairman and Chief Executive Officer of
the Company as a result of Mr. Connelly no longer meeting the requirements of
the Amended By-Laws and elected Terrence L. Wirginis as Vice President and
Chairman of the Board and John S. Aylsworth as President, Chief Executive
Officer and Chief Operating Officer.  Effective May 25, 2006, Mr. Wirginis
resigned as director, Chairman of the Board and Vice President-Marine and
Development of the Company, and as an officer and director of the Company's
subsidiaries.  See "Item 9B.  Other Information."

Marketing and Sales

  The Company targets its marketing efforts at middle income, recreational
gaming customers.  The Company relies on a mix of billboards, television,
radio and print advertisements in both the local and regional markets to
attain a high recognition level.  The Company also has a preferred slot player
program, together with electronic slot player tracking, a table player
tracking and rating system, hosts, special events, direct mailing,
telemarketing and other casino marketing techniques to identify, recognize and
cultivate frequent and better casino customers.  This effort is supported by
direct marketing, a targeted trade advertising schedule and attendance at
industry trade shows and sales gatherings.  The Company also utilizes its web
site at www.presidentcasino.com to enhance its marketing programs.

Regulatory Matters

  --Gaming Regulations

  General.  The ownership and operation of gaming facilities are subject to
extensive state and local regulation.  The Company's former Biloxi gaming
operations were regulated by the Mississippi Gaming Commission and its St.
Louis gaming operations are regulated by the Missouri Gaming Commission.  As a
condition to obtaining and maintaining a gaming license, the Company must pay
fees and taxes, observe stringent regulations on operations, submit and update
comprehensive applications and submit detailed financial, operating and other
reports to each such Commission.  Each such Commission has broad powers to

                                    13

<PAGE> 17
suspend or revoke licenses in which event operations would be terminated or
suspended.  In addition, substantially all of the Company's material
transactions are subject to prior notice to review, and in some instances,
approval by such Commission.  Any person acquiring 5% or more of the Common
Stock or equity securities of any publicly held gaming entity must be found
suitable by the appropriate regulatory body.

  Various license fees and taxes are payable to the jurisdictions in which the
Company conducts or conducted gaming operations.  These taxes are calculated
in various ways, and may be based upon (i) a percentage of the gross gaming
revenues received by the casino operation, (ii) the number of slot machines
operated by the casino, (iii) the number of table games operated by the casino
and/or (iv) passenger counts.  In addition, certain other fees may be imposed.

  The Company, its subsidiaries, its employees and other individuals or
entities having material relationships with the Company are required to obtain
and hold various licenses and approvals in Missouri.  If a gaming authority
were to find a director, officer or key employee unsuitable for licensing or
unsuitable to continue to have a relationship with the Company, the Company
would have to suspend or dismiss such person.  The failure of the Company, or
any of its key personnel, to obtain or retain a license in any jurisdiction
could have a material adverse effect on the Company and its prospects or its
ability to obtain or retain licenses in other jurisdictions.  Generally,
regulatory authorities have broad discretion in granting, renewing and
revoking licenses.

  The Company may be subject to substantial fines for each violation of a
gaming law or regulation.  In addition, a violation of a gaming law or
regulation may subject a license to suspension or revocation.  Limitation,
conditioning or suspension of a gaming license could (and revocation of a
gaming license would) materially adversely affect the financial position and
results of operations of the Company.

  Missouri Gaming Regulations.  Gaming on the Missouri and Mississippi Rivers
in the State of Missouri was originally authorized pursuant to a statewide
referendum on November 3, 1992.  On April 29, 1993, Missouri enacted revised
legislation (as amended, the "Missouri Gaming Law") which amended the existing
legislation.  The Missouri Gaming Law also established the Missouri Gaming
Commission (the "Missouri Commission"), which is responsible for the licensing
and regulation, and enforcement with respect to some aspects of gaming in
Missouri.

  Opponents of gaming in Missouri have brought several legal challenges to
gaming in the past and may possibly bring similar challenges in the future.
On November 25, 1997, the Missouri Supreme Court overturned a state lower
court and held that a portion of the Missouri Gaming Law that authorized
excursion gaming facilities in "artificial basins" up to 1,000 feet from the
Mississippi or Missouri rivers was unconstitutional.  This ruling created
uncertainty as to the legal status of several excursion gaming riverboat
facilities in the state; however, as President Missouri facilities were fully
on the Mississippi River, they did not appear to be affected.  On November 3,
1998, a statewide referendum was held, whereby the voters amended the
constitution to allow "artificial basins" for existing facilities, effectively
overturning the above Missouri Supreme Court decision.  There can be no
assurances that any future challenges, if brought, would not further interfere
with full-scale gaming operations in Missouri, including the operations of

                                   14

<PAGE> 18
President Missouri.

  Under the Missouri Gaming Law, the ownership and operation of riverboat
gaming facilities are subject to extensive state and local regulation. The
Company, its parent, subsidiaries and certain of its officers and employees
are subject to various regulations.

  President Missouri must be licensed by the Missouri Commission in order to
conduct its operations.  Licenses issued by the Missouri Commission to conduct
gaming operations are subject to two-year renewals and may not be transferred
or pledged as collateral.  In addition to the information required of the
operator, the operator's directors, officers and other key persons (which
include individuals and related companies designated by the Missouri
Commission) must submit applications which include detailed personal and
financial information and are subject to thorough investigations and
licensing.  Also, all gaming employees must obtain an occupational license
issued by the Missouri Commission.  Each applicant has an ongoing duty to
update the information provided to the Missouri Commission in the application.
Applications filed with the Missouri Commission are continuously "pending" and
any issue may be reopened at any time.  The President Missouri license was
last renewed in April 2006 for a period through May 2008.

  The Missouri Gaming Law regulations impose restrictions on the use and
transfer of the gaming licenses as well as limitations on transactions engaged
in by licensees.  The Missouri Gaming Law regulations bar a licensee from
taking any of the following actions without prior notice to, and approval by,
the Missouri Commission:  any transfer or issuance of an ownership interest of
five percent or more of the issued and outstanding ownership interest, any
private incurrence of debt by the licensee or any holding company of $1.0
million or more, any public issuance of debt by a licensee or its holding
company, and certain defined "significant related party transactions."  In
addition, the licensee must notify the Missouri Commission of other
transactions, including the transfer of five percent or more of an ownership
interest in the licensee or holding company, and any transaction of at least
$1.0 million.  The restrictions on transfer of ownership apply to the parent
as well as the direct licensee, President Missouri.  Gaming equipment and
corporate stock of some licensees may not be pledged except in narrow
circumstances and subject to regulatory conditions.

  The Missouri Gaming Law imposes operational requirements on riverboat
operators, including a charge of two dollars per gaming customer per excursion
that licensees must pay to the Missouri Commission, a 20% tax on adjusted
gross receipts (in addition to other state taxes and license fees),
requirements regarding minimum payouts, prohibitions against providing credit
to gaming customers (except for the use of credit cards and cashing checks)
and a requirement that each licensee reimburse the Missouri Commission for all
costs of all Missouri Commission staff, including Missouri Highway Patrol
Officers, necessary to protect the public on the licensee's riverboat.

  Licensees must also submit monthly, quarterly and annual reports of
financial and statistical data and quarterly and annual audited financial
information and compliance reports to the Missouri Commission and pay the
associated auditing fees.

  Other areas of operation which are subject to regulation under the Missouri
Gaming Law rules are the color, denomination and handling of chips and tokens;

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<PAGE> 19
the surveillance methods and computer monitoring of electronic games;
accounting and audit methods and procedures; and approval of an extensive
internal control system.  The internal operating procedures and controls of
each facility are subject to the approval of the Missouri Commission.  The
purchase and sale of slot machines and other gaming equipment are subject to
regulation, and must be purchased from a licensed supplier.  The Missouri
Commission requires comprehensive safety inspections and compliance with local
ordinances and federal safety requirements.  The Missouri Commission regulates
security and surveillance, and the control of cash and chips.  Liquor licenses
are issued and regulated by the Missouri Commission, rather than local or
other state agencies.

  The Missouri Commission has the authority to investigate any potential
violation of the Missouri Gaming Law.  In addition, the Missouri Commission
may take enforcement action against a licensee for the failure of that
licensee to comply with any other law.

  The Missouri Commission has the power and broad discretion in exercising
this power to revoke or suspend gaming or occupational licenses and impose
other penalties for violation of the Missouri Gaming Law and the rules and
regulations promulgated thereunder.  These penalties may include forfeiture of
all gaming equipment used for improper gaming and fines of up to three times a
licensee's highest daily gross receipts during the preceding twelve months.

  Although the Missouri Gaming Law does not limit the amount of riverboat
space that may be used for gaming, the Missouri Commission is empowered to
impose such space limitations through the adoption of rules and regulations.
The Missouri Gaming Law provides for a loss limit of five hundred dollars per
person per each two-hour gaming session.  In order to establish an excursion
schedule which allows patrons to enter and exit the gaming floor at any time
during the excursion, the licensee must prove to the Missouri Commission that
it can enforce the five hundred dollar loss limit.

  Non-Gaming Regulations

  The Company is subject to certain federal, state and local safety and health
laws, regulations and ordinances that apply to non-gaming businesses
generally, such as the Americans with Disabilities Act, the Clean Air Act,
Clean Water Act, Occupational Safety and Health Act, Resource and Conservation
Recovery Act and the Comprehensive Environmental Response, Compensation and
Liability Act.  The Company has not made material expenditures with respect to
such laws and regulations.  However, the coverage and attendant compliance
costs associated with such laws, regulations and ordinances may result in
future additional costs to the Company's operations.  For example, in 1990 the
U.S. Congress enacted the Oil Pollution Act to consolidate and rationalize
mechanisms under various oil spill response laws.  The Department of
Transportation has proposed regulations requiring owners and operators of
certain vessels to establish through the U.S. Coast Guard evidence of
financial responsibility in the amount of $5.5 million for clean-up of oil
pollution.  This requirement would be satisfied by either proof of adequate
insurance (including self-insurance) or the posting of a surety bond or
guaranty.

  Employees

  As of February 28, 2006, the Company had approximately 610 employees.

                                    16

<PAGE> 20
  In April 1999, certain gaming, service and maintenance employees of
President Missouri ratified a three-year collective bargaining agreement
setting out wages, benefits and other terms and conditions of employment.  The
labor agreement was renegotiated and ratified on numerous occasions.  The
current labor agreement was renegotiated and ratified and was effective until
October 2005.  Management is currently in negotiations to ratify a new labor
agreement.  The labor agreement covers approximately 225 of the Company's
approximately 600 St. Louis employees.

  Internet Access to Information

  The Company's Internet address is www.presidentcasino.com.  The Company's
Annual Report on Form 10-K, its quarterly reports on Form 10-Q, current
reports on Form 8-K and any other documents filed with the Securities and
Exchange Commission ("SEC") are available free of charge on the Company's
website through a link with Edgar Archives Search.  These materials may also
be accessed directly through the SEC's website (www.sec.gov) or in the SEC's
Public Reference Room at 100 F Street, NE, Washington, D.C. 20549.
Information on the operation of the Public Reference Room may be obtained by
calling 1-800-SEC-0330.

  Copies of other relevant information, such as press releases and
announcements regarding the Company, and links to other websites providing
information about the Company can also be accessed on the Company's website.

Item 1A.  Risk Factors

  In evaluating our company, careful consideration should be given to the risk
factors set forth below, as well as the other information set forth in this
Annual Report on Form 10-K.  Although these risk factors are many,
these factors should not be regarded as constituting the only risks present in
connection with the business.  Each of these risk factors could adversely
affect our business, operating results and/or financial condition.  In
addition to the following disclosures, please refer to the other information
contained in this report including the consolidated financial statements and
the related notes.

  We filed for reorganization under Chapter 11 of the Bankruptcy Code and are
subject to the risks and uncertainties associated with Chapter 11 proceedings.
For the duration of our Chapter 11 proceedings, our operations, including our
ability to continue as a going concern, are subject to the risks and
uncertainties associated with bankruptcy.  Risks and uncertainties associated
with our Chapter 11 proceedings are outlined under "Item 1.  Business -
Substantial Indebtedness; Bankruptcy Proceedings" in this Annual Report on
Form 10-K, and include the following:

   o  our ability to obtain additional financing;

   o  the actions and decisions of our creditors and other third parties
      who have interests in our Chapter 11 proceedings that may be
      inconsistent with our plans;

   o  our ability to obtain court approval with respect to motions in the
      Chapter 11 proceedings prosecuted from time to time;

   o  our ability to develop, prosecute, confirm and consummate a plan of

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<PAGE> 21
      reorganization with respect to the Chapter 11 proceedings;

   o  our ability to obtain and maintain normal terms with vendors and
      service providers;

   o  our ability to maintain contracts; and

   o  risks associated with third parties seeking and obtaining court
      orders to convert the cases to Chapter 7 cases.

  These risks and uncertainties could affect our business and operations in
various ways.  Because of the risks and uncertainties associated with our
Chapter 11 proceedings, the ultimate impact of events that occur during these
proceedings will have on our business, financial condition and results of
operations cannot be accurately predicted or quantified, and there is
substantial doubt about our ability to continue as a going concern.

  We may be unable to complete the proposed sale of our St. Louis operations
and, if completed the sale proceeds may not be sufficient to satisfy our debt
obligations.  On February 24, 2006, we entered into a Riverboat Casino Sale
and Purchase Agreement with Pinnacle Entertainment, Inc. for the sale of our
St. Louis operations, which comprise substantially all of our remaining
assets.  Under the terms of this purchase agreement, all of the outstanding
capital stock of President Missouri will be sold for approximately $31.5
million, subject to working capital adjustments.  The purchase agreement has
been submitted to the Missouri Bankruptcy Court for approval.  Final closing
of the sale to Pinnacle is contingent upon satisfaction of various closing
conditions including licensing and approval of the buyer by the Missouri
Gaming Commission.  There can be no assurance that these closing conditions
can be satisfied, or that the transaction will be completed on the terms set
forth in the purchase agreement.

  We intend to complete the sale under the agreement with Pinnacle as soon as
practicable after the conditions have been fulfilled.  If a superior offer is
not received, the anticipated sale proceeds from the transaction with Pinnacle
may not be sufficient to pay our outstanding debt obligations and other
liabilities in full.  The proceeds of the sale to Pinnacle will be held for
the ultimate benefit of our creditors as provided by order of the Bankruptcy
Court.

  Gaming companies are subject to extensive regulation.  Failure to comply
with such regulations may have a material adverse effect on our operations.
We face extensive federal, state and local regulation of our ownership and
operation of gaming facility, including regulation by the Missouri Gaming
Commission.  The Missouri Gaming Commission may, among other things, limit,
condition, suspend or revoke our gaming authorization.  Substantial fines or
forfeiture of assets for violations of gaming laws or regulations may be
levied against us, our subsidiaries and the persons involved.  To date, we
believe we have obtained all governmental licenses, qualifications,
registrations, permits and approvals necessary for the operation of our gaming
facilities.  However, there can be no assurance that we can obtain any new
licenses, qualifications, registrations, permits or approvals that may be
required in the future or that existing ones will not be suspended or revoked.
From time to time, legislators and special interest groups have proposed
legislation that would restrict or prevent gaming operations.  Any new
restriction on or prohibition of our gaming operations could force us to

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<PAGE> 22
curtail operations and incur significant losses.

  Adverse economic conditions could have a negative effect on our business.
Our business involves leisure and entertainment, and accordingly our gaming
revenues are sensitive to general economic conditions and are influenced by
consumer confidence in the economy and other factors.  During periods of
recession or economic downturn, consumers may reduce or eliminate spending on
leisure and entertainment activities.  A recession or downturn in the general
economy or in our market area could result in fewer customers visiting our
property, which would adversely affect our results of operations.

  Inclement weather and other conditions could seriously disrupt our business,
financial condition and results of operations.  Our St. Louis operations are
subject to risks in addition to those associated with land-based casinos,
including flood or other severe weather.  Our operating results have in the
past been negatively affected by the effects of floods and adverse weather
conditions, and we have temporarily suspended operations on various occasions
as a result of such adversities.  Under less severe conditions, high river
levels in St. Louis cause reduced parking and a general public perception of
diminished access to the casino resulting in decreased revenues.  Reduced
patronage and the suspension or loss of our gaming operations for any period
of time could adversely affect our results of operations.

  We operate in a highly competitive market.  The St. Louis market area in
which we operate is highly competitive.  There are presently four other casino
companies operating five casinos in the market area, many of which have
significantly greater name recognition and financial and marketing resources,
which may put us at a competitive disadvantage.  Two of these are Illinois
casino companies operating single casino vessels docked on the Mississippi
River, one across the Mississippi River from the "Admiral" and the second 20
miles upriver.  There are two Missouri casino companies, each of which
operates casino vessels approximately 20 miles west of St. Louis on the
Missouri River.  One company operates two casinos in Maryland Heights,
Missouri and the other company operates one casino in the City of St. Charles,
Missouri.  The Missouri Gaming Commission has announced that it would consider
licensing additional casinos in the St. Louis market.  In September 2003, the
City of St. Louis and St. Louis County, which are separate political and
geographic subdivisions, announced that they were both issuing requests for
proposals for a new casino in each jurisdiction.  A project proposed by
Pinnacle Entertainment, Inc. was selected and approved by the City of St.
Louis as its recommendation before the Missouri Gaming Commission.  Its
proposal includes a casino two blocks from the "Admiral."

  The St. Louis County Council approved a separate Pinnacle Entertainment,
Inc. project in Lemay, Missouri.  On September 1, 2004, the Missouri Gaming
Commission approved Pinnacle Entertainment, Inc. for formal license
investigations for both the St. Louis City and St. Louis County projects.
Each of the proposals submitted requires significant construction of new
infrastructure for the casino and entertainment complexes.  Pending
construction and gaming license approval, it is anticipated that the City of
St. Louis casino development will open in 2007.  Our management believes that
the licensing of a new casino or casinos in metropolitan St. Louis will have a
material adverse effect on our financial condition and results of operations.

  We are subject to litigation which, if adversely determined, could cause us
to incur substantial losses.  We are, from time to time, during the normal

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<PAGE> 23
course of operating our businesses, subject to various litigation claims and
legal disputes. Some of the litigation claims may not be covered under our
insurance policies, or our insurance carriers may seek to deny coverage. As a
result, we might required to incur significant legal fees, which may have a
material adverse effect on our financial position. In addition, because we
cannot predict the outcome of any action, it is possible that, as a result of
current and/or future litigation, we will be subject to adverse judgments or
settlements that could significantly reduce our earnings or result in losses.
We are currently involved in litigation regarding certain parking facilities
used in our St. Louis operations. We believe that a sustained loss of use of
parking facilities will have a significant negative impact on revenue and a
material adverse effect on the financial condition and results of operations.
For discussion regarding a dispute with respect to these proceedings and other
litigation in which we are involved, see "Item 3.  Legal Proceedings.
Litigation."

Item 1B.  Unresolved Staff Comments.

  None.

Item 2.  Properties.

  The Company's principal executive offices are located in an approximately
36,000 square foot building partially leased by the Company.  The Company
leases approximately 1,400 square feet for its principal executive offices.
The Company's mailing address is 1000 North Leonor K. Sullivan Boulevard, St.
Louis, Missouri 63102 and telephone number is (314) 622-3000.  Information
about the Company's casino operations locations appears under "Discontinued
Operations - Segments" in Item 1 of this report and is incorporated by
reference herein.

Item 3.  Legal Proceedings.

Pending Bankruptcy Proceedings

  For information regarding the Company's bankruptcy proceedings, see the
disclosures under "Item 1.  Business   Substantial Indebtedness; Bankruptcy
Proceedings."

Litigation

  The Company is from time to time a party to litigation, which may or may not
be covered by insurance, arising in the ordinary course of its business.
Management of the Company does not believe that the outcome of any such
litigation will have a material adverse effect on the Company's financial
condition or results of operations, or which would have any material adverse
impact upon the gaming licenses of the Company's subsidiaries except as
follows:

  The Company's St. Louis patrons have, since the "Admiral" was moved north
from its original location, almost exclusively used a public parking lot
immediately in front of the entrance to the "Admiral," known as the Cherrick
Lot.  The Company had a validation agreement with the operator of the Cherrick
Lot to accept $1.25 (later raised to $1.50) for use by "Admiral" patrons of
the Cherrick Lot.  On September 10, 2004, the City of St. Louis commenced an
action seeking to condemn the Cherrick Lot for use by Pinnacle which is

                                    20

<PAGE> 24
developing a large gaming and hotel complex approximately one block away from
the Cherrick Lot.  At the time the condemnation was commenced, Columbia Sussex
had an option to purchase the Cherrick Lot for $5.0 million.  On October 26,
2004, Columbia Sussex exercised its option and purchased the Cherrick Lot.  On
November 4, 2005, the Creditors Committee and the Company filed a Verified
Complaint for Declaratory Judgment and for Injunctive Relief in the Company's
bankruptcy proceedings pending in the Missouri Bankruptcy Court.  On November
10, 2005, the Court granted the request and enjoined the condemnation action
until January 9, 2006.  In connection with the pending sale of the Company's
St. Louis operations, Pinnacle, the Company and President Missouri entered
into a letter agreement relating to the Cherrick Lot.  Pinnacle currently
holds an option to purchase the Cherrick Lot if it is taken in the
condemnation proceeding. Pursuant to the letter agreement, the parties agreed
that if the Cherrick Lot is condemned, Pinnacle shall exercise its option to
purchase the Cherrick Lot, provided the aggregate price required to be paid as
compensation for the Cherrick Lot does not exceed $5.0 million.  If Pinnacle
purchases the Cherrick Lot, whether pursuant to its option or otherwise,
Pinnacle shall permit patrons of President Missouri the right to park on the
Cherrick Lot for a validation fee not exceeding one dollar and fifty cents per
day for each vehicle, which arrangement shall extend for a term ending on the
earlier of (a) the date on which Pinnacle opens its new casino project on
Laclede's Landing, or (b) December 31, 2008.  In consideration for Pinnacle's
obligations under the letter agreement, the Company's complaint against the
City of St. Louis has been dismissed and the injunction has been dissolved.

  On January 12, 2006, the Company filed a verified Complaint for Damages and
Injunctive Relief in the Missouri Bankruptcy Court, where its bankruptcy is
pending.  The suit named both the Company and President Riverboat Casino-
Missouri, Inc. as plaintiffs and named Columbia Sussex, Inc. and Wimar Tahoe
Corporation as defendants.  The Company alleged breach of contract by Columbia
Sussex because it took actions that could reasonably be expected to impede or
delay licensure by the Missouri Gaming Commission and it failed to use all
commercially reasonable efforts to obtain licensure from Missouri Gaming
Commission.  The Company also alleged a prima facie tort in that Columbia
Sussex had unilaterally raised validation rates for the Cherrick Lot used by
the Company for its patrons and with the intent to cause injury to the
Company.  The Company seeks damages for the injury inflicted and an injunction
to prevent Columbia Sussex from raising the validation fee above the $1.50 per
"Admiral" patron vehicle charged immediately prior to the increase in fees.
The Company also seeks injunctive relief requesting that Columbia Sussex be
enjoined from blocking access to the parking lot to the Company's patrons,
from raising the validation fee above $1.50 per patron vehicle and to prevent
any subsequent action designed to unreasonably curtail access for "Admiral"
patrons parking on the Cherrick Lot.

  On February 16, 2006, the Missouri Bankruptcy Court issued a preliminary
injunction prohibiting Columbia Sussex from charging more than $1.50 per
patron vehicle for validated parking for casino patrons.  The preliminary
injunction will remain in effect until a trial on the merits unless the
injunction is modified by the Court prior to trial.  As security for the
preliminary injunction, the Company was required to put up a $525,000 bond.
It is anticipated that in September 2006 the parties will ask the Court to set
a scheduling conference to determine, among other things, when a trial will be
scheduled.  On May 23, 2006, Columbia Sussex filed a motion with the Missouri
Bankruptcy Court seeking an increase to the preliminary injunction by $417,000
immediately and by the sum of $78,000 per week for every additional week that

                                    21

<PAGE> 25
the injunction remains in place, or in the alternative, that the Company post
a total bond of $4.5 million.  The motion is scheduled for a hearing June 13,
2006.

Item 4.  Submission of Matters to a Vote of Security Holders.

  There were no matters submitted to a vote of security holders during the
fourth quarter of fiscal 2006.

                                    PART II

Item 5.  Market for the Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities.

  The Company's Common Stock trades on the OTC Bulletin Board under the symbol
"PREZQ.OB."  The following table sets forth, for the fiscal quarters
indicated, the high and low sale or bid prices for the Common Stock, as
reported by the OTC Bulletin Board:

<TABLE>
<CAPTION>
                                                High       Low
                                               ------     -----

            <S>                               <C>         <C>
            Fiscal 2006
              First Quarter................   $ 0.28      $ 0.15
              Second Quarter...............   $ 0.30      $ 0.25
              Third Quarter................   $ 0.80      $ 0.23
              Fourth Quarter...............   $ 0.23      $ 0.08


            Fiscal 2005
              First Quarter................   $ 0.20      $ 0.07
              Second Quarter...............   $ 0.14      $ 0.09
              Third Quarter................   $ 0.40      $ 0.10
              Fourth Quarter...............   $ 0.30      $ 0.15


</TABLE>

  The market bid quotations reflect inter-dealer prices, without retail mark-
up, mark-down or commission and may not necessarily represent actual
transactions.  Bid quotations are derived from Commodity Systems, Inc. through
Yahoo.com Historical Quotes.

  On May 26, 2006, there were approximately 1,079 holders of record of the
Company's Common Stock.

  The Company has never paid any dividends on its Common Stock.  Currently,
all earnings, if any, are used for the repayment of debt and the operation of
its business.  The payment of dividends by the Company is restricted under the
terms of the indenture governing the Company's Senior Exchange Notes and the
Company's pending bankruptcy reorganization proceedings.  See "Management's
Discussion and Analysis of Financial Position and Results of Operations."

Item 6.  Selected Consolidated Financial Data.

  The following selected financial data of the Company is qualified by
reference to and should be read in conjunction with "Item 7.  Management's

                                        22

<PAGE> 26
Discussion and Analysis of Financial Condition and Results of Operations" and
the consolidated financial statements and notes thereto included elsewhere
herein.  The selected consolidated statement of operations and balance sheet
data are derived from the Company's consolidated financial statements which
are included elsewhere herein.

<TABLE>
<CAPTION>
                                                        Years Ended February 28/29,
                                              2006       2005       2004       2003       2002
                                             ------     ------     ------     ------     ------
                                                     (in thousands, except share data)

<S>                                         <C>        <C>        <C>        <C>        <C>
Consolidated Statement of Operations Data:

Total operating revenues (1)..............  $    --    $     --   $    --    $    --    $    --

Operating loss............................  $ (2,611)  $ (2,644)  $ (2,904)  $ (3,248)  $ (4,506)

Loss from continuing operations...........  $ (3,649)  $ (5,742)  $ (4,535)  $ (8,580)  $(15,493)

Income (loss) from discontinued
  operations (1)..........................  $ 37,990   $ 15,934   $  1,800   $   (499)  $ (5,255)

Net income (loss).........................  $ 34,341   $ 10,192   $ (2,735)  $ (9,079)  $(20,748)

Basic and diluted net loss per share
 from continuing operations...............   $ (0.72)   $ (1.14)   $ (0.90)   $ (1.70)   $ (3.08)
Basic and diluted net income (loss) per
  share from discontinued operations......   $  7.54    $  3.17    $  0.36    $ (0.10)   $ (1.04)
                                             --------   --------   --------   --------   --------
Basic and diluted net income
 (loss) per share.........................   $  6.82    $  2.03    $ (0.54)   $ (1.80)   $ (4.12)
                                             ========   ========   ========   ========   ========

Consolidated Balance Sheet Data:

Cash and cash equivalents.................  $ 28,077   $ 20,706    $ 18,362  $ 11,720   $  5,710
Restricted cash, cash equivalents
  and short-term investments..............       --       2,584       2,672     5,404      7,717
Assets of discontinued operations (1).....    38,511     93,237      95,568   102,734    106,752
Total assets..............................    66,760    116,705     116,818   120,834    120,450
Current liabilities.......................     7,728     47,992      14,096    58,429    145,237
Long-term debt............................       --         --       45,429       --         --
Minority interest (2).....................     3,531     19,020      17,653       679     15,102
Liabilities subject to compromise.........    63,317     91,850      91,989   111,340        646
Stockholders' deficit.....................    (7,816)   (42,157)    (52,349)  (40,614)   (40,535)
</TABLE>

(1)  On April 15, 2005, the Biloxi operations were sold for approximately
     $82,000 pursuant to an auction and sale approved by the United States
     Bankruptcy Court for the Eastern District of Missouri.

     On February 24, 2006, the Company, President Missouri, and Pinnacle
     Entertainment, Inc. ("Pinnacle") entered into a Riverboat Casino Sale
     and Purchase Agreement (the "Purchase Agreement").  Under the terms of
     this Purchase Agreement all of the outstanding capital stock of
     President Missouri will be sold for approximately $31,500, subject to
     working capital adjustments.  The Purchase Agreement has been submitted
     to the Missouri Bankruptcy Court for approval.  Final closing of the
     sale is contingent upon satisfaction of certain closing conditions
     including licensing and approval of the buyer by the Missouri Gaming
     Commission.

                                    23

<PAGE> 27
     The Company sold one of two vessels accounted for in its leasing
     segment during May 2003 and the second vessel was foreclosed on by the
     lender which held a Preferred First Fleet Mortgage collateralizing debt
     owed to them.  Management's evaluation of the net realizable value of
     its assets, based on their intended future use and current market
     conditions, resulted in impairments of long-lived assets of $288,
     $1,167 and $7,068, respectively, during fiscal years 2004, 2003 and
     2002, on the two casino vessels accounted for in the
     leasing segment.

     In accordance with Statement of Financial Accounting Standard No. 144
     "Accounting for the Impairment and Disposal of Long-Lived Assets," the
     St. Louis and Biloxi operations and leasing segment are accounted for
     as discontinued operations.  The results for fiscal 2002, 2003 and 2004
     have been revised to reflect these reclassifications.

(2)  As of February 28, 2003, $15,669 of minority interest related to
     J. Edward Connelly Associates, Inc.'s Class B Unit of PBLLC was
     classified as liabilities subject to comprise.

  Gaming operations commenced in Davenport, Iowa on April 1, 1991, in Biloxi,
Mississippi on August 13, 1992 and in St. Louis, Missouri on May 27, 1994.
Hotel operations commenced in Davenport, Iowa on October 30, 1990 and in
Biloxi, Mississippi on July 27, 1997.  The assets of the Davenport operations
were sold on October 10, 2000.  The assets of Gateway Riverboat Cruises, the
Company's non-gaming cruise operations in St. Louis, were sold on July 17,
2001.  The assets of the Biloxi operations were sold April 15, 2005.

Item 7.  Management's Discussion and Analysis of Financial Condition and
Results of Operations.

  The following discussion, which covers fiscal years 2004 through 2006,
should be read in conjunction with the consolidated financial statements of
the Company and the notes thereto included elsewhere in this report.

  President Casinos, Inc., President Riverboat Casino-Missouri, Inc., The
President Riverboat Casino-Mississippi, Inc., Broadwater Hotel, Inc., PRC
Management, Inc., PRC Holdings Corporation, TCG/Blackhawk, Inc. and Vegas
Vegas, Inc. have each filed voluntary petitions for reorganization under
Chapter 11 of the Bankruptcy Code.  See "Note 1.  Bankruptcy Proceedings" of
the Notes to Condensed Consolidated Financial Statements.

  The Company entered into agreements to sell its St. Louis, Missouri and
Biloxi, Mississippi gaming operations.  The agreement to sell the Biloxi
operations was consummated on April 15, 2005.  At this time management is
unable to predict when or where the sale of St. Louis operations will be
completed.

  As a result of the Company's relatively high degree of leverage and the need
for significant capital expenditures at its St. Louis property, the Company
was unable to pay the regularly scheduled interest payments of $6.4 million
that were each due and payable March 15, and September 15, 2000.  Under the
indentures pursuant to which the $75.0 million 13.0% Senior Exchange Notes
(the "Senior Exchange Notes") and the $25.0 million 12% Secured Notes (the
"Secured Notes" and collectively with the Senior Exchange Notes, the "Notes")
were issued, an Event of Default occurred on April 15, 2000, and is continuing

                                    24

<PAGE> 28
as of the date hereof.  Additionally, the Company was unable to pay the $25.0
million principal payment due September 15, 2000 on the Senior Exchange Notes.
The holders of at least 25% of the Senior Exchange Notes and the Secured Notes
were notified of the defaults and instructed the Indenture Trustee to
accelerate the Notes and on August 11, 2000, the holders declared the unpaid
principal and interest to be due and payable.

  On October 10, 2000, the Company sold the assets of its Davenport, Iowa
operations for aggregate consideration of $58.2 million in cash.  On November
22, 2000, the Company entered into an agreement with a majority of the holders
of the Senior Exchange Notes and a majority of the holders of the Secured
Notes.  The agreement provided for a proposed restructuring of the Company's
debt obligations under the Notes and the application of certain of the
proceeds received by the Company from the sale of the Company's Davenport
assets.  Approximately $43.0 million of the proceeds from the sale were
deposited with a trustee.  Of this amount, $12.8 million was used to pay
missed interest payments due March 15, 2000 and September 15, 2000 on the
Notes; $25.0 million was used to partially redeem the Notes; and $5.2 million
was used to pay interest due March 15, 2001 on the Notes.  Subsequently, the
Company was unable to make the principal and interest payments due September
15, 2001.

  On April 15, 2005, the Company sold the assets of its Biloxi, Mississippi
operations for aggregate consideration of $82.0 million in cash, subject to
certain post-closing adjustments.  The sale was pursuant to an auction and
sale process approved by the Missouri Bankruptcy Court.  From the proceeds,
the Company paid $37.1 million to the lender of the PBLLC debt to satisfy the
outstanding principal and interest obligations in full.  The Company paid the
Noteholders and their assignees $27.3 million to partially satisfy its
obligation and redeemed $16.1 million of Mr. Connelly's Class B membership
interest.

  On March 16, 2004, the Company sold the 179-room Broadwater Tower Hotel for
$6.5 million.  The Company's other hotel, the 333-room President Broadwater
Resort, was not included in this transaction.  The net proceeds of the
transaction were used to reduce the debt of PBLLC.  In connection with the
transaction the Company also entered into a lease agreement with the new
owners whereby the Company continued to operate the Broadwater Tower Hotel.

  On August 9, 2004, the Company entered into an agreement with Penn National
Gaming, Inc. for the purchase of its St. Louis operations.  The agreement was
submitted to the Missouri Bankruptcy Court for review and was amended on
September 17, 2004.  Under the terms of the agreement, the stock of President
Missouri was to be sold for approximately $28.0 million, subject to working
capital adjustments and subject to higher and better offers.  On October 7,
2004, an auction was held in accordance with Section 363 of the Bankruptcy
Code.  Pursuant to an agreement submitted September 30, 2004, Columbia Sussex
Corporation, Inc. was the winning over-bidder for the purchase of all of the
President Missouri's outstanding stock for a purchase price of approximately
$57.0 million, subject to closing adjustments.  On October 13, 2004, the
Missouri Bankruptcy Court entered an order approving the sale of the stock of
the Company to Columbia Sussex.  The closing of the transaction was contingent
upon approval by the Missouri Gaming Commission and other closing conditions.
On October 25, 2005, Columbia Sussex notified the Company that it had
withdrawn its application for licensing with the Missouri Gaming Commission.

                                    25

<PAGE> 29
  On February 24, 2006, the Company entered into an agreement with Pinnacle
Entertainment, Inc. for the purchase of the stock of President Missouri for
approximately $31.5 million, subject to working capital adjustments.  The
agreement has been submitted to the Missouri Bankruptcy Court for approval.
Final closing of the sale is contingent upon satisfaction of certain closing
conditions including licensing and approval of the buyer by the Missouri
Gaming Commission.

  Management believes the Company's liquidity and capital resources will be
sufficient to maintain its current operations until the St. Louis operations
are sold.  However, costs previously incurred and which will be incurred in
the future in connection with restructuring the Company's debt obligations and
the bankruptcy proceedings have been and will continue to be substantial and,
in any event, there can be no assurance that the Company will be able to
successfully restructure its indebtedness or that its liquidity and capital
resources will be sufficient to maintain its normal operations during the
restructuring period.

  The proceeds from the sale of the St. Louis operations to Pinnacle under the
current Sale and Purchase Agreement will not provide sufficient funds to
discharge the Company's indebtedness.  In the event a competing sale agreement
is consummated and proceeds are sufficient to discharge the Company's
indebtedness, the Board of Directors will determine whether to liquidate the
Company or engage in further business activities, including activities other
than gaming.  At this time it is not possible to predict whether the sale of
the St. Louis operations will be consummated or whether the Company will
liquidate or continue business operations in some form.

Overview

  The Company's operating results are affected by a number of factors,
including competitive pressures, changes in regulations governing the
Company's activities, the economic environment and general weather conditions.
Consequently, the Company's operating results may fluctuate from period to
period and the results for any period may not be indicative of results for
future periods.  The Company's operations are not significantly affected by
seasonality.

  As a result of the sale of the Biloxi operations in April 2005 and the
pending sale agreement for the St. Louis operations discussed above, the
results of operations for these segments are classified in discontinued
operations.

  --Competition

  Competition is intense in the St. Louis market area.  There are presently
four other casino companies operating five casinos in the market area.  Many
of these competitors have significantly greater name recognition and financial
and marketing resources than the Company.  Two of these are Illinois casino
companies operating single casino vessels docked on the Mississippi River, one
across the Mississippi River from the "Admiral" and the second 20 miles
upriver.  There are two Missouri casino companies, each of which operates
casino vessels approximately 20 miles west of St. Louis on the Missouri River.
One company operates two casinos in Maryland Heights, Missouri and the other
company operates one casino in the City of St. Charles, Missouri.  The
operator of the St. Charles casino replaced its facility and reopened with

                                    26

<PAGE> 30
nearly double its prior gaming positions in August 2002.

  The Missouri Gaming Commission announced that it would consider licensing
additional casinos in the St. Louis market.  In September 2003, the City of
St. Louis and St. Louis County, which are separate political and
geographic subdivisions, announced that they were both issuing requests for
proposals for a new casino in each jurisdiction.

  A project proposed by Pinnacle Entertainment, Inc. was selected and approved
by the City of St. Louis as its recommendation before the Missouri Gaming
Commission.  Its proposal includes a casino two blocks from the "Admiral."
The St. Louis County Council approved a separate Pinnacle Entertainment, Inc.
project in Lemay, Missouri.  Various other gaming companies filed proposals.
On September 1, 2004, the Missouri Gaming Commission approved Pinnacle
Entertainment, Inc. for formal license investigations for both the St. Louis
City and St. Louis County projects.  Each of the proposals submitted requires
significant construction of new infrastructure for the casino and
entertainment complexes.  Pending licensing, it is anticipated that the City
of St. Louis casino development will open in 2007.  Management believes that
the licensing of a new casino or casinos in metropolitan St. Louis, would have
a material adverse effect on the Company's financial condition and results of
operations.

  --Regulatory Matters

  The Company's Missouri gaming license was renewed in April 2006 for a period
through May 2008.  Missouri regulations limit the loss per "simulated" cruise
per passenger by limiting the amount of chips or tokens a guest may purchase
during each two-hour gaming session to $500 (the "loss limit").  The company
in Maryland Heights, Missouri that operates adjacent casinos is able to offer
guests who reach the two-hour loss limit the ability to move to the adjacent
casino and continue to play.  The lack of a statutory loss limit on Illinois
casinos allows them to attract higher stake players.  Additionally, their
guests are not burdened with the administrative requirements related to the
loss limits, which includes the presentation of government issued
identification.  Any easing of the loss limits in Missouri would be expected
to have a positive impact on the Company's St. Louis operations.

  --Economic Environment

  The Company's business involves leisure and entertainment.  During periods
of recession or economic downturn, consumers may reduce or eliminate spending
on leisure and entertainment activities.  In the event that the Company's
demographic markets suffer adverse economic conditions, the Company's revenues
may be materially adversely affected.

  --Weather Conditions

  The Company's operating results are susceptible to the effects of floods and
adverse weather conditions.  Historically, the Company has temporarily
suspended operations on various occasions as a result of such adversities.
Under less severe conditions, high river levels in St. Louis cause reduced
parking and a general public perception of diminished access to the casino
resulting in decreased revenues.

                                     27

<PAGE> 31
  --St. Louis Parking Matters

  Management believes that a sustained loss of use of certain parking
facilities in St. Louis will have a significant negative impact on revenue and
a material adverse effect on the Company's financial condition and results of
operations.  For discussion regarding a dispute with respect to use of certain
parking facilities see "Note 12. Commitments and Contingent Liabilities."

Results of Operations

  The results of continuing operations for the years ended February 28, 2006,
February 28, 2005 and February 29, 2004 include only those expenses resulting
from corporate administration.  The gaming results for the Company's
operations in Biloxi, Mississippi and to a lesser significance, the hotel
operations in Biloxi (the Broadwater Property) are classified as discontinued
operations as a result of the sale of the assets in April 2005.  The planned
sale of the St. Louis casino requires the Company to classify the St. Louis
operations in discontinued operations.  Also included in discontinued
operations are the Company's former leasing operations.

  The following table highlights the results of the Company's operations
during the periods presented.

            <TABLE>
            <CAPTION>
                                               Twelve Months Ended February 28/29,
                                                  2006        2005        2004
                                                 ------      ------      ------
                                                         (in millions)

             <S>                                 <C>         <C>          <C>

             Continuing Operations:

             Corporate Administration
               operating loss                    $ (2.6)     $ (2.6)      $ (2.9)

             Discontinued Operations:

             St. Louis, Missouri Operations
               Operating revenues                  67.3        69.8         70.8
               Operating income                    10.2         7.9          5.7

             Biloxi, Mississippi Operations
               Operating revenues                   5.6        43.2         48.5
               Operating income                     0.6         1.2          3.0

             Leasing Operations
               Operating income (loss)              0.1        (0.1)        (1.6)

             St. Louis operating margin            15.1%       11.3%         8.0%

             </TABLE>

                                    28
<PAGE> 32
  The following table highlights cash flows of the Company's operations.

            <TABLE>
            <CAPTION>
                                              Twelve Months Ended February 28/29,
                                                  2006        2005        2004
                                                 ------      ------      ------
                                                         (in millions)

             <S>                                <C>          <C>         <C>
             Cash provided by (used in)
               operating activities             $(10.1)      $  6.4      $  7.8
             Cash provided by (used in)
               investing activities               83.9          2.3        (2.4)
             Cash used in
               financing activities              (67.8)        (6.4)       (3.6)
             Cash paid for interest               13.6          2.9         3.0
             </TABLE>

Fiscal 2006 Compared to Fiscal 2005

  Operating revenues from continuing operations.  As of February 28, 2006, the
Company had sold its Biloxi operations and was negotiating a new agreement for
the sale of its St. Louis operations.  As such, all revenues are classified in
discontinued operations.

  Operating costs and expenses of continuing operations.  The Company's
consolidated selling, general and administrative expenses were $2.6 million
for fiscal 2006 and fiscal 2005.

  Operating income.  As a result of the foregoing items, the Company had an
operating loss of $2.6 million during both fiscal 2006 and fiscal 2005.

  Reorganization items.  The Company incurred reorganization items of $0.7
million during the year ended February 28, 2006, compared to $1.7 million
during the year ended February 28, 2005.  Reorganization expense is largely
attributable to legal fees associated with the Company's bankruptcy
proceedings.  The decrease in reorganization costs is a result of more costs
being attributable to discontinued operations rather than corporate
administration.

  Minority interest expense.  The Company incurred $0.6 million in minority
interest expense during the year ended February 28, 2006, compared to $1.4
million during the year ended February 28, 2005.  During both periods the
minority interest arose from Mr. Connelly's Class B Unit of the Broadwater
Property.  The decrease is the result of the Company redeeming $16.1 million
of the Class B Unit in fiscal 2006.

  Net loss from continuing operations.  As a result of foregoing items, the
Company incurred a net loss from continuing operations of $3.6 during fiscal
year 2006 compared to a net loss from continuing operations of $5.7 million
during fiscal year 2005.

  Discontinued operations.  Discontinued operations consist of the Company's
St. Louis segment, Biloxi segment and the former vessel leasing segment.

  St. Louis segment.  On August 9, 2004, the Company entered into an agreement
with Penn National Gaming, Inc. for the purchase of its St. Louis operations.
The agreement was submitted to the Missouri Bankruptcy Court for review and

                                   29

<PAGE> 33
was amended on September 17, 2004.  Under the terms of the agreements, the
stock of the St. Louis operations was to be sold for approximately $28.0
million, subject to working capital adjustments and subject to a potential
overbid.  On October 7, 2004, an auction was held in accordance with Section
363 of the Bankruptcy Code.  Columbia Sussex, Inc. was the winning over-bidder
for the St. Louis casino operations for a purchase price of approximately
$57.0 million, subject to closing adjustments.  On October 13, 2004, the
Missouri Bankruptcy Court approved the terms of the agreement.  The closing of
the transaction was contingent upon licensing approval of Columbia Sussex and
its key officers by the Missouri Gaming Commission.  On October 25, 2005,
Columbia Sussex notified the Company that it had withdrawn its application for
licensing with the Missouri Gaming Commission.

  On February 24, 2006, the Company entered into an agreement with Pinnacle
Entertainment, Inc. for the purchase of the stock of President Missouri for
approximately $31.5 million, subject to working capital adjustments.  The
agreement has been submitted to the Missouri Bankruptcy Court for approval.
Final closing of the sale is contingent upon satisfaction of certain closing
conditions including licensing and approval of the buyer by the Missouri
Gaming Commission.

  The Company's St. Louis operating segment had operating income of $10.2
million, consisting of revenues of $67.3 million and operating expenses of
$57.1 million, during the year ended February 28, 2006, compared to operating
income of $7.9 million, consisting of revenues of $69.8 million and operating
expenses of $61.9 million, during the year ended February 28, 2005.  Net
revenues decreased $2.5 million primarily as a result of the competitive
environment.  Operating expenses, other than depreciation, decreased $4.8
million.  The decrease is primarily the result of a decrease in payroll and
benefits and admissions taxes due to a decrease in volume, and decreased
gaming taxes as a result of a decrease in revenue.  Depreciation expense
decreased $3.4 million as a result of ceasing to depreciate assets in November
2004, in accordance with SFAS 144.  The St. Louis segment had net income of
$10.1 million for the year ended February 28, 2006, compared to net income of
$7.1 million for the year ended February 28, 2005.

  Biloxi segment.  On April 15, 2005, the Company consummated the sale of
substantially all of the assets utilized in its Biloxi operations to
Broadwater Development, LLP (the "Purchaser").  The sale was consummated
pursuant to the terms and conditions of a Sale and Purchase Agreement, dated
as of November 15, 2004, by and between President Mississippi, Vegas Vegas,
Inc., PBLLC, (collectively, with President Mississippi and Vegas Vegas, the
"Sellers") and Purchaser, as amended by the Amendment to Sale and Purchase
Agreement dated as of November 19, 2004, and the Second Amendment to Sale and
Purchase Agreement dated as of November 29, 2004 (collectively, the "Sale
Agreement").  Pursuant to the Sale Agreement, the Purchaser acquired from the
Sellers substantially all of the real and personal property associated with
the Company's Biloxi, Mississippi operations.  Under the terms of the Sale
Agreement, the purchase price was $82.0 million, subject to certain post-
closing adjustments.  Of this amount, $6.8 million was paid by Silver Slipper
Casino Venture LLC, which acquired the right to purchase the gaming casino
assets under a separate transaction with the Purchaser.

  The Company's Biloxi operating segment had operating income of $0.6 million,
consisting of revenues of $5.6 million and operating expenses of $5.0 million
during the year ended February 28, 2006, compared to operating income of $1.2

                                    30

<PAGE> 34
million, consisting of revenues of $43.2 million and operating expenses of
$42.0 million during the year ended February 28, 2005.   Depreciation expense
decreased $1.5 million as a result of ceasing to depreciate assets in December
2004, in accordance with SFAS 144, effective with the Bankruptcy Court's

approval of the sale agreement.  The Biloxi segment had net income of $27.7
million for the year ended February 28, 2006, compared to net income of $6.4
million for the year ended February 28, 2005.  Included in fiscal year 2006
net income is a $27.5 million gain resulting from the sale of the Biloxi
assets.  Included in fiscal year 2005 net income is a $2.4 million gain
resulting from the write down of the PBLLC debt to net realizable value due to
the Court approved Mississippi Plan of Liquidation.  As a result of the sale
of the Company's Biloxi operations on April 15, 2005, and the gain that
resulted from the transaction, the Company recorded a reduction of the income
tax valuation allowance resulting in a $5.7 million tax benefit during fiscal
year 2005.

  Leasing segment.  The leasing segment was operated by President Riverboat
Casino-New York, Inc., a wholly-owned subsidiary of the Company.  Of the two
vessels owned by this segment, the "Surfside Princess" was sold in May 2003.
On June 11, 2003, as a result of the Company's default on the debt that the
second vessel collateralized, the United States Marshall's office served a
warrant on the "President Riverboat Casino-Mississippi."  On April 7, 2004,
the vessel was auctioned.

  The Company had net income of $0.1 million during the year ended February
28, 2006 as the result of selling gaming chips which were purchased in 1998 in
conjunction with pursuing a gaming license in New York City.  The Company had
net income of $2.5 million, including a gain of $2.6 million on restructuring
debt, from the leasing segment during the year ended February 28, 2005.  On
October 17, 2003, the Mississippi Bankruptcy Court issued an order dismissing
President Riverboat Casino-New York, Inc.'s Chapter 11 bankruptcy case.

  Net income.  The Company generated net income of $34.4 million during the
year ended February 28, 2006, compared to net income of $10.2 million during
the year ended February 28, 2005.

Fiscal 2005 Compared to Fiscal 2004

  Operating revenues from continuing operations.  As of February 28, 2005, the
Company had entered into purchase agreements for the sale of the Company's St.
Louis and Biloxi operations which were each approved by the Bankruptcy Court.
As such, all revenues are classified in discontinued operations.

  Operating costs and expenses of continuing operations.  The Company's
consolidated selling, general and administrative expenses were $2.6 million
during the year ended February 28, 2005 compared to $2.9 million for the year
ended February 29, 2004.  Corporate overhead decreased $0.3 million primarily
as the result of a decrease in payroll and payroll benefits.

  Operating income.  As a result of the foregoing items, the Company had an
operating loss of $2.6 million during fiscal 2005, compared to an operating
loss of $2.9 million during fiscal 2004.

  Reorganization items.  The Company incurred reorganization items of $1.7
million during the year ended February 28, 2005, compared to $0.3 million

                                    31

<PAGE> 35
during the year ended February 29, 2004.  Reorganization expense is largely
attributable to legal fees associated with the Company's bankruptcy
proceedings.  The increase in reorganization costs is a result of the costs
resulting from legal representation of the noteholders.

  Minority interest expense.  The Company incurred $1.4 million in minority
interest expense during the year ended February 28, 2005, compared to $1.3
million during the year ended February 29, 2004.  During both periods the
minority interest arises from Mr. Connelly's Class B Unit of the Broadwater
Property.

  Net loss from continuing operations.  As a result of foregoing items, the
Company incurred a net loss from continuing operations of $5.7 during fiscal
year 2005 compared to a net loss from continuing operations of $4.5 million
during fiscal year 2004.

  Discontinued operations.   Discontinued operations consists of the Company's
St. Louis segment, Biloxi segment and the former vessel leasing segment.

  St. Louis segment.  On August 9, 2004, the Company entered into an agreement
with Penn National Gaming, Inc. for the purchase of its St. Louis operations.
The agreement was submitted to the Missouri Bankruptcy Court for review and
was amended on September 17, 2004.  Under the terms of the agreements, the
stock of the St. Louis operations was to be sold for approximately $28.0
million, subject to working capital adjustments and subject to a potential
overbid.  On October 7, 2004, an auction was held in accordance with Section
363 of the Bankruptcy Code.  Columbia Sussex, Inc. was the winning over-bidder
for the St. Louis casino operations for a purchase price of approximately
$57.0 million, subject to closing adjustments.  On October 13, 2004, the
Missouri Bankruptcy Court approved the terms of the agreement.  On February
24, 2006, the Company entered into an agreement with Pinnacle Entertainment,
Inc. for the purchase of the stock of President Missouri for approximately
$31.5 million, subject to working capital adjustments.  The agreement has been
submitted to the Missouri Bankruptcy Court for approval.  Final closing of the
sale is contingent upon satisfaction of certain closing conditions including
licensing and approval of the buyer by the Missouri Gaming Commission.

  The Company's St. Louis operating segment had operating income of $7.9
million, consisting of revenues of $69.8 million and operating expenses of
$61.9 million, during the year ended February 28, 2005, compared to operating
income of $5.6 million, consisting of revenues of $70.8 million and operating
expenses of $65.2 million, during the year ended February 29, 2004.  Net
revenues decreased $1.0 million primarily as a result in increased promotional
allowances in response to the competitive environment.  Operating expenses,
other than depreciation, decreased $0.5 million.  The decrease is primarily
the result of a decrease in payroll and benefits and admissions taxes due to a
decrease in volume, and decreased gaming taxes as a result of a decrease in
revenue.  Depreciation expense decreased $2.6 million as a result of ceasing
to depreciate assets, in accordance with SFAS 144, effective with the
Bankruptcy Court's approval of the sale agreement.  The St. Louis segment had
net income of $7.1 million for the year ended February 28, 2005, compared to
net income of $4.6 million for the year ended February 29, 2004.

  Biloxi segment.  On April 15, 2005, the Company consummated the sale of
substantially all of the assets utilized in its Biloxi operations to
Broadwater Development, LLP (the "Purchaser").  The sale was consummated

                                   32

<PAGE> 36
pursuant to the terms and conditions of a Sale and Purchase Agreement, dated
as of November 15, 2004, by and between President Mississippi, Vegas Vegas,
Inc., PBLLC, (collectively, with President Mississippi and Vegas Vegas, the
"Sellers") and Purchaser, as amended by the Amendment to Sale and Purchase
Agreement dated as of November 19, 2004, and the Second Amendment to Sale and
Purchase Agreement dated as of November 29, 2004 (collectively, the "Sale
Agreement").  Pursuant to the Sale Agreement, the Purchaser acquired from the
Sellers substantially all of the real and personal property associated with
the Company's Biloxi, Mississippi operations.  Under the terms of the Sale
Agreement, the purchase price was approximately $82.0 million, subject to
certain post-closing adjustments.  Approximately $6.8 million of the purchase
price was paid by Silver Slipper Casino Venture LLC, which acquired the right
to purchase the gaming casino assets under a separate transaction with the
Purchaser.

  The Company's Biloxi operating segment had operating income of $1.2 million,
consisting of revenues of $43.2 million and operating expenses of $42.0
million during the year ended February 28, 2005, compared to operating income
of $3.0 million, consisting of revenues of $48.5 million and operating
expenses of $45.5 million during the year ended February 29, 2004.  The
Company's Biloxi operations were closed from noon on September 14, 2004 until
7:00 a.m. on September 17, 2004 due to Hurricane Ivan.  The Company's Biloxi
properties received no significant damage.  However, damage caused by
Hurricane Ivan to areas east of Biloxi, principally Alabama and Florida,
representing a significant portion of Biloxi's feeder market, was significant.
As a result of the temporary closure and the damage in areas east of Biloxi,
Biloxi's patron count decreased, resulting in a decline in revenues.
Operating expenses, other than depreciation, decreased $3.0 million as a
result of decreased payroll and benefits due to a decrease in number of guests
and decreased gaming taxes as a result of a decrease in revenue.  Depreciation
expense decreased $0.5 million as a result of ceasing to depreciate assets, in
accordance with SFAS 144, effective with the Bankruptcy Court's approval of
the sale agreement.  The Biloxi segment had net income of $6.4 million for the
year ended February 28, 2005, compared to a net loss of $0.4 million for the
year ended February 29, 2004.  Included in fiscal year 2005 net income is a
$2.4 million gain resulting from the write down of the PBLLC debt to net
realizable value due to the Court approved Mississippi Plan of Liquidation.
As a result of the sale of the Company's Biloxi operations on April 15, 2005,
and the gain that resulted from the transaction, the Company recorded a
reduction of the income tax valuation allowance resulting in a $5.7 million
tax benefit during fiscal year 2005.

  Leasing segment.  The leasing segment was operated by President Riverboat
Casino-New York, Inc., a wholly-owned subsidiary of the Company.  Of the two
vessels owned by this segment, the "Surfside Princess" was sold in May 2003.
On June 11, 2003, as a result of the Company's default on the debt that the
second vessel collateralized, the United States Marshall's office served a
warrant on the "President Riverboat Casino-Mississippi."  On April 7, 2004,
the vessel was auctioned and the lender offered the highest bid.

  The Company had net income of $2.5 million, including a gain of $2.6 million
on restructuring debt, from the leasing segment during the year ended February
28, 2005, compared to a net loss of $2.4 million during the year ended
February 29, 2004.  On October 17, 2003, the Mississippi Bankruptcy Court
issued an order dismissing President Riverboat Casino-New York, Inc.'s Chapter
11 bankruptcy case.  As a result of the segment no longer operating under the

                                     33

<PAGE> 37
protection of Chapter 11, the Company accrued certain contractual obligations
under the terms of the debt agreement collateralized by the M/V "President
Riverboat Casino-Mississippi."  Such amounts consist of $0.7 million of
default interest arising since the inception of the bankruptcy filing, $0.5
million in contractual legal fees and $0.1 million in penalties.

  Additionally, the Company recognized a $0.3 million valuation allowance on
the vessel.  The sales proceeds did not cover the debt obligation.  Subsequent
to February 28, 2005, the Company and lender reached an agreement whereby the
parties mutually agreed that all obligations related to the indebtedness and
penalties for default thereon would be satisfied for $0.8 million.  As a
result of this agreement, the Company recognized a gain of $2.6 million on
restructuring of debt.

  Net income/loss.  The Company generated net income of $10.2 million during
the year ended February 28, 2005, compared to a net loss of $2.7 million
during the year ended February 28, 2004.

Liquidity and Capital Resources

  The Company meets its working capital requirements from a combination of
internally generated sources including cash from operations and the sale of
assets.

  As discussed above, the Company and its operating subsidiaries, with the
exception of PBLLC and President Riverboat Casino-New York, Inc., are
operating their businesses as debtors-in-possession under Chapter 11 of the
Bankruptcy Code.  In addition to the cash requirements necessary to fund
ongoing operations, the Company anticipates that it will continue to incur
significant professional fees and other reorganization costs in connection
with the reorganization.  As a result of the uncertainty surrounding the
Company's current circumstances, it is difficult to predict the Company's
actual liquidity needs and sources at this time.  However, based upon current
and anticipated levels of operations, during the pendency of the bankruptcy,
management believes that its liquidity and capital resources will be
sufficient to maintain its St. Louis operations at current levels until the
sale of the property.  Costs previously incurred and to be incurred in the
future in connection with the reorganization have been and will continue to be
substantial and, in any event, there can be no assurance that the Company will
be able to reorganize its indebtedness or that its liquidity and capital
resources will be sufficient to maintain its normal operations during the
reorganization period.  The Company's access to additional financing is, and
for the foreseeable future will likely continue to be, very limited.
Additionally, any significant interruption or decrease in the revenues derived
by the Company from its St. Louis operations would have a material adverse
effect on the Company's liquidity and the ability to maintain the Company's
operations as presently conducted.

  As a result of the Company's high degree of leverage and the need for
significant capital expenditures at its St. Louis property, the Company was
unable to make the regularly scheduled interest payments of $6.4 million that
were each due and payable March 15 and September 15, 2000.  Under the
Indentures pursuant to which the Senior Exchange Notes and Secured Notes were
issued, an Event of Default occurred on April 15, 2000, and is continuing as
of the date hereof.  Additionally the Company did not pay the $25.0 million
principal payment due September 15, 2000 on the Senior Exchange Notes.  The

                                     34

<PAGE> 38
holders of at least 25% of the Senior Exchange Notes and Secured Notes were
notified and instructed the Indenture Trustee to accelerate the Senior
Exchange Notes and Secured Notes and on August 11, 2000, the holders declared
the unpaid principal and interest to be due and payable.  As of February 28,
2006, principal due on the Senior and Secured Notes was $46.0 million and
$14.7 million, respectively.

  The Company's St. Louis operations require approximately $4.0 million to
fund daily operations.  As of February 28, 2006, the St. Louis operations had
$28.1 million of non-restricted cash.  The Company also had $3.0 million of
non-restricted cash included in discontinued operations.

  The Company is heavily dependent on cash generated from operations to
continue to operate as planned and to make capital expenditures.  Management
anticipates that its existing available cash and cash equivalents and its
anticipated cash generated from operations will be sufficient to fund its
ongoing operations.  To the extent cash generated from operations is less than
anticipated, the Company may be required to curtail certain planned
expenditures.

  The Company used $10.1 million of cash from operating activities during the
year ended February 28, 2006, compared to generating $6.4 million for the year
ended February 28, 2005. The primary decrease in cash from operating
activities was the payment of $12.6 million in interest to the Noteholders
during fiscal year 2006.

  Investing activities of the Company generated $83.9 million of cash during
the year ended February 28, 2006 compared to generating $2.3 million during
fiscal 2005.  During the year ended February 28, 2006, the Company received
proceeds from the sale of the Biloxi assets of $82.0 million and from the sale
of the St. Louis office building of $1.7 million.  During the year ended
February 28, 2005, the Company received proceeds from the sale of the
Broadwater Tower of $6.5 million.

  Financing activities of the Company used $67.8 million of cash during the
year ended February 28, 2006, compared to $6.4 million during the year ended
February 28, 2005.  During the year ended February 28, 2006, the Company used
proceeds from the sale of the Biloxi assets to pay the debt obligation of
PBLLC in the amount of $36.6 million and to partially pay the Noteholders
$14.3 million principal.  Additionally, during the year ended February 28,
2006, the Company redeemed minority interest of $16.1 million for the Class B
Unit in PBLLC.  During the year ended February 28, 2005, the Company used
proceeds from the sale the Broadwater Tower to partially pay PBLLC's debt
obligation.

  The sale of the Company's Biloxi operations closed effective April 15, 2005
and on May 27, 2005 the Missouri Bankruptcy Court confirmed a Plan of
Liquidation (the "Mississippi Plan of Liquidation") for President Mississippi,
Vegas, Vegas and PBLLC (the "Mississippi Affiliates") that was jointly
developed by the Company and its creditors AIG SunAmerica Inc. and MacKay
Shields LLC in the Company's bankruptcy case.  The Mississippi Plan of
Liquidation became final on June 7, 2005.  Pursuant to the Mississippi Plan of
Liquidation, the proceeds from the sale of the Mississippi Affiliates,
following adjustments required under the Mississippi Asset Sale Agreement,
have been allocated and distributed to the creditors of the Mississippi
Affiliates, including the holders of the Company's Senior Exchange Notes and

                                    35

<PAGE> 39
Secured Notes and to J. Edward Connelly Associates, Inc. ("JECA") and certain
assignees of JECA.  JECA, an entity controlled by John E. Connelly, the
Company's former Chairman and Chief Executive Officer, holds a Class B
membership interest in PBLLC.  The Company anticipates that under the
Mississippi Plan of Liquidation, creditors of the Mississippi Affiliates, with
the exception of the Noteholders, will be paid in full, subject to final
determination and settlement of claims and expenses.  During the year ended
February 28, 2006, the Company paid $27.4 million of indebtedness to the
Noteholders and redeemed $16.1 million of JECA's Class B membership interest
in PBLLC.

  The Mississippi Plan of Liquidation established August 8, 2005 as the
Administrative Bar Date, whereby each person or entity could file a claim
arising on or after July 9, 2002 and before May 25, 2005 for President
Mississippi or arising after July 11, 2002 and before May 25, 2005 for Vegas
Vegas and BHI.  The Company has attempted to notify creditors that failure to
file a claim against President Mississippi, Vegas Vegas and/or BHI would
result in the claim being forever barred and discharged.

  The Company defaulted under the terms of its "M/V "President Casino-
Mississippi" note.  The M/V "President Casino-Mississippi" is the vessel
previously operated as a casino in Biloxi and Davenport.  The vessel and
various equipment aboard the M/V "President Casino-Mississippi" collateralized
a term note payable which was also personally guaranteed by Mr. Connelly.  The
Company continued to make the quarterly principal and interest payments on the
note prior to the Company's bankruptcy filing.  Under the terms of the note
agreement, $2.1 million principal became due and payable in August 2002
together with interest and costs (the "Note").  In November 2002, the lender
brought an action against Mr. Connelly for breach of contract under his
personal guarantee.  In December 2003, Mr. Connelly satisfied his personal
guarantee paying the lender $1.2 million.  In January 2003, the Mississippi
Bankruptcy Court granted a motion to relieve the lender from the automatic
stay in order to enforce its rights under the Preferred Fleet Ship Mortgage,
including but not limited to the right of the lender to seize and sell the
vessel.  In May 2003, the lender filed a motion with the United States
District Court for the Southern District of Illinois for an order directing
the Clerk of Court to issue a warrant for the arrest of the M/V "President
Casino-Mississippi" pursuant to rules of admiralty and maritime claims.  On
May 20, 2003, the Court executed the warrant, which allowed the vessel to be
seized and sold.  On April 7, 2004, the vessel was auctioned and the lender
offered the highest bid of $0.5 million.

  Because the Note was also guaranteed by the Company and President
Mississippi, the payment of the personal guarantee triggered a right of
contribution to Mr. Connelly from both the Company and the President
Mississippi.  In addition, Mr. Connelly became partially jointly subrogated to
the lender's right under the Note to collect the payment by him from the
Company's subsidiary that issued the Note.  The Company, President
Mississippi, Mr. Connelly and the lender entered into an agreement whereby the
Company would satisfy its obligations under the indebtedness, and related
costs, for $0.8 million.  Additionally, Mr. Connelly agreed to forego his
rights and assignments.  The terms are incorporated in the Mississippi Plan of
Liquidation, which was confirmed on May 27, 2005, and became effective on June
7, 2005, subsequent to which the Company paid the lender $0.8 million in
satisfaction of its obligations.

                                    36
<PAGE> 40
Critical Accounting Policies

  --Significant Accounting Policies and Estimates

  The Company prepares the consolidated financial statements in conformity
with accounting principles generally accepted in the United States.  Certain
of the Company's accounting policies, including the determination of the
allowance for doubtful accounts receivable, the estimated useful lives
assigned to property and equipment, asset impairment, insurance reserves and
player point liability require that management apply significant judgment in
defining the appropriate assumptions for calculating financial estimates.  By
their nature, these judgments are subject to an inherent degree of
uncertainty.  Management's judgments are based on historical experience, terms
of existing contracts, observance of trends in the gaming industry and
information available from other outside sources.  There can be no assurance
that actual results will not differ from the Company's estimates.  To provide
an understanding of the methodology applied, significant accounting policies
and basis of presentation are discussed where appropriate in this discussion
and analysis and in the notes of the consolidated financial statements.

  The carrying values of the Company's long-lived assets are reviewed when
events or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable.  Asset impairment is determined to exist if
estimated future cash flows, undiscounted and without interest charges, are
less than the carrying amount.  If it is determined that an impairment loss
has occurred, then an impairment loss is recognized in the statement of
operations.  The resulting impairment loss is measured as the amount by which
the carrying amount of the asset exceeds its fair value, estimated using
quoted market prices, if available, or other acceptable valuation
methodologies, including discounted cash flows or comparable sales.

Recently Issued Accounting Standards

  On March 30, 2005, the Financial Accounting Standards Board ("FASB") issued
FASB Interpretation No. 47, Accounting for Conditional Asset Retirement
Obligations ("FIN 47").  Per FASB's press release, FIN 47 will result in (a)
more consistent recognition of liabilities relating to asset retirement
obligations, (b) more information about expected future cash outflows
associated with those obligations, and (c) more information about investments
in long-lived assets because additional asset retirement costs will be
recognized as part of the carrying amounts of the assets.

  FIN 47 clarifies that the term "conditional asset retirement obligation" as
used in FASB Statement No. 143, Accounting for Asset Retirement Obligations,
refers to a legal obligation to perform an asset retirement activity in which
the timing and (or) method of settlement are conditional on a future event
that may or may not be within the control of the entity. The obligation to
perform the asset retirement activity is unconditional even though uncertainty
exists about the timing and (or) method of settlement. Uncertainty about the
timing and (or) method of settlement of a conditional asset retirement
obligation should be factored into the measurement of the liability when
sufficient information exists.  FIN 47 also clarifies when an entity would
have sufficient information to reasonably estimate the fair value of an asset
retirement obligation.

  FIN 47 is effective no later than the end of fiscal years ending after

                                    37

<PAGE> 41
December 15, 2005.  Retrospective application of interim financial information
is permitted but is not required.  Adoption of this Interpretation has not had
an impact on the Company's results of operations.

  In December 2004, the FASB issued Statement of Financial Accounting Standard
No. 123 (revised 2004), Share-Based Payment ("SFAS 123R").  SFAS 123R replaced
SFAS No. 123, Accounting for Stock-Based Compensation ("SFAS 123"), and
superseded Accounting Principles Board Opinion No. 25, Accounting for Stock
Issued to Employees ("APB 25").  Statement 123R requires all share-based
payments to employees, including grants of employee stock options, to be
recognized in the consolidated financial statements based on their fair values
and eliminates the alternative method of accounting for employee share-based
payments previously available under APB 25.  Historically, the Company has
elected to follow the guidance of APB 25 which allowed the Company to use the
intrinsic value method of accounting to value its share-based payment
transactions with employees.  Based on this method, the Company did not
recognize compensation expense in its consolidated financial statements as the
stock options granted had an exercise price equal to the fair market value of
the underlying common stock on the date of the grant.  SFAS 123R requires
measurement of the cost of share-based payment transactions to employees at
the fair value of the award on the grant date and recognition of expense over
the required service or vesting period.  The provisions of SFAS 123R are
required to be adopted by the Company beginning March 1, 2006.  The Company
does not expect adoption of this standard to have a material impact, if any,
on the Company's results of operations and such impact is contingent upon the
number of future options granted, the selected transition method and the
selection between acceptable valuation methodologies for valuing options.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

  As of February 28, 2006, the Company had $60.7 million of debt that bears
contractual interest at fixed rates and is classified as liabilities subject
to compromise. The Company continues to monitor interest rate markets, but has
not engaged in any hedging transactions with respect to such risks.

  As of February 28, 2006, the Company is obligated to pay under the Class B
Unit of Mr. Connelly in PBLLC a priority return based on a percentage per
annum equal to the greater of (i) 7.75% or (ii) 4.0% plus LIBOR, as defined by
the terms of the agreement, for PBLLC.  As of February 28, 2006, the minority
interest on the balance sheet is comprised of $3.5 million, related to its
obligation to redeem the Class B Unit.  On June 7, 2005, August 25, 2005 and
February 15, 2006, the Company redeemed $14.4 million, $1.4 million and $0.4
of the Class B Unit, respectively.  As of February 28, 2006, the interest rate
applicable to the Class B Unit carried a variable rate of 7.75%.  An increase
of one percentage point in the average interest rate applicable to the
variable rate debt outstanding as of February 28, 2006, would not
significantly increase the Company's annual contractual interest costs.

  Although the Company manages its short-term cash assets to maximize return
with minimal risk, the Company does not invest in market rate sensitive
instruments for trading or other purposes and the Company is not exposed to
foreign currency exchange risks or commodity price risks in its transactions.

                                     38
<PAGE> 42
Item 8.  Financial Statements and Supplementary Data.

  Reference is made to the Index to Financial Statements and Schedules on page
F-1.

Item 9.  Changes in and Disagreements with Independent Registered Public
Accounting Firm on Accounting and Financial Disclosure.

  Not applicable.

Item 9A.  Controls and Procedures.

  As of February 28, 2006, the Company carried out an evaluation, under the
supervision and with the participation of the Company's management, including
the Chief Executive Officer and Chief Financial Officer, of the effectiveness
of the Company's disclosure controls and procedures, as defined in Rules
13a-15(e) and 15d-15(e) of the Securities and Exchange Act of 1934.  Based on
that evaluation, the Chief Executive Officer and Chief Financial Officer have
concluded that the Company's disclosure controls and procedures as of February
28, 2006 were effective to ensure that information required to be disclosed by
the Company in reports that it files or submits under the Securities Exchange
Act of 1934 is recorded, processed, summarized and reported within the time
periods specified in Securities and Exchange Commission's rules and forms.

  There were no changes in the Company's internal control over financial
reporting that occurred during the quarter ended February 28, 2006 that have
materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting.

Item 9B.  Other Information.

  On May 25, 2006, Mr. Terrence L. Wirginis resigned as director, Chairman of
the Board and Vice President-Marine and Development of the Company, and as an
officer and director of the Company's subsidiaries.  Mr. Wirginis has informed
the Company that he may seek the appointment of an equity holder's committee
in the Company's bankruptcy proceedings.  Mr. Wirginis has indicated that the
equity holder's committee, consisting of Mr. Wirginis and other interested
stockholders of the Company, would explore development of an alternative
reorganization plan for the Company, including seeking financing arrangements
with third parties which would permit the Company to refinance its existing
indebtedness and emerge from its bankruptcy proceedings as an operating gaming
company.  The appointment of an equity holder's committee would be subject to
approval by the Missouri Bankruptcy Court, and any such alternative
reorganization plan for the Company proposed by the equity holder's committee
would require confirmation of the Missouri Bankruptcy Court and the requisite
vote of the Company's creditors and equity holders.  The Company continues to
proceed with the sale of its St. Louis gaming operations to Pinnacle
Entertainment consistent with its obligations under the Purchase Agreement
with Pinnacle Entertainment.  The Company is unable at this time to predict
with certainty whether Mr. Wirginis will seek appointment of an equity
holder's committee or propose an alternative reorganization plan for the
Company, or whether, if proposed, such an alternative reorganization plan
would be confirmed by the Missouri Bankruptcy Court.

                                   39<PAGE> 43
                                   Part III

Item 10.  Directors and Executive Officers of the Registrant.

  As of the date hereof, the directors and executive officers of the Company,
together with certain information about them, are set forth below.

         Name           Age    Director Since    Positions with the Company
         ----           ---    --------------    --------------------------
   John S. Aylsworth     55        1995          President, Chief Executive
                                                 Officer, Chief Operating
                                                   Officer and Director
                                                   (Class III)
   Ralph J. Vaclavik     51         --           Senior Vice President and
                                                   Chief Financial Officer
   Karl G. Andren        59        1993          Director (Class I)
   Royal P. Walker, Jr.  46        1996          Director (Class I)

  The Company has a classified Board of Directors consisting of three classes.
At each annual meeting of stockholders, the bylaws provide that directors are
elected for a term of three years to succeed those directors whose terms are
expiring.  No annual meeting of stockholders has been held since August 2001
and none is scheduled for 2006.  Each director will continue in office until
his successor is duly elected and qualified.

  Mr. Aylsworth became Chief Executive Officer effective April 4, 2006.  Mr.
Aylsworth serves as President and Chief Operating Officer since July 1997, and
a director of the Company since July 1995.  Mr. Aylsworth served as Executive
Vice President and Chief Operating Officer of the Company from March 1995 to
July 1997.  Prior to joining the Company, Mr. Aylsworth served as an executive
officer for Davis Companies, located in Los Angeles, California.  From January
1992 through October 1994, Mr. Aylsworth was Chief Executive Officer of The
Sports Club Company, a company which operates premier health and fitness
facilities in Los Angeles and Irvine, California.

  Mr. Vaclavik has been Senior Vice President and Chief Financial Officer of
the Company since September 2002.  Mr. Vaclavik served as Vice President of
Finance of the Company since its inception in June 1992.

  Mr. Andren has been Chairman of Circle-Line Sightseeing Yachts, Inc., a
subsidiary of New York Cruise Lines, Inc. ("NYCL"), which operates the leading
sightseeing cruise line in New York City, since 1981.  In addition, NYCL owns
World Yacht, Inc., a fleet of luxury dinner cruise, sightseeing and excursion
boats in New York City.  Mr. Andren is a principal stockholder in NYCL.  Mr.
Andren is a member of the Company's Audit and Compensation Committees.

  Mr. Walker became a member of the Company's Board of Directors on June 4,
1996.  Mr. Walker holds a J.D. from Texas Southern University in Houston,
Texas, and since June 1, 1992 has served on the staff of The Institute for
Disability Studies at the University of Southern Mississippi.  From June 1991
through May 1992 he served as the first Executive Director of the Mississippi
Gaming Commission.  Mr. Walker is a member of the Company's Audit and
Compensation Committees.

  The Company's board of directors has a standing Audit Committee which is
comprised of non-employee directors.  Messrs. Andren and Walker comprise the

                                     40

<PAGE> 44
Audit Committee.  The Audit Committee acts pursuant to a written charter.  The
Audit Committee met telephonically four times during fiscal 2006.  Each member
of the Company's Audit Committee meets the independence requirement of the
Securities Exchange Act of 1934, as amended, and is financially literate,
knowledgeable and qualified to review financial statements.  The Audit
Committee does not have a financial expert designated by the board of
directors.  Messrs. Andren and Walker, who are the sole independent board
members, are not financial experts by definition of Regulation S-K.  Due to
the bankruptcy proceedings and financial uncertainties of the Company, it has
not been possible to recruit additional independent board members.

  The Company has adopted a Code of Ethics that applies to its principal
executive officer, principal financial officer, principal accounting officer
and controller, or persons performing similar functions.  A copy of the Code
of Ethics is available from the Company at no charge.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

  Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers ("Reporting Persons") to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of Common Stock of the Company.  The Company has
designated an officer who is available to the Company's Reporting Persons to
assist them in filing the required reports.  To the Company's knowledge, based
solely on its review of the copies of such reports furnished to the Company
and written representations that no other reports were required, during the
year ended February 28, 2006 all Section 16(a) filing requirements applicable
to the Reporting Persons were complied with.

                                    41
<PAGE> 45
Item 11.  Executive Compensation.

  The following table sets forth certain information with respect to
compensation paid by the Company during the three fiscal years ended February
28, 2006 and February 28, 2005 and February 29, 2004, respectively, to each of
the named executive officers of the Company.

<Table>
<Caption>
                                    SUMMARY COMPENSATION TABLE
                                                                 Long-Term
                                        Annual Compensation     Compensation
                                        --------------------    ------------
                                                                 Securities          All
                                Fiscal                           Underlying         Other
Name and Principal Position      Year     Salary      Bonus     Options/SARs     Compensation (1)
---------------------------     ------    ------      -----     ------------     ----------------

<S>                              <C>     <C>         <C>          <C>               <C>
John E. Connelly                 2006    $200,000    $    --          --            $ 4,000
Former Chairman of the Board     2005     200,000         --          --              4,090
and Chief Executive Officer (2)  2004     200,000         --          --              4,000

John S. Aylsworth                2006    $450,000    $ 42,188         --            $ 4,135
President, Chief Executive       2005     450,000     112,500         --              4,446
Officer  and Chief Operating     2004     450,000     171,561         --              3,718
Officer

Terrence L. Wirginis             2006    $205,000    $ 11,532         --            $ 4,119
Former Chairman of the Board     2005     205,000      30,750         --              4,407
and Vice President               2004     205,000      46,894         --              3,923
-Marine and Development (3)

Ralph J. Vaclavik                2006    $180,000    $ 10,125         --            $ 4,129
Senior Vice President and        2005     180,000      27,000         --              4,238
Chief Financial Officer          2004     180,000      41,174         --              3,923
</Table>
___________________

(1) Consists of contributions made to the Company's 401(k) plan for the
    account of the named executive.

(2) Mr. Connelly ceased being Chairman of the Board and Chief Executive
    Officer to the Company effective April 4, 2006.

(3) Effective May 25, 2006, Mr. Wirginis resigned as director, Chairman of
    the Board and Vice President-Marine and Development of the Company, and
    as officer and director of the Company's subsidiaries.

  The following table sets forth information regarding the number and value of
options held by each of the Company's executive officers named in the Summary
Compensation Table during fiscal 2006.  None of the named executive officers
exercised any stock options during fiscal 2006.

                                    42
<PAGE> 46
<Table>
<Caption>
                                FISCAL YEAR END OPTION/SAR VALUES

                                  Number of Securities
                                 Underlying Unexercised               Value of Unexercised
                                     Options/SARs                   in-the-Money Options/SARs
                                 at Fiscal Year End (#)             at Fiscal Year End ($) (1)
                               -------------------------            --------------------------
Name                       Exercisable       Unexercisable       Exercisable       Unexercisable
----                      --------------     --------------     --------------     --------------
<S>                            <C>               <C>               <C>                <C>
John E. Connelly                   --                --            $    --            $    --
John S. Aylsworth              370,000               --                 --                 --
Terrence L. Wirginis           107,000               --                 --                 --
Ralph J. Vaclavik               23,500               --                 --                 --
</Table>

(1)  As of February 28, 2006, no options were in the money.

Employment Arrangements

  In March 2002, the Company entered into an employment agreement with Mr.
Vaclavik for an employment term through June 1, 2004.  The agreement is
renewable thereafter for successive two-year terms unless terminated by either
party within 90 days of its expiration.

  The agreement provides for minimum annual base salary of $180,000 for Mr.
Vaclavik.  Mr. Vaclavik may also receive incentive bonuses provided through
any incentive compensation plan of the Company.

  Mr. Vaclavik's employment agreement provides that if the Company terminates
the employment of the executive without Cause or if the executive terminates
his employment for Good Reason prior to a Change in Control of the Company,
the Company will be required to pay the executive officer severance benefits
including the continuation of the executive's then-current annual salary for a
maximum of one year, and the continuation of certain employment benefits to
which he otherwise would have been entitled.  "Cause" is generally defined as
(i) any breach or failure to perform duties or follow instructions of the
Board of Directors, (ii) commission of fraud, misappropriation, embezzlement
or other acts of dishonesty, alcoholism, drug addiction or dependency or
conviction of a felony or gross misdemeanor if the Board of Directors
determines such conduct is materially adverse to Company, (iii) breach of the
employment agreement by the executive, or (iv) the refusal by any gaming
commission with jurisdiction over the Company's facilities to grant a license
to the executive or any suspension or revocation of a license previously
granted to the executive.  "Good Reason" is generally defined as (i) a
significant and adverse change in the nature or scope of the executive's
position, authority, duties or responsibility, (ii) a failure to continue the
executive officer's then-current participation in benefits or compensation,
(iii) within a period of one year following a Change in Control (as defined),
resignation by the executive in his sole and absolute discretion, or (iv) any
material breach of the agreement by the Company.

  The employment agreements additionally provide that Mr. Vaclavik will be
paid severance benefits in the event that his employment with the Company is
terminated by the Company without Cause or by the executive for Good Reason
within two years of a Change in Control of the Company.  The Change in Control
provisions would require, in addition to any other benefits to which the

                                  43

<PAGE> 47
executive is entitled, a lump-sum cash payment in an amount equal to 1.5 times
the Mr. Vaclavik's average annual base compensation, as determined pursuant to
the employment agreement.

  If payment of the foregoing amounts and any other benefits received or
receivable upon termination after a Change in Control would subject such
executive officer to the payment of a federal excise tax, the total amount
payable by the Company to the executive officer would be increased by an
amount sufficient to provide the executive officer (after satisfaction of all
excise taxes and federal income taxes attributable to such increased payment)
with a net amount equal to the amount receivable prior to the federal excise
tax and federal income tax owed by the executive officer.

  Change in Control is generally defined as (i) the acquisition by any person
of beneficial ownership of 20% or more of the combined voting power of the
Company's then outstanding securities, (ii) a change in the composition of the
Company's Board of Directors such that during any two consecutive years the
incumbent directors and their nominees do not constitute a majority of the
Board, (iii) a merger or consolidation of the Company in which the Company is
not the continuing or surviving corporation or pursuant to which the holders
of the Common Stock prior to such event do not have the same proportionate
ownership of the common stock of the surviving corporation, (iv) a merger or
consolidation of the Company in which the Company is the continuing or
surviving corporation in which the holders of the Company's Common Stock
immediately prior to such event do not own 50% or more of the outstanding
stock of the surviving corporation, or (v) approval by the stockholders of the
Company of a complete liquidation or dissolution of the Company or the sale of
substantially all of the assets of the Company.  A transfer by Mr. Connelly
and certain related persons and entities would not constitute a change in
control.

  On April 27, 2003, the Missouri Bankruptcy Court granted a motion for
approval of a key employee retention plan for certain parent corporate and
Missouri operating company employees.  The motion does not affect any pre-
petition employment agreements as to assumption or rejection of pre-petition
executory contracts, with the exception that any claim asserted by a key
employee on account of a pre-petition employment agreement shall be reduced
dollar for dollar by the amounts paid or payable under the retention plan.
Under the terms of the plan, Mr. Vaclavik will receive $180,000 of
compensation on the date he is discharged from employment. If at any time
prior thereto Mr. Vaclavik's salary is reduced or he is required to move his
residence from the St. Louis, Missouri metropolitan area, he will also receive
such payment.

Compensation of Directors

  During fiscal 2006, directors who were not employees of the Company received
annual director's fees of $36,000.  Directors who are employees of the Company
do not receive director's fees.  Directors of the Company are entitled to
receive discretionary grants of stock options.  No such grants were made in
fiscal 2006.  In addition, under the Company's existing stock option plan,
each non-employee director elected to the Board of Directors receives a grant
of non-qualified stock options to purchase 5,000 shares of Common Stock at the
fair market value of the Company's Common Stock on the date of grant.  These
stock options are exercisable immediately with respect to one-half of the
shares and become exercisable with respect to the remainder of the shares in

                                    44

<PAGE> 48
two equal annual installments.

Item 12.  Security Ownership of Certain Beneficial Owners and Management
          And Related Stockholder Matters.

  The following table sets forth certain information regarding the ownership
of the Company's Common Stock as of the May 26, 2006: (i) by each person known
to the Company to own beneficially more than 5% of the outstanding shares of
the Company's Common Stock; (ii) by each of the Company's directors; (iii) by
each of the executive officers of the Company listed in the Summary
Compensation Table, and (iv) by all of directors and executive officers of the
Company as a group.

  Name of Beneficial Owner          No. of Shares (1)     % of Class (1)
  ------------------------         ------------------     -------------
    John E. Connelly                     615,235 (2)          12.2%
    John S. Aylsworth                    492,318 (3)           9.1%
    Terrence L. Wirginis               1,250,603 (4)          24.3%
    Karl G. Andren                        69,500 (5)           1.4%
    Royal J. Walker, Jr.                  36,000 (6)            *
    Ralph J. Vaclavik                     29,114 (7)            *
    All executive officers and
     directors as a group (4 persons)    626,932 (8)          12.5%
________________________
* Less than 1%

(1)  Except as otherwise noted in the footnotes to this table, to the
     Company's knowledge each of the persons named in the table has sole
     voting and investment power with respect to all shares of Common Stock
     shown as beneficially owned by them.  The percentage calculations are
     based upon 5,033,161 shares of Company Common Stock issued and
     outstanding and, for each director or executive officer or the group, the
     number of shares subject to options exercisable by such director or
     executive or the group.

(2)  Consists of an aggregate of 615,235 shares owned of record by an entity
     controlled by Mr. Connelly.  Mr. Connelly's address is 2180 Noblestown
     Road, Pittsburgh, PA 15205.

(3)  Includes 370,000 shares issuable pursuant to stock options which are
     currently exercisable.  Mr. Aylsworth's address is 1000 North Leonor
     K. Sullivan Boulevard, St. Louis, MO 63102.

(4)  Includes 107,000 shares issuable pursuant to stock options which are
     currently exercisable.  Mr. Wirginis's address is 350 West Station
     Square Drive, Pittsburgh, PA 15219.

(5)  Consists of 12,500 shares owned by New York Cruise Lines, Inc., of which
     Mr. Andren is Chairman and a principal stockholder and 57,000 shares
     issuable pursuant to stock options which are currently exercisable.

(6)  Consists solely of shares issuable pursuant to stock options which are
     currently exercisable.

(7)  Includes 23,500 shares issuable pursuant to stock options which are
     currently exercisable.

                                    45


<PAGE> 49
(8)  Includes 486,500 shares issuable pursuant to stock options which are
     currently exercisable.

  The following table reflects information about the Company's equity
compensation plans as of February 28, 2006.

<TABLE>
<CAPTION>
                                                                         Number of securities
                    Number of securities                               remaining available for
                     to be issued upon     Weighted average exercise    future issuance under
                        exercise of           price of outstanding       equity compensation
Plan category        outstanding options          options                       plans
-------------         ------------------      ------------------          ------------------
<S>                     <C>                        <C>                       <C>

Equity compensation
plans approved by
shareholders            615,967                     $ 0.87                    140,700

Equity compensation
plans not approved
by shareholders             --                          --                        --
</TABLE>

Item 13.  Certain Relationships and Related Transactions

  J. Edward Connelly and Associates, Inc. ("JECA"), an entity controlled by
John E. Connelly, the Company's former Chairman and Chief Executive Officer,
holds a Class B membership interest in PBLLC.  Under the operating agreement
of PBLLC, such Class B interest is entitled to certain redemption rights and
preferred returns on cash flows.  In April 2001, PBLLC filed a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code.  As part of the
plan of reorganization filed by PBLLC in the bankruptcy proceedings, JECA will
retain its membership interest but any payments by PBLLC to JECA shall be
restricted until such time as all outstanding obligations to its lender and
other interests receiving funds under the plan of reorganization are
discharged.

  The M/V "President Casino-Mississippi" and various equipment aboard the M/V
"President Casino-Mississippi" collateralized a term note payable which was
also personally guaranteed by Mr. Connelly and his affiliates.  Under the
terms of the note agreement, $2.1 million principal became due and payable in
August 2002 together with interest and costs (the "Note").  The highest
aggregate sum guaranteed on the Note in fiscal 2005 was $2.1 million.  In
November 2002, the lender brought an action against Mr. Connelly for breach of
contract under his personal guarantee.  In December 2003, Mr. Connelly
satisfied his personal guarantee paying the lender $1.2 million.  See "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations.  Liquidity and Capital Resources."

  In connection with the resolution of various bankruptcy issues with respect
to the Company's Biloxi operations, JECA entered into an agreement (the "JECA
Proceeds Distribution Agreement") with John S. Aylsworth, President, Chief
Executive Officer, Chief Operating Officer and Director of the Company,
Terrence L. Wirginis, former Chairman of the Board, Vice President-Marine
Development and Director, and Ralph J. Vaclavik, Senior Vice President and
Chief Financial Officer of the Company, pursuant to which upon receipt of
funds by JECA toward payment of the liquidation preference of its Class B
membership interest in PBLLC, JECA will use its best efforts to pay a

                                   46

<PAGE> 50
percentage of such funds to Messrs. Aylsworth, Wirginis and Vaclavik based on
the total sales proceeds to JECA.  While final distributions under the
Mississippi Plan of Liquidation are subject to final determination and
settlement of claims and expenses, the Company currently estimates that the
proceeds of the sale of the Mississippi Properties will not be sufficient to
repay the Noteholders the outstanding indebtedness under the Notes and will
not satisfy JECA's liquidation preference of its Class B membership interest
in PBLLC.  Pursuant to the terms of the Proceeds Distribution Agreement,
Messrs. Aylsworth, Wirginis and Vaclavik would be entitled to receive
approximately $4.8 million, $4.8 million and $0.3 million, respectively, were
the proceeds sufficient to satisfy the Class B membership interest.

  On June 7, 2005, the Company made a distribution from the proceeds of the
sale of the Mississippi Properties.  JECA's Class B membership interest was
partially redeemed for $14,375,000, of which, Messrs. Aylsworth, Wirginis and
Vaclavik were paid $3,539,063, $3,539,063 and $218,750, respectively.  During
August 2005, JECA's Class B membership interest was redeemed for $1,400,000,
of which additional distributions of $332,500, $332,500 and $70,000 were made
to Mssrs. Aylsworth, Wirginis and Vaclavik, respectively.  During February
2006, JECA's Class B membership interest was further redeemed for $350,000, of
which additional disbursements of $84,688, $84,688 and $11,250 were made to
Mssrs. Aylsworth, Wirginis and Vaclavik, respectively.

Item 14. Principal Accountant Fees and Services.

  The Audit Committee has appointed Deloitte & Touche LLP to serve as the
Company's independent registered public accounting firm for 2006 and 2005.

  The following table presents fees for professional audit services rendered
by Deloitte & Touche LLP for the audit of our the Company's financial
statements, and fees billed for other services rendered by Deloitte & Touche
LLP for the fiscal years shown.

                                              Year Ended February 28,
                                               2006            2005
                                              ------          ------

     Audit Fees (1)......................   $    196        $   228
     Audit-Related Fees (2)..............        114            131
     Tax Fees (3)........................         35            163
                                             ---------       --------
        Total                               $    345        $   522
                                             =========       ========

(1)  Audit Fees consist of fees rendered for professional services rendered
for the audit of our financial statements included in our Forms 10-K and Forms
10-Q during the 2006 and 2005 fiscal years and services that are normally
provided by Deloitte & Touche LLP in connection with statutory and regulatory
filings or engagement.

(2)  Audit Related Fees consist of fees rendered for assurance and related
services that are reasonably related to the performance of the audit or review
of our financial statements and are not reported under "Audit Fees."  This
category includes fees related primarily to compliance audits required by the
Missouri and Mississippi Gaming Commissions.

                                   47


<PAGE> 51
(3)  Tax Fees consist of fees rendered for professional services rendered for
tax compliance, tax advice and tax planning.  These services include
assistance regarding federal and state tax compliance, tax planning,
divestiture and reorganization.

  The Audit Committee has established a policy requiring the approval of all
audit engagement fees and terms and the pre-approval of all non-audit services
provided to the Company by Deloitte & Touche LLP.  The policy prohibits the
Audit Committee from delegating to management the committee's responsibility
to pre-approve permitted services of the independent registered public
accounting firm.

  During 2006, the Audit Committee pre-approved non-audit services related to
tax compliance and gaming compliance.  The Audit Committee pre-approved 100%
of the fees for services covered under the captions "Audit Related Fees" and
"Tax Fees," for fiscal years 2006 and 2005.

  Prior to retaining Deloitte & Touche LLP to provide any non-audit services,
the Audit Committee considered whether Deloitte & Touche LLP's provision of
all these services was compatible with maintaining the independence of
Deloitte & Touche LLP and determined that the provision of these services
would not interfere with Deloitte & Touche LLP's independence.

                                    PART IV

Item 15.   Exhibits and Financial Statement Schedules.

(a) 1.     Financial Statements.

           See the Index to Financial Statements and Schedules on page F-1.

    2.     Financial Statement Schedules.

           See the Index to Financial Statements and Schedules on page F-1.

    3.     Exhibits.

           See Exhibit Index on page F-56.

                                      48<PAGE> 52
                  INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

I.   PRESIDENT CASINOS, INC. (Debtors-in-Possession)
     Consolidated Financial Statements:
       Report of Independent Registered Public Accounting Firm...........F-2
       Consolidated Balance Sheets as of February 28, 2006 and
         February 28, 2005...............................................F-3
       Consolidated Statements of Operations for the Years
         Ended February 28, 2006, February 28, 2005 and
         February 29, 2004...............................................F-4
       Consolidated Statements of Stockholders' Equity (Deficit) for the
         Years Ended February 28, 2006, February 28, 2005
         and February 29, 2004...........................................F-5
       Consolidated Statements of Cash Flows for the Years
         Ended February 28, 2006, February 28, 2005 and
         February 29, 2004...............................................F-6
       Notes to Consolidated Financial Statements........................F-7
     Financial Statement Schedule:
       Schedule II--Valuation and Qualifying Accounts...................F-46
       All other schedules are omitted as the required information is
       inapplicable or is presented in the Company's Consolidated
       Financial Statements or Notes thereto.

II.  THE CONNELLY GROUP, L.P.
     Financial Statements:
       Report of Independent Registered Public Accounting Firm..........F-47
       Balance Sheets as of February 28, 2006 and February 28, 2005.....F-48
       Statements of Operations for the Years Ended February 28, 2006,
         February 28, 2005 and February 29, 2004........................F-49
       Statements of Partners' Preferred Redeemable Capital and
         General Capital for the Years Ended February 28, 2006,
         February 28, 2005 and February 29, 2004........................F-50
       Statements of Cash Flows for the Years Ended
         February 28, 2006, February 28, 2005 and February 29, 2004.....F-51
       Notes to Financial Statements....................................F-52
     Financial Statement Schedule:
       Schedule II - Valuation and Qualifying Accounts..................F-54
       All other schedules are omitted as the required information is
       inapplicable or is presented in the Company's Financial Statements
       or Notes thereto.

                                     F-1
<PAGE> 53
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Members of the Board of Directors of
President Casinos, Inc.:

We have audited the accompanying consolidated balance sheets of President
Casinos, Inc. (debtors-in-possession), (the "Company") as of February 28, 2006
and February 28, 2005, and the related consolidated statements of operations,
stockholders' equity (deficit), and cash flows for each of the three years in
the period ended February 28, 2006.  Our audits also include the financial
statement schedule listed in the Index at Item 15(a)2.  These consolidated
financial statements and the financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and the financial statement schedule
based on our audits.

We conducted our audits in accordance with auditing standards of the Public
Company Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement.  The
Company is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audits included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting.  Accordingly, we express no such
opinion.  An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation.  We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company as of February 28,
2006 and February 28, 2005, and the results of its operations and its cash
flows for each of the three years in the period ended February 28, 2006 in
conformity with accounting principles generally accepted in the United States
of America.  Also, in our opinion, such financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.

As discussed in Note 1, the Company has filed for reorganization under Chapter
11 of the United States Bankruptcy Code.  The accompanying consolidated
financial statements do not purport to reflect or provide for the consequences
of the bankruptcy proceedings.  In particular, such consolidated financial
statements do not purport to show (a) as to assets, their realizable value on
a liquidation basis or their availability to satisfy liabilities; (b) as to
pre-petition liabilities, the amounts that may be allowed for claims or
contingencies, or the status and priority thereof; (c) as to stockholder
accounts, the effect of any changes that may be made in the capitalization of
the Company; or (d) as to operations, the effect of any changes that may be
made in its business.

The accompanying consolidated financial statements have been prepared assuming
that the Company, will continue as a going concern.  As discussed in Notes 1

                                   F-1

<PAGE> 54
and 2, the Company's recurring losses from operatons, negative working capital
and stockholders' capital deficiency raise substantial doubt about its ability
to continue as a going concern.  Management's plans concerning these matters
are also described in Note 1.  The consolidated financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.

As discussed in Note 1, the Company has sold its Biloxi, Mississippi
operations and entered into an agreement to sell its St. Louis, Missouri
casino operations.

/s/ Deloitte & Touche LLP
St. Louis, Missouri
May 26, 2006
                                    F-2
<PAGE> 55
<TABLE>
<CAPTION>
                                  PRESIDENT CASINOS, INC.
                                  (DEBTORS-IN-POSSESSION)
                                CONSOLIDATED BALANCE SHEETS
                             (in thousands, except share data)

                                                                              February 28,
                                                                            2006       2005
                                                                          --------   --------

<S>                                                                       <C>        <C>
ASSETS

Current Assets:
  Cash and cash equivalents.............................................  $ 28,077   $ 20,706
  Restricted cash and cash equivalents..................................       --       2,234
  Restricted short-term investments.....................................       --         350
  Assets of discontinued operations.....................................    38,511     93,237
  Prepaid expenses and other current assets.............................       170        173
                                                                          ---------  ---------
      Total current assets..............................................    66,758    116,700

Property and Equipment, net.............................................         2          5
                                                                          ---------  ---------
                                                                          $ 66,760   $116,705
                                                                          =========  =========
LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities Not Subject to Compromise:
  Accounts payable......................................................  $     89   $    641
  Accrued payroll and benefits..........................................       258        339
  Other accrued liabilities.............................................       525      1,045
  Liabilities of discontinued operations................................     6,856      9,346
  Current maturities of long-term debt..................................       --      36,621
                                                                          ---------  ---------
      Total current liabilities.........................................     7,728     47,992

Minority Interest.......................................................     3,531     19,020
                                                                          ---------  ---------
      Total liabilities not subject to compromise.......................    11,259     67,012

Liabilities Subject to Compromise.......................................    63,317     91,850
                                                                          ---------  ---------
         Total liabilities..............................................    74,576    158,862
                                                                          ---------  ---------
Commitments and Contingent Liabilities..................................       --         --

Stockholders' Deficit:
  Preferred Stock, $.01 par value per share; 150,000 shares
    authorized; none issued and outstanding.............................       --         --
  Common Stock, $.06 par value per share; 14,000,000 shares
    authorized; 5,033,161 shares issued and outstanding.................       302        302
  Additional paid-in capital............................................   101,729    101,729
  Accumulated deficit...................................................  (109,847)  (144,188)
                                                                          ---------  ---------
      Total stockholders' deficit.......................................    (7,816)   (42,157)
                                                                          ---------  ---------
                                                                          $ 66,760   $116,705
                                                                          =========  =========
See Notes to Consolidated Financial Statements.
</TABLE>
                                    F-3
<PAGE> 56
<TABLE>
<CAPTION>
                            PRESIDENT CASINOS, INC.
                            (DEBTORS-IN-POSSESSION)
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (in thousands, except per share data)

                                                  Years Ended February 28/29,
                                                  2006       2005       2004
                                                 ------     ------     ------

<S>                                            <C>        <C>        <C>

OPERATING REVENUES.........................    $    --    $    --    $    --
                                               ---------  ---------  ---------
OPERATING COSTS AND EXPENSES:
Selling, general and administrative........       2,608      2,640      2,899
Depreciation and amortization..............           3          4          5
                                               ---------  ---------  ---------
  Total operating costs and expenses.......       2,611      2,644      2,904
                                               ---------  ---------  ---------

OPERATING LOSS.............................      (2,611)    (2,644)    (2,904)
                                               ---------  ---------  ---------
OTHER INCOME (EXPENSE):
Interest expense (contractual interest of
   $8,729, $13,310 and $12,335 for the
   years ended February 28, 2006,
   2005 and 2004)..........................         --          --         (1)
Interest income............................         269          8         18
Reorganization items, net..................        (671)    (1,738)      (342)
                                               ---------  ---------  ---------
Total other income (expense), net..........        (402)    (1,730)      (325)
                                               ---------  ---------  ---------
LOSS BEFORE MINORITY INTEREST
 AND DISCONTINUED OPERATIONS...............      (3,013)    (4,374)    (3,229)
Minority interest..........................         636      1,368      1,306
                                               ---------  ---------  ---------
LOSS FROM CONTINUING OPERATIONS............      (3,649)    (5,742)    (4,535)
                                               ---------  ---------  ---------
Income from discontinued operations........      37,990     15,934      1,800
                                               ---------  ---------  ---------
NET INCOME (LOSS)..........................    $ 34,341   $ 10,192   $ (2,735)
                                               =========  =========  =========

Basic and diluted net loss per share
   from continuing operations..............     $ (0.72)   $ (1.14)   $ (0.90)
Basic and diluted net income per
   share from discontinued operations......        7.54       3.17       0.36
                                                --------   --------   --------
Basic and diluted net income (loss)
   per share...............................     $  6.82    $  2.03    $ (0.54)
                                                ========   ========   ========
Weighted average common and dilutive
 potential common shares outstanding.......       5,033      5,033      5,033
                                                 =======    =======    =======

See Notes to Consolidated Financial Statements.
</TABLE>
                                      F-4
<PAGE> 57
<TABLE>
<CAPTION>
                          PRESIDENT CASINOS, INC.
                          (DEBTORS-IN-POSSESSION)
         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                               (in thousands)

                                                Additional
                                      Common      Paid-In   Accumulated
                                       Stock      Capital     Deficit      Total
                                       -----      -------     --------     -----

<S>                                 <C>         <C>         <C>         <C>
Years Ended February 29, 2004,
  February 28, 2005 and
  February 28, 2006:

Balance as of March 1, 2003.......  $     302   $ 101,729   $(151,645)  $ (49,614)
Net loss..........................        --          --       (2,735)     (2,735)
                                    ----------  ----------  ----------  ----------
Balance as of February 29, 2004...        302     101,729    (154,380)    (52,349)
Net income........................        --          --       10,192      10,192
                                    ----------  ----------  ----------  ----------
Balance as of February 28, 2005...        302     101,729    (144,188)    (42,157)
Net income........................        --          --       34,341      34,341
                                    ----------  ----------  ----------  ----------
Balance as of February 28, 2006...  $     302   $ 101,729   $(109,847)  $  (7,816)
                                    ==========  ==========  ==========  ==========

See Notes to Consolidated Financial Statements.
</TABLE>

                                    F-5
<PAGE> 58
<TABLE>
<CAPTION>
                            PRESIDENT CASINOS, INC.
                            (DEBTORS-IN-POSSESSION)
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (in thousands)

                                                          Years Ended February 28/29,
                                                         2006        2005        2004
                                                        ------      ------      ------

<S>                                                    <C>         <C>         <C>
Cash flows from operating activities:
Net income (loss)...................................   $ 34,341    $ 10,192   $ (2,735)
Adjustments to reconcile net income (loss) to net
  cash provided by operating activities:
    Depreciation and amortization...................          3       4,934       8,114
    (Gain) loss on disposal of assets...............    (33,847)          8         150
    Impairment of long-lived assets.................        --          --          288
    Minority interest...............................        636       1,368       1,306
    Deferred income taxes...........................      5,707      (5,707)        --
    Net change in working capital accounts..........    (16,954)     (4,356)        633
                                                       ---------   ---------   ---------
      Net cash provided by (used in)
        operating activities........................    (10,114)      6,439       7,756
                                                       ---------   ---------   ---------
Cash flows from investing activities:
  Expenditures for property and equipment...........     (2,476)     (4,344)     (2,464)
  Proceeds from the sale of property
     and equipment..................................     83,793       6,554       1,560
  Changes in restricted cash and cash equivalents...      2,234          87       2,982
  Maturity of short-term investments................        350         --          322
                                                       ---------   ---------   ---------
       Net cash provided by investing activities....     83,901       2,297       2,400
                                                       ---------   ---------   ---------
Cash flows from financing activities:
  Payments on notes payable.........................    (51,691)     (6,392)     (3,551)
  Payment of minority interest......................    (16,125)         --          (2)
                                                       ---------   ---------   ---------
      Net cash used in financing activities.........    (67,816)     (6,392)     (3,553)
                                                       ---------   ---------   ---------
Net increase in cash and cash equivalents...........      5,971       2,344       6,603

Cash and cash equivalents at beginning of year......     25,106      22,762      16,159
                                                       ---------   ---------   ---------
Cash and cash equivalents at end of year............   $ 31,077    $ 25,106    $ 22,762
                                                       =========   =========   =========

Cash and cash equivalents from
  continuing operations.............................   $ 28,077    $ 20,706    $ 18,362
Cash and cash equivalents from
  discontinued operations...........................   $  3,000    $  4,400    $  4,400

See Notes to Consolidated Financial Statements.
</TABLE>

                                    F-6
<PAGE> 59
                           PRESIDENT CASINOS, INC.
                           (DEBTORS-IN-POSSESSION)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Dollars in thousands, except share data and unless otherwise stated)

1.  BANKRUPTCY PROCEEDINGS

--Overview

  As used herein, the term "Company" refers to President Casinos, Inc., its
wholly-owned subsidiaries, a 95%-owned limited partnership and a limited
liability company in which a wholly-owned subsidiary of President Casinos,
Inc. owns a Class A ownership interest and in which an entity wholly-owned by
the former Chairman of President Casinos, Inc. owns a Class B unit and has a
preferred right to certain cash flows.  As described below, President Casinos,
Inc. and certain of its subsidiaries are currently in bankruptcy proceedings.

  As a result of the Company's relatively high degree of leverage and the need
for significant capital expenditures at its St. Louis property, the Company
was unable to pay the regularly scheduled interest payments of $6,375 which
were each due and payable March 15, and September 15, 2000.  Under the
indentures pursuant to which the $75,000 13% Senior Exchange Notes (the
"Senior Exchange Notes") and $25,000 12% Secured Notes (the "Secured Notes"
and, collectively with the Senior Exchange Notes, the "Notes") were issued, an
Event of Default occurred on April 15, 2000, and is continuing as of the date
hereof.  Additionally, the Company was unable to pay the $25,000 principal
payment due September 15, 2000 on the Senior Exchange Notes.  The holders of
at least 25% of the Senior Exchange Notes and the Secured Notes were notified
of the defaults and instructed the Indenture Trustee to accelerate the Notes
and on August 11, 2000, the holders declared the unpaid principal and interest
to be due and payable.  As of February 28, 2006, the outstanding principal
consists of $45,967 of Senior Exchange Notes and $14,713 of Secured Notes.

  On June 20, 2002, President Casinos, Inc. and its subsidiary, President
Riverboat Casino-Missouri, Inc. ("President Missouri"), which owns and
operates the St. Louis operations, filed voluntary petitions for
reorganization under Chapter 11 of Title 11, United States Code (the
"Bankruptcy Code") in the United States Bankruptcy Court for the Southern
District of Mississippi (the "Mississippi Bankruptcy Court").  On July 9,
2002, President Casinos, Inc.'s subsidiary, The President Riverboat Casino-
Mississippi, Inc. ("President Mississippi"), filed a voluntary reorganization
petition in the same Court.  On July 11, 2002, substantially all of President
Casinos, Inc.'s other operating subsidiaries filed voluntary reorganization
petitions under Chapter 11 in the same Mississippi Bankruptcy Court.
Subsequently, orders were entered by the Mississippi Bankruptcy Court
transferring venue of all of the bankruptcy cases, except President Riverboat
Casino-New York, Inc. ("President New York") and President Broadwater Hotel,
LLC, to the United States Bankruptcy Court for the Eastern District of
Missouri (the "Missouri Bankruptcy Court," and together with the Mississippi
Bankruptcy Court, the "Bankruptcy Courts,") where the latter proceeding is now
pending and being administered.

  The Company and its operating subsidiaries, except President Broadwater
Hotel, LLC and President New York, each continue in possession and use of
their assets as debtors-in-possession.  The Company and its operating
subsidiaries have had their Missouri Bankruptcy Chapter 11 cases

                                   F-7

<PAGE> 60
administratively consolidated.

  Prior to any of the cases being transferred to the Missouri Bankruptcy
Court, the Mississippi Bankruptcy Court established "bar dates," all of which
have expired, by which all claimants were required to submit and characterize
claims against the Company.  As part of the Company's Chapter 11
reorganization process, the Company has attempted to notify all known or
potential creditors of the filings for the purpose of identifying certain pre-
petition claims.  In the Company's Chapter 11 cases, substantially all of the
Company's liabilities as of the filing date are subject to adjustment under a
plan of reorganization.  Generally, actions to enforce or otherwise effect
repayment of all pre-petition liabilities as well as all pending litigation
against the Company are stayed while the Company continues its business
operations as debtors-in-possession.  Schedules have been filed by the Company
with the Bankruptcy Courts setting forth the assets and liabilities of the
debtors as of the filing dates as reflected in the Company's accounting
records.  Differences between amounts reflected in such schedules and claims
filed by creditors will be investigated and amicably resolved or adjudicated
before the Bankruptcy Court.  The ultimate amount and settlement terms for
such liabilities are subject to a plan of reorganization.  Under the
Bankruptcy Code, the Company may elect to assume or reject real estate leases,
employment contracts, personal property leases, service contracts and other
executory pre-petition contracts and unexpired leases, subject to Bankruptcy
Court review.

  The consummation of a plan of reorganization (a "Plan") is the principal
objective of the Company's Chapter 11 filings in the Missouri Bankruptcy
Court.  A Plan would, among other things, set forth the means for satisfying
claims against and interests in the Company, including setting forth the
potential distributions on account of such claims and interests, if any.
Confirmation of a Plan is subject to certain statutory findings by the
Missouri Bankruptcy Court. Before a Plan may be distributed for balloting the
Court must approve a Disclosure Statement by determining that the Disclosure
Statement adequately describes the Plan.  Subject to certain exceptions as set
forth in the Bankruptcy Code, confirmation of a Plan requires, among other
things, a vote on the Plan by certain classes of creditors whose rights or
interests are impaired under the Plan.  If any impaired class of creditors
does not vote to accept the Plan, but all of the other requirements of the
Bankruptcy Code are met, the proponent of the Plan may seek confirmation of
the Plan pursuant to the "cram down" provisions of the Bankruptcy Code.  Under
these provisions, the Bankruptcy Court may still confirm a Plan
notwithstanding the non-acceptance of the Plan by an impaired class, if, among
other things, no claim or interest receives or retains any property under the
Plan until each holder of a claim senior to such claim or interest has been
paid in full.  There can be no assurance that a Plan will be confirmed by the
Missouri Bankruptcy Court, or that any such Plan will be consummated.

  On April 15, 2005, the Company sold its Biloxi operations for approximately
$82,000.  On February 24, 2006, the Company entered into an agreement with
Pinnacle Entertainment, Inc. for the purchase of the stock of President
Missouri for approximately $31,500, subject to working capital adjustments.
Consummation of the transaction was subject to, among other things, potential
over-bid by third parties at an auction to be held under the Bankruptcy Code.
The Company did not receive any qualified third party bids for its St. Louis
operations and, accordingly, the auction was not held.  On May 26, 2006, the
Missouri Bankruptcy Court issued an order approving the sale of the stock of

                                   F-8

<PAGE> 61
President Missouri in accordance with the purchase agreement with Pinnacle
Entertainment, Inc.  Final closing of the sale is contingent upon satisfaction
of certain closing conditions, including licensing and approval of the buyer
by the Missouri Gaming Commission.  If a sale of the Company's St. Louis
operations is consummated under the agreed upon terms, the Company would not
have any current ongoing business operations.  In the event that following
such sale the Company's remaining assets are not sufficient to discharge its
indebtedness and other liabilities and the Company or a third party is unable
to confirm a plan for the reorganization of the Company, the Company may be
forced to liquidate. At this time management is unable to predict with
certainty whether a sale of its St. Louis operations will be consummated.

  On May 25, 2006, Mr. Terrence L. Wirginis resigned as director, Chairman of
the Board and Vice President-Marine and Development of the Company, and as an
officer and director of the Company's subsidiaries.  Mr. Wirginis has informed
the Company that he may seek the appointment of an equity holder's committee
in the Company's bankruptcy proceedings.  Mr. Wirginis has indicated that the
equity holder's committee, consisting of Mr. Wirginis and other interested
stockholders of the Company, would explore development of an alternative
reorganization plan for the Company, including seeking financing arrangements
with third parties which would permit the Company to refinance its existing
indebtedness and emerge from its bankruptcy proceedings as an operating gaming
company.  The appointment of an equity holder's committee would be subject to
approval by the Missouri Bankruptcy Court, and any such alternative
reorganization plan for the Company proposed by the equity holder's committee
would require confirmation of the Missouri Bankruptcy Court and the requisite
vote of the Company's creditors and equity holders.  The Company continues to
proceed with the sale of its St. Louis gaming operations to Pinnacle
Entertainment consistent with its obligations under the Purchase Agreement
with Pinnacle Entertainment.  The Company is unable at this time to predict
with certainty whether Mr. Wirginis will seek appointment of an equity
holder's committee or propose an alternative reorganization plan for the
Company, or whether, if proposed, such an alternative reorganization plan
would be confirmed by the Missouri Bankruptcy Court.

  In light of the prior sales of the Company's Biloxi assets and leasing
operations assets, and the anticipated sale of the St. Louis operations, the
Company has one reportable segment from continuing operations consisting of
corporate administration.

-- Biloxi Casino and Hotel Operations

  President Mississippi, Vegas, Vegas, Inc. ("Vegas, Vegas") and President
Broadwater Hotel, L.L.C. ("PBLLC") (collectively, the "Mississippi
Affiliates") agreed, with the prior approval of the Bankruptcy Court, to sell
substantially all of the real and personal property associated with the
Company's Biloxi, Mississippi operations (the "Mississippi Properties") to
Broadwater Development, LLP, a Mississippi limited liability partnership (or
the assignee or designee thereof) for $82,000.  In connection with the sale, a
certain Sale and Purchase Agreement dated November 15, 2004 was executed by
and among Broadwater Properties, LLC, as purchaser, and the Mississippi
Affiliates, as sellers, as amended by an Amendment to Sale and Purchase
Agreement dated as of November 29, 2004, assigned on or about January 13, 2005
by Broadwater Properties to Broadwater Development, LLP ("BDLLP", and together
with any assignees or designees thereof, the "Mississippi Purchaser"), further
modified by a certain Second Amendment to Sale and Purchase Agreement dated

                                   F-9

<PAGE> 62
January 20, 2005 (as modified and amended, the "Mississippi Asset Sale
Agreement").  The Mississippi Asset Sale Agreement further provided that the
Mississippi Affiliates would retain certain excluded assets as therein defined
(the "Mississippi Excluded Assets"), consisting primarily of cash in bank
accounts.  Pursuant to a separate Agreement Concerning Assignment dated March
30, 2005 ("Agreement Concerning Assignment") made by and between the
Mississippi Affiliates, BDLLP and Silver Slipper Casino Venture, LLC, it was
agreed, with the approval of the Bankruptcy Court, that the assets associated
with the Company's Mississippi casino would be transferred at the closing of
the transaction to Silver Slipper on certain terms and conditions therein
stated.

  The sale of the Mississippi Properties closed effective April 15, 2005 and
on May 27, 2005 the Missouri Bankruptcy Court confirmed a Plan of Liquidation
(the "Mississippi Plan of Liquidation") for the Mississippi Affiliates that
was jointly developed by the Company and its creditors AIG SunAmerica Inc. and
MacKay Shields LLC.  The Mississippi Plan of Liquidation became effective on
June 7, 2005.  Pursuant to the Mississippi Plan of Liquidation, the proceeds
from the sale of the Mississippi Properties, following adjustments required
under the Mississippi Asset Sale Agreement, together with the proceeds from
the liquidation of the Mississippi Excluded Assets, are being distributed to
the creditors of the Mississippi Affiliates, including the holders of the
Company's Notes (the "Noteholders") and to J. Edward Connelly Associates, Inc.
("JECA") and certain assignees of JECA.  JECA, an entity controlled by John E.
Connelly, the Company's former Chairman and Chief Executive Officer, holds a
Class B membership interest in PBLLC.  The Company anticipates that under the
Mississippi Plan of Liquidation, creditors of the Mississippi Affiliates, with
the exception of the Noteholders, will be paid in full subject to final
determination and settlement of claims and expenses.  On June 7, 2005, the
effective date of the Mississippi Plan of Liquidation, the Company paid
$25,625 of indebtedness to the Noteholders.  Of this amount, $12,750 was
applied to principal, $12,644 was applied to accrued interest and $411 to
accrued trustee and legal fees incurred by the Noteholders.  Additionally, the
Company redeemed $14,375 of JECA's Class B membership interest in PBLLC.
During August 2005, the Company made a second distribution from the proceeds
consisting of $1,400 to the Noteholders and $1,400 redemption of JECA's Class
B membership interest.  During February 2006, the Company made a third
distribution consisting of $350 to the Noteholders and $350 redemption of
JECA's Class B membership interest.

  JECA has entered into an agreement (the "JECA Proceeds Distribution
Agreement") with John S. Aylsworth, President, Chief Executive Officer, Chief
Operating Officer and Director of the Company, Terrence L. Wirginis, former
Chairman of the Board, Vice President and Director, and and Ralph J. Vaclavik,
Senior Vice President and Chief Financial Officer of the Company, pursuant to
which upon receipt of funds by JECA toward payment of the liquidation
preference of its Class B membership interest in PBLLC, JECA would use its
best efforts to pay a percentage of such funds to Messrs. Aylsworth, Wirginis
and Vaclavik based on the total sales proceeds to JECA.  While final
distributions under the Mississippi Plan of Liquidation are subject to final
determination and settlement of claims and expenses, the Company currently
estimates that the proceeds of the sale of the Mississippi Properties will not
be sufficient to repay the Noteholders the outstanding indebtedness under the
Notes and, in addition, will not be sufficient to satisfy JECA's liquidation
preference of its Class B membership interest in PBLLC.  Messrs. Aylsworth,
Wirginis and Vaclavik would be entitled to receive an aggregate of

                                   F-10

<PAGE> 63
approximately $4,800, $4,800 and $300, respectively, pursuant to the JECA
Proceeds Distribution Agreement were the proceeds sufficient to satisfy the
Class B membership interest.  On June 7, 2005, distributions of $3,539, $3,539
and $219 were made to Messrs. Aylsworth, Wirginis and Vaclavik, respectively,
from the $14,375 Class B membership interest redemption.  During August 2005,
additional distributions of $333, $333 and $70 were made to Messrs. Aylsworth,
Wirginis and Vaclavik, respectively, from the $1,400 Class B membership
redemption.  During February 2006, additional distributions of $85, $85 and
$11 were made to Messrs. Aylsworth, Wirginis and Vaclavik, respectively, from
the $350 Class B membership redemption.

--St. Louis Casino Operations

  On September 25, 2003, the Company entered into an agreement with Isle of
Capri Casinos, Inc. to sell the assets of its St. Louis operations for
approximately $50,000.  On May 4, 2004, the Company and Isle of Capri Casinos,
Inc. announced they had mutually agreed to terminate the agreement.

  On August 9, 2004, the Company entered into an agreement with Penn National
Gaming, Inc. for the sale of its St. Louis operations.  The agreement was
submitted to the Missouri Bankruptcy Court for review and was amended on
September 17, 2004.  Under the terms of the agreement, the stock of President
Missouri was to be sold for approximately $28,000, subject to working capital
adjustments and subject to higher and better offers.  On October 7, 2004, an
auction was held in accordance with Section 363 of the Bankruptcy Code.
Pursuant to an agreement submitted September 30, 2004, Columbia Sussex
Corporation ("Columbia Sussex") was the winning over-bidder for the St. Louis
casino operations for a purchase price of approximately $57,000, subject to
closing adjustments.  The Company and Columbia Sussex entered into a Riverboat
Casino Sale and Purchase Agreement dated as of September 30, 2004 (as amended,
the "President Missouri Sale Agreement").  On October 13, 2004, the Missouri
Bankruptcy Court entered an order approving the sale of the stock of President
Missouri to Columbia Sussex pursuant to the President Missouri Sale Agreement.
The closing of the transaction was contingent upon licensing approval by the
Missouri Gaming Commission of Columbia Sussex and its key officers.  On
October 25, 2005, Columbia Sussex notified the Company that it had withdrawn
its application for licensing with the Missouri Gaming Commission.

  On February 24, 2006, the Company, President Missouri, and Pinnacle
Entertainment, Inc. ("Pinnacle") entered into a Riverboat Casino Sale and
Purchase Agreement (the "Purchase Agreement").  Under the terms of this
Purchase Agreement all of the outstanding capital stock of President Missouri
will be sold for approximately $31,500, subject to working capital
adjustments.  The Purchase Agreement has been submitted to the Missouri
Bankruptcy Court for approval.  Final closing of the sale is contingent upon
satisfaction of certain closing conditions including licensing and approval of
the buyer by the Missouri Gaming Commission.

  In connection with the Purchase Agreement, Pinnacle, the Company and
President Missouri also entered into a letter agreement (the "Letter
Agreement") relating to the "Cherrick Lot," a parking lot located across from
the President Missouri's gaming facility that has been primarily used by
President Missouri's patrons for the last several years.  The Cherrick Lot is
currently the subject of a condemnation proceeding, and Pinnacle holds an
option to purchase the Cherrick Lot if it is taken in the condemnation
proceeding.  Pursuant to the Letter Agreement, the parties agreed that if the

                                    F-11

<PAGE> 64
Cherrick Lot is condemned, Pinnacle shall exercise its option to purchase the
Cherrick Lot, provided the aggregate price required to be paid as compensation
for the Cherrick Lot does not exceed $5,000.  If Pinnacle purchases the
Cherrick Lot, whether pursuant to its option or otherwise, Pinnacle shall
permit patrons of President Missouri the right to park on the Cherrick Lot for
a validation fee not exceeding $1.50 per day for each vehicle, which
arrangement shall extend for a term ending on the earlier of (a) the date on
which Pinnacle opens its new casino project on Laclede's Landing, or (b)
December 31, 2008.

--President Broadwater Hotel, LLC Bankruptcy Proceedings

  PBLLC, a limited liability company in which Broadwater Hotel, Inc. ("BHI"),
a wholly-owned subsidiary of the Company, has a Class A ownership interest,
was in default under a $30,000 promissory note and associated $7,000 loan fee
incurred in connection with the July 1997 purchase by PBLLC of the real estate
and improvements utilized in the Company's operations in Biloxi, Mississippi.
On April 19, 2001, PBLLC filed a voluntary petition for reorganization under
Chapter 11 of the Bankruptcy Code in the Mississippi Bankruptcy Court.  PBLLC
continued in possession and use of its assets as a debtor-in-possession and
had an agreement with its secured lender and largest creditor, approved by the
Mississippi Bankruptcy Court, which allowed PBLLC's use of its cash
collateral.

  On October 16, 2001, PBLLC filed its plan of reorganization which permitted
PBLLC to restructure its debt obligations in a manner which was designed to
permit it to continue as a going concern.  Subsequently, on February 28, 2003,
PBLLC filed Modifications to Debtor's Plan of Reorganization (together with
the reorganization plan, the "Modified Plan").  On May 14, 2003, the
Mississippi Bankruptcy Court entered an order confirming the Modified Plan.
The Modified Plan became effective on May 28, 2003 and the Company initiated
consummation of the Modified Plan at that time.  The Modified Plan provided
that the unsecured creditors of PBLLC would receive 100% of their claims.
Under the Modified Plan, the obligations to the secured lender were modified
with respect to the debt amount, the interest rate and the due date.  On April
15, 2005, the Modified Indebtedness and accrued interest thereon were fully
satisfied by PBLLC from the proceeds of the sale of the Company's Biloxi
assets.

  --Other

  The Company's ability to continue as a going concern is dependent on its
ability to restructure successfully, including selling assets on a timely
basis under acceptable terms and conditions, and the ability of the Company to
generate sufficient cash to fund future operations.  There can be no assurance
in this regard.

  The descriptions of the Company's business, financial condition and
prospects contained in this Annual Report on Form 10-K are qualified in their
entirety by the foregoing description of the significant risks associated with
the Company's bankruptcy proceedings.

  As of February 28, 2006, the Company had $28,077 of unrestricted cash and
cash equivalents.  The Company also had $3,000 of cash held in discontinued
operations, representing cash to be retained by the purchasers upon the sale
of the properties.  Of these amounts, the Company requires a minimum of

                                    F-12

<PAGE> 65
approximately $4,000 for the St. Louis operations for working capital.  The
Company is heavily dependent on cash generated from operations to continue to
operate as planned and to make capital expenditures.  Management anticipates
that its existing available cash and cash equivalents and its anticipated cash
generated from operations will be sufficient to fund its ongoing operations
during the bankruptcy proceedings.  Payments under the Company's defaulted
debt obligations generally have been stayed during the bankruptcy proceedings.
Costs previously incurred and which will be incurred in the future in
connection with the reorganizations have been and will continue to be
substantial and, in any event, there can be no assurance that the Company will
be able to restructure its indebtedness or that its liquidity and capital
resources will be sufficient to maintain its normal operations during the
reorganization period.  To the extent cash generated from operations is less
than anticipated, the Company may be required to curtail certain planned
expenditures.

2.  BASIS OF PRESENTATION

  The consolidated financial statements set forth herein include the accounts
and operations of President Casinos, Inc., its wholly-owned subsidiaries, a
95%-owned limited partnership and a limited liability company in which a
wholly-owned subsidiary of the Company has a Class A ownership interest and in
which an entity wholly-owned by the former Chairman of the Board of the
Company owns a Class B Unit and has preferred rights to certain cash flows.
All material intercompany balances and transactions have been eliminated.

  The accompanying consolidated financial statements are presented in
accordance with American Institute of Certified Public Accountants Statement
of Position 90-7, "Financial Reporting by Entities in Reorganization under the
Bankruptcy Code," assuming that the Company will continue as a going concern.
The Company is currently operating under the jurisdiction of Chapter 11 of the
Bankruptcy Code and the Missouri Bankruptcy Court, and continuation of the
Company as a going concern is contingent upon, among other things, its ability
to formulate a reorganization which will gain approval of the requisite
parties under the Bankruptcy Code and confirmation by the Missouri Bankruptcy
Court, its ability to be profitable, generate sufficient cash flows from
operations and obtain financing sources to meet future obligations.  These
matters raise substantial doubt about the Company's ability to continue as a
going concern.  The accompanying consolidated financial statements do not
include any adjustments relating to the outcome of these uncertainties.

  The accompanying consolidated balance sheets as of February 28, 2006 and
February 28, 2005, segregate liabilities subject to compromise, such as
unsecured claims, from liabilities not subject to compromise, such as fully
secured liabilities and liabilities arising subsequent to filing bankruptcy
petitions.  A plan of reorganization could materially change the amounts
currently recorded in the consolidated financial statements.  The consolidated
statements that might result from the outcome of this uncertainty may be
materially different than those presented herein.

  Reorganization items represent expenses incurred by the Company as a result
of the bankruptcy filings and proceedings.  Such items are required to be
expensed as incurred.

                                    F-13
<PAGE> 66
3.  NATURE OF OPERATIONS

  The Company currently owns and operates a dockside gaming casino in St.
Louis, Missouri through its wholly-owned subsidiary, President Missouri.  The
Company conducted dockside gaming operations in Biloxi, Mississippi through
its wholly-owned subsidiary President Mississippi through April 14, 2005 at
which time the assets were sold.  In addition, the Company owned and managed
certain hotel and ancillary facilities associated with its gaming operations
in Biloxi through April 14, 2005, when they, too, were sold.  As a result of
the sale of the Biloxi operations and the anticipated sale of the St. Louis
operations, the accounts of the Biloxi and St. Louis operations are classified
as discontinued operations.

4.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

  Cash and cash equivalents include highly liquid investments, primarily
certificates of deposit, with maturities of ninety days or less at date of
purchase.

Restricted Cash and Cash Equivalents

  Restricted cash and cash equivalents consist of cash and cash equivalents
which are held in segregated accounts to fund potential obligations required
by third parties.  See "Note 5.  Restricted Cash and Cash Equivalents and
Restricted Short-Term Investments."

Restricted Short-Term Investments

  To fulfill certain regulatory and obligations, the Company invested in
certificates of deposit with maturities greater than ninety days and not in
excess of one year at date of purchase.  Short-term investments are stated at
cost, which approximates fair value.  See "Note 5."

Inventories

  Inventories, consisting principally of food, beverage, retail items and
operating supplies, are stated at the lower of first-in, first-out cost or
market.

Property and Equipment

  Property and equipment are recorded at cost.  Repairs and maintenance are
charged to expense as incurred.  Improvements that extend the useful life or
increase the productivity of the asset are capitalized.  Depreciation and
amortization, except on property held for sale or development in which no
depreciation or amortization is taken, are computed on a straight-line basis
over the following estimated useful lives:

         Land improvements                     3-20 years
         Buildings and improvements           10-40 years
         Riverboats, barges and improvements   5-15 years
         Leasehold improvements                3-25 years
         Furnishings and equipment             5-10 years

                                     F-14


<PAGE> 67
  Leasehold improvements' estimated useful lives do not exceed the terms of
the related lease agreements.

Gaming Revenues and Promotional Allowances

  In accordance with industry practice, the Company recognizes gaming revenues
as the net win from gaming activities, which is the difference between gaming
wins and losses.  All other revenues are recognized by reference to the
service provided.  Revenues include the retail value of food and beverage,
rooms and other items provided on a complimentary basis to customers.  The
estimated departmental costs of providing such promotional allowances are
included in gaming costs and expenses and consist of the following:

                                     2006       2005       2004
                                    ------     ------     ------
         Food and beverage......   $ 1,344    $ 4,355    $ 4,051
         Hotel..................       257      1,047      1,098
         Other..................        18        171        257
                                   --------   --------   --------
                                   $ 1,619    $ 5,573    $ 5,406
                                   ========   ========   ========

  All such revenues and promotional allowances are included in "Income from
Discontinued Operations."

Reorganization Items, Net

  Reorganization items, net, represent professional fees and U.S. Bankruptcy
Trustee fees, net of forgiveness of certain pre-petition claims by certain
professionals, incurred by the Company as a direct result of the Chapter 11
proceedings.  Such items are required to be expensed as incurred.

Minority Interest

  The Company recognizes net income (loss) in The Connelly Group, LP ("TCG"),
in which the Company has a 95% ownership interest, and PBLLC, in which BHI has
100% interest in the Class A Unit.  In addition, the Company accrues minority
interest at 5% of net income for TCG and recognizes a priority return based on
a percentage per annum equal to the greater of (i) 7.75% or (ii) 4.0% plus
LIBOR, as defined by the terms of the agreement, for PBLLC.  As of February
28, 2006 and February 28, 2005, the minority interest on the balance sheet is
comprised of $3,531 and $19,020, respectively, related to its obligation to
redeem the Class B Unit for $10,000, plus any priority return accrued but not
paid.  See "Note 16.  Minority Interest."

Stock-Based Compensation

  As of February 28, 2006, the Company has three stock option plans, which are
described more fully in "Note 17.  Stock Option Plans."  The Company applied
Accounting Principles Board Opinion No. 25 and related interpretations in
accounting for its stock-based compensation plans using the intrinsic value
method.  Accordingly, no compensation expense is reflected in net income for
stock options, as all options granted had an exercise price equal to the market
value of the underlying common stock on the date of grant.  All of the
Company's stock options were fully vested as of February 28, 2006.  Had
compensation cost for the Company's Stock Option Plans been determined based on

                                   F-15

<PAGE> 68
the fair value method consistent with the method of Statement of Financial
Accounting Standards ("SFAS") No. 123 "Accounting for Stock-Based
Compensation," the Company's net income (loss) and net income (loss) per share
for the years ended February 28, 2006, February 28, 2005 and February 29, 2004
would have been the same as the reported amounts.

Basic and Diluted Income/Loss Per Share Information

  Income/loss per share information is computed using the weighted average
number of shares of Common Stock outstanding and common stock equivalent shares
from diluted stock options from date of grant, using the treasury stock method.
There is no difference between loss per share under the basic and diluted
methods due to the anti-dilutive effect of the stock options, since the Company
has either had losses or the exercise price of the stock options is in excess
of the market value of the stock.  See "Note 17.  Stock Option Plans."

Fair Value of Financial Instruments

  The Company calculates the fair value of financial instruments and includes
this additional information in the Notes to the Consolidated Financial
Statements.  The Company uses quoted market prices whenever available to
calculate these fair values.  When quoted market prices are not available, the
Company uses valuation methodologies which take into account the present value
of estimated future cash flows to determine fair value.

Recoverability of Long-Lived Assets

  The carrying values of the Company's long-lived assets are reviewed when
events or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable.  Asset impairment is determined to exist if
estimated future cash flows, undiscounted and without interest charges, are
less than the carrying amount.  If it is determined that an impairment loss has
occurred, then an impairment loss is recognized in the statement of operations.
The resulting impairment loss is measured as the amount by which the carrying
amount of the asset exceeds its fair value, estimated using quoted market
prices, if available, or other acceptable valuation methodologies, including
discounted cash flows or comparable sales.

Use of Management Estimates

  The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make certain estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the amounts of revenues
and expenses during the reporting period.  Actual results may differ from those
estimates.

Recently Issued Accounting Standards

  On March 30, 2005, the Financial Accounting Standards Board ("FASB") issued
FASB Interpretation No. 47, Accounting for Conditional Asset Retirement
Obligations ("FIN 47").  Per FASB's press release, FIN 47 will result in (a)
more consistent recognition of liabilities relating to asset retirement
obligations, (b) more information about expected future cash outflows
associated with those obligations, and (c) more information about investments

                                   F-16

<PAGE> 69
in long-lived assets because additional asset retirement costs will be
recognized as part of the carrying amounts of the assets.

  FIN 47 clarifies that the term "conditional asset retirement obligation" as
used in FASB Statement No. 143, Accounting for Asset Retirement Obligations,
refers to a legal obligation to perform an asset retirement activity in which
the timing and (or) method of settlement are conditional on a future event that
may or may not be within the control of the entity. The obligation to perform
the asset retirement activity is unconditional even though uncertainty exists
about the timing and (or) method of settlement. Uncertainty about the timing
and (or) method of settlement of a conditional asset retirement obligation
should be factored into the measurement of the liability when sufficient
information exists.  FIN 47 also clarifies when an entity would have sufficient
information to reasonably estimate the fair value of an asset retirement
obligation.

  FIN 47 is effective no later than the end of fiscal years ending after
December 15, 2005.  Adoption of this Interpretation has not had an impact on
the Company's results of operations.

  In December 2004, FASB issued Statement of Financial Accounting Standard No.
123 (revised 2004), Share-Based Payment ("SFAS 123R").  SFAS 123R replaced SFAS
No. 123, Accounting for Stock-Based Compensation ("SFAS 123"), and superseded
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees ("APB 25").  Statement 123R requires all share-based payments to
employees, including grants of employee stock options, to be recognized in the
consolidated financial statements based on their fair values and eliminates the
alternative method of accounting for employee share-based payments previously
available under APB 25.  Historically, the Company has elected to follow the
guidance of APB 25 which allowed the Company to use the intrinsic value method
of accounting to value its share-based payment transactions with employees.
Based on this method, the Company did not recognize compensation expense in its
consolidated financial statements as the stock options granted had an exercise
price equal to the fair market value of the underlying common stock on the date
of the grant.  SFAS 123R requires measurement of the cost of share-based
payment transactions to employees at the fair value of the award on the grant
date and recognition of expense over the required service or vesting period.
The provisions of SFAS 123R are required to be adopted by the Company beginning
March 1, 2006.  The Company does not expect adoption of this standard to have a
material impact, if any, on the Company's results of operations and such impact
is contingent upon the number of future options granted, the selected
transition method and the selection between acceptable valuation methodologies
for valuing options.

5.  RESTRICTED CASH AND CASH EQUIVALENTS AND RESTRICTED SHORT-TERM
    INVESTMENTS

  Restricted cash and cash equivalents consisted of the cash of PBLLC.  PBLLC
deposited revenues into lockboxes that were controlled by its lender.
Expenditures from the lockboxes were limited to the operating expenses, capital
improvements and debt service of the Broadwater Property as defined by certain
agreements.  The lender controlled the capital improvements lockbox.  PBLLC
operated under a cash collateral stipulation and agreement, which allowed PBLLC
to use its cash collateral for normal operations in accordance with certain
terms as defined by the cash collateral agreement.

                                    F-17


<PAGE> 70
  The Company was required to collateralize certain performance bonds.  To
fulfill these requirements, the Company invested in certificates of deposit
with maturities greater than ninety days and which did not exceed one year at
the date of purchase.  Such amounts are classified as restricted short-term
investments.

6.  PROPERTY AND EQUIPMENT

  On January 20, 2005, an auction was held under the terms of Section 363 of
the United States Bankruptcy Code for the Company's Biloxi operations.  On
April 15, 2005, the assets of the Biloxi operations were sold.  The Company
recognized a gain of $27,545, net of income tax expense of $6,039, on this
transaction.  See "Note 10.  Discontinued Operations."

  On February 24, 2006, the Company and Pinnacle entered into a Riverboat
Casino Sale and Purchase Agreement (the "Purchase Agreement").  Under the terms
of the Purchase Agreement all of the outstanding capital stock of President
Missouri will be sold for approximately $31,500, subject to working capital
adjustments.  The Purchase Agreement has been submitted to the Missouri
Bankruptcy Court for approval.  As such, property and equipment of the St.
Louis operations has been classified as "Assets of Discontinued Operations" as
of February 28, 2006 and February 28, 2005.  See "Note 10.  Discontinued
Operations."

  The Company consummated a sale agreement for its 36,000 square foot office
building in St. Louis for $1,825 on June 23, 2005.  A gain of approximately
$344 was recognized as a result of this transaction.  The building houses the
Company's executive offices and certain casino administrative staff.  Upon
closing, certain areas of the building were leased back by the Company.
Approximately 5,400 square feet is being leased by the Company's casino
operation.  The initial term of the lease was through November 30, 2005 with
two one-month extensions.  The Company exercised both options.  The Company
negotiated an amended lease agreement through the period January 31, 2007, with
a one six-month option.  An additional area of approximately 1,400 square feet
is being leased by the Company's corporate administration with such lease's
initial term ending December 31, 2005 with three one-month extensions at the
option of the Company, and three additional months that can be terminated at
the discretion of either the landlord or tenant.  The Company has exercised its
three options.

  On March 16, 2004, the Company sold the 179-room Broadwater Tower Hotel for
$6,500.  The Company's other hotel, the 333-room President Broadwater Resort,
was not included in this transaction.  The net proceeds of the transaction were
used to reduce the debt of PBLLC.  In connection with the transaction the
Company also entered into an initial lease with options to renew the lease.
The options were extended on a month to month basis and remained in effect
through the date on which the Biloxi operations were sold.

7.  LONG-TERM DEBT AND CURRENT PORTION OF LONG-TERM DEBT

  As of February 28, 2006 and 2005, the Company's noteholder debt was
classified as liabilities subject to compromise.  As of February 28, 2005, the
M/V "President Casino-Mississippi" note was classified as liabilities of
discontinued operations.  The note was subsequently satisfied.  See "Note 8.
Liabilities Subject to Compromise and Reorganization Items, Net" and "Note 10.
Discontinued Operations."

                                     F-18


<PAGE> 71
Broadwater Hotel Note

  In conjunction with the purchase of the Broadwater Property, PBLLC borrowed
the sum of $30,000 from a third party lender (the "Original Indebtedness").
Except as set forth in the promissory note and related security documents,
PBLLC's obligations under the Indebtedness were nonrecourse and secured by the
Broadwater Property, its improvements and leases thereon.  The Original
Indebtedness bore interest at a stipulated variable rate per annum equal to the
greater of (i) 8.75% or (ii) 4% plus the LIBOR 30-day rate.

  PBLLC was obligated under the Original Indebtedness to make monthly payments
of interest and was obligated to repay the Original Indebtedness in full on
July 22, 2000.  In addition, PBLLC was obligated to pay to the lender a loan
fee in the amount of $7,000 which was fully earned and non-refundable when the
Original Indebtedness was due.  Neither the Original Indebtedness nor the loan
fee payments were made on the due date and the Original Indebtedness was in
default through the effective date of the Modified Plan discussed below.  PBLLC
continued to make monthly interest payments accruing on the $30,000 principal
through April 19, 2001, when the Company announced that PBLLC had filed for
reorganization under Chapter 11 in the Mississippi Bankruptcy Court.

  On October 16, 2001, PBLLC filed its plan of reorganization.  Subsequently,
on February 28, 2003, PBLLC filed Modifications to Debtor's Plan of
Reorganization (together with the reorganization plan, the "Modified Plan").
On May 14, 2003, the Mississippi Bankruptcy Court entered an order confirming
the Modified Plan.  The Modified Plan became effective on May 28, 2003 and the
Company consummated the Modified Plan at that time.  The Modified Plan provided
that the unsecured creditors of PBLLC would receive 100% of their claims.
Under the Modified Plan, the obligations to the lender were modified with
respect to the debt amount, the interest rate and the due date, and was re-
documented substantially along the lines of the Original Indebtedness,
including the non-recourse provision, (the "Modified Indebtedness").  On May
28, 2003, PBLLC paid its lender $3,551 pursuant to the Modified Plan.  In March
2004, PBLLC paid its lender $6,392 of principal from the proceeds of the sale
of the Broadwater Tower.  The principal amount of the Modified Indebtedness
earned interest at a rate of 12.75% per annum until the obligation was
satisfied.  The maturity date of the Modified Indebtedness was June 1, 2005.
Interest was payable during the term of the Modified Indebtedness on the
adjusted loan obligation amount.  As of February 29, 2004, the adjusted loan
obligation amount was $43,013.  PBLLC was required to pay interest earned on
the adjusted loan obligation monthly from May 28, 2003 at a rate of the greater
of 7.75% per annum or LIBOR plus 4% per annum floating through the term of the
Modified Indebtedness.

  On April 15, 2005, the Modified Indebtedness and interest thereon were fully
satisfied from the proceeds on the sale of the Broadwater property.  The
Company recognized a gain of $2,416 as of February 28, 2005 to write the
principal amount down to the subsequent liquidated payment amount.  This
adjustment was recorded in discontinued operations.

                                    F-19
<PAGE> 72
8.  LIABILITIES SUBJECT TO COMPROMISE AND REORGANIZATION ITEMS, NET

  The components of liabilities subject to compromise are as follows:

              <TABLE>
              <CAPTION>
                                                                    2006         2005
                                                                   ------       ------

              <S>                                                <C>          <C>
              Senior Exchange Notes, 13%......................   $ 45,967     $  56,250
              Secured Notes, 12%,.............................     14,713        18,750
              Accrued interest................................        --         13,146
              Accounts payable and other accrued expenses.....      2,637         3,704
                                                                 ---------     ---------
                 Total liabilities subject to compromise......   $ 63,317      $ 91,850
                                                                 =========     =========
              </TABLE>

  Senior Exchange Notes and Secured Notes

  The Senior Exchange Notes rank equal in right of payment to all present and
future senior debt, as defined in the indenture governing the Senior Exchange
Notes (the "Note Indenture"), of the Company and its subsidiaries are currently
due and payable.  In addition, the Senior Exchange Notes are unconditionally
guaranteed, jointly and severally on a senior basis, by all of the Company's
restricted subsidiaries (the "Guarantors"), and, under certain circumstances,
the Company's future subsidiaries, although the subsidiary guarantee from The
Connelly Group, LP ("TCG") is limited in amount and was zero as of February 28,
2006 and February 28, 2005.  As security for the obligations of the Company and
the Guarantors under the Senior Exchange Notes, the Company and the Guarantors
have pledged their equity interests in each Guarantor.  The Note Indenture
contains certain restrictive covenants which, among other things, limit the
Company's Guarantors' ability to pay dividends, incur additional indebtedness
(exclusive of $15,000 of senior debt), issue preferred stock, create liens on
certain assets, merge or consolidate with another company and sell or otherwise
dispose of all or substantially all of its properties or assets.

  On December 3, 1998, the Company repurchased $25,000 of its Senior Exchange
Notes.  The repurchased notes were used to satisfy the $25,000 principal
payment due September 15, 1999 on the Company's $100,000 Senior Exchange Notes.
The repurchase was funded by the issuance of $25,000 of new 12% notes due
September 15, 2001 (the "Secured Notes").  The Secured Notes have no mandatory
redemption obligation and are secured by a mortgage on the "Admiral" as well as
subsidiary guarantees.

  See "Note 1.  Bankruptcy Proceedings" regarding default of the Senior
Exchange Notes and Secured Notes.

  In light of the current financial condition of the Company and the fact that
the Notes have not been actively trading, management believes it is
impracticable to determine the current value of the Senior Exchange Notes and
Secured Notes.

9.  OPERATING LEASES

  In January 2000, in conjunction with the anticipated move of the "Admiral,"
the Company entered into a sublease agreement with the Port Authority of the
City of St. Louis for a mooring site on the St. Louis river front approximately

                                   F-20

<PAGE> 73
1,000 feet north of its former location.  The term of the lease is 25 years
commencing on the day the "Admiral" moved to the new mooring site.  At such
time, the lease for the former mooring site of the "Admiral" was surrendered
and terminated.

  Rent under the terms of the new lease consists of base rent plus a percent of
adjusted gross receipts.  The base rent is subject to rate change every five
years based on the recommendation of the Port Commission and was $27 annually
through December 31, 2003.  Effective January 1, 2004, the rent was adjusted to
$29 annually.  The percentage rent is 2% of adjusted gross receipts for any
lease year equal to or less than $80,000, plus 3% of that portion of adjusted
gross receipts for such lease year which exceed $80,000 but which are equal to
or less than $100,000, plus 4% of that portion of adjusted gross receipts for
such lease year, if any, which exceed $100,000.  Rent expense for the mooring
site for the years ended February 28, 2006, February 28, 2005 and February 29,
2004 was $1,420, $1,459 and $1,475, respectively.

  The marina where the Company conducted its Biloxi gaming operations was
determined by the Secretary of State of Mississippi to constitute both
"tidelands" and "fast lands" under the Mississippi Trust Tidelands Act (the
"Tidelands Act").  The tidelands lease was for an initial period of ten years
commencing August 1, 1992.  During August 2002, the Company exercised its
option to extend the lease for a term of five years under the same terms and
provisions, and renegotiated the annual rental.  The rent was $672 annually.
The fast lands lease was for a period of 40 years commencing December 31, 1996
for annual rent of $21, adjustable every five years as defined in the lease
agreement.  The purchasers of the Biloxi casino assets assumed both leases.

  Rental expense incurred under operating leases was $3,477, $4,245 and $4,710
for the years ended February 28, 2006, February 28, 2005 and February 29, 2004,
respectively, and is classified in discontinued operations.

  Future minimum lease commitments under non-cancelable long-term operating
leases as of February 28, 2006, are as follows:

                                          Non-cancelable
                                            Operating
                                              Leases
                                           ------------

           Years ending February 28/29:
             2007........................    $    672
             2008........................         200
             2009........................         163
             2010........................          29
             2011........................          29
             Thereafter..................         431
                                             ---------
                                             $  1,524
                                             =========

  The future minimum lease commitments under non-cancelable operating leases
consist solely of commitments of President Missouri.

                                    F-21
<PAGE> 74
10. DISCONTINUED OPERATIONS

  --Biloxi

  Following an auction held on January 20, 2005, under the terms of Section 363
of the United States Bankruptcy Code, three subsidiaries of President Casinos,
Inc., namely President Mississippi, Vegas Vegas, Inc., and PBLLC (collectively,
"Sellers"), on the one hand, and Broadwater Development, LLP ("Purchaser") on
the other, entered into a Second Amendment to Sale and Purchase Agreement (the
"Second Amendment") pursuant to which the Purchaser agreed to acquire from the
Sellers substantially all of the real and personal property associated with the
Company's Biloxi operations for $82,000, subject to certain closing
adjustments.  Prior to the auction, on January 13, 2005, the Purchaser received
an assignment of all the right, title and interest of Broadwater Properties,
LLC in and to that certain Sale and Purchase Agreement dated as of November 15,
2004, as amended by the Amendment to Sale and Purchase Agreement dated as of
November 29, 2004 (as amended, the "Purchase Agreement") which had been
previously executed by the Sellers with respect to the sale of the Company's
Biloxi operations.  A hearing to approve the auction results and sale to the
Purchaser was held before the Missouri Bankruptcy Court on January 26, 2005,
and the court issued an order approving the auction results and the sale on
February 7, 2005.  On April 15, 2005, the Company completed the sale, subject
to certain post-closing adjustments.  The Company recognized a gain of $27,545,
net of income tax expense of $6,039, as a result of this transaction.

  --St. Louis

  On August 9, 2004, the Company entered into an agreement with Penn National
Gaming, Inc. for the purchase of its St. Louis operations.  The agreement was
submitted to the Missouri Bankruptcy Court for review and was amended on
September 17, 2004.  Under the terms of the agreement, the stock of President
Missouri was to be sold for approximately $28,000, subject to working capital
adjustments and subject to higher and better offers.  On October 7, 2004, an
auction was held in accordance with Section 363 of the Bankruptcy Code.
Pursuant to an agreement submitted September 30, 2004, Columbia Sussex was the
winning over-bidder for the St. Louis casino operations for a purchase price of
approximately $57,000, subject to closing adjustments.  The Company and
Columbia Sussex entered into a Riverboat Casino Sale and Purchase Agreement
dated as of September 30, 2004 (as amended, the "Columbia Purchase Agreement").
On October 13, 2004, the Missouri Bankruptcy Court entered an order approving
the sale of the stock of President Missouri to Columbia Sussex pursuant to the
Columbia Purchase Agreement.  The closing of the transaction was contingent
upon the licensing approval of Columbia Sussex and its key officers by the
Missouri Gaming Commission.  On October 25, 2005, Columbia Sussex notified the
Company that it had withdrawn its application for licensing with the Missouri
Gaming Commission.  The Company is pursuing certain action against Columbia
Sussex as described below for breaching the Columbia Purchase Agreement.

  On February 24, 2006, the Company and Pinnacle entered into a Riverboat
Casino Sale and Purchase Agreement (the "Pinnacle Purchase Agreement").  Under
the terms of the Pinnacle Purchase Agreement all of the outstanding capital
stock of President Missouri will be sold for approximately $31,500, subject to
working capital adjustments.  On May 26, 2006 the Missouri Bankruptcy Court
issued an order approving the sale of he stock of President Missouri in
accordance with the Pinnacle Purchase Agreement.  Final closing of the sale is
contingent upon satisfaction of certain closing conditions including licensing

                                    F-22

<PAGE> 75
and approval of the buyer by the Missouri Gaming Commission.

  In connection with the Pinnacle Purchase Agreement, Pinnacle, the Company and
President Missouri also entered into a letter agreement (the "Letter
Agreement") relating to the "Cherrick Lot," a parking lot located across from
the President Missouri's gaming facility that has been primarily used by the
President Missouri's patrons for the last several years.  The Cherrick Lot is
currently the subject of a condemnation proceeding, and Pinnacle holds an
option to purchase the Cherrick Lot if it is taken in the condemnation
proceeding.  Pursuant to the Letter Agreement, the parties agreed that if the
Cherrick Lot is condemned, Pinnacle shall exercise its option to purchase the
Cherrick Lot, provided the aggregate price required to be paid as compensation
for the Cherrick Lot does not exceed $5,000.  If Pinnacle purchases the
Cherrick Lot, whether pursuant to its option or otherwise, Pinnacle shall
permit patrons of President Missouri the right to park on the Cherrick Lot for
a validation fee not exceeding one dollar and fifty cents per day for each
vehicle, which arrangement shall extend for a term ending on the earlier of (a)
the date on which Pinnacle opens its new casino project on Laclede's Landing,
or (b) December 31, 2008.

  The Cherrick Lot has been the choice parking lot for the casino's guests due
to its proximity and convenience.  Based on recent usage, approximately 68% of
the casino's guests have parked on the Cherrick Lot, representing approximately
40,000 vehicles per month.  On September 10, 2004, the City of St. Louis
commenced an action seeking to condemn the Cherrick Lot.  On October 26, 2004,
Columbia Sussex exercised an option it held on the lot and purchased the
Cherrick Lot for $5,000.  The City of St. Louis intended to take the property
under the powers of eminent domain on behalf of Pinnacle for its casino
development project.  The Company and the Creditor's Committee of President
Missouri filed a complaint with the Bankruptcy Court seeking an injunction to
prevent the condemnation action from proceeding.  On November 10, 2005, the
Bankruptcy Court granted the request for injunctive relief and enjoined the
condemnation action to January 9, 2006, which date was subsequently extended.
In consideration for Pinnacle's obligations under the letter agreement to
exercise its option to purchase the Cherrick Lot and lease it to the Company
if, and when, it is condemned by the City of St. Louis, the complaint against
the City of St. Louis has been dismissed and the injunction dissolved.

  On December 16, 2005, Columbia Sussex notified the Company that the parking
rate on the Cherrick Lot would be increased from one dollar and fifty cents per
vehicle to six dollars per vehicle effective at midnight.  On December 22,
2005, the Company was notified of a further rate increase from six dollars per
vehicle to a minimum of ten dollars per vehicle.  The Company withheld payment
to Columbia Sussex of all parking fees incurred after the initial rate increase
due to the Company's determination that the increases were not justified.  On
December 30, 2005, Columbia Sussex responded by ceasing to further honor casino
validation for parking and raising the rate to twenty five dollars per vehicle
to all vehicles parked on the lot.

  Alternative parking arrangements are less desirable due to their distance
from the casino and due to their use being limited by adverse weather
conditions.  During the winter, predictions of snow and ice cause the levee
parking adjacent to the casino to be closed.  High water levels in the spring
cause the parking on the levee to become partially or completely unavailable.
The closest alternative parking not on the levee is two blocks away. Management
believes that a sustained loss of use of the Cherrick Lot would have a

                                     F-23

<PAGE> 76
significant negative impact on revenue and a material adverse effect on
the Company's financial condition and results of operations.

  The Company has filed an action in the Bankruptcy Court against Columbia
Sussex for breach of contract regarding the Columbia Purchase Agreement and
seeks injunctive relief for rates at the Cherrick Lot.  See "Note 12.
Commitments and Contingent Liabilities."

  On February 16, 2006, the Missouri Bankruptcy Court issued a preliminary
injunction for relief from the parking fees being charged by Columbia Sussex.
The preliminary injunction will remain in effect until a trial on the merits
unless the preliminary injunction is modified by the Missouri Bankruptcy Court
prior to trial.  Under the preliminary injunction, the Company currently pays
one dollar and fifty cents per vehicle.  As security for the preliminary
injuction, the Company was required to post a $525 bond.  It is anticipated
that in September 2006 the parties will ask the Missouri Bankruptcy Court to
set a scheduling conference to determine, among other things, when a trial will
be scheduled.  In the event that an unfavorable outcome for the Company occurs,
the Company could be liable for the difference between one dollar and fifty
cents per vehicle and a higher rate, as determined by the court.  At this time
management is unable to predict with any certainty what the outcome of this
matter will be.

  On May 23, 2006, Columbia Sussex filed a motion with the Missouri Bankruptcy
Court seeking an increase to the preliminary injunction by $417 immediately and
by the sum of $78 per week for every additional week that the injunction
remains in place, or in the alternative, that the Company post a total bond of
$4,500.  The motion is scheduled for a hearing June 13, 2006.

   Leasing Segment

  The Company sold one of two vessels accounted for in its leasing segment
during May 2003 and the second vessel was foreclosed on by the lender which
held a Preferred First Fleet Mortgage collateralizing debt owed to them.

  In accordance with the Financial Accounting Standards Board SFAS No. 144
"Accounting for the Impairment and Disposal of Long-Lived Assets," ("SFAS 144")
the St. Louis and Biloxi operations and leasing segment are accounted for as
discontinued operations, as follows:

                                    F-24
<PAGE> 77
            <TABLE>
            <CAPTION>
                                                                  Feb. 28,     Feb. 28,
                                                                    2006         2005
                                                                   ------       ------

            <S>                                                  <C>           <C>
            ASSETS
              Cash and cash equivalents..................        $  3,000      $  4,400
              Receivables, net...........................             428           784
              Inventories................................             432           947
              Prepaid expenses...........................           1,918         2,591
              Deferred tax asset.........................             --          5,707
              Property and equipment, net................          32,733        78,808
                                                                 ---------     ---------
                                                                 $ 38,511      $ 93,237
                                                                 =========     =========
            LIABILITIES
              M/V "President Casino-Mississippi"
                note payable.............................        $    --       $    750
              Accounts payable...........................           1,546         1,729
              Income taxes payable.......................              32           --
              Accrued payroll and benefits...............           1,535         2,741
              Accrued interest payable...................             --            221
              Other accrued liabilities..................           3,743         3,905
                                                                 ---------     ---------
                                                                 $  6,856      $  9,346
                                                                 =========     =========
            </TABLE>
            <TABLE>
            <CAPTION>
                                                                  Feb. 28,     Feb. 28,
                                                                    2006         2005
                                                                   ------       ------

            <S>                                                  <C>           <C>

            ASSETS
              St. Louis operations.......................        $ 38,361      $ 37,082
              Biloxi operations..........................             150        56,155
                                                                 ---------     ---------
                                                                 $ 38,511      $ 93,237
                                                                 =========     =========
            LIABILITIES
              St. Louis operations.......................        $  5,985      $  5,246
              Biloxi operations..........................             871         3,350
              New York leasing operations................             --            750
                                                                 ---------     ---------
                                                                 $  6,856      $  9,346
                                                                 =========     =========
             </TABLE>

  The Company's St. Louis segment had operating income of $10,174 consisting of
revenues of $67,301 and operating expenses of $57,127 during the year ended
February 28, 2006, compared to operating income of $7,901, consisting of
revenues of $69,811 and operating expenses of $61,910 during the year ended
February 28, 2005.  The St. Louis segment had operating income of $5,652
consisting of revenues of $70,819 and operating expenses of $65,167 during the
year ended February 29, 2004.  Operating expenses of the St. Louis segment for
the year ended February 28, 2005, include depreciation through October 2004, at
which time depreciation of the related long-lived assets was suspended in
accordance with SFAS 144.

  The Company's Biloxi segment had operating income of $648, consisting of
revenues of $5,604 and operating expenses of $4,956 during the year ended
February 28, 2005, compared to operating income of $1,173, consisting of

                                    F-25

<PAGE> 78
revenues of $43,195 and operating expenses of $42,022 during the year ended
February 28, 2005.  The Biloxi segment had operating income of $2,984
consisting of revenues of $48,477 and operating expenses of $45,493 during the
year ended February 29, 2004.  The sale of the Biloxi property was completed
April 15, 2005.

  The Company's leasing segment had no operating income during the years ended
February 28, 2006 and 2005.  The leasing segment had an operating loss of
$1,323 for the year ended February 29, 2004.

M/V "President Casino-Mississippi" Note

   The Company defaulted under the terms of its M/V "President
Casino-Mississippi" note.  The M/V "President Casino-Mississippi" was
previously operated by the Company as its initial casino in Biloxi.  The vessel
and various equipment aboard the M/V "President Casino-Mississippi"
collateralized a term note payable which was also personally guaranteed by Mr.
Connelly.  The Company continued to make the quarterly principal and interest
payments on the note prior to the Company's bankruptcy filing.  Under the terms
of the note agreement, $2,100 principal became due and payable in August 2002
together with interest and costs.  In November 2002, the lender brought an
action against Mr. Connelly for breach of contract under his personal
guarantee.  In December 2003, Mr. Connelly satisfied his personal guarantee
paying the lender $1,200.  In January 2003, the Mississippi Bankruptcy Court
granted a motion to relieve the lender from the automatic stay in order to
enforce its rights under the Preferred Fleet Ship Mortgage, including but not
limited to the right of the lender to seize and sell the assets.  In May 2003,
the lender filed a motion with the United States District Court for the
Southern District of Illinois for an order directing the Clerk of Court to
issue a warrant for the arrest of the M/V "President Casino-Mississippi"
pursuant to rules of admiralty and maritime claims.  On May 20, 2003, the Court
executed the warrant, which allowed the vessel to be seized and sold.  On April
7, 2004, the vessel was auctioned and the lender offered the highest bid of
$500.

  The Company, President Mississippi, Mr. Connelly and the lender entered into
an agreement whereby the Company would satisfy its obligations under the
indebtedness, and related costs, for $750.  Additionally, Mr. Connelly agreed
to forego his rights and assignments.  The terms are incorporated in the
Mississippi Plan of Liquidation, which was confirmed on May 27, 2005, and
became effective on June 7, 2005.  Subsequently, the Company paid the lender
$750.  Pursuant to the agreement between the Company and other parties
involved, the Company wrote down its obligations related to the M/V "President
Casino-Mississippi" by $2,643 in the fourth quarter of fiscal 2005 to reflect
the resolution of the previously estimated contingent liabilities related to
this obligation.  Such amount is included in income from discontinued
operations.

11.  INCOME TAXES

  The Company recognizes deferred tax assets, net of applicable reserves,
related to net operating loss carryforwards and certain temporary differences.
Recognition of future tax benefits is based on the extent the realization of
such benefit is "more likely than not."  As such, the realization of the
deferred tax benefit is dependent on the Company's ability to generate future
taxable income.  Given the level of operations, the increased competition and

                                    F-26

<PAGE> 79
the overall uncertainty as to the timing of the Company's ability to return to
profitability, management determined that the tax benefit did not satisfy the
recognition criteria through the period ended February 29, 2004.  Accordingly,
a 100% valuation allowance was maintained against the Company's deferred tax
assets through that time.  During the year ended February 28, 2005, the
valuation allowance decreased by $5,707 due primarily to the sale and
subsequent closure of the Biloxi operations.  The sale was expected to generate
a gain which made it more likely than not that a portion of the net operating
loss carryforward would be realized.  The tax benefit related to the reversal
of this valuation allowance was recognized in discontinued operations.

  The gain on the sale of the Company's Biloxi assets has generated federal
income taxes of $5,707 which has been offset by a portion of the Company's net
operating loss carryforward.  The use of the Company's net operating loss
carryforward generated an additional $332 of alternative minimum tax liability
and credit.  Given the level of operations, the increased competition, the
contingencies related to the potential sale of the St. Louis operations and the
overall uncertainty as to the timing of the Company's ability to return to
profitability, management determined that the remaining tax benefits do not
satisfy the recognition criteria and accordingly the Company maintains a 100%
valuation allowance against the Company's deferred tax assets.  All state
income taxes related to this sale are offset by state net operating losses.
The Company's total income tax expense of $6,039 for the year ending February
28, 2006 is reflected in discontinued operations.  There was no income tax
expense for the year ending February 29, 2004.

  The components of the net deferred tax asset are as follows:

      <TABLE>
      <CAPTION>
                                                   Feb. 28,      Feb. 28,
                                                     2006          2005
                                                    ------        ------
     <S>                                          <C>           <C>
     Deferred tax assets:
       Net operating loss carryforward.......     $ 66,172      $ 74,022
       Pre-opening costs and intangible
         assets..............................          853         1,669
       Accounting reserves and liabilities...          896          (543)
       Tax credits...........................          280           280
       Other.................................           55            55
                                                  ---------     ---------
                                                    68,256        75,483
       Less: Valuation allowance.............      (59,575)      (61,379)
                                                  ---------     ---------
                                                     8,681        14,104
     Deferred tax liabilities:
       Property..............................        8,681         8,397
                                                  ---------     ---------
          Net deferred tax asset.............     $    --       $  5,707
                                                  =========     =========
       </TABLE>

  As of February 28, 2006, the Company had Federal and Missouri net operating
loss carryforwards of $160,123 and $204,831, respectively.  These tax benefits
will expire between 2008 and 2025 unless first offset against taxable income.
The availability of the loss carryforwards may be limited in the event a
significant change in ownership of the Company or its subsidiaries.

   There are numerous and complex tax issues associated with the Company's
filing for protection under Chapter 11 of the Bankruptcy Code and the future

                                  F-27


<PAGE> 80
reorganization, such as discharge of indebtedness, sale of property or
potential abandonment of assets.  The impact of these tax issues will affect
the amount of tax attribute carryforwards and deferred taxes; however, such
impact cannot be determined at this time.

12. COMMITMENTS AND CONTINGENT LIABILITIES

Bankruptcy Actions

  On June 20, 2002, the Company together with its subsidiary, President
Missouri filed voluntary petitions for reorganization under Chapter 11 of the
Bankruptcy Code in the Mississippi Bankruptcy Court.  On July 9, 2002, the
Company's subsidiary President Mississippi filed a voluntary reorganization
petition in the same Court.  On July 11, 2002, substantially all of the
Company's other operating subsidiaries filed voluntary reorganization petitions
under Chapter 11 in the same Court.  Subsequently, orders were entered by the
Mississippi Bankruptcy Court transferring venue of all of the Chapter 11 cases,
except President New York and PBLLC, to the Missouri Bankruptcy Court, where
they are now pending and being administered.  President New York subsequently
had its Chapter 11 case dismissed and PBLLC subsequently emerged from Chapter
11.  The Company and its subsidiaries, except as noted, each continue in
possession and use of their assets as debtors-in-possession.  See "Note 1.
Bankruptcy Proceedings."

  On April 27, 2003, the Missouri Bankruptcy Court granted a motion for
approval of a key employee retention plan for certain corporate and Missouri
casino employees (the "Retention Plans").  The motion does not affect any pre-
petition employment agreements as to assumption or rejection of pre-petition
executory contracts, with the exception that any claim asserted by a key
employee on account of a pre-petition employment agreement shall be reduced
dollar for dollar by the amounts paid or payable under the retention plan.
Under the terms of the Retention Plans for certain Missouri key casino
employees, certain key employees will receive 50% of their then salary which
will be due and payable on the earlier of the following dates: (i) the date on
which all or substantially all of President Missouri's assets are sold or (ii)
the date on which the Company terminates substantially all of its ordinary
Missouri business operations.  Under the terms of the Retention Plans for
corporate employees, the Chief Financial Officer will receive one year of his
then salary on the date he is discharged from employment and the other named
key employees will receive 50% of their then salary.  If at any time prior
thereto the corporate key employees' salaries are reduced or he or she is
required to move his or her residence from the St. Louis, Missouri metropolitan
area, he or she will also receive such payment.  In the event of the sale of
the Missouri assets, an amount shall be set aside to fund such payments.  The
aggregate amount of the Missouri retention agreements, including corporate, is
$505.

  On April 1, 2004, the Missouri Bankruptcy Court granted a motion for approval
of a key employee retention plan for certain Mississippi casino employees.  The
terms and conditions are the same as the Missouri key casino employee Retention
Plan except the assets and operations refer to those of Mississippi and one key
employee receiving his then twelve month salary rather than 50%.  The aggregate
amount of the Mississippi retention agreements was $322.  Such amount was paid
on April 15, 2005, upon consummation of the sale.

                                     F-28
<PAGE> 81
be covered by insurance, arising in the ordinary course of its business.
Management of the Company does not believe that the outcome of any such
litigation will have a material adverse effect on the Company's financial
condition or results of operations, or which would have any material adverse
impact upon the gaming licenses of the Company's subsidiaries except as
follows:

  The Company's St. Louis patrons have, since the "Admiral" was moved north
from its original location, almost exclusively used a public parking lot
immediately in front of the entrance to the "Admiral," known as the Cherrick
Lot.  The Company had a validation agreement with the operator of the Cherrick
Lot to accept one dollar and twenty five cents (later raised to one dollar and
fifty cents) for use by "Admiral" patrons of the Cherrick Lot.  On September
10, 2004, the City of St. Louis commenced an action seeking to condemn the
Cherrick Lot for use by Pinnacle which is developing a large gaming and hotel
complex approximately one block away from the Cherrick Lot.  At the time the
condemnation was commenced, Columbia Sussex, Inc. had an option to purchase the
Cherrick Lot for $5,000.  On October 26, 2004, Columbia Sussex exercised its
option and purchased the Cherrick Lot.  On November 4, 2005, the Creditors
Committee and the Company filed a Verified Complaint for Declaratory Judgment
and for Injunctive Relief in the Company's bankruptcy proceedings pending in
the Missouri Bankruptcy Court.  On November 10, 2005, the Court granted the
request and enjoined the condemnation action until January 9, 2006.  In
connection with the pending sale of the Company's St. Louis operations,
Pinnacle, the Company and President Missouri entered into a letter agreement
relating to the Cherrick Lot.  Pinnacle currently holds an option to purchase
the Cherrick Lot if it is taken in the condemnation proceeding. Pursuant to the
letter agreement, the parties agreed that if the Cherrick Lot is condemned,
Pinnacle shall exercise its option to purchase the Cherrick Lot, provided the
aggregate price required to be paid as compensation for the Cherrick Lot does
not exceed $5,000.  If Pinnacle purchases the Cherrick Lot, whether pursuant to
its option or otherwise, Pinnacle shall permit patrons of President Missouri
the right to park on the Cherrick Lot for a validation fee not exceeding one
dollar and fifty cents per day for each vehicle, which arrangement shall extend
for a term ending on the earlier of (a) the date on which Pinnacle opens its
new casino project on Laclede's Landing, or (b) December 31, 2008.  In
consideration for Pinnacle's obligations under the letter agreement, the
Company's complaint against the City of St. Louis has been dismissed and the
injunction has been dissolved.

  On January 12, 2006, the Company filed a verified Complaint for Damages and
Injunctive Relief in the Missouri Bankruptcy Court, where its bankruptcy is
pending.  The suit named both the Company and President Riverboat Casino-
Missouri, Inc. as plaintiffs and named Columbia Sussex, Inc. and Wimar Tahoe
Corporation as defendants.  The Company alleged breach of contract by Columbia
Sussex because it took actions that could reasonably be expected to impede or
delay licensure by the Missouri Gaming Commission and it failed to use all
commercially reasonable efforts to obtain licensure from Missouri Gaming
Commission.  The Company also alleged a prima facie tort in that Columbia
Sussex had unilaterally raised validation rates for the Cherrick Lot used by
the Company for its patrons and with the intent to cause injury to the Company.
The Company seeks damages for the injury inflicted and an injunction to prevent
Columbia Sussex from raising the validation fee above the one dollar and fifty
cents per "Admiral" patron vehicle charged immediately prior to the increase in
fees.  The Company also seeks injunctive relief requesting that Columbia Sussex
be enjoined from blocking access to the parking lot to the Company's patrons,

                                   F-29

<PAGE> 82
 from raising the validation fee above one dollar and fifty cents per patron
vehicle and to prevent any subsequent action designed to unreasonably curtail
access for "Admiral" patrons parking on the Cherrick Lot.

  On February 16, 2006, the Missouri Bankruptcy Court issued a preliminary
injunction prohibiting Columbia Sussex from charging more than one dollar and
fifty cents per patron vehicle for validated parking for casino patrons.  The
preliminary injunction will remain in effect until a trial on the merits unless
the injunction is modified by the Court prior to trial.  As security for the
preliminary injunction, the Company was required to post a $525 bond.  It is
anticipated that in September 2006 the parties will ask the Court to set a
scheduling conference to determine, among other things, when a trial will be
scheduled.  On May 23, 2006, Columbia Sussex filed a motion with the Missouri
Bankruptcy Court seeking an increase to the preliminary injunction by $417
immediately and by the sum of $78 per week for every additional week that the
injunction remains in place, or in the alternative, that the Company post a
total bond of $4,500.  The motion is scheduled for a hearing June 13, 2006.

General

  The ownership and operation of casino gaming facilities are subject to
extensive state and local regulation.  As a condition to obtaining and
maintaining a gaming license, the Company must submit detailed financial,
operating and other reports to state gaming commissions, all of which have
broad powers to suspend or revoke licenses.  In addition, substantially all of
the Company's material transactions are subject to review and/or approval by
the various regulatory bodies.  Any person acquiring 5% or more of the Common
Stock or of the equity securities of any gaming entity must be found suitable
by the appropriate regulatory body.  The President Missouri license was last
approved by the Missouri Gaming Commission in April 2006 for a period through
May 2008.

13.  RISKS AND UNCERTAINTIES

  --Insurance Risk

  The Company was partially self-insured for employee health and workers
compensation claims and third party liability costs through April 1999.
Effective May 1999, the Company became fully insured for workers compensation
claims.  The Company continues to be partially self-insured for employee health
and third party liability claims.  The self-insurance claim liability is based
on claims reported and claims incurred but not reported using the Company's
historic experience with such matters.

  The Company does carry business interruption insurance, but due to the
current insurance market, the policy does not cover interruption from windstorm
or flood.

  --Concentration of Credit Risk

  The Company maintains cash balances at certain financial institutions in
excess of amounts insured by federal agencies.  In addition, the Company
maintains significant cash balances on hand at its gaming facility.

                                   F-30

<PAGE> 83
--Cyclical Nature of Business

  The Company's business involves leisure and entertainment.  During periods of

recession or economic downturn, consumers may reduce or eliminate spending on
leisure and entertainment activities.  In the event that any of the Company's
demographic markets suffer adverse economic conditions, the Company's revenues
may be materially adversely affected.

14. MINORITY INTEREST

The Connelly Group, LP

  The assets of the Company's Davenport casino operations were sold in October
2000.  The Davenport casino operations were managed by the Company's wholly-
owned subsidiary, PRC Iowa, which is the general partner of the 95% Company-
owned operating partnership, TCG.  The partnership agreement provides for the
allocation of income between the general partner and limited partner at 95% and
5%, respectively.

President Broadwater Hotel, LLC

  To effectuate the acquisition of the Broadwater Property, the Company entered
into a Redemption Agreement dated as of July 22, 1997 (the "Redemption
Agreement") by and among J. Edward Connelly Associates, Inc., a company
controlled by Mr. Connelly ("JECA"), Broadwater Hotel, Inc., a wholly-owned
subsidiary of the Company, and PBLLC, a limited liability company formed by
JECA and BHI for purposes of the transaction.

  BH Acquisition Corporation ("BHAC"), a company wholly-owned by Mr. Connelly,
was the sole owner of the Broadwater Property.  Prior to the closing of the
transactions, JECA, the successor by merger to BHAC became the sole owner of
the Broadwater Property.  In connection with the formation of PBLLC, JECA
transferred its interest in the Broadwater Property to PBLLC as a capital
contribution in exchange for the sole outstanding membership interest in PBLLC.
Pursuant to the Redemption Agreement, BHI made a capital contribution of $5,000
to PBLLC in exchange for the Class A Unit of PBLLC as described in the Amended
and Restated Limited Liability Company Operating Agreement of PBLLC (the
"Amended Operating Agreement").  Simultaneously with BHI's acquisition of the
Class A Unit, PBLLC redeemed JECA's existing membership interest in PBLLC in
exchange for (i) the cash payment by PBLLC to JECA of $28,484, (ii) redemption
of the $2,016 debt owed by BHAC to the Company and (iii) the issuance by PBLLC
to JECA of the Class B Unit of PBLLC as described in the Amended Operating
Agreement.

  PBLLC was obligated to redeem the Class B Unit from JECA for a redemption
price of $10,000 on the date on which the indebtedness (as defined in "Note 10.
Discontinued Operations") is fully and finally discharged and the mortgage
securing the Indebtedness is released.

  On June 7, 2005, the Company made a distribution from the proceeds of the
sale of the Mississippi Properties.  JECA's Class B membership interest was
partially redeemed for $14,375, of which, Messrs. Aylsworth, Wirginis and
Vaclavik were paid $3,539, $3,539 and $219, respectively.  During August 2005,
JECA's Class B membership interest was further redeemed for $1,400, of which
additional distributions of $333, $333 and $70 were made to Mssrs. Aylsworth,

                                   F-31

<PAGE> 84
Wirginis and Vaclavik, respectively.  During February 2006, JECA's Class B
membership interest was further redeemed for $350, of which additional
distributions of $85, $85 and $11 were made to Mssrs. Aylsworth, Wirginis and
Vaclavik, respectively.

15.  EMPLOYEE BENEFIT PLANS

  The Company maintains an employee savings plan which covers all eligible
employees as defined by the plan.  Pursuant to this savings plan, participating
employees may contribute (defer) a percentage of eligible compensation.
Employee contributions to the savings plan, up to certain limits, are partially
matched by the Company.  The expense applicable for the Company's contribution
to the savings plan, net of forfeitures, was $102, $200 and $228 for the years
ended February 28, 2006, February 28, 2005 and February 29, 2004, respectively.

16.  STOCK OPTION PLANS

  The Company has adopted non-qualified and incentive stock option plans which
provide for the granting of stock options to eligible directors, officers and
employees.  In addition, the plans authorize the issuance of tandem stock
appreciation rights in connection with the issuance of certain options.  Stock
appreciation rights may only be issued in connection with a non-qualified stock
option.  This right will entitle the holder to receive in cash or stock an
amount equal to the excess of the fair market value on the date of exercise
over the exercise price of the tandem stock option.  The maximum value of any
stock appreciation right will be limited to the exercise price of the tandem
stock option.  A stock appreciation right may be exercisable only at the same
time and to the same extent as the tandem stock option.

  The plans are administered by the Compensation Committee of the Board of
Directors (the "Committee"), whose members determine to whom options will be
granted and the terms of each option.  The exercise price of stock options
granted under the plans are established by the Committee, but the exercise
price may not be less than the market price of the Company's Common Stock on
the date the option is granted.  Each option granted is exercisable in full at
any time or from time to time as determined by the Committee and provided in
the option agreement, provided that no option may have a term exceeding ten
years.  In July 1997 and June 1999, the stockholders of the Company approved
the Company's 1997 and 1999 stock option plans which increased the number of
shares available for grant by 500,000 shares and 300,000 shares, respectively.

  On June 19, 1996 and August 22, 1997, the Committee approved amendments to
certain of the outstanding stock option agreements.  Pursuant to such
amendments, options to purchase an aggregate of 276,340 shares of Common Stock
at exercise prices ranging from $54.00 to $5.625, per share were repriced to an
exercise price of $11.625 and $2.625, respectively, per share, the market value
of the Common Stock on the date of the repricings.

  On August 28, 2001, the Committee approved further amendments to certain of
the outstanding stock option agreements.  Pursuant to such amendments, options
to purchase an aggregate of 811,618 shares of Common Stock at exercise prices
ranging from $1.875 to $4.000, per share were repriced at an exercise price of
$0.87 per share.  Except for such amendments, the other terms of the stock
options were not changed.  The Over the Counter fair market value of the Common
Stock on August 28, 2001, was $0.87.  Pursuant to the guidance of APB 25,
"Accounting for Stock Issued to Employees" and related interpretations, the

                                    F-32

<PAGE> 85
amendments to certain of the outstanding option agreements modified the options
from being fixed stock option awards to variable stock option awards.  As such,
the Company recognizes compensation cost for increases or decreases in the
intrinsic value of the modified award in periods subsequent to the modification
until the award is exercised, forfeited or expires unexercised.  However,
compensation cost is not adjusted below the intrinsic value, if any, of the
modified stock option at the date of modification unless the award is forfeited
because the employee fails to fulfill an obligation.  The Over the Counter
closing market value of the Common Stock on February 28, 2006, was $0.09,
therefore, as of February 28, 2006, no compensation cost has been recognized.

  The Committee believes that the modifications were necessary and appropriate
in light of competitive conditions in the gaming industry and in order to
provide a meaningful long-term incentive compensation opportunity in light of
recent trading prices of the Common Stock to the management team whose efforts
are essential to the Company's success.

  The Company applies SFAS No. 123, "Accounting for Stock-Based Compensation"
to account for stock compensation arrangements.  SFAS No. 123 provides, among
other things, that companies may elect to account for employee stock options
using a fair value-based method or continue to apply the intrinsic value-based
method prescribed by APB No. 25.  As permitted, the Company has elected to
continue to apply the intrinsic value-based method for stock options.
Accordingly, no compensation cost has been recognized.

  Under the Company's plans, the Company is authorized to grant options up to
an aggregate of 1,325,000 shares to management team members and directors.  Of
this amount, 408,333 shares have expired.  As of February 28, 2006, 100,000
options have been exercised and 140,700 are available for grant.  Options under
the plans are generally granted at market value at the date of the grant and
expire ten years from the date of grant.  The outstanding options that have
been granted under the plan generally vest either at (i) a rate of 20% each
anniversary date or (ii) 20% on date of grant and 20% on each anniversary date
thereafter.  The Company has also granted stock options to external board
members under a non-qualified plan.  These options are granted at market value
at the date of the grant; and generally vest at 50% on date of grant and 25%
each anniversary date thereafter or 20% at the date of grant, 20% on the first
anniversary and 60% on the second anniversary; and expire 10 years from date of
grant.

                                    F-33
<PAGE> 86
  A summary of the status of the Company's stock option plans as of February
28, 2006, February 28, 2005 and February 29, 2004, and changes during the years
ending on those dates is presented below:

<TABLE>
<CAPTION>
                            2006                      2005                       2004
                 -------------------------  -------------------------  --------------------------
Variable                  Weighted-Average           Weighted-Average           Weighted-Average
Options          Shares    Exercise Price   Shares    Exercise Price   Shares    Exercise Price
-------------------------------------------------------------------------------------------------
<S>           <C>              <C>         <C>            <C>           <C>          <C>
Outstanding at
 beginning
 of year        688,609        $ 0.87        674.526      $ 0.87        787,293      $ 0.87
-------------------------------------------------------------------------------------------------
Granted             --            --             --          --             --          --
Forfeited        (5,975)         0.87           (500)       0.87        (90,183)       0.87
Expired         (66,667)         0.87         (2,084)       0.87         (5,917)       0.87
-------------------------------------------------------------------------------------------------
Outstanding
 at end
 of year        615,967          0.87        688,609        0.87        691,193        0.87
-------------------------------------------------------------------------------------------------
Options
 exercisable
 at year-end    615,967                      671,942                    674,526
-------------------------------------------------------------------------------------------------
</TABLE>

  The following table summarizes information about variable stock options
outstanding at February 28, 2006:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
                             Options Outstanding                       Options Exercisable
                ------------------------------------------------   ----------------------------
   Range of       Number       Weighted-Average     Weighted-        Number        Weighted-
   Exercise     Outstanding       Remaining          Average       Exercisable      Average
    Prices      at 02/28/06   Contractual Life    Exercise Price   at 02/28/06   Exercise Price
-------------------------------------------------------------------------------------------------
<S>               <C>            <C>                  <C>          <C>             <C>
$ 0.00 - 1.00     615,967        2.51 years           0.87         615,967         0.87
-------------------------------------------------------------------------------------------------
</TABLE>

17.  SEGMENT INFORMATION

  The Company has one reportable segment from continuing operations consisting
of corporate administration.  All expenses, assets and additions to property
and equipment consist of corporate items.  See "Note 10.  Discontinued
Operations" for the results of the Company's discontinued operations.

  The Company has no inter-segment sales and accounts for transfers of property
and inventory at its net book value at the time of such transfer.

18. RELATED PARTY TRANSACTIONS

  M/V "President Casino-Mississippi" Note

  The Company defaulted under the terms of its $2,100 M/V "President
Casino-Mississippi" note.  The vessel and various equipment aboard the M/V

                                   F-34


<PAGE> 87
"President Casino-Mississippi" collateralized a term note payable which was
also personally guaranteed by Mr. Connelly.  The Company continued to make the
quarterly principal and interest payments on the note prior to the Company's
bankruptcy filing.  Under the terms of the note agreement, $2,100 principal
became due and payable in August 2002 together with interest and costs (the
"Note").  In November 2002, the lender brought an action against Mr. Connelly
for breach of contract under his personal guarantee.  In December 2003, Mr.
Connelly satisfied his personal guarantee paying the lender $1,200.  In January
2003, the Mississippi Bankruptcy Court granted a motion to relieve the lender
from the automatic stay in order to enforce its rights under the Preferred
Fleet Ship Mortgage, including but not limited to the right of the lender to
seize and sell the vessel.  In May 2003, the lender filed a motion  with the
United States District Court for the Southern District of Illinois for an order
directing the Clerk of Court to issue a warrant for the arrest of the M/V
"President Casino-Mississippi" pursuant to rules of admiralty and maritime
claims.  On May 20, 2003, the Court executed the warrant, which allowed the
vessel to be seized and sold.  On April 7, 2004, the vessel was auctioned and
the lender offered the highest bid of $500.

  Because the Note was also guaranteed by the Company and President
Mississippi, the payment of the personal guarantee triggered a right of
contribution to Mr. Connelly from both the Company and the President
Mississippi.  In addition, Mr. Connelly became subrogated to the lender's right
under the Note to collect the payment by him from the Company's subsidiary that
issued the Note.  The Note remained outstanding as of February 28, 2005.

  The Company, President Mississippi, Mr. Connelly and the lender entered into
an agreement whereby the Company would satisfy its obligations under the
indebtedness, and related costs, for $750.  Additionally, Mr. Connelly agreed
to forego certain rights and assignments.  The terms are incorporated in the
Mississippi Plan of Liquidation, which was confirmed May 27, 2005, and became
effective on June 7, 2005.  The Company subsequently paid its agreed upon
obligation.

  Mississippi Plan of Liquidation

  In connection with the resolution of various bankruptcy issues with respect
to the Company's Biloxi operations, JECA entered into an agreement (the "JECA
Proceeds Distribution Agreement") with John S. Aylsworth, President, Chief
Executive Officer, Chief Operating Officer and Director of the Company,
Terrence L. Wirginis, former Vice President and Chairman of the Board and Ralph
J. Vaclavik, Senior Vice President and Chief Financial Officer of the Company,
pursuant to which upon receipt of funds by JECA toward payment of the
liquidation preference of its Class B membership interest in PBLLC, JECA will
use its best efforts to pay a percentage of such funds to Messrs. Aylsworth,
Wirginis and Vaclavik based on the total sales proceeds to JECA.  While final
distributions under the Mississippi Plan of Liquidation are subject to final
determination and settlement of claims and expenses, the Company currently
estimates that the proceeds of the sale of the Mississippi Properties will not
be sufficient to repay the Noteholders the outstanding indebtedness under the
Notes and will not be sufficient to satisfy JECA's liquidation preference of
its Class B membership interest in PBLLC.  Pursuant to the terms of the JECA
Proceeds Distribution Agreement, Messrs. Aylsworth, Wirginis and Vaclavik would
be entitled to receive an aggregate of approximately $4,800, $4,800 and $300,
respectively, were the proceeds sufficient to satisfy the Class B membership
unit.  See "Note 1.  Bankruptcy Proceedings."

                                    F-35


<PAGE> 88
  On June 7, 2005, the Company made a distribution from the proceeds of the
sale of the Mississippi Properties.  JECA's Class B membership interest was
partially redeemed for $14,375, of which, Messrs. Aylsworth, Wirginis and
Vaclavik were paid $3,539, $3,539 and $219, respectively.  During August 2005,
JECA's Class B membership interest was further redeemed for $1,400, of which
additional distributions of $333, $333 and $70 were made to Mssrs. Aylsworth,
Wirginis and Vaclavik, respectively.  During February 2006, JECA's Class B
membership interest was further redeemed for $350, of which additional
distributions of $85, $85 and $11 were made to Mssrs. Aylsworth, Wirginis and
Vaclavik, respectively.

19.  SUPPLEMENTAL CASH FLOW STATEMENT DISCLOSURES

  The components of net change in working capital accounts are as follows:

                                                  2006       2005       2004
                                                 ------     ------     ------
  Changes in working capital accounts:
    Receivables, net.......................... $    356   $   (118)  $    (7)
    Prepaid expenses and other current assets.    1,190        643      (349)
    Accounts payable..........................   (1,345)    (4,174)     (643)
    Income taxes payable......................       32        --        --
    Accrued payroll and benefits..............   (1,755)    (1,345)      687
    Other accrued liabilities.................  (15,432)       638       945
                                               ---------  ---------  --------
                                               $(16,984)  $ (4,356)  $   633
                                               =========  =========  ========

  During fiscal years 2006 and 2005, the Company paid $315 and $19,
respectively, in income taxes.  During fiscal year 2004, the Company paid no
income taxes.  Interest paid by the Company was $13,626, $2,946 and $2,977 for
the years ended February 28, 2006, February 28, 2005 and February 29, 2004,
respectively.

20.  QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

  The following table sets forth consolidated income statement data for the
periods indicated.  The quarterly information is unaudited, but in management's
opinion reflects all adjustments necessary for a fair presentation of the
information for the periods presented.

                                    F-36

<PAGE> 89
<TABLE>
<CAPTION>
                                           Fiscal 2006 Quarters Ended
                                     May 31     Aug. 31    Nov. 30    Feb. 28
                                    --------   ---------  ---------  ---------

<S>                                 <C>        <C>        <C>        <C>
Operating revenues................  $    --    $    --    $    --    $     --

Operating loss....................      (737)      (677)      (575)      (622)

Loss before income tax,
  minority interest and
  discontinued operations.........    (1,506)      (424)      (562)      (521)

Loss from continuing operations...    (1,861)      (561)      (634)      (593)

Income from discontinued
  operations......................    30,936       2,688     2,350      2,016

Net income........................    29,075       2,127     1,716      1,423
                                    =========  =========  =========  =========
Basic and diluted loss per
  share from continuing operations   $ (0.37)   $ (0.11)   $ (0.13)   $ (0.12)
Basic and diluted income
  per share from discontinued
  operations......................      6.15       0.53       0.47       0.40
                                     --------   --------   --------   --------
Basic and diluted net income
  per share.......................   $  5.78    $  0.42    $  0.34    $  0.28
                                     ========   ========   ========   ========
</TABLE>

<TABLE>
<CAPTION>
                                           Fiscal 2005 Quarters Ended
                                     May 31     Aug. 31    Nov. 30    Feb. 28
                                    --------   ---------  ---------  ---------

<S>                                 <C>        <C>        <C>        <C>
Operating revenues................  $    --    $    --    $    --    $     --

Operating loss....................      (636)      (606)      (676)      (725)

Loss before income tax,
  minority interest and
  discontinued operations.........      (814)      (955)      (967)    (1,638)

Loss from continuing operations...    (1,144)    (1,293)    (1,318)    (1,985)

Income from discontinued
  operations......................       594        548        550     14,240

Net income (loss).................      (550)      (745)      (768)    12,255
                                    =========  =========  =========  =========
Basic and diluted loss per
  share from continuing operations   $ (0.23)   $ (0.26)   $ (0.26)   $ (0.39)
Basic and diluted income
  per share from discontinued
  operations......................       .12       0.11       0.11       2.83
                                     --------   --------   --------   --------
Basic and diluted net income
  (loss) per share................   $ (0.11)   $ (0.15)   $ (0.15)   $  2.44
                                     ========   ========   ========   ========
</TABLE>

  Income from discontinued operations for the fourth quarter of 2005 includes a
$2,416 adjustment to the PBLLC debt, discussed in "Note 7.  Long-Term Debt and
Current Portion of Long-Term Debt," and a $2,643 adjustment to the obligation

                                   F-37

<PAGE> 90
related to the M/V "President Casino-Mississippi," discussed in "Note 10.
Discontinued Operations," resulting from the Court approved Mississippi Plan of
Liquidation, and the $5,707 reduction of the income tax valuation allowance,
discussed in "Note 11.  Income Taxes."  During the fourth quarter of 2005,
discontinued operations also benefitted from the suspension of depreciation in
accordance with SFAS 144.  These unusual items contributed to the increase in
income from discontinued operations during the fourth quarter of 2005.

21.  SUBSEQUENT EVENT

  On May 25, 2006, Mr. Wirginis resigned as director, Chairman of the Board and
Vice President-Marine and Development of the Company, and as an officer and
director of the Company's subsidiaries.  Mr. Wirginis has informed the Company
that he may seek the appointment of an equity holder's committee in the
Company's bankruptcy proceedings.  Mr. Wirginis has indicated that the equity
holder's committee, consisting of Mr. Wirginis and other interested
stockholders of the Company, would explore development of an alternative
reorganization plan for the Company, including seeking financing arrangements
with third parties which would permit the Company to refinance its existing
indebtedness and emerge from its bankruptcy proceedings as an operating gaming
company.  The appointment of an equity holder's committee would be subject to
approval by the Missouri Bankruptcy Court, and any such alternative
reorganization plan for the Company proposed by the equity holder's committee
would require confirmation of the Missouri Bankruptcy Court and the requisite
vote of the Company's creditors and equity holders.  The Company continues to
proceed with the sale of its St. Louis gaming operations to Pinnacle
Entertainment consistent with its obligations under the Purchase Agreement with
Pinnacle Entertainment.  The Company is unable at this time to predict with
certainty whether Mr. Wirginis will seek appointment of an equity holder's
committee or propose an alternative reorganization plan for the Company, or
whether, if proposed, such an alternative reorganization plan would be
confirmed by the Missouri Bankruptcy Court.

22. SUMMARIZED AND CONDENSED FINANCIAL INFORMATION OF THE COMPANY

  The following summarized and condensed financial information presents the
separate financial information of the parent company, the combined financial
information of the Non-Guarantors and the combined financial information of the
Guarantors of the Company's Senior Exchange Notes and Secured Notes as of the
dates presented.  See "Note 7.  Long-Term Debt and Current Portion of Long-Term
Debt."

  The Company has incorporated a wholly-owned subsidiary which is a Non-
Guarantor, BHI, and a limited liability company which is a Non-Guarantor,
PBLLC.  See "Note 15.  Minority Interest."

  All of the Guarantors (other than TCG) are wholly-owned subsidiaries of the
Company and are full joint and several guarantors of the Senior Exchange Notes
(limited only to the extent necessary to insure that it does not constitute a
fraudulent conveyance under applicable law).  The guarantee of TCG, which is a
95% Company-owned partnership, is limited to the amount owed from time to time
by TCG to PRC Holdings ($0 as of February 28, 2006 and February 28, 2005).  As
security for the obligations of the Company and the Guarantors under the Senior
Exchange Notes and the Secured Notes, the Company and the Guarantors have
pledged their equity interests in each Guarantor and all of their rights in
certain management agreements with, certain indebtedness from, and certain
investments in, certain gaming ventures.  Separate financial information for
TCG is presented elsewhere herein.
                                  F-38

<PAGE> 91
<TABLE>
<CAPTION>
                        SUMMARIZED AND CONDENSED CONSOLIDATING BALANCE SHEET
                                          FEBRUARY 28, 2006
                                           (in thousands)

                                      President                  Non-    Eliminating
                                    Casinos, Inc. Guarantors  Guarantors   Entries   Consolidated
                                      ---------   ---------   ----------  ---------   ---------
<S>                                    <C>         <C>         <C>         <C>         <C>
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents.........   $      96   $  26,868   $   1,113    $    --    $  28,077
  Assets of discontinued operations.         --       38,498      20,245     (20,232)     38,511
  Related party notes receivable....         --       16,367         --      (16,367)        --
  Other current assets..............         --          170         --          --          170
                                       ----------  ----------  ----------  ----------  ----------
    Total current assets............      60,776      81,903      21,358     (36,599)     66,758
                                       ----------  ----------  ----------  ----------  ----------

PROPERTY AND EQUIPMENT, NET.........         --            2         --          --            2
RELATED PARTY NOTES RECEIVABLE......      60,680     499,635         --     (560,315)        --
INVESTMENT IN SUBSIDIARIES..........      25,447         --          --      (25,447)        --
                                       ----------  ----------  ----------  ----------  ----------
                                       $  86,223   $ 581,540   $  21,358   $(622,361)  $  66,760
                                       ==========  ==========  ==========  ==========  ==========

LIABILITIES AND STOCKHOLDERS'
  EQUITY (DEFICIT)

LIABILITIES NOT SUBJECT
  TO COMPROMISE:
  Accounts payable..................   $     --    $      89    $    --    $     --    $      89
  Other current liabilities.........         349         430           4         --          783
  Due to related parties............         --        4,160      31,675     (35,835)        --
  Liabilities of discontinued
    operations......................         --        5,918         938         --        6,856
                                       ----------  ----------  ----------  ----------  ----------
    Total current liabilities.......         349      10,597      32,617     (35,835)      7,728

  Due to related parties............         --      187,952         --     (187,952)        --
  Minority interest.................       3,531         --          --          --        3,531
                                       ----------  ----------  ----------  ----------  ----------
    Total liabilities not subject
      to compromise.................       3,880     198,549      32,617    (223,787)     11,259
LIABILITIES SUBJECT TO COMPROMISE...      90,127     364,051      11,713    (402,574)     63,317
                                       ----------  ----------  ----------  ----------  ----------
    Total liabilities...............      94,007     562,600      44,330    (626,361)     74,576
                                       ----------  ----------  ----------  ----------  ----------
STOCKHOLDERS' EQUITY (DEFICIT)......      (7,784)     18,490     (22,972)      4,000      (7,816)
                                       ----------  ----------  ----------  ----------  ----------
                                       $  86,223   $ 581,540   $  21,358   $(622,361)  $  66,760
                                       ==========  ==========  ==========  ==========  ==========
</TABLE>
                                  F-39
<PAGE> 92
<TABLE>
<CAPTION>
                        SUMMARIZED AND CONDENSED CONSOLIDATING BALANCE SHEET
                                          FEBRUARY 28, 2005
                                           (in thousands)

                                      President                  Non-    Eliminating
                                    Casinos, Inc. Guarantors  Guarantors   Entries   Consolidated
                                      ---------   ---------   ----------  ---------   ---------
<S>                                    <C>         <C>         <C>         <C>         <C>
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents.........   $      54   $  20,520   $     132    $    --    $  20,706
  Restricted cash, cash equivalents
    and short-term investments......         --          350       2,234         --        2,584
  Related party notes receivable....      75,000     504,159       1,250    (580,409)        --
  Assets of discontinued operations.         --       51,664      42,342        (769)     93,237
  Other current assets..............      13,145         173         --      (13,145)        173
                                       ----------  ----------  ----------  ----------  ----------
    Total current assets............      88,199     576,866      45,958    (594,323)    116,700
                                       ----------  ----------  ----------  ----------  ----------

PROPERTY AND EQUIPMENT, NET.........         --            5         --          --            5
INVESTMENT IN SUBSIDIARIES..........       6,778         --          --       (6,778)        --
                                       ----------  ----------  ----------  ----------  ----------
                                       $  94,977   $ 576,871   $  45,958   $(601,101)  $ 116,705
                                       ==========  ==========  ==========  ==========  ==========

LIABILITIES AND STOCKHOLDERS' DEFICIT

LIABILITIES NOT SUBJECT
  TO COMPROMISE:
  Accounts payable..................   $     --    $     520    $    121   $     --    $     641
  Other current liabilities.........         507         877         --          --        1,384
  Due to related parties............         --           24         101        (125)        --
  Liabilities of discontinued
    operations......................         --       13,796       1,110      (5,560)      9,346
 Current maturities of
    long-term debt..................         --          --       36,621         --       36,621
                                       ----------  ----------  ----------  ----------  ----------
    Total current liabilities.......         507      15,217      37,953      (5,685)     47,992
  Long-term liabilities from
    discontinued operations.........         --      155,019         --     (155,019)        --
  Due to related parties............         --      121,168         --     (121,168)        --
  Minority interest.................      19,020         --          --          --       19,020
                                       ----------  ----------  ----------  ----------  ----------
    Total liabilities not subject
      to compromise.................      19,527     291,404      37,953    (281,872)     67,012
LIABILITIES SUBJECT TO COMPROMISE...     117,607     304,427      11,713    (341,897)     91,850
                                       ----------  ----------  ----------  ----------  ----------
    Total liabilities...............     137,134     595,831      49,666    (623,769)    158,862
                                       ----------  ----------  ----------  ----------  ----------
STOCKHOLDERS' DEFICIT...............     (42,157)    (18,960)     (3,708)     22,668     (42,157)
                                       ----------  ----------  ----------  ----------  ----------
                                       $  94,977   $ 576,871   $  45,958   $(601,101)  $ 116,705
                                       ==========  ==========  ==========  ==========  ==========
</TABLE>
                                  F-40
<PAGE> 93
<TABLE>
<CAPTION>
                  SUMMARIZED AND CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
                                            (in thousands)

                                      President                  Non-    Eliminating
                                    Casinos, Inc. Guarantors  Guarantors   Entries   Consolidated
                                      ---------   ---------   ---------   ----------  ---------

<S>                                  <C>         <C>         <C>         <C>         <C>
Year Ended February 28, 2006:
Operating revenues.................  $     --    $    --     $     --    $     --    $     --
Operating costs and expenses.......         67       2,536           8         --        2,611
                                     ----------  ----------  ----------  ----------  ----------
  Operating loss...................        (67)     (2,536)         (8)        --       (2,611)
Equity loss in
  consolidated subsidiaries........        (57)         --          --          57         --
Other income (expense):
  Interest income..................          1           9         259         --          269
  Reorganization items, net........         24        (377)       (318)        --         (671)
                                     ----------  ----------  ----------  ----------  ----------
    Other income (expense).........         25        (368)        (59)        --         (402)
                                     ----------  ----------  ----------  ----------  ----------
  Loss before minority interest
   and discontinued operations.....        (99)     (2,904)        (67)         57      (3,013)
Minority interest..................       (636)        --          --          --         (636)
                                     ----------  ----------  ----------  ----------  ----------
Loss from continuing operations....       (735)     (2,904)        (67)         57      (3,649)
                                     ----------  ----------  ----------  ----------  ----------
Income from discontinued operations     35,108       9,446      28,544     (35,108)     37,990
                                     ----------  ----------  ----------  ----------  ----------
    Net income.....................  $  34,373   $   6,542   $  28,477   $ (35,051)   $ 34,341
                                     ==========  ==========  ==========  ==========  ==========

Year Ended February 28, 2005:
Operating revenues.................  $     --    $    --     $     --    $     --    $     --
Operating costs and expenses.......         61       2,576           7         --        2,644
                                     ----------  ----------  ----------  ----------  ----------
  Operating loss...................        (61)     (2,576)         (7)        --       (2,644)
Equity loss in consolidated
  subsidiaries.....................     (3,751)        --          --        3,751         --
Other income (expense):
  Interest income..................        --            2           6         --            8
  Reorganization items, net........       (562)       (601)       (575)        --       (1,738)
                                     ----------  ----------  ----------  ----------  ----------
    Other expense..................     (4,313)       (599)       (569)      3,751      (1,730)
                                     ----------  ----------  ----------  ----------  ----------
  Loss before minority interest
    and discontinued operations....     (4,374)     (3,175)       (576)      3,751      (4,374)
Minority interest..................     (1,368)        --          --          --       (1,368)
                                     ----------  ----------  ----------  ----------  ----------
Loss from continuing operations....     (5,742)     (3,175)       (576)      3,751      (5,742)
                                     ----------  ----------  ----------  ----------  ----------
Income from discontinued operations     15,934      10,965       4,969     (15,934)     15,934
                                     ----------  ----------  ----------  ----------  ----------
    Net income.....................  $  10,192   $   7,790   $   4,393   $ (12,183)  $  10,192
                                     ==========  ==========  ==========  ==========  ==========
</TABLE>

                                      F-41<PAGE> 94
<TABLE>
<CAPTION>
                  SUMMARIZED AND CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
                                      (in thousands)

                                      President                  Non-    Eliminating
                                    Casinos, Inc. Guarantors  Guarantors   Entries   Consolidated
                                      ---------   ---------   ---------   ----------  ---------
<S>                                  <C>         <C>         <C>         <C>         <C>
Year Ended February 29, 2004:
Operating revenues.................  $     --    $     --    $    --    $     --     $     --
Operating costs and expenses.......         28       2,872          4         --         2,904
                                     ----------  ----------  ----------  ----------  ----------
  Operating loss...................        (28)     (2,872)        (4)         --       (2,904)
Equity loss in consolidated
  subsidiaries.....................     (3,200)        --          --        3,200         --
Other income (expense):
  Interest income, net.............        --            2          15         --           17
  Reorganization items, net........         (1)       (340)         (1)        --         (342)
                                     ----------  ----------  ----------  ----------  ----------
    Other income (expense).........     (3,201)       (338)         14       3,200        (325)
                                     ----------  ----------  ----------  ----------  ----------
  Income (loss) before minority
   interest and discontinued
   operations......................     (3,229)     (3,210)         10       3,200      (3,229)
Minority interest..................     (1,306)        --          --          --       (1,306)
                                     ----------  ----------  ----------  ----------  ----------
Income (loss) from continuing
   operations......................     (4,535)     (3,210)         10       3,200      (4,535)
                                     ----------  ----------  ----------  ----------  ----------
Income from discontinued
   operations......................      1,800       1,288         512      (1,800)      1,800
                                     ----------  ----------  ----------  ----------  ----------
    Net income (loss)..............  $  (2,735)  $  (1,922)  $     522   $   1,400   $  (2,735)
                                     ==========  ==========  ==========  ==========  ==========
</TABLE>

                                      F-42
<PAGE> 95
<TABLE>
<CAPTION>
                  SUMMARIZED AND CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                                  YEAR ENDED FEBRUARY 28, 2006
                                        (in thousands)

                                      President                  Non-    Eliminating
                                    Casinos, Inc. Guarantors  Guarantors   Entries   Consolidated
                                      ---------   ---------   ----------  ----------   ---------

<S>                                    <C>         <C>         <C>         <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income...........................  $ 34,373    $  6,542    $ 28,477    $(35,051)   $ 34,341
Adjustments to reconcile net
  income to net cash provided by
  (used in) operating activities:
  Depreciation and amortization......       --            3         --          --            3
  (Gain) loss on disposal of assets..       --        1,627     (35,474)        --      (33,847)
  Deferred income taxes..............       --        3,983       1,724         --        5,707
  Equity income in consolidated
    subsidiaries.....................   (35,051)        -           --       35,051         --
  Minority interest..................       636         --          --          --          636
  Net change in working
    capital accounts.................       536      (2,717)    (14,773)        --      (16,954)
                                       ---------   ---------   ---------   ---------   ---------
    Net cash provided by (used in)
      operating activities...........      (494)      9,438     (20,046)        --      (10,114)
                                       ---------   ---------   ---------   ---------   ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Expenditures for property
   and equipment.....................       --       (2,476)        --          --       (2,476)
  Proceeds from the sale of property.       --        1,793      82,000         --       83,793
  Changes in restricted cash.........       --          --        2,234         --        2,234
  Maturity of short-term
   investments.......................       --          350         --          --          350
                                       ---------   ---------   ---------   ---------   ---------
    Net cash provided by (used in)
      investing activities...........       --         (333)     84,234          -       83,901
                                       ---------   ---------   ---------   ---------   ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Payments on notes payable..........      (541)       (750)    (50,400)        --      (51,691)
  Payment of minority interest.......   (16,125)        --      (16,125)     16,125     (16,125)
  Changes in intercompany accounts...    16,215      (3,407)      3,317     (16,125)        -
                                       ---------   ---------   ---------   ---------   ---------
    Net cash used in
      financing activities...........      (451)     (4,157)    (63,208)        -       (67,816)
                                       ---------   ---------   ---------   ---------   ---------
NET INCREASE IN CASH
  AND CASH EQUIVALENTS...............        43       4,948         981         --        5,971

CASH AND CASH EQUIVALENTS
  AT BEGINNING OF YEAR...............        54      24,920         132         --       25,106
                                       ---------   ---------   ---------   ---------   ---------
CASH AND CASH EQUIVALENTS
  AT END OF YEAR.....................  $     97    $ 29,868    $  1,113    $    --     $ 31,077
                                       =========   =========   =========   =========   =========
</TABLE>

                                    F-43
<PAGE> 96
<TABLE>
<CAPTION>
                  SUMMARIZED AND CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                                  YEAR ENDED FEBRUARY 28, 2005
                                        (in thousands)

                                      President                  Non-    Eliminating
                                    Casinos, Inc. Guarantors  Guarantors   Entries   Consolidated
                                      ---------   ---------   ----------  ----------   ---------

<S>                                    <C>         <C>         <C>         <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income...........................  $ 10,192    $  4,467    $  7,716    $(12,183)   $ 10,192
Adjustments to reconcile net
  income to net cash provided by
  (used in) operating activities:
  Depreciation and amortization......       --        4,769         165         --        4,934
  Loss on disposal of assets.........       --            8         --          --            8
  Deferred tax benefit...............       --          --       (5,707)        --       (5,707)
  Equity income in consolidated
    subsidiaries.....................   (12,183)        -           --       12,183         --
  Minority interest..................     1,368         --          --          --        1,368
  Net change in working
    capital accounts.................       583      (2,243)     (2,696)        --       (4,356)
                                       ---------   ---------   ---------   ---------   ---------
    Net cash provided by (used in)
      operating activities...........       (40)      7,001        (522)        --        6,439
                                       ---------   ---------   ---------   ---------   ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Expenditures for property
   and equipment.....................       --       (4,140)       (204)        --       (4,344)
  Proceeds from the sale of property.       --          119       6,435         --        6,554
  Changes in restricted cash.........       --          --           87         --           87
                                       ---------   ---------   ---------   ---------   ---------
    Net cash provided by (used
     in) investing activities........       --       (4,021)      6,318          -        2,297
                                       ---------   ---------   ---------   ---------   ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Payments on notes payable..........       --          --       (6,392)        --       (6,392)
  Changes in intercompany accounts...       --        1,013      (1,013)         -          -
                                       ---------   ---------   ---------   ---------   ---------
    Net cash provided by (used in)
      financing activities...........       --        1,013      (7,405)        -        (6,392)
                                       ---------   ---------   ---------   ---------   ---------
NET INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS...............       (40)      3,993      (1,609)        --        2,344

CASH AND CASH EQUIVALENTS
  AT BEGINNING OF YEAR...............        93      20,928       1,741         --       22,762
                                       ---------   ---------   ---------   ---------   ---------
CASH AND CASH EQUIVALENTS
  AT END OF YEAR.....................  $     53    $ 24,921    $    132    $    --     $ 25,106
                                       =========   =========   =========   =========   =========
</TABLE>

                                    F-44
<PAGE> 97
<TABLE>
<CAPTION>
                  SUMMARIZED AND CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                                  YEAR ENDED FEBRUARY 29, 2004
                                        (in thousands)

                                      President                  Non-    Eliminating
                                    Casinos, Inc. Guarantors  Guarantors   Entries   Consolidated
                                      ---------   ---------   ----------  ----------   ---------

<S>                                    <C>         <C>         <C>          <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)....................  $ (2,735)   $ (1,922)   $    522      $ 1,400   $ (2,735)
Adjustments to reconcile net income
  (loss) to net cash provided by
  (used in) operating activities:
  Depreciation and amortization......       --        7,793         321         --        8,114
  Loss on disposal of assets.........       --          150         --          --          150
  Impairment of long-lived assets....       --          288         --          --          288
  Equity loss in consolidated
    subsidiaries.....................     1,400         -           --       (1,400)        --
  Minority interest..................     1,306         --          --          --        1,306
  Net change in working
    capital accounts.................      (648)        953         328         --          633
                                       ---------   ---------   ---------   ---------   ---------
    Net cash provided by (used in)
      operating activities...........      (677)      7,262       1,171         --        7,756
                                       ---------   ---------   ---------   ---------   ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Expenditures for property
   and equipment.....................       --       (2,347)       (117)        --       (2,464)
  Proceeds from the sale of property.       --        1,560         --          --        1,560
  Changes in restricted cash.........       --          --        2,982         --        2,982
  Maturity of short-term investments.        -          322          -           -          322
                                       ---------   ---------   ---------   ---------   ---------
    Net cash provided by (used in)
      investing activities...........       --         (465)      2,865          -        2,400
                                       ---------   ---------   ---------   ---------   ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Payments on notes payable..........       --          --       (3,551)        --       (3,551)
  Payment of minority interest.......        (2)        --          --          --           (2)
  Changes in intercompany accounts...       674        (204)       (470)        --         -
                                       ---------   ---------   ---------   ---------   ---------
    Net cash provided by (used in)
      financing activities...........       672        (204)     (4,021)        --       (3,553)
                                       ---------   ---------   ---------   ---------   ---------
NET INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS...............        (5)      6,593          15         --        6,603

CASH AND CASH EQUIVALENTS
  AT BEGINNING OF YEAR...............        98      14,335       1,726         --       16,159
                                       ---------   ---------   ---------   ---------   ---------
CASH AND CASH EQUIVALENTS
  AT END OF YEAR.....................  $     93    $ 20,928    $  1,741    $    --     $ 22,762
                                       =========   =========   =========   =========   =========
</TABLE>

                                    F-45
<PAGE> 98
<TABLE>
<CAPTION>
                                      PRESIDENT CASINOS, INC.
                                      (DEBTORS-IN-POSSESSION)
                         SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
                     For the Years Ended February 28/29, 2006, 2005 and 2004
                                          (in thousands)

                                                           Additions
                                              Balance at   Charged to
                                              Beginning    Costs and                 Balance at
        Description                            of Year      Expenses    Deductions   End of Year
        -----------                           ---------    ----------    ---------    ---------

<S>                                            <C>          <C>          <C>          <C>


Allowance for Doubtful Accounts Receivable:

Year ended February 28, 2006...............    $    48      $     7      $   (33)(a)  $    22

Year ended February 28, 2005...............        119           62         (133)(a)       48

Year ended February 29, 2004...............        189          135         (205)(a)      119

Allowance for Deferred Income Tax
  Asset Valuation:

Year ended February 28, 2006...............     61,379       (1,804)(b)      --        59,575

Year ended February 28, 2005...............     69,911       (8,532)(c)      --        61,379

Year ended February 29, 2004...............     70,179         (268)(d)      --        69,911
</TABLE>

(a)  Write-offs of uncollectible accounts receivable, net of recoveries.

(b)  The decrease in the reserve is due to a decrease in net deferred tax
     assets of $2,104 and an increase in the valuation allowance of $300
     for that alternative minimum tax credit which more likely than not will
     be realized.  See "Note 11.  Income Taxes."

(c)  The decrease in the reserve is due to a decrease in net deferred tax
     assets of $2,825 and a decrease in the valuation allowance of $5,707
     for that portion of the net operating loss carryforward which more
     likely than not will be realized.  See "Note 11. Income Taxes."

(d)  The decrease in the reserve is the result of a decrease in net deferred
     tax assets.

                                    F-46<PAGE> 99
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners of
The Connelly Group, L.P.:

We have audited the accompanying balance sheets of The Connelly Group, L.P., a
limited partnership, (the "Partnership") as of February 28, 2006 and
February 28, 2005 and the related statements of operations, partners' preferred
redeemable capital and general capital, and cash flows for each of the three
years in the period ended February 28, 2006.  These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  The Partnership is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting.  Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Partnership's internal
control over financial reporting.  Accordingly, we express no such opinion.  An
audit also includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of February 28, 2006 and
February 28, 2005, and the results of its operations and its cash flows for
each of the three years in the period ended February 28, 2006 in conformity
with accounting principles generally accepted in the United States of America.

Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole.  The Financial Statement Schedule II
listed in the Index to Financial Statements and Schedules on page F-1 is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements. Financial Statement Schedule II is the
responsibility of the Partnership's management.  This schedule has been
subjected to the auditing procedures applied in our audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects when considered in relation to the basic financial statements taken as
a whole.


/s/ Deloitte & Touche LLP
St. Louis, Missouri
May 26, 2006
                                      F-47

<PAGE> 100
<TABLE>
<CAPTION>
                          THE CONNELLY GROUP, L.P.
                               BALANCE SHEETS
                               (in thousands)

                                                       Feb. 28,    Feb. 28,
                                                         2006        2005
                                                        ------      ------

<S>                                                    <C>         <C>
ASSETS

  Cash and cash equivalents......................      $     69    $     67
                                                       ---------   ---------
                                                       $     69    $     67
                                                       =========   =========

LIABILITIES, PARTNERS' PREFERRED REDEEMABLE
  CAPITAL AND GENERAL CAPITAL


  Accrued liabilities............................           --          11

  Due to related parties.........................             1         --

  Commitments and contingent liabilities.........           --          --

  Partners' general capital......................            68          56
                                                       ---------   ---------
                                                       $     69    $     67
                                                       =========   =========

See Notes to Financial Statements.
</TABLE>
                                  F-48
<PAGE> 101
<TABLE>
<CAPTION>
                            THE CONNELLY GROUP, L.P.
                            STATEMENTS OF OPERATIONS
                                 (in thousands)

                                               Years Ended February 28/29,
                                              2006        2005        2004
                                             ------      ------      ------

<S>                                         <C>         <C>         <C>

Operating revenues.....................     $    --     $    --     $    --
                                            ---------   ---------   ---------
  Total operating revenues.............          --          --          --
                                            ---------   ---------   ---------
OPERATING COSTS AND EXPENSES:

Selling, general and administrative....          (11)          1         (87)
                                            ---------   ---------   ---------
  Total operating costs and expenses...          --            1         (87)
                                            ---------   ---------   ---------

OPERATING INCOME (LOSS)................          --           (1)         87
                                            ---------   ---------   ---------
OTHER INCOME:
Interest income........................            1           1           1
                                            ---------   ---------   ---------
  Total other income...................            1           1           1
                                            ---------   ---------   ---------
NET INCOME.............................     $     12    $     --    $     88
                                            =========   =========   =========

See Notes to Financial Statements.
</TABLE>

                                  F-49
<PAGE> 102
<TABLE>
<CAPTION>
                                      THE CONNELLY GROUP, L.P.
                       STATEMENTS OF PARTNERS' PREFERRED REDEEMABLE CAPITAL
                                        AND GENERAL CAPITAL
                                           (in thousands)

                                                               Partners' General Capital
                                                         ---------------------------------------
                                             Partner's      Limited       General        Total
                                             Preferred     Partner's     Partner's     Partners'
                                             Redeemable     General       General       General
                                              Capital       Capital       Capital       Capital
                                             ---------     ---------     ---------     ---------

<S>                                         <C>           <C>           <C>           <C>
Years Ended February 29, 2004,
  February 28, 2005 and
  February 28, 2006:

Balance as of March 1, 2003...........      $    --       $     --      $      3      $      3
Capital distributions.................           --             (2)          (33)          (35)
Net income allocated..................           --              4            84            88
                                            ---------     ---------     ---------     ---------
Balance as of February 29, 2004.......           --              2            54            56
Net income allocated..................           --            --             --           --
                                            ---------     ---------     ---------     ---------
Balance as of February 28, 2005.......           --              2            54            56
Net income allocated..................           --              1            11            12
                                            ---------     ---------     ---------     ---------
Balance as of February 28, 2006.......      $    --       $      3      $     65      $     68
                                            =========     =========     =========     =========

See Notes to Financial Statements.
</TABLE>

                                    F-50
<PAGE> 103
<TABLE>
<CAPTION>
                          THE CONNELLY GROUP, L.P.
                          STATEMENTS OF CASH FLOWS
                              (in thousands)

                                                Years Ended February 28/29,
                                               2006        2005        2004
                                              ------      ------      ------

<S>                                          <C>         <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................   $     12    $     --    $     88
Adjustments to reconcile net income
  to net cash provided by
  operating activities:
    Changes in assets and liabilities:
      Accrued liabilities.................        (11)         (4)       (106)
      Due to related party................          1          --         --
                                             ---------   ---------   ---------
Net cash used in operating activities.....          2          (4)       (106)
                                             ---------   ---------   ---------
CASH FLOWS FROM INVESTING ACTIVITIES:

  Change in restricted cash...............        --          --          --
                                             ---------   ---------   ---------
Net cash provided by investing activities.        --          --          --
                                             ---------   ---------   ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Capital distributions...................        --          --          (35)
                                             ---------   ---------   ---------
Net cash used in financing activities.....        --          --          (35)
                                             ---------   ---------   ---------
NET DECREASE IN CASH AND
  CASH EQUIVALENTS........................          2          (4)        (53)
CASH AND CASH EQUIVALENTS AT
   BEGINNING OF YEAR......................         67          71         124
                                             ---------   ---------   ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR..   $     69    $     67    $     71
                                             =========   =========   =========

See Notes to Financial Statements.
</TABLE>

                                   F-51

<PAGE> 104
                            THE CONNELLY GROUP, L.P.
                         NOTES TO FINANCIAL STATEMENTS
                  (Dollars in thousands unless otherwise stated)

1.  BASIS OF PRESENTATION

  The Connelly Group, L.P. (the "Partnership") is a Delaware limited
partnership which was organized in January 1990.  The Partnership was formed to
own, manage and operate the President Riverboat Casino, a riverboat gaming
operation, and ancillary facilities in Davenport, Iowa.

  In December 1992, all preferred and general capital interests, except a
limited partner's general capital interest of 5%, were contributed by the
general partners to a newly formed corporation, President Casinos, Inc. ("PCI")
in exchange for common stock of PCI.  PCI subsequently transferred its
ownership interest in the Partnership to a wholly-owned subsidiary, President
Riverboat Casino-Iowa, Inc. ("PRC-Iowa").  PCI and its affiliates are engaged
in the business of owning, operating and managing entertainment oriented
operations with its primary focus on gaming.  PCI, along with some of its
affiliates is currently operating under Chapter 11 of Title 11, United States
Bankruptcy Code in the United States Bankruptcy Court for the Eastern District
of Missouri.

  On October 10, 2000, the Partnership sold the assets of its Davenport casino
operations to Isle of Capri Casinos, Inc. and ceased gaming operations at that
time.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  Cash and Cash Equivalents -- Cash and cash equivalents include interest
earning deposits with maturities of ninety days or less at date of purchase.

  Income Taxes -- The Partnership is not subject to federal and state income
taxes.  Taxable income and losses of the Partnership are reportable on the
income tax returns of the respective partners.

  Use of Management Estimates -- The preparation of financial statements in
conformity with accounting principles generally accepted in the United States
of America requires management to make certain estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the amounts of revenues and expenses during the reporting period.  Actual
results may differ from those estimates.

3.  PARTNER'S PREFERRED REDEEMABLE CAPITAL

  The preferred redeemable capital was originally recorded at the historical
cost of assets and advances contributed by the partners which were entities
under common control and such carrying value was less than the stated value of
the preferred capital as set forth in the partnership agreement.  The
Partnership accrued the difference between the recorded value and stated value
each year to the extent of available net income.  The preferred redeemable
capital had cumulative distribution rights of 13% on the stated value which
were accrued as of February 28, 1998.  During fiscal year 1999, the Partnership
fully redeemed the partner's preferred capital.


                                  F-52

<PAGE> 105
4.  PARTNERS' GENERAL CAPITAL

  The partnership agreement provides for the allocation of income (losses)

between the general partner and limited partner at 95% and 5%, respectively,
after preferred capital accounts are allocated their cumulative preferred
return and any difference between the carrying value and stated value of
preferred capital is accrued.  The limited partner's capital account cannot be
reduced below zero.

5.  RELATED PARTY TRANSACTIONS

  The Partnership is related to other entities through common ownership by its
partners or principal officers.  The Partnership entered into a management
advisory agreement with the general partner for advisory services related to
gaming and riverboat operations.  The agreement provides for management fees
based on a percentage of revenues.  There were no transactions with related
parties in fiscal years 2005, 2004 or 2003.

6.  COMMITMENTS AND CONTINGENT LIABILITIES

  The Partnership was a party to legal proceedings arising in the normal
conduct of business.  Management believes that there will not be a material
adverse effect upon the Partnership's financial position as a result of any
further matters.

7.  SUPPLEMENTAL CASH FLOWS DISCLOSURES

  There were no noncash investing and financing activities during fiscal years
2006, 2005 and 2004.

  No interest was paid by the Partnership during fiscal years 2006, 2005 and
2004.

                                  F-53
<PAGE> 106
                              THE CONNELLY GROUP, L.P.
                  SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
             For the Years Ended February 28/29, 2006, 2005 and 2004
                                  (in thousands)
<TABLE>
<CAPTION>

                                                                 Additions
                                              Balance at   Charged to
                                               Beginning    Costs and                 Balance at
        Description                            of Year      Expenses    Deductions   End of Year
        -----------                           ---------    ----------   ----------   -----------

<S>                                             <C>          <C>          <C>           <C>
Allowance for Doubtful Accounts Receivable:

Year ended February 28, 2006...............     $ --         $  --        $ --          $ --

Year ended February 28, 2005...............       --            --          --            --

Year ended February 29, 2004...............       --            --          (45)(a)       --


(a)  Write-offs of uncollectible accounts receivable, net of recoveries.
</TABLE>

                                    F-54
<PAGE> 107
<Table>
<S><C>
                              SIGNATURES

  Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, hereunto duly authorized.

PRESIDENT CASINOS, INC.

By:     /s/ Ralph J. Vaclavik
    ---------------------------
    Name:   Ralph J. Vaclavik
    Title:  Senior Vice President
            and Chief Financial Officer

    Date:   May 26, 2006

  Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed on this 26th day of May, 2006 by the following persons
on behalf of the registrant in the capacities indicated.

Signature                            Capacity
----------                           --------


  /s/ John S. Aylsworth             President, Chief Executive Officer, Chief
--------------------------          Operating Officer and Director
John S. Aylsworth


  /s/ Karl G. Andren                Director
--------------------------
Karl G. Andren


  /s/ Royal P. Walker, Jr.          Director
--------------------------
Royal P. Walker, Jr.


  /s/ Ralph J. Vaclavik             Senior Vice President and
--------------------------          Chief Financial Officer
Ralph J. Vaclavik

</Table>

                                   F-55
<PAGE> 108
                            PRESIDENT CASINOS, INC.
                                EXHIBIT INDEX
  Exhibits
   2.1      Asset Sale Agreement, dated as of July 19, 2000, by and among
            The Connelly Group, L.P. ("TCG"), TCG/Blackhawk, Inc.
            ("Blackhawk") (collectively, the "Sellers"), and IOC-Davenport,
            Inc. and Isle of Capri Casinos, Inc. ("Purchasers"). (17)
   2.2      Riverboat Casino Sale and Purchase Agreement entered into as of
            30th day of September, 2004, 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 Columbia Sussex Corporation. (27)
   2.3      Sale and Purchase Agreement, dated as of November 15,2004, by
            and between The President Riverboat Casino-Mississippi, Inc.,
            Vegas, Vegas, Inc. (each a debtor in Case No. 02-53005-172
            pending in the United States Bankruptcy Court for the Eastern
            District of Missouri), President Broadwater Hotel, LLC, on the
            one hand, and Broadwater Properties, LLC, on the other hand. (28)
   2.4      Amendment to Sale and Purchase Agreement, dated as of November
            29, 2004, by and between The President Riverboat Casino-
            Mississippi, Inc., Vegas, Vegas, Inc. (each a debtor in Case No.
            02-53005-172 pending in the United States Bankruptcy Court for
            the Eastern District of Missouri), President Broadwater Hotel,
            LLC, on the one hand, and Broadwater Properties, LLC, on the
            other hand. (29)
   2.5      Second Amendment to Sale and Purchase Agreement executed and
            delivered the 20th day of January, 2005, by Broadwater
            Development, LLP to President Riverboat Casino-Mississippi,
            Inc., Vegas Vegas, Inc. (each a debtor in Case No. 02-53005-172
            pending in the United States Bankruptcy Court for the Eastern
            District of Missouri, and President Broadwater Hotel, LLC. (30)
   2.6      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. (31)
   3.1      Restated Articles of Incorporation of the Company. (21)
   3.2      By-Laws of the Company, as amended. (32)
   4.1      Indenture dated as of August 26, 1994, by and among the Company,
            the Guarantors and United States Trust Company of New York
            ("U.S. Trust"). (6)
   4.1.1    Form of Senior Exchange Note issued pursuant to Indenture. (5)
   4.1.2    Warrant Agreement dated as of September 23, 1993, by and between
            the Company and U.S. Trust, as Warrant agent. (4)
   4.1.3    Warrant Agreement dated as of August 26, 1994, by and between
            the Company and U.S. Trust. (6)
   4.1.4    Subsidiary Stock Pledge and Collateral Assignment Agreement
            dated as of August 26, 1994, by the Company and Subsidiary
            Pledgors in favor of U.S. Trust, as collateral agent. (6)
   4.2      Rights Agreement, dated as of November 20, 1997, between the
            Company and ChaseMellon Shareholder Services, LLC. (12)
   4.3      Agreement to Exchange Securities, dated December 3, 1998 by and
            among the Company, President Riverboat Casino-Iowa, Inc.
            ("President Iowa"), President Riverboat Casino-Missouri, Inc.

                                    F-56

<PAGE> 109
            ("President Missouri"), The President Riverboat Casino-
            Mississippi, Inc. ("President Mississippi"), Blackhawk, P.R.C.-
            Louisiana, Inc., President Riverboat Casino-New York, Inc.
            ("President New York"), President Casino New Yorker, Inc., PRC
            Holdings Corporation, PRC Management, Inc. ("PRC Management"),
            PRCX Corporation, President Riverboat Casino-Philadelphia, Inc.
            ("President Philadelphia"), Vegas, Vegas, Inc., and TCG and each
            holder of the Company's 13% Senior Exchange Notes due 2001. (14)
   4.3.1    Indenture dated as of December 3, 1998, among The Company,
            President Iowa, President Missouri, President Mississippi,
            Blackhawk, P.R.C.-Louisiana, Inc., President New York, President
            Casino New Yorker, Inc., PRC Holdings Corporation, PRC
            Management, PRCX Corporation, President Philadelphia, Vegas,
            Vegas, Inc. and TCG and U.S. Trust Company of Texas, N.A. (14)
   4.4.2    President Casinos, Inc. Supplemental Indenture with respect to
            $25,000,000 12% Notes due September 15, 2001. (18)
   4.4.3    President Casinos, Inc. Supplemental Indenture with respect to
            $75,000,000 13% Senior Notes due September 15, 2001. (18)
   10.1     Amended and Restated Agreement of Limited Partnership of TCG. (1)
   10.2     The Company's 1992 Stock Option Plan, as amended. (5)
 * 10.2.1   The Company's 1996 Amended and Restated Stock Option Plan. (7)
 * 10.2.2   The Company's 1997 Stock Option Plan. (11)
 * 10.2.3   The Company's 1999 Incentive Stock Plan. (15)
   10.3     Management Advisory Agreement for TCG. (1)
   10.4     Promissory Note (Vessel-Term) dated July 8, 1992, from President
            Mississippi to Caterpillar. (3)
   10.4.1   Loan Agreement dated July 31, 1992, between President
            Mississippi and Caterpillar. (1)
   10.4.2   Preferred Fleet Mortgage dated July 8, 1992, between President
            Mississippi and Caterpillar. (1)
   10.5     Form of Indemnification Agreement for Directors and Officers. (1)
 * 10.6     1998 Fiscal Year Management Incentive Plan Participant Form. (9)
   10.7     Promissory Note dated July 22, 1997, by and between President
            Broadwater Hotel, L.L.C. (Broadwater LLC) and Lehman Brothers
            Holdings Inc. ("Lehman"). (8)
   10.7.1   Redemption Agreement dated July 22, 1997, by and among J. Edward
            Connelly Associates, Inc. ("JECA") and Broadwater LLC and
            Broadwater Hotel, Inc. (8)
   10.7.2   Indemnity Agreement dated July 22, 1997, by Broadwater LLC, the
            Company and President Mississippi, jointly and severally, in
            favor of Lehman. (8)
   10.7.3   Indemnity and Guaranty Agreement dated July 22, 1997, by the
            Company and President Mississippi in favor of Lehman. (11)
   10.7.4   Unconditional Guaranty of Lease Obligations dated July 22, 1997,
            by the Company. (8)
   10.7.5   Amended and Restated Limited Liability Company Operating
            Agreement, dated as of July 22, 1997, by and between JECA and
            President Broadwater Hotel, Inc. (8)
   10.8     Relocation Funding Agreement entered into January 18, 2000, by
            and among the City of St. Louis, Missouri, the Port Authority of
            the City of St. Louis, President Missouri and Mercantile Bank
            National Association. (16)
   10.8.1   Lease and Sublease Agreement entered into January 18, 2000,
            among the City of St. Louis, the Port Authority of the City of
            St. Louis and President Missouri. (16)
   10.8.2   Escrow Agreement made as of January 18, 2000, by and among

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            Mercantile Bank, President Missouri and U.S. Title Guaranty
            Company, Inc. (16)
   10.8.3   Escrow Agreement made as of January 18, 2000, by and among the
            Port Authority of the City of St. Louis, President Missouri and
            U.S. Title Guaranty Company, Inc. (16)
   10.9     Agreement, dated as of October 10, 2000, entered into by and
            among the Company, PRC Holdings Corporation, PRC Management,
            PRCX, Inc., President Philadelphia, P.R.C. Louisiana, Inc.,
            Vegas Vegas, Inc., President New York, President Mississippi
            Charter Corp., President Missouri, President Mississippi,
            Broadwater Hotel, Inc., President Iowa, Blackhawk, President
            Casino New Yorker, Inc., TCG, and President Broadwater Hotel,
            LLC, and each of the undersigned holders of the US $100.0
            million 13% Senior Notes, due September 15, 2001 issued pursuant
            to that certain indenture dated as of August 26, 1994 by and
            between the Company and United States Trust Company of New York,
            as trustee, of which US $75.0 million in principal amount is
            outstanding, and holders of the US $25.0 million 12% Notes, due
            September 15, 2001 issued pursuant to that certain indenture
            dated as of December 3, 1998, by and between the Company and
            U.S. Trust Company of Texas, N.A., as trustee. (17)
  *10.10    Employment agreement dated February 1, 1999, by and between the
            Company and Ralph J. Vaclavik. (20)
  *10.10.1  Employment agreement dated March 1, 2002, by and between the
            Company and Ralph J. Vaclavik. (22)
   10.11    Amended and Restated Promissory Note dated as of May 28, 2003 by
            and between President Broadwater Hotel, LLC and Lehman Brothers
            Holdings Inc. (23)
   10.11.1  Amended and Restated Deed of Trust, Security Agreement and
            Fixture Filing made as of the 28th day of May, 2003, by
            President Broadwater Hotel, LLC for the benefit of Lehman
            Brothers Holdings Inc. (23)
   10.11.2  Amended and Restated Security Agreement and Lockbox Agreement
            dated as of May 28, 2003 by and among President Broadwater Hotel,
            LLC, Lehman Brothers Holdings Inc. and Trimont Real Estate
            Advisors. (23)
   10.11.3  Amended and Restated Security Agreement and Assignment of
            Contractual Agreements Affecting Real Estate made as of May 28,
            2003, by President Broadwater Hotel, LLC in favor of Lehman
            Brothers Holdings Inc. (23)
   10.12    Riverboat Casino Sale and Purchase Agreement entered into as of
            25th day of September, 2003, by and between President Missouri,
            debtor-in-possession in Case No. 02-53404-SEG pending in the
            United States Bankruptcy Court for the Eastern District of
            Missouri, and STLP, L.L.C.  (24)
   10.12.1  Eighth Amendment to Riverboat Casino Sale and Purchase Agreement
            entered into as of the 2nd day of December, 2003, by and between
            President Missouri, debtor-in-possession in Case No. 02-53404-
            SEG pending in the United States Bankruptcy Court for the
            Eastern District of Missouri, and IOC-City of St. Louis, LLC,
            f/k/a STLP, L.L.C. (25)
   10.13    Agreement for Purchase and Sale of President Broadwater Tower
            by and between President Broadwater Hotel, LLC and Site Realty
            Inc., a subsidiary of Morgan Niko, Inc. (26)
   10.14    Letter Agreement entered into February 24, 2006 among Pinnacle
            Entertainment, Inc., President Casinos, Inc. and President

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            Riverboat Casino-Missouri, Inc. (31)
   21       Schedule of subsidiaries of the Company.
   23.1     Consent of Deloitte & Touche, L.L.P. with respect to the
            Company's Registration Statements on Form S-8, as filed on June
            8, 1994, January 8, 1998 and October 10, 2001.
   31.1     Certification of Chief Executive Officer Pursuant to 18 Rule
            131-14(a) under the Securities Exchange Act of 1934, as amended.
   31.2     Certification of Chief Financial Officer Pursuant to 18 Rule
            131-14(a) under the Securities Exchange Act of 1934, as amended.
   32.1     Certification of Chief Executive Officer Pursuant to 18 U.S.C.
            Section 1350, as Adopted Pursuant to Section 906 of the
            Sarbanes-Oxley Act of 2002.
   32.2     Certification of Chief Financial Officer Pursuant to 18 U.S.C.
            Section 1350, as Adopted Pursuant to Section 906 of the
            Sarbanes-Oxley Act of 2002.

  __________________

(1)  Incorporated by reference from the Company's Registration Statement on
     Form S-1 (File No. 33-48446) filed on June 5, 1992.
(2)  Incorporated by reference from the Company's Registration Statement on
     Form S-1 (Registration No. 33-63174), filed on May 21, 1993.
(3)  Incorporated by reference from the Company's Annual Report on Form 10-K
     for the Fiscal Year Ended February 28, 1993 filed on June 1, 1993.
(4)  Incorporated by reference from the Company's Registration Statement on
     Form S-4 (File No. 33-71332) filed November 5, 1993.
(5)  Incorporated by reference from the Company's Registration Statement on
     Form S-8 dated June 8, 1994.
(6)  Incorporated by reference from the Company's Registration Statement on
     Form S-4 (File No. 33-86386) filed November 15, 1994.
(7)  Incorporated by reference from the Company's Quarterly Report on Form
     10-Q for the quarterly period ended November 30, 1996 filed January 14,
     1997.
(8)  Incorporated by reference from the Company's Report on Form 8-K dated
     July 24, 1997.
(9)  Incorporated by reference from the Company's Quarterly Report on Form
     10-Q for the quarterly period ended August 31, 1997 filed October 10,
     1997.
(10) Incorporated by reference from the Company's Quarterly Report on Form
     10-Q for the quarterly period ended November 30, 1997 filed January 14,
     1998.
(11) Incorporated by reference from the Company's Definitive Proxy Statement
     for the 1997 Annual Meeting of Stockholders.
(12) Incorporated by reference from the Company's Registration Statement on
     Form 8-A dated December 5, 1997.
(13) Incorporated by reference from the Company's Quarterly Report on Form
     10-Q for the quarterly period ended August 31, 1998 filed October 15,
     1998.
(14) Incorporated by reference from the Company's Report on Form 8-K
     dated December 15, 1998.
(15) Incorporated by reference from the Company's Quarterly Report on Form
     10-Q for the quarterly period ended August 31, 1999 filed October 15,
     1999.
(16) Incorporated by reference from the Company's Annual Report on Form 10-K
     for the Fiscal Year Ended February 29, 2000 on May 30, 2000.
(17) Incorporated by reference from the Company's Quarterly Report on Form

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<PAGE> 112
     10-Q for the quarterly period ended August 31, 2000 filed October 19,
     2000.
(18) Incorporated by reference from the Company's Report on Form 8-K dated
     November 22, 2000.
(19) Incorporated by reference from the Company's Annual Report on Form 10-K
     for the Fiscal Year Ended February 28, 2001 on May 29, 2001.
(20) Incorporated by reference from the Company's Quarterly Report on Form
     10-Q for the quarterly period ended May 31, 2001 filed July 13, 2001.
(21) Incorporated by reference from the Company's Registration Statement on
     Form S-8 dated October 10, 2001.
(22) Incorporated by reference from the Company's Quarterly Report on Form
     10-Q for the quarterly period ended Ausust 31, 2002 filed October 15,
     2002.
(23) Incorporated by reference from the Company's Quarterly Report on Form
     10-Q for the quarterly period ended May 31, 2003 filed July 14, 2003.
(24) Incorporated by reference from the Company's Report on Form 8-K dated
     September 25, 2003.
(25) Incorporated by reference from the Company's Report on Form 8-K dated
     December 30, 2003.
(26) Incorporated by reference from the Company's Quarterly Report on Form
     10-Q for the quarterly period ended May 31, 2004 filed July 14, 2004.
(27) Incorporated by reference from the Company's Quarterly Report on Form
     10-Q dated August 31, 2004.
(28) Incorporated by reference from the Company's Report on Form 8-K dated
     November 15, 2004.
(29) Incorporated by reference from the Company's Report on Form 8-K dated
     November 29, 2004.
(30) Incorporated by reference from the Company's Report on Form 8-K dated
     January 20, 2005.
(31) Incorporated by reference from the Company's Report on Form 8-K dated
     February 24, 2006.
(32) Incorporated by reference from the Company's Report on Form 8-K dated
     April 6, 2006.

 *   Compensatory plan filed as an exhibit pursuant to Item 14(c) of this
     report.

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