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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q/A



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(Amendment No. 1 to Form 10-Q
filed November 21, 2005)



|x | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended Date: September 30, 2005

or



| ̈ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission file number 000-14050



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THE SANDS REGENT

(exact name of registrant as specified in charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Nevada                                                         |  | 88-0201135                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|345 North Arlington Avenue, Reno, Nevada                       |  | 89501                               
|(Address of principal executive offices)                       |  | (Zip code)                          

Registrants telephone number, including area code (775) 348-2200

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 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 whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.

Large accelerated filer ̈an accelerated filer ̈or a 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

On
June 19, 2006, the registrant had outstanding 7,126,391 shares of its common stock, $.10 par value.



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Explanatory Note

This Amendment No. 1 to the Quarterly Report on Form 10-Q (the Form 10-Q) of The Sands Regent (the Company) for the quarterly period ended September 30, 2005, which was originally
filed on November 21, 2005, is being filed to reflect the restatement of the Companys condensed consolidated financial statements as of September 30, 2005 and for the three month period then ended, as discussed in Note 9 to the
Companys condensed consolidated financial statements included in Item 1. The Company has also amended the applicable disclosures in Item 2, MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS and Item 4, CONTROLS AND PROCEDURES.

Management has concluded, based on the circumstances involving the
restatement of the aforementioned financial statements that, as of September 30, 2005, material weaknesses in internal control over financial reporting existed with respect to the design and implementation of the Companys internal controls
over financial reporting. As a result of these material weaknesses, the Companys Chief Executive Officer and the Chief Financial Officer have concluded that the Companys disclosure controls and procedures were not effective as of
September 30, 2005. See Item 4, CONTROLS AND PROCEDURES.

For more information relating to the effect of the restatement, see the following
items in this report:



| |  |  | Item 1. Financial Information
| | - |  | -----------------------------



| |  |  | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
| | - |  | ---------------------------------------------------------------------------------------------



| |  |  | Item 4. Controls and Procedures
| | - |  | -------------------------------

This Amendment No. 1 amends
and restates the Form 10-Q in its entirety. This Amendment No. 1 does not reflect events occurring after the original filing of the Form 10-Q, and does not modify or update the disclosures therein in any way other than as required to reflect
the amendments as previously described and set forth hereinafter. In addition, the filing of this amendment to the Form 10-Q shall not be deemed an admission that the original filing, when made, included any untrue statement of material fact or
omitted to state a material fact necessary to make a statement made therein not misleading. This Form 10-Q/A (Amendment No. 1) should be read in conjunction with our filings made with the SEC subsequent to the filing of the original Form 10-Q,
including any amendments to those filings.



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THE SANDS REGENT

FORM 10-Q/A

TABLE OF CONTENTS



|                             |  |                                                                                       |  |         
|---------------------------- |  | ------------------------------------------------------------------------------------- |  | --------
|                             |  |                                                                                       |  | Page No.
|PART I FINANCIAL INFORMATION |  |                                                                                      
|                             |  |                                                                                      
|Item 1.                      |  | Financial Statements                                                                  |  | 4       
|                             |  | Condensed Consolidated Statements of Income (unaudited)                               |  | 4       
|                             |  | Condensed Consolidated Balance Sheets (unaudited)                                     |  | 5       
|                             |  | Condensed Consolidated Statements of Cash Flows (unaudited)                           |  | 6       
|                             |  | Notes to Condensed Consolidated Financial Statements (unaudited)                      |  | 7-14    
|Item 2.                      |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 15-24   
|Item 3.                      |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 25      
|Item 4.                      |  | Controls and Procedures                                                               |  | 25      
|                             | 
|PART II OTHER INFORMATION    |  |                                                                                      
|                             |  |                                                                                      
|Item 1.                      |  | Legal Proceedings                                                                     |  | 26      
|Item 2.                      |  | Changes in Securities                                                                 |  | 26      
|Item 3.                      |  | Defaults Upon Senior Securities                                                       |  | 26      
|Item 4.                      |  | Submission of Matters to a Vote of Security Holders                                   |  | 26      
|Item 5.                      |  | Other Information                                                                     |  | 26      
|Item 6.                      |  | Exhibits and Reports on Form 8-K                                                      |  | 26      
|                             | 
|SIGNATURES                   |  | 27                                                                                   
|CERTIFICATIONS              



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##### Table of Contents

PART I FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

THE SANDS REGENT

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)



|                                                 |                            |                                 |           |   |      |   |           |  
|------------------------------------------------ | -------------------------- | ------------------------------- | --------- | - | ---- | - | --------- | -
|                                                 |                            | THREE MONTHS ENDEDSEPTEMBER 30, |          
|(Dollars in thousands, except per share amounts) |                            | 2005                            |           |   | 2004 |  
|                                                 | (As restated  See Note 9) |                                 |           |   |     
|Operating revenues                               |                            |                                 |           |   |      |   |           |  
|Gaming                                           |                            | $                               | 13,420    |   |      | $ | 12,424    |  
|Lodging                                          |                            |                                 | 3,187     |   |      |   | 3,054     |  
|Food and beverage                                |                            |                                 | 3,046     |   |      |   | 3,047     |  
|Fuel and convenience store                       |                            |                                 | 5,964     |   |      |   | 4,703     |  
|Other                                            |                            |                                 | 503       |   |      |   | 479       |  
|                                                 |                            |                                 |           |   |      |   |           |  
|Gross revenues                                   |                            |                                 | 26,120    |   |      |   | 23,707    |  
|Promotional allowances                           |                            |                                 | 1,988     |   |      |   | 1,832     |  
|                                                 |                            |                                 |           |   |      |   |           |  
|Net revenues                                     |                            |                                 | 24,132    |   |      |   | 21,875    |  
|                                                 |                            |                                 |           |   |      |   |           |  
|Operating expenses                               |                            |                                 |           |   |      |   |           |  
|Gaming                                           |                            |                                 | 5,293     |   |      |   | 4,995     |  
|Lodging                                          |                            |                                 | 1,074     |   |      |   | 1,105     |  
|Food and beverage                                |                            |                                 | 2,079     |   |      |   | 1,938     |  
|Fuel and convenience store                       |                            |                                 | 5,738     |   |      |   | 4,473     |  
|Other                                            |                            |                                 | 165       |   |      |   | 157       |  
|Maintenance and utilities                        |                            |                                 | 1,575     |   |      |   | 1,492     |  
|General and administrative                       |                            |                                 | 3,382     |   |      |   | 3,045     |  
|Depreciation and amortization                    |                            |                                 | 1,650     |   |      |   | 1,545     |  
|                                                 |                            |                                 |           |   |      |   |           |  
|                                                 |                            |                                 | 20,956    |   |      |   | 18,750    |  
|                                                 |                            |                                 |           |   |      |   |           |  
|Income from operations                           |                            |                                 | 3,176     |   |      |   | 3,125     |  
|                                                 |                            |                                 |           |   |      |   |           |  
|Other income (expense)                           |                            |                                 |           |   |      |   |           |  
|Interest expense                                 |                            |                                 | (428      | ) |      |   | (606      | )
|Other, net                                       |                            |                                 | 9         |   |      |   | (46       | )
|                                                 |                            |                                 |           |   |      |   |           |  
|Other income (expense), net                      |                            |                                 | (419      | ) |      |   | (652      | )
|                                                 |                            |                                 |           |   |      |   |           |  
|Income before income taxes                       |                            |                                 | 2,757     |   |      |   | 2,473     |  
|Income tax provision                             |                            |                                 | (933      | ) |      |   | (833      | )
|                                                 |                            |                                 |           |   |      |   |           |  
|Net income                                       |                            | $                               | 1,824     |   |      | $ | 1,640     |  
|                                                 |                            |                                 |           |   |      |   |           |  
|Net income per share                             |                            |                                 |           |   |      |   |           |  
|Basic                                            |                            | $                               | 0.26      |   |      | $ | 0.29      |  
|Diluted                                          |                            | $                               | 0.24      |   |      | $ | 0.27      |  
|Weighted average shares outstanding              |                            |                                 |           |   |      |   |           |  
|Basic                                            |                            |                                 | 6,996,409 |   |      |   | 5,646,555 |  
|Diluted                                          |                            |                                 | 7,459,005 |   |      |   | 6,118,804 |  

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



4



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THE SANDS REGENT

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)



|                                                                                                   |                            |                   |         |   |              |   |         |  
|-------------------------------------------------------------------------------------------------- | -------------------------- | ----------------- | ------- | - | ------------ | - | ------- | -
|(Dollars in thousands except share data)                                                           |                            | SEPTEMBER 30,2005 |         |   | JUNE 30,2005 |  
|                                                                                                   | (As restated  See Note 9) |                   |         |   |             
|ASSETS                                                                                             |                            |                   |         |   |              |   |         |  
|Current Assets:                                                                                    |                            |                   |         |   |              |   |         |  
|Cash and cash equivalents                                                                          |                            | $                 | 4,748   |   |              | $ | 3,272   |  
|Accounts receivable, net                                                                           |                            |                   | 751     |   |              |   | 580     |  
|Inventories                                                                                        |                            |                   | 682     |   |              |   | 692     |  
|Prepaid expenses and other current assets                                                          |                            |                   | 2,152   |   |              |   | 1,805   |  
|                                                                                                   |                            |                   |         |   |              |   |         |  
|Total current assets                                                                               |                            |                   | 8,333   |   |              |   | 6,349   |  
|                                                                                                   |                            |                   |         |   |              |   |         |  
|Property and equipment:                                                                            |                            |                   |         |   |              |   |         |  
|Land                                                                                               |                            |                   | 12,307  |   |              |   | 10,007  |  
|Buildings and improvements                                                                         |                            |                   | 46,548  |   |              |   | 43,597  |  
|Equipment, furniture and fixtures                                                                  |                            |                   | 28,332  |   |              |   | 27,264  |  
|Leasehold improvements                                                                             |                            |                   | 178     |   |              |   | 178     |  
|Construction in progress                                                                           |                            |                   | 2,122   |   |              |   | 854     |  
|                                                                                                   |                            |                   |         |   |              |   |         |  
|Total property and equipment                                                                       |                            |                   | 89,487  |   |              |   | 81,900  |  
|Less accumulated depreciation and amortization                                                     |                            |                   | 44,270  |   |              |   | 42,992  |  
|                                                                                                   |                            |                   |         |   |              |   |         |  
|Property and equipment, net                                                                        |                            |                   | 45,217  |   |              |   | 38,908  |  
|                                                                                                   |                            |                   |         |   |              |   |         |  
|Other assets:                                                                                      |                            |                   |         |   |              |   |         |  
|Goodwill                                                                                           |                            |                   | 32,747  |   |              |   | 28,642  |  
|Other intangibles                                                                                  |                            |                   | 12,760  |   |              |   | 12,426  |  
|Other                                                                                              |                            |                   | 1,177   |   |              |   | 1,202   |  
|                                                                                                   |                            |                   |         |   |              |   |         |  
|Total other assets                                                                                 |                            |                   | 46,684  |   |              |   | 42,270  |  
|                                                                                                   |                            |                   |         |   |              |   |         |  
|Total assets                                                                                       |                            | $                 | 100,234 |   |              | $ | 87,527  |  
|                                                                                                   |                            |                   |         |   |              |   |         |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                               |                            |                   |         |   |              |   |         |  
|Current Liabilities:                                                                               |                            |                   |         |   |              |   |         |  
|Accounts payable                                                                                   |                            | $                 | 2,287   |   |              | $ | 2,578   |  
|Accrued salaries, wages and benefits                                                               |                            |                   | 2,039   |   |              |   | 1,884   |  
|Other accrued expenses                                                                             |                            |                   | 1,730   |   |              |   | 398     |  
|Federal income tax payable                                                                         |                            |                   | 738     |   |              |   | 774     |  
|Deferred federal income tax liability                                                              |                            |                   | 388     |   |              |   | 338     |  
|Current maturities of long-term debt                                                               |                            |                   | 3,459   |   |              |   | 2,198   |  
|                                                                                                   |                            |                   |         |   |              |   |         |  
|Total current liabilities                                                                          |                            |                   | 10, 641 |   |              |   | 8,170   |  
|Long-term debt                                                                                     |                            |                   | 25,360  |   |              |   | 17,744  |  
|Deferred federal income tax liability                                                              |                            |                   | 2,354   |   |              |   | 2,209   |  
|                                                                                                   |                            |                   |         |   |              |   |         |  
|Total liabilities                                                                                  |                            |                   | 38,355  |   |              |   | 28,123  |  
|                                                                                                   |                            |                   |         |   |              |   |         |  
|Stockholders Equity:                                                                               |                            |                   |         |   |              |   |         |  
|Common stock ($.10 par value, 20,000,000 shares authorized; 9,482,714 and 9,376,766 shares issued) |                            |                   | 948     |   |              |   | 938     |  
|Additional paid-in capital                                                                         |                            |                   | 27,579  |   |              |   | 26,938  |  
|Retained earnings                                                                                  |                            |                   | 55,710  |   |              |   | 53,886  |  
|                                                                                                   |                            |                   |         |   |              |   |         |  
|                                                                                                   |                            |                   | 84,237  |   |              |   | 81,762  |  
|Treasury stock (at cost; 2,403,000 shares)                                                         |                            |                   | (22,358 | ) |              |   | (22,358 | )
|                                                                                                   |                            |                   |         |   |              |   |         |  
|Total stockholders equity                                                                         |                            |                   | 61,879  |   |              |   | 59,404  |  
|                                                                                                   |                            |                   |         |   |              |   |         |  
|Total liabilities and stockholders equity                                                         |                            | $                 | 100,234 |   |              | $ | 87,527  |  
|                                                                                                   |                            |                   |         |   |              |   |         |  

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



5



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THE SANDS REGENT

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)



|                                                                                  |                            |                                 |         |   |      |   |        |  
|--------------------------------------------------------------------------------- | -------------------------- | ------------------------------- | ------- | - | ---- | - | ------ | -
|                                                                                  |                            | THREE MONTHS ENDEDSEPTEMBER 30, |        
|(Dollars in thousands)                                                            |                            | 2005                            |         |   | 2004 |  
|                                                                                  | (As restated  See Note 9) |                                 |         |   |     
|Operating Activities                                                              |                            |                                 |         |   |      |   |        |  
|Net income                                                                        |                            | $                               | 1,824   |   |      | $ | 1,640  |  
|Adjustments to reconcile net income to net cash provided by operating activities: |                            |                                 |         |   |      |   |        |  
|Depreciation and amortization                                                     |                            |                                 | 1,650   |   |      |   | 1,545  |  
|(Gain) loss on disposal of property and equipment                                 |                            |                                 | (9      | ) |      |   | 46     |  
|Share-based compensation expense                                                  |                            |                                 | 134     |   |      |   |       |  
|Changes in operating assets and liabilities:                                      |                            |                                 |         |   |      |   |        |  
|(Increase) decrease in accounts receivable, net                                   |                            |                                 | (171    | ) |      |   | 81     |  
|Decrease in inventories                                                           |                            |                                 | 34      |   |      |   | 38     |  
|(Increase) decrease in prepaid expenses and other current assets                  |                            |                                 | (197    | ) |      |   | 239    |  
|Decrease in other assets                                                          |                            |                                 | 79      |   |      |   | 55     |  
|(Decrease) increase in accounts payable                                           |                            |                                 | (131    | ) |      |   | 67     |  
|(Decrease) increase in accrued expenses                                           |                            |                                 | 1,441   |   |      |   | (758   | )
|Change in federal income taxes payable/receivable                                 |                            |                                 | (36     | ) |      |   | (62    | )
|Change in deferred federal income taxes                                           |                            |                                 | 195     |   |      |   | 95     |  
|                                                                                  |                            |                                 |         |   |      |   |        |  
|Net cash provided by operating activities                                         |                            |                                 | 4,813   |   |      |   | 2,986  |  
|                                                                                  |                            |                                 |         |   |      |   |        |  
|Investing Activities                                                              |                            |                                 |         |   |      |   |        |  
|Investment in property and equipment                                              |                            |                                 | (1,902  | ) |      |   | (1,069 | )
|Net cash paid for Dayton Depot Casino                                             |                            |                                 | (10,317 | ) |      |   |       |  
|Proceeds from sale of assets                                                      |                            |                                 | 5       |   |      |   | 3      |  
|                                                                                  |                            |                                 |         |   |      |   |        |  
|Net cash used in investing activities                                             |                            |                                 | (12,214 | ) |      |   | (1,066 | )
|                                                                                  |                            |                                 |         |   |      |   |        |  
|Financing Activities                                                              |                            |                                 |         |   |      |   |        |  
|Payments on long-term debt                                                        |                            |                                 | (2,273  | ) |      |   | (2,024 | )
|Issuance of long-term debt                                                        |                            |                                 | 11,150  |   |      |   |       |  
|Payment of costs relative to the issuance of long-term debt                       |                            |                                 |        |   |      |   | (41    | )
|Issuance of Company common stock                                                  |                            |                                 |        |   |      |   | 18     |  
|                                                                                  |                            |                                 |         |   |      |   |        |  
|Net cash provided by (used in) financing activities                               |                            |                                 | 8,877   |   |      |   | (2,047 | )
|                                                                                  |                            |                                 |         |   |      |   |        |  
|Net increase (decrease) in cash and cash equivalents                              |                            |                                 | 1,476   |   |      |   | (127   | )
|Cash and cash equivalents, beginning of period                                    |                            |                                 | 3,272   |   |      |   | 5,443  |  
|                                                                                  |                            |                                 |         |   |      |   |        |  
|Cash and cash equivalents, end of period                                          |                            | $                               | 4,748   |   |      | $ | 5,316  |  
|                                                                                  |                            |                                 |         |   |      |   |        |  
|Supplemental disclosure of cash flow information                                  |                            |                                 |         |   |      |   |        |  
|Interest paid                                                                     |                            | $                               | 374     |   |      | $ | 606    |  
|Federal income taxes paid                                                         |                            | $                               | 774     |   |      | $ | 800    |  
|Supplemental disclosure of non-cash investing and financing activities            |                            |                                 |         |   |      |   |        |  
|Property and equipment acquired by accounts payable                               |                            | $                               | 130     |   |      | $ | 133    |  
|Issuance of common stock to acquire Dayton Depot Casino                           |                            | $                               | 551     |   |      | $ |       |  
|Fair value of assets acquired and liabilities assumed in business combination:    |                            |                                 |         |   |      |   |        |  
|Current assets, net of cash acquired                                              |                            | $                               | 234     |   |      |   |        |  
|Property, plant and equipment                                                     |                            |                                 | 6,131   |   |      |   |        |  
|Goodwill and intangibles                                                          |                            |                                 | 4,515   |   |      |   |        |  
|Current liabilities                                                               |                            |                                 | (12     | ) |      |   |        |  
|Common stock issued                                                               |                            |                                 | (551    | ) |      |   |        |  
|                                                                                  |                            |                                 |         |   |      |   |        |  
|Cash paid, net of cash acquired                                                   |                            | $                               | 10,317  |   |      |   |        |  
|                                                                                  |                            |                                 |         |   |      |   |        |  

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



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##### Table of Contents

THE SANDS REGENT

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1 - BASIS OF PRESENTATION



The accompanying condensed consolidated financial statements include the accounts of The Sands Regent (the
Company) and its wholly-owned subsidiaries: Zante, Inc. (Zante), Last Chance, Inc. (Last Chance), Plantation Investments, Inc. (Plantation), and Dayton Gaming, Inc. (Dayton). The Company
and its subsidiaries are incorporated in Nevada. Zante owns and operates the Sands Regency Casino/Hotel (Sands Regency) in downtown Reno, Nevada. Last Chance owns and operates the Gold Ranch Casino and RV Resort in Verdi, Nevada, and
California Prospectors, Ltd. (California Prospectors), a Nevada limited liability company, which operates a California lottery station. Together, Last Chance and California Prospectors are presented as Gold Ranch. Plantation
owns and operates Rail City Casino (Rail City). On September 1, 2005, the Company acquired, through Dayton Gaming, Inc., the assets of Dayton Depot and Red Hawk Sports Bar (Dayton Depot Casino) in Dayton, Nevada. (See
Note 6)

The accounting policies followed in the preparation of the financial information herein are the same as those summarized in the Companys
2005 Annual Report on Form 10-K, except for the Companys adoption of Statement of Financial Accounting Standards (SFAS) No. 123R on July 1, 2005 (see Notes 4 and 5). The condensed consolidated balance sheet at
June 30, 2005 was derived from audited consolidated financial statements at that date. The interim condensed consolidated financial information is unaudited and should be read in conjunction with the Companys 2005 Form 10-K. In the
opinion of management, all adjustments and normally recurring accruals necessary to fairly present the financial condition of the Company as of September 30, 2005 and the results of its operations and its cash flows for the three months ended
September 30, 2005 and 2004 have been included. Interim results of operations are not necessarily indicative of the results of operations for the full year due to seasonality and other factors.

NOTE 2 - EARNINGS PER SHARE

Earnings per share is calculated in
accordance with SFAS No. 128 Earnings Per Share. SFAS No. 128 provides for the reporting of basic, or undiluted earnings per share, and diluted earnings per share. Basic earnings per share is
computed by dividing net income by the weighted average number of shares outstanding during the period. Diluted earnings per share reflect the addition of potentially dilutive securities, which for the Company, consist of stock options, convertible
debt and warrants. Dilution is determined based upon the assumption that the options, the convertible debt, and the warrants are exercised or converted. The weighted average number of shares outstanding for the calculation of diluted earnings per
share includes the dilutive effect of the Companys stock options, convertible debt and outstanding warrants unless the associated strike price(s) exceeds the average closing price in the period.

The following shares were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive:



|                  |  |                                  |  |     
|----------------- |  | -------------------------------- |  | ----
|                  |  | THREE MONTHS ENDED SEPTEMBER 30,
|                  |  | 2005                             |  | 2004
|Stock options     |  | 35,000                           |  |    
|Restricted shares |  | 36,600                           |  |    
|Warrants          |  | 336,000                          |  |    

The following is a reconciliation of the number of shares (denominator) used in the basic and diluted earnings per
share computations (in thousands except per share data):



|                                     |  |                                 |       |      |   |      
|------------------------------------ |  | ------------------------------- | ----- | ---- | - | -----
|                                     |  | THREE MONTHS ENDEDSEPTEMBER 30,
|                                     |  | 2005                            |       | 2004
|Net income                           |  | $                               | 1,824 |      | $ | 1,640
|                                     |  |                                 |       |      |   |      
|Weighted Average Shares Outstanding: |  |                                 |       |      |   |      
|Common stock                         |  |                                 | 6,996 |      |   | 5,647
|Common stock equivalents             |  |                                 | 463   |      |   | 472  
|                                     |  |                                 |       |      |   |      
|Diluted shares                       |  |                                 | 7,459 |      |   | 6,119
|                                     |  |                                 |       |      |   |      
|Earnings per share:                  |  |                                 |       |      |   |      
|Basic                                |  | $                               | 0.26  |      | $ | 0.29 
|Diluted                              |  | $                               | 0.24  |      | $ | 0.27 



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THE SANDS REGENT

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 3 - BUSINESS SEGMENTS



The Company reports business segment information based on geographic location. The following is a breakdown of
relevant data by location.



|                                |  |                                  |        |   |      |   |        |  
|------------------------------- |  | -------------------------------- | ------ | - | ---- | - | ------ | -
|                                |  | THREE MONTHS ENDED SEPTEMBER 30, |       
|(Dollars in thousands)          |  | 2005                             |        |   | 2004 |  
|Net revenues                    |  |                                  |        |   |      |   |        |  
|Rail City Casino                |  | $                                | 6,117  |   |      | $ | 6,070  |  
|Sands Regency Casino/Hotel      |  |                                  | 9,550  |   |      |   | 9,002  |  
|Gold Ranch Casino and RV Resort |  |                                  | 8,102  |   |      |   | 6,803  |  
|Dayton Depot Casino             |  |                                  | 363    |   |      |   |       |  
|                                |  |                                  |        |   |      |   |        |  
|                                |  | $                                | 24,132 |   |      | $ | 21,875 |  
|                                |  |                                  |        |   |      |   |        |  
|Income from operations          |  |                                  |        |   |      |   |        |  
|Rail City Casino                |  | $                                | 1,772  |   |      | $ | 1,449  |  
|Sands Regency Casino/Hotel      |  |                                  | 1,541  |   |      |   | 1,323  |  
|Gold Ranch Casino and RV Resort |  |                                  | 486    |   |      |   | 680    |  
|Dayton Depot Casino             |  |                                  | 92     |   |      |   |       |  
|Corporate                       |  |                                  | (715   | ) |      |   | (327   | )
|                                |  |                                  |        |   |      |   |        |  
|                                |  | $                                | 3,176  |   |      | $ | 3,125  |  
|                                |  |                                  |        |   |      |   |        |  
|Depreciation and amortization   |  |                                  |        |   |      |   |        |  
|Rail City Casino                |  | $                                | 488    |   |      | $ | 487    |  
|Sands Regency Casino/Hotel      |  |                                  | 876    |   |      |   | 876    |  
|Gold Ranch Casino and RV Resort |  |                                  | 228    |   |      |   | 138    |  
|Dayton Depot Casino             |  |                                  | 51     |   |      |   |       |  
|Corporate                       |  |                                  | 7      |   |      |   | 44     |  
|                                |  |                                  |        |   |      |   |        |  
|                                |  | $                                | 1,650  |   |      | $ | 1,545  |  
|                                |  |                                  |        |   |      |   |        |  

NOTE 4 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In December 31, 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 123 (revised 2004), Share-Based Payment
(SFAS No. 123R), replacing SFAS No. 123, Accounting for Share-Based Compensation, and superseding Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to
Employees. SFAS No. 123R requires recognition of share-based compensation in the financial statements based on the fair value of the awards granted. SFAS No. 123R is effective as of the first annual reporting period that begins after
June 15, 2005 and was adopted by the Company on July 1, 2005. See Note 5.

NOTE 5 - SHARE-BASED COMPENSATION

On July 1, 2005, the Company adopted SFAS No. 123R, Share-Based Payment (SFAS No. 123R) which requires companies to measure the
cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. The Company has elected to use the Modified Prospective Transition method such that SFAS No. 123R applies to the
unvested portion of existing awards, new awards and to awards modified, repurchased or canceled after the effective date. The Company has two stock option incentive plans: (1) the Second Amended and Restated Stock Option Plan (the Second
Restated Plan) and (2) the 2004 Equity Incentive Plan (the 2004 Plan). The Second Restated Plan provides for the granting of incentive stock options, as well as non-qualified stock options to executives and key employees. The
plan also provides for the grant of non-qualified stock options to independent (non-employee) directors. Generally, stock options granted to employees fully vest four years from the grant date and in one year for directors and have a term of ten
years. No new options were granted subsequent to June 30, 2005 pursuant to this plan.

The 2004 Plan provides for the granting of incentive and
non-qualified stock options as well as restricted stock to executives, key employees, consultants and independent directors. On September 1, 2005, the Company issued 36,600 restricted shares of stock to employees which vest 25% annually,
starting one year from the date of grant. The Company recognizes share-based compensation expense over the requisite service period of the individual grants and awards which are generally equal to the vesting period.



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THE SANDS REGENT

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)



The Second Restated Plan

The fair values of stock-based compensation in vested awards at July 1, 2005 were estimated using a Black-Scholes option-pricing model with the following assumptions:



|                        |  |          
|----------------------- |  | ---------
|Expected volatility     |  | 54%-120% 
|Expected dividends      |  | 0.00%    
|Expected term, in years |  | 2.2-2.6  
|Risk free interest rate |  | 2.8%-6.3%

A summary of the Companys outstanding stock options as of June 30, 2005 and changes during the quarter
ended September 30, 2005, is presented below:



|                                  |  |         |  |                                 |      |                                                   |     |                           |   |          
|--------------------------------- |  | ------- |  | ------------------------------- | ---- | ------------------------------------------------- | --- | ------------------------- | - | ---------
|Options                           |  | Shares  |  | Weighted Average Exercise Price |      | Weighted Average Remaining Contractual Term (Yrs) |     | Aggregate Intrinsic Value
|Outstanding at June 30, 2005      |  | 672,500 |  | $                               | 3.48 |                                                   | 5.9 |                           | $ | 4,253,504
|Granted                           |  |        |  |                                 |     |                                                   |     |                           |   |         
|Exercised                         |  |        |  |                                 |     |                                                   |     |                           |   |         
|Forfeited or expired              |  |        |  |                                 |     |                                                   |     |                           |   |         
|                                  |  |         |  |                                 |      |                                                   |     |                           |   |          
|Outstanding at September 30, 2005 |  | 672,500 |  | $                               | 3.48 |                                                   | 5.6 |                           | $ | 4,019,504
|                                  |  |         |  |                                 |      |                                                   |     |                           |   |          
|Exercisable at September 30, 2005 |  | 510,000 |  | $                               | 2.25 |                                                   | 4.7 |                           | $ | 3,623,804
|                                  |  |         |  |                                 |      |                                                   |     |                           |   |          

A summary of the Companys non-vested stock options as of June 30, 2005, and changes during the quarter
ended September 30, 2005 is presented below:



|                                 |  |         |  |                                  |      |                           |   |        
|-------------------------------- |  | ------- |  | -------------------------------- | ---- | ------------------------- | - | -------
|Options                          |  | Shares  |  | Weighted- Average Exercise Price |      | Aggregate Intrinsic Value
|Non-vested at June 30, 2005      |  | 162,500 |  | $                                | 7.31 |                           | $ | 430,800
|Granted                          |  |        |  |                                  |     |                           |   |       
|Vested                           |  |        |  |                                  |     |                           |   |       
|Forfeited                        |  |        |  |                                  |     |                           |   |       
|                                 |  |         |  |                                  |      |                           |   |        
|Non-vested at September 30, 2005 |  | 162,500 |  | $                                | 7.31 |                           | $ | 395,700
|                                 |  |         |  |                                  |      |                           |   |        

At September 30, 2005, there was $256,000 of total unrecognized compensation cost related to non-vested
share-based compensation arrangements granted under the Second Restated Plan. The cost is expected to be recognized over a weighted-average period of four years. Compensation expense of $84,000 related to stock options issued prior to July 1,
2005 was recognized and is included in general and administrative expenses for the three months ended September 30, 2005.

Prior to July 1, 2005,
the Company accounted for these plans under the intrinsic value method described in APB Opinion No. 25, Accounting for Stock Issued to Employees and related interpretations. The Company, applying the intrinsic value method, did not
record share-based compensation cost in net income because the exercise price of its stock options equaled the market price of the underlying stock at the date of grant. Compensation costs for the portion of unvested stock options for which the
required service period has not been rendered that are outstanding as of July 1, 2005 will be recognized as the remaining required services are rendered. The compensation costs relating to unvested awards are based on the grant date fair value
of those awards as calculated under SFAS No. 123R.



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THE SANDS REGENT

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)



SFAS No. 123R requires the Company to present proforma information for periods prior to the adoption as if it
had accounted for all share-based compensation under the fair value method. Had compensation costs under the Companys stock option plan been recorded using the fair value method required by SFAS No. 123, the effect on the Companys
net income and earnings per share would have been as follows (in thousands except for per share amounts):



|                                                                                                                              |  |                                       |       |  
|----------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------- | ----- | -
|                                                                                                                              |  | Three months ended September 30, 2004 |      
|Net income, as reported                                                                                                       |  | $                                     | 1,640 |  
|Total share-based employee compensation expense determined under fair value method for all awards, net of income tax benefits |  |                                       | (33   | )
|                                                                                                                              |  |                                       |       |  
|Pro forma net income                                                                                                          |  | $                                     | 1,607 |  
|                                                                                                                              |  |                                       |       |  
|Earnings per share:                                                                                                           |  |                                       |       |  
|Basic as reported                                                                                                            |  | $                                     | 0.29  |  
|                                                                                                                              |  |                                       |       |  
|Basic pro forma                                                                                                              |  | $                                     | 0.28  |  
|                                                                                                                              |  |                                       |       |  
|Diluted as reported                                                                                                          |  | $                                     | 0.27  |  
|                                                                                                                              |  |                                       |       |  
|Diluted pro forma                                                                                                            |  | $                                     | 0.26  |  
|                                                                                                                              |  |                                       |       |  

The 2004 Plan

On September 1, 2005, the Company issued 36,600 restricted shares of stock to employees which vest 25% annually, starting one year from the date of grant. The fair values of stock-based compensation for fiscal year 2006 were estimated
using the market price on the date of grant. A summary of the Companys outstanding restricted shares as of June 30, 2005, and changes during the three months ended September 30, 2005 is presented below:



|                                  |  |        |  |                                        |       |                                                |     |                          |   |        
|--------------------------------- |  | ------ |  | -------------------------------------- | ----- | ---------------------------------------------- | --- | ------------------------ | - | -------
|Restricted Shares                 |  | Shares |  | Weighted AverageGrant-DateMarket Value |       | Weighted AverageRemainingContractual Term(Yrs) |     | AggregateIntrinsic Value
|Outstanding at June 30, 2005      |  |       |  |                                        |      |                                                |    |                          |   |       
|Granted September 1, 2005         |  | 36,600 |  | $                                      | 10.00 |                                                | 5.0 |                          | $ | 366,000
|Vested                            |  |       |  |                                        |      |                                                |    |                          |   |       
|Forfeited or expired              |  |       |  |                                        |      |                                                |    |                          |   |       
|                                  |  |        |  |                                        |       |                                                |     |                          |   |        
|Outstanding at September 30, 2005 |  | 36,600 |  | $                                      | 10.00 |                                                | 4.9 |                          | $ | 366,000
|                                  |  |        |  |                                        |       |                                                |     |                          |   |        

September 1, 2005 was the first date of issuance of restricted shares under this Plan.

At September 30, 2005, there was $350,000 of unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the 2004 Plan.
Compensation expense of $16,000 and $34,000 related to the grant of restricted stock and the incentive performance plan are included in general and administrative expenses for the three months ended September 30, 2005.

NOTE 6  ACQUISITIONS

On September 1, 2005, the Company
completed its acquisition of the assets of Dayton Depot Casino and Red Hawk Sports Bar (Dayton Depot Casino) through its subsidiary, Dayton Gaming, Inc., a Nevada corporation, pursuant to an Asset Purchase Agreement dated
February 28, 2005 (the Agreement).

The preliminary purchase price of $10.9 million (including acquisition costs and excluding cash
acquired) was calculated based on EBITDA (earnings before interest, taxes, depreciation and amortization) for Dayton Depot Casino for the twelve months preceding the closing date of acquisition as prescribed in the Agreement. The purchase was funded
with the payment of $10.3 million in cash and issuance of 69,438 shares of Company stock with a fair market value equal to $9.91 per share on the date of issuance. The cash paid in connection with the transaction came primarily from an amended and
restated credit facility (Note 8), which, in concert with the stock, funded the acquisition including net working capital. The Company stock issued to the seller contains a two year trading restriction from the date of the acquisition. The value of
the stock issued in the transaction has been recorded at a 20% discount to market value to account for the impact of the trading restriction.



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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)



The acquisition has been accounted for as a purchase and accordingly, the purchase price has been allocated to the
assets acquired and the liabilities assumed based upon estimated fair values at the date of acquisition. The Company is still in the process of valuing certain assets, which we expect to complete by the end of the fiscal year 2006.

The following table summarizes the preliminary purchase price and the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:



|                              |  |   |       
|----------------------------- |  | - | ------
|Purchase Price:               |  |   |       
|Cash                          |  | $ | 374   
|Proceeds from credit facility |  |   | 10,050
|Issuance of common stock      |  |   | 551   
|Costs of acquisition          |  |   | 226   
|                              |  |   |       
|                              |  | $ | 11,201
|                              |  |   |       



|                                         |  |   |        |  
|---------------------------------------- |  | - | ------ | -
|Assets Acquired and Liabilities assumed: |  |   |        |  
|Current assets                           |  | $ | 567    |  
|Property, plant and equipment            |  |   | 6,131  |  
|Goodwill and intangibles                 |  |   | 4,515  |  
|Current liabilities                      |  |   | (12    | )
|                                         |  |   |        |  
|                                         |  | $ | 11,201 |  
|                                         |  |   |        |  

The pro forma consolidated results of operations, as if the acquisition of Dayton Depot Casino had occurred on
July 1, 2004, are as follows (in thousands except per share data):



|                             |  |                                      |        |                                      |   |       
|---------------------------- |  | ------------------------------------ | ------ | ------------------------------------ | - | ------
|                             |  | Three months endedSeptember 30, 2005 |        | Three months endedSeptember 30, 2004
|Net revenues                 |  | $                                    | 25,045 |                                      | $ | 22,788
|Net income                   |  | $                                    | 1,905  |                                      | $ | 1,762 
|Basic net income per share   |  | $                                    | 0.27   |                                      | $ | 0.31  
|Diluted net income per share |  | $                                    | 0.26   |                                      | $ | 0.28  
|                             |  |                                     
|Basic Shares Outstanding     |  |                                      | 6,996  |                                      |   | 5,647 
|Diluted Shares outstanding   |  |                                      | 7,459  |                                      |   | 6,119 



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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)



NOTE 7  INTANGIBLES AND GOODWILL

Intangible Balances



|                                    |  |                       |        |                          |   |     |  |                       |        |                          |   |        |  |   |     |  |   |       
|----------------------------------- |  | --------------------- | ------ | ------------------------ | - | --- |  | --------------------- | ------ | ------------------------ | - | ------ |  | - | --- |  | - | ------
|                                    |  | September 30, 2005    |        | June 30, 2005           
|(Dollars in thousands)              |  | Gross Carrying Amount |        | Accumulated Amortization |   | Net |  | Gross Carrying Amount |        | Accumulated Amortization |   | Net   
|Finite-lived intangible assets:     |  |                       |        |                          |   |     |  |                       |        |                          |   |        |  |   |     |  |   |       
|Customer list/relationships         |  | $                     | 1,190  |                          | $ | 780 |  | $                     | 410    |                          | $ | 1,190  |  | $ | 709 |  | $ | 481   
|Under-market land lease             |  |                       | 448    |                          |   | 27  |  |                       | 421    |                          |   | 448    |  |   | 21  |  |   | 427   
|Non-compete agreement               |  |                       | 231    |                          |   | 3   |  |                       | 228    |                          |   |       |  |   |    |  |   |      
|                                    |  |                       |        |                          |   |     |  |                       |        |                          |   |        |  |   |     |  |   |       
|                                    |  |                       | 1,869  |                          |   | 810 |  |                       | 1,059  |                          |   | 1,638  |  |   | 730 |  |   | 908   
|                                    |  |                       |        |                          |   |     |  |                       |        |                          |   |        |  |   |     |  |   |       
|Indefinite-lived intangible assets: |  |                       |        |                          |   |     |  |                       |        |                          |   |        |  |   |     |  |   |       
|Grandfathered gaming license        |  |                       | 7,205  |                          |   |    |  |                       | 7,205  |                          |   | 7,205  |  |   |    |  |   | 7,205 
|Trademark/tradename                 |  |                       | 4,478  |                          |   |    |  |                       | 4,478  |                          |   | 4,303  |  |   |    |  |   | 4,303 
|Other                               |  |                       | 18     |                          |   |    |  |                       | 18     |                          |   | 10     |  |   |    |  |   | 10    
|                                    |  |                       |        |                          |   |     |  |                       |        |                          |   |        |  |   |     |  |   |       
|                                    |  |                       | 11,701 |                          |   |    |  |                       | 11,701 |                          |   | 11,518 |  |   |    |  |   | 11,518
|                                    |  |                       |        |                          |   |     |  |                       |        |                          |   |        |  |   |     |  |   |       
|                                    |  | $                     | 13,570 |                          | $ | 810 |  | $                     | 12,760 |                          | $ | 13,156 |  | $ | 730 |  | $ | 12,426
|                                    |  |                       |        |                          |   |     |  |                       |        |                          |   |        |  |   |     |  |   |       

Amortization of Intangibles

The aggregate amortization expense was $80,000 and $155,000 for the three months ended September 30, 2005 and 2004, respectively. Estimated annual amortization expense for the current and succeeding fiscal years
is as follows:



|                       |  |            |  |  |  |                
|---------------------- |  | ---------- |  |  |  | ---------------
|(Dollars in thousands) |  | Fiscalyear |  |  |  | Amortization   
|                       |  | 2006       |  |  |  | $343 (9 months)
|                       |  | 2007       |  |  |  | 195            
|                       |  | 2008       |  |  |  | 129            
|                       |  | 2009       |  |  |  | 100            
|                       |  | 2010       |  |  |  | 86             

Goodwill Changes and Balance by Segment



|                                |  |           |        |           |   |             |  |       |       |  |   |       
|------------------------------- |  | --------- | ------ | --------- | - | ----------- |  | ----- | ----- |  | - | ------
|(Dollars in thousands)          |  | Rail City |        | GoldRanch |   | DaytonDepot |  | Total
|Balance at beginning of period  |  | $         | 17,624 |           | $ | 11,018      |  | $     |      |  | $ | 28,642
|Dayton Depot Casino acquisition |  |           |       |           |   |            |  |       | 4,105 |  |   | 4,105 
|                                |  |           |        |           |   |             |  |       |       |  |   |       
|Balance at September 30, 2005   |  | $         | 17,624 |           | $ | 11,018      |  | $     | 4,105 |  | $ | 32,747
|                                |  |           |        |           |   |             |  |       |       |  |   |       

NOTE 8  RECENTLY AMENDED AND RESTATED CREDIT FACILITIES

In connection with the acquisition of Dayton Depot Casino, the Company executed an amended and restated syndicated financing arrangement (Credit Agreement)
through Wells Fargo Bank. The Credit Agreement provided for a 5-year, $22,000,000 term loan collateralized by substantially all property and equipment of Zante, Inc., Plantation Investments, Inc., and Dayton Gaming, Inc., and the furniture, fixtures
and equipment of Last Chance, Inc. The balance of the term loan was $21.2 million at September 30, 2005 and $16.1 million at June 30, 2005. The loan has a variable interest rate based on LIBOR or the U.S. Prime Index plus an applicable
margin as detailed in the Credit Agreement. The interest rate at September 30, 2005 was LIBOR plus 2.25% or Prime plus .75%. The interest rate at June 30, 2005 was LIBOR plus 2% or Prime plus .5%. At September 30, 2005 and
June 30, 2005 the weighted average interest rate on the term loan was 6.06% and 5.38%, respectively. The weighted average interest rate on the revolving credit facility at September 30, 2005 and June 30, 2005 was 6.88% and 6.50%,
respectively. The loan has a 5-year amortization schedule, and matures on September 1, 2010, with any remaining interest and unpaid principal due and payable on that date. At September 30, 2005, the Company had made payments of principal
of $825,000. Additionally, as part of the Credit Agreement, the Company secured a Wells Fargo Bank syndicated, 5-year $25,000,000 revolving credit facility with collateralization and terms which are substantially similar to the term loan. The
balance of the revolving credit facility was $ 7.2 million at September 30, 2005 and $ 3.4 million at June 30, 2005. The credit facility requires interest-only payments and matures September 1, 2010, with any remaining
interest and unpaid principal due and payable on that date. Together, the bank term loan and revolving credit facility requires the Company to be in compliance with certain financial and other covenants, restricts future encumbrances, and limits



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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)



situations where a change in control in the Company may occur. The financial covenants include the requirement that a minimum EBITDA (earnings before
interest expense, taxes, depreciation and amortization) and certain other financial ratios be maintained. The Company believes that it is in compliance with all covenants and restrictions at September 30, 2005.

NOTE 9  RESTATEMENT

Subsequent to the issuance of the
Companys quarterly report on Form 10-Q for the quarter ended September 30, 2005, the Company determined that errors were made with respect to (i) expenses for stock options which were not recorded for $85,000, and a corresponding
understatement of additional paid-in capital, (ii) classification of $221,000 of other assets, previously recorded as goodwill, as a result of a misallocation of the purchase price among the assets acquired in the purchase of Dayton Depot
Casino, and (iii) certain computations and classifications on the Statement of Cash Flows. As a result, the accompanying Condensed Consolidated Balance Sheet as of September 30, 2005, Condensed Consolidated Statement of Income for the
three months ended September 30, 2005 and Condensed Consolidated Statement of Cash Flows for the three months ended September 30, 2005 have been restated to correct these errors.

Effects of the Restatement

A summary of the effects of the
restatement is as follows:



|                                           |                       |                   |             |                   |   |        
|------------------------------------------ | --------------------- | ----------------- | ----------- | ----------------- | - | -------
|(Dollars are in thousands)                 |                       | SEPTEMBER 30,2005 |             | SEPTEMBER 30,2005
|                                           | As previouslyreported |                   | As restated
|ASSETS                                     |                       |                   |             |                   |   |        
|Prepaid expenses and other current assets  |                       | $                 | 1,824       |                   | $ | 2,152  
|Total current assets                       |                       |                   | 8,005       |                   |   | 8,333  
|Goodwill                                   |                       |                   | 32,968      |                   |   | 32,747 
|Other                                      |                       |                   | 956         |                   |   | 1,177  
|Total assets                               |                       |                   | 99,906      |                   |   | 100,234
|LIABILITIES AND STOCKHOLDERS EQUITY       |                       |                   |             |                   |   |        
|Other accrued expenses                     |                       |                   | 1,402       |                   |   | 1,730  
|Federal income tax payable                 |                       |                   | 767         |                   |   | 738    
|Total current liabilities                  |                       |                   | 10,342      |                   |   | 10,641 
|Total liabilities                          |                       |                   | 38,056      |                   |   | 38,355 
|Additional paid-in capital                 |                       |                   | 27,494      |                   |   | 27,579 
|Retained earnings                          |                       |                   | 55,766      |                   |   | 55,710 
|Stockholders equity subtotal              |                       |                   | 84,208      |                   |   | 84,237 
|Total stockholders equity                 |                       |                   | 61,850      |                   |   | 61,879 
|Total liabilities and stockholders equity |                       |                   | 99,906      |                   |   | 100,234



|                                                    |                      |                                      |        |             |  |   |        |  
|--------------------------------------------------- | -------------------- | ------------------------------------ | ------ | ----------- |  | - | ------ | -
|(Dollars are in thousands except per share amounts) |                      | THREE MONTHS ENDEDSEPTEMBER 30, 2005 |       
|                                                    | Aspreviouslyreported |                                      |        | As restated | 
|General and administrative                          |                      | $                                    | 3,297  |             |  | $ | 3,382  |  
|Total operating expenses                            |                      |                                      | 20,871 |             |  |   | 20,956 |  
|Income from operations                              |                      |                                      | 3,261  |             |  |   | 3,176  |  
|Income before income taxes                          |                      |                                      | 2,842  |             |  |   | 2,757  |  
|Income tax provision                                |                      |                                      | (962   | )           |  |   | (933   | )
|Net income                                          |                      |                                      | 1,880  |             |  |   | 1,824  |  
|Net income per share                                |                      |                                      |        |             |  |   |        |  
|Basic                                               |                      |                                      | 0.27   |             |  |   | 0.26   |  
|Diluted                                             |                      |                                      | 0.25   |             |  |   | 0.24   |  



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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)



|                                                                                  |                       |                                      |         |             |  |   |         |  
|--------------------------------------------------------------------------------- | --------------------- | ------------------------------------ | ------- | ----------- |  | - | ------- | -
|(Dollars are in thousands)                                                        |                       | THREE MONTHS ENDEDSEPTEMBER 30, 2005 |        
|                                                                                  | As previouslyreported |                                      |         | As restated | 
|Operating Activities                                                              |                       |                                      |         |             |  |   |         |  
|Net income                                                                        |                       | $                                    | 1,880   |             |  | $ | 1,824   |  
|Adjustments to reconcile net income to net cash provided by operating activities: |                       |                                      |         |             |  |   |         |  
|Share-based compensation expense                                                  |                       |                                      |        |             |  |   | 134     |  
|Increase in prepaid expenses and other current assets                             |                       |                                      | (19     | )           |  |   | (197    | )
|Decrease (increase) in other assets                                               |                       |                                      | (40     | )           |  |   | 79      |  
|Decrease in accounts payable                                                      |                       |                                      | (1      | )           |  |   | (131    | )
|Increase in accrued expenses                                                      |                       |                                      | 1,147   |             |  |   | 1,441   |  
|Change in federal income taxes payable/receivable                                 |                       |                                      | (7      | )           |  |   | (36     | )
|Net cash provided by operating activities                                         |                       |                                      | 4,658   |             |  |   | 4,813   |  
|Investing Activities                                                              |                       |                                      |         |             |  |   |         |  
|Investment in property and equipment                                              |                       |                                      | (1,729  | )           |  |   | (1,902  | )
|Net cash paid for Dayton Depot Casino                                             |                       |                                      | (10,297 | )           |  |   | (10,317 | )
|Proceeds from sale of assets                                                      |                       |                                      | 9       |             |  |   | 5       |  
|Net cash used in investing activities                                             |                       |                                      | (12,017 | )           |  |   | (12,214 | )
|Financing Activities                                                              |                       |                                      |         |             |  |   |         |  
|Payments on long-term debt                                                        |                       |                                      | (1,180  | )           |  |   | (2,273  | )
|Issuance of long-term debt                                                        |                       |                                      | 10,050  |             |  |   | 11,150  |  
|Payment of costs relative to the issuance of long-term debt                       |                       |                                      | (35     | )           |  |   |        |  
|Net cash provided by financing activities                                         |                       |                                      | 8,835   |             |  |   | 8,877   |  



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THE SANDS REGENT

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

The following Managements Discussion and Analysis gives effect to the restatement discussed in Note 9 to the Condensed Consolidated Financial Statements included in Item 1.

Subsequent to the issuance of the Companys quarterly report on Form 10-Q for the quarter ended September 30, 2005, the Company determined that errors were
made with respect to (i) expenses for stock options which were not recorded for $85,000, and a corresponding understatement of additional paid-in capital, (ii) classification of $221,000 of other assets, previously recorded as goodwill, as
a result of a misallocation of the purchase price among the assets acquired in the purchase of Dayton Depot Casino, and (iii) certain computations and classifications on the Statement of Cash Flows. As a result, the accompanying Condensed
Consolidated Balance Sheet as of September 30, 2005, Condensed Consolidated Statement of Income for the three months ended September 30, 2005 and Condensed Consolidated Statement of Cash Flows for the three months ended September 30,
2005 have been restated to correct these errors. See Note 9 to the Condensed Consolidated Financial Statements for a comparison of the Companys restated results to previously reported results.

The Sands Regent and its subsidiaries (the Company, we, our, or us) operate the Rail City Casino (Rail City)
in Sparks, Nevada , the Sands Regency Casino Hotel (the Sands) in downtown Reno, Nevada, the Gold Ranch Casino and RV Resort (the Gold Ranch) on Interstate-80 in Verdi, Nevada and, effective September 1, 2005, the Dayton
Depot Casino and Red Hawk Sports Bar (Dayton Depot Casino) in Dayton, Nevada.

Rail City has approximately 16,600 square feet of gaming space
housing 650 slots, 6 table games, keno, a sportsbook operated by a third party, a 24-hour family-style restaurant and a bar.

The Sands Regency has 833
hotel rooms and 5 restaurants, including Tony Romas Famous for Ribs, Mels the Original diner, and Arbys. It has a full selection of gaming options, including 544 slot machines, 17 table games, keno, bingo, and a sportsbook operated
by a third party. Additionally, the Sands Regency has a Just for Laughs comedy club, a cabaret lounge, and a health spa.

Gold Ranchs gaming
options include 243 slot machines, a California lottery station on Gold Ranchs property which straddles the Nevada/California border, and a sportsbook operated by a third party. Additionally, Gold Ranch has a 105-space RV park, 2 restaurants
(a family style restaurant and a Jack-in-the-Box), a Bar and an ARCO gas station and convenience store.

On September 1, 2005, the Company acquired
Dayton Depot Casino in Dayton, Nevada. Dayton Depot Casino has 16,000 square feet of casino, a family-style restaurant, two bars, 250 slot machines and a sportsbook operated by a third party. The Red Hawk Sports Bar, located across Highway 50 from
the Depot Casino, houses 33 slot machines and a convenience store. The results of operations for the quarter ended September 30, 2005 include the results of Dayton Depot Casino beginning September 1, 2005.

Critical Accounting Policies and Estimates

The Company prepares its
consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. Certain of the Companys policies, including the estimated lives assigned to long-lived assets, asset impairment,
goodwill and other intangibles impairment, the adequacy of our allowance for uncollectible receivables, self insurance reserves, litigation reserves, and customer rewards program liability requires that the Company 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. The Companys judgments are based on historical experience, terms of existing
contracts, observations of trends in the industry, information provided by customers and information available from other outside sources, as appropriate however, there have been no changes from critical accounting policies reflected in the annual
report of the Companys Form 10-K. There can be no assurance that actual results will not differ from Company estimates.

Results of Operations -
Quarter ended September 30, 2005, as compared to the quarter ended September 30, 2004.

CONSOLIDATED RESULTS. For the quarter ended
September 30, 2005, the Companys consolidated net revenues increased from $21.9 million to $24.1 million, or 10.3% from the quarter ended September 30, 2004. On a by-property basis,



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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



the net revenue for Rail City increased 0.8% from the corresponding quarter of the prior year, while net revenue for the Sands increased 6.1% from the
corresponding quarter of the prior year. Gold Ranch net revenue increased 19.1% from the corresponding quarter of the prior year, attributable to increases in the retail price of gasoline. Consolidated net revenues include a partial quarter of
Dayton Depot Casino of $363,000. Dayton Depot was acquired by the Company on September 1, 2005. The factors that are attributed to the financial results of the business are discussed below.

Consolidated income from operations was $3.2 million for the quarter ended September 30, 2005, compared to $3.1 million for the same quarter of the prior year. Rail
City achieved income from operations of $1.8 million, a 22.2% increase from the same quarter of the prior year. The Sands achieved income from operations of $1.5 million, a 16.5% increase from the same quarter of the prior year. Income from
operations at Gold Ranch of $486,000 represents a 28.5% decrease. Rising gasoline prices contributed to decreases in weekend traffic on Interstate-80 which resulted in an adverse impact to Gold Ranch. The competitive nature of gasoline prices does
not allow the property to increase its profit margins in spite of increased retail pricing. Total gallons of gasoline pumped at Gold Ranch, a key indicator of customer traffic to the property, decreased 11.6% from the same period in the prior year.
Consolidated income from operations includes a partial quarter of Dayton Depot Casino. Dayton Depot Casino was acquired by the Company on September 1, 2005.

Corporate expenses increased to $715,000 for the quarter ended September 30, 2005, compared to $327,000 for the same quarter of the prior year. Increases from the prior period reflect the implementation in the current quarter of the
requirements of SFAS No. 123R Share-Based Payment of $85,000 for stock options issued prior to July 1, 2005 and $16,000 for current year grants of restricted stock and $34,000 accrued for management incentive awards to be
awarded in the future based on fiscal 2006 performance. In addition, the Company incurred $178,000 of costs related to preparation to meet the new internal control requirements of the Sarbanes-Oxley Act of 2002.

The Company had consolidated net income of $1.8 million, or $.26 per share ($.24 diluted), for the three months ended September 30, 2005, compared to $
1.6 million, or $.29 per share ($.27 diluted), for the three months ended September 30, 2004.

RAIL CITY CASINO

The following table highlights Rail City Casinos sources of revenues and expenses for the periods indicated:



|                           |  |                                 |       |   |      |   |       |               |  |       |  
|-------------------------- |  | ------------------------------- | ----- | - | ---- | - | ----- | ------------- |  | ----- | -
|                           |  | THREE MONTHS ENDEDSEPTEMBER 30, |      
|(dollars in thousands)     |  | 2005                            |       |   | 2004 |   |       | PERCENTCHANGE | 
|Gaming revenues            |  | $                               | 5,599 |   |      | $ | 5,493 |               |  | 1.9   | %
|Gaming expenses            |  | $                               | 2,025 |   |      | $ | 2,111 |               |  | -4.1  | %
|Expense margin             |  |                                 | 36.2  | % |      |   | 38.4  | %             |  |       |  
|Food and beverage revenues |  | $                               | 1,181 |   |      | $ | 1,276 |               |  | -7.4  | %
|Food and beverage expenses |  | $                               | 811   |   |      | $ | 803   |               |  | 1.0   | %
|Expense margin             |  |                                 | 68.7  | % |      |   | 62.9  | %             |  |       |  
|Total net revenues         |  | $                               | 6,117 |   |      | $ | 6,070 |               |  | 0.8   | %
|Total operating expenses   |  | $                               | 4,345 |   |      | $ | 4,621 |               |  | -6.0  | %
|Expense margin             |  |                                 | 71.0  | % |      |   | 76.1  | %             |  |       |  
|Maintenance and utilities  |  | $                               | 374   |   |      | $ | 370   |               |  | 1.1   | %
|Percent of net revenues    |  |                                 | 6.1   | % |      |   | 6.1   | %             |  |       |  
|General and administrative |  | $                               | 634   |   |      | $ | 837   |               |  | -24.3 | %
|Percent of net revenues    |  |                                 | 10.4  | % |      |   | 13.8  | %             |  |       |  

RAIL CITY CASINO. Gaming revenue of $5.6 million for the quarter ended September 30, 2005 reflects a 1.9%
increase or $106,000 from the quarter ended September 30, 2004. The slot machine win percentage remained constant for the first quarters of 2005 and 2004, however, the total coin-in, an indicator of total slot machine wagering, increased $2.1
million from $102.1 million for the first quarter 2004 to $104.2 million for the same quarter in 2005. The win percentage which remained consistent with the prior year quarter on increased total coin-in, represents the total increased gaming revenue
for the first quarter ended September 30, 2005.

Gaming operating expenses for the first quarter of 2005 were $2.0 million, for a decrease of $86,000
from $2.1 million for the first quarter of 2004, due to reduced rental agreements, maintenance contracts and expense for slot machine parts.



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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Food and beverage revenue of $1.2 million for the first quarter of 2005 decreased $95,000 from $1.3 million for the
same quarter of 2004. Cover counts (number of meals served) for the first three months of 2005 are 10.0% less than for the same period one year ago.

General and administrative expenses for the quarter ended September 30, 2005 were $634,000 compared to $837,000 for the prior year period, a decrease of $203,000. The decrease was primarily attributable to payroll and related tax and
benefit reductions of $116,000. During the quarter ended September 30, 2005, the property had several temporary vacancies in management positions that have been subsequently filled. The reduction in payroll and related taxes and benefits
experienced in the first fiscal quarter is not expected to continue through the remainder of the fiscal year. In addition, decreased professional fees of $49,000 and decreased advertising costs of $18,000 contributed to the overall savings in
general and administrative expenses.

The Company is proceeding with plans to expand the facilities at Rail City by approximately 23,500 square feet. This
expansion will allow the property to increase from its current 650 slot machines to a first stage of approximately 850 slot machines with space that will allow a further increase to a total of approximately 1,000 slot machines. Included in the scope
of the expansion will be an additional restaurant and bar venue. The Company expects an early calendar year 2006 groundbreaking but our expansion plans remain contingent on our ability to acquire a parcel of land, currently leased by Rail City,
which is owned by the State of Nevada. If we are unable to acquire the parcel of land in question, we have an alternative plan that we intend to pursue to expand the facility.

SANDS REGENCY HOTEL AND CASINO

The
following table highlights the Sands Regency sources of revenues and expenses for the periods indicated:



|                           |  |                                 |       |   |      |   |       |                |  |      |  
|-------------------------- |  | ------------------------------- | ----- | - | ---- | - | ----- | -------------- |  | ---- | -
|                           |  | THREE MONTHS ENDEDSEPTEMBER 30, |      
|(Dollars in thousands)     |  | 2005                            |       |   | 2004 |   |       | PERCENT CHANGE | 
|Gaming revenues            |  | $                               | 5,947 |   |      | $ | 5,390 |                |  | 10.3 | %
|Gaming expenses            |  | $                               | 2,608 |   |      | $ | 2,424 |                |  | 7.6  | %
|Expense margin             |  |                                 | 43.9  | % |      |   | 45.0  | %              |  |      |  
|Lodging revenues           |  | $                               | 3,005 |   |      | $ | 2,847 |                |  | 5.5  | %
|Lodging expenses           |  | $                               | 1,022 |   |      | $ | 1,040 |                |  | -1.7 | %
|Expense margin             |  |                                 | 34.0  | % |      |   | 36.5  | %              |  |      |  
|Food and beverage revenues |  | $                               | 1,275 |   |      | $ | 1,310 |                |  | -2.7 | %
|Food and beverage expenses |  | $                               | 915   |   |      | $ | 817   |                |  | 12.0 | %
|Expense margin             |  |                                 | 71.8  | % |      |   | 62.4  | %              |  |      |  
|Total net revenues         |  | $                               | 9,550 |   |      | $ | 9,002 |                |  | 6.1  | %
|Total operating expenses   |  | $                               | 8,009 |   |      | $ | 7,679 |                |  | 4.3  | %
|Expense margin             |  |                                 | 83.9  | % |      |   | 85.3  | %              |  |      |  
|Maintenance and utilities  |  | $                               | 996   |   |      | $ | 940   |                |  | 6.0  | %
|Percent of net revenues    |  |                                 | 10.4  | % |      |   | 10.4  | %              |  |      |  
|General and Administrative |  | $                               | 1,456 |   |      | $ | 1,444 |                |  | 0.8  | %
|Percent of net revenues    |  |                                 | 15.2  | % |      |   | 16.0  | %              |  |      |  

SANDS REGENCY. Net revenue for the Sands Regency of $9.6 million for the quarter ended September 30, 2005,
represented a 6.1% increase over the net revenue of $9.0 million for the quarter ended September 30, 2004. Gaming revenue for the quarter increased 10.3% over the prior period. The increase in gaming revenue is comprised of a $296,000 increase
in slot revenue to $4.6 million for the current quarter as compared to $4.3 million for the prior year quarter. Live poker generated revenue of $117,000 in the quarter ended September 30, 2005 and was not offered in the prior year quarter. Keno
revenue for the quarter was $55,000, an increase from $39,000 in the prior year quarter. Keno is currently operated by the Company compared to having been a leased operation in the prior year quarter.

Gaming expenses for the quarter ended September 30, 2005 were $2.6 million for an increase of 7.6% or $184,000, from the prior year quarter. Increased expenses are
related to the addition of poker and the return of keno to be a Company offered product.



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Lodging revenue for the quarter ended September 30, 2005 was $3.0 million for an increase of $158,000 or 5.5%
over the prior year quarter. Hotel room occupancy was 70.7% for the quarter ended September 30, 2005, compared to 69.9% for the same quarter of the prior year. Average daily room rate increased 2.5% from the prior year quarter.

GOLD RANCH CASINO AND RV RESORT

The
following table highlights Gold Ranchs sources of revenues and expenses for the periods indicated:



|                                    |  |                                 |       |   |      |   |       |               |  |       |  
|----------------------------------- |  | ------------------------------- | ----- | - | ---- | - | ----- | ------------- |  | ----- | -
|                                    |  | THREE MONTHS ENDEDSEPTEMBER 30, |      
|(Dollars in thousands)              |  | 2005                            |       |   | 2004 |   |       | PERCENTCHANGE | 
|Gaming revenues                     |  | $                               | 1,562 |   |      | $ | 1,541 |               |  | 1.4   | %
|Gaming expenses                     |  | $                               | 528   |   |      | $ | 460   |               |  | 14.8  | %
|Expense margin                      |  |                                 | 33.8  | % |      |   | 29.9  | %             |  |       |  
|Lodging revenues                    |  | $                               | 182   |   |      | $ | 207   |               |  | -12.1 | %
|Lodging expenses                    |  | $                               | 52    |   |      | $ | 65    |               |  | -20.0 | %
|Expense margin                      |  |                                 | 28.6  | % |      |   | 31.4  | %             |  |       |  
|Food and beverage revenues          |  | $                               | 516   |   |      | $ | 461   |               |  | 11.9  | %
|Food and beverage expenses          |  | $                               | 319   |   |      | $ | 318   |               |  | 0.3   | %
|Expense margin                      |  |                                 | 61.8  | % |      |   | 69.0  | %             |  |       |  
|Fuel and convenience store revenues |  | $                               | 5,964 |   |      | $ | 4,703 |               |  | 26.8  | %
|Fuel and convenience store expenses |  | $                               | 5,738 |   |      | $ | 4,473 |               |  | 28.3  | %
|Expense margin                      |  |                                 | 96.2  | % |      |   | 95.1  | %             |  |       |  
|Total net revenues                  |  | $                               | 8,102 |   |      | $ | 6,803 |               |  | 19.1  | %
|Total operating expenses            |  | $                               | 7,616 |   |      | $ | 6,123 |               |  | 24.4  | %
|Expense margin                      |  |                                 | 94.0  | % |      |   | 90.0  | %             |  |       |  
|Maintenance and utilities           |  | $                               | 193   |   |      | $ | 182   |               |  | 6.0   | %
|Percent of net revenues             |  |                                 | 2.4   | % |      |   | 2.7   | %             |  |       |  
|General and Administrative          |  | $                               | 553   |   |      | $ | 481   |               |  | 15.0  | %
|Percent of net revenues             |  |                                 | 6.8   | % |      |   | 7.1   | %             |  |       |  

GOLD RANCH. For the quarter ended September 30, 2005, Gold Ranch had net revenue of $8.1 million compared to
$6.8 million for the quarter ended September 30, 2004. Gold Ranch gasoline revenues were 19.0% higher during the current fiscal quarter, resulting from increases in the retail price of gasoline, which averaged $2.73 per gallon versus $2.03 in
the same quarter of the prior year. Gasoline gallons sold were 11.6% lower for the quarter compared to the last year due to the increasing cost of fuel that resulted in reduced traffic counts on I-80, immediately adjacent to the property.

Gaming revenue for Gold Ranch, comprised principally of slot machine revenue, increased to $1.6 million in the September 2005 quarter from $1.5 million
for the quarter ended September 2004. During the quarter the property increased its marketing and promotional activities in an effort to increase tracked customer play. However, the continued escalation in the retail price of gas and the resulting
decrease in traffic offset much of the growth achieved in tracked customer play. The Company believes and historical performance of the property has shown that there is a relationship between gasoline gallons sold and gaming revenue.

Gold Ranch income from operations for the quarter ended September 30, 2005 was $486,000, a $194,000 decrease from $680,000 in the quarter ended September 30,
2004. The decline in Gold Ranchs income from operations was primarily due to a $63,000 increase in marketing costs intended to provide incentives to encourage customers to sign up for the Slot Club, to use the facilities and to increase the
number of customers in the database. In addition, depreciation expense increased $90,000 resulting from the installation in the spring of 2005 of an automated slot customer tracking system.

DAYTON DEPOT CASINO

The operating results
of Dayton Depot and Red Hawk Sports Bar (Dayton Depot Casino), which was acquired on September 1, 2005, are reflected below. First month results of operations under new ownership may not be indicative of future results.



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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



The following table highlights Dayton Depot Casinos sources of revenues and expenses for the month ended
September 30, 2005.



|                           |  |                                  |      |  
|-------------------------- |  | -------------------------------- | ---- | -
|(Dollars in thousands)     |  | ONE MONTH ENDEDSEPTEMBER 30,2005 |     
|Gaming revenues            |  | $                                | 312  |  
|Gaming expenses            |  | $                                | 132  |  
|Expense margin             |  |                                  | 42.3 | %
|Food and beverage revenues |  | $                                | 74   |  
|Food and beverage expenses |  | $                                | 34   |  
|Expense margin             |  |                                  | 45.9 | %
|Total net revenues         |  | $                                | 363  |  
|Total operating expenses   |  | $                                | 271  |  
|Expense margin             |  |                                  | 74.7 | %
|Maintenance and utilities  |  | $                                | 12   |  
|Percent of net revenues    |  |                                  | 3.3  | %
|General and Administrative |  | $                                | 31   |  
|Percent of net revenues    |  |                                  | 8.5  | %

We are implementing a new operating strategy at Dayton Depot Casino that includes upgrading slot products,
implementing marketing and promotional programs that have been successful for the other properties within the Company, finalizing design and remodeling of the restaurant and moving ahead with plans to implement a slot player tracking system.

CORPORATE COSTS. Corporate costs include the salaries and benefits of corporate officers and management, public company reporting costs, and related legal
and accounting fees. Corporate costs were $715,000 in the quarter ended September 30, 2005, which compares to $327,000 in the quarter ended September 30, 2004.

The $388,000 increase in corporate costs is primarily the result of $178,000 of costs directly attributable to fees to outside professionals retained to assist in compliance with the new internal controls requirements
of the SarbanesOxley Act of 2002 (SOX), specifically SOX section 404. There were no outside costs relating to SOX compliance in the quarter ended September 30, 2004. The Company currently qualifies as a non-accelerated filer.
The Securities and Exchange Commission recently extended the required compliance dates for non-accelerated filers, and we are now required to report on our systems of internal controls (SOX 404) as of June 30, 2008. The Company has begun to
shift the emphasis of the SOX 404 effort to be more focused on internal resources and reduced use of outside professionals. Management compensation expense related to the adoption of SFAS No. 123R Share-Based Payment totaled
$134,000 for the quarter ended September 30, 2005. There was no management compensation expense related to SFAS No. 123R in the same period of the prior year.

INTEREST EXPENSE. Interest expense was $428,000 for the quarter ended September 30, 2005, compared to $606,000 for the quarter ended September 30, 2004. Our long-term debt balance at September 30, 2005
was $28.8 million, which includes $10.3 million advanced on September 1, 2005, in connection with the acquisition of Dayton Depot Casino. This represents a decrease from $34.9 million at September 30, 2004.



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THE SANDS REGENT

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Capital Resources and Liquidity

At September 30, 2005, the Companys cash and cash equivalents were $4.7 million, an increase from $3.3 million as of July 1, 2005, the beginning of the fiscal year. We had negative working capital of
$2.3 million at September 30, 2005, consistent with our policy to use any available cash, which is not needed in operations, to pay down our line of credit to minimize interest expense. At September 30, 2005, the Company had $17.8 million
of borrowings available under its revolving credit facility.

Cash flow from operating activities was $4.8 million during the three month period ended
September 30, 2005, primarily from net income, the add-back of depreciation and amortization and an increase of $1.4 million increase in accrued expenses. The increase in accrued expenses was a result of the purchase of new gaming equipment, an
increase in gaming taxes payable and costs associated with the acquisition of Dayton Depot Casino. In conjunction with a transition to a new accounting system on July 1, 2005, accounts payable were paid down at June 30, 2005 and selected
accounts previously categorized as accounts payable were reclassed to accrued expenses This resulted in higher accrued expenses and lower accounts payable at September 30, 2005.

Investing activities accounted for a $12.2 million use of cash for the three months ended September 30, 2005, compared with $1.1 million for the three months ended September 30, 2004. The difference
represents the net cash paid for the purchase of Dayton Depot Casino on September 1, 2005. On September 1, 2005, the Company acquired Dayton Depot Casino for $600,000 in cash, proceeds from credit facility of $10.1 million and 69,438
shares of Company stock, including an additional $226,000 in acquisition related expenses. See Note 6.

The Company increased its investment in property,
plant and equipment during the three month period ended September 30, 2005, by $1.9 million attributed to purchases of new slot machines for $200,000 and costs associated with renovations of $1.7 million.

Financing activities accounted for $8.9 million of cash inflows during the three month period ended September 30, 2005 compared to $2.0 million cash outflow for the
three month period ended September 30, 2004. Financing activities provided $11.2 million of cash inflows related to borrowings on our amended and restated credit facility primarily to fund the purchase of the Dayton Depot Casino and working
capital needs. Long-term debt was reduced by payments of approximately $2.3 million during the three months ended September 30, 2005.

Our amended and
restated bank term loan and revolving credit facility, which totaled $46.2 million as of September 30, 2005, requires the Company to be in compliance with certain financial and other covenants, restricts future encumbrances and limits
situations where a change in control in the Company may occur. The financial covenants include the requirement that a minimum EBITDA (earnings before interest expense, taxes, depreciation and amortization) and certain other financial ratios be
maintained. The Company believes that it is in compliance with all covenants and restrictions at September 30, 2005.

The Company believes that its
cash funds, cash generated from operations, and available borrowing capacity will be sufficient to fund its operations, meet current debt obligations, and fulfill its capital expenditure obligations for the next 12 months; however, the
Companys operations are subject to financial, economic, competitive, regulatory, and other factors, many of which are beyond its control. If the Company is unable to generate sufficient cash flow, it could be required to adopt one or more
alternatives, such as reducing or delaying planned capital expenditures, selling assets, restructuring debt, or obtaining additional equity capital.

Commitments and Contingencies

The following table summarizes the Companys contractual obligations as
of September 30, 2005.



|                               |  |       |            |                        |   |             |  |             |            |               |   |            |  |   |          
|------------------------------ |  | ----- | ---------- | ---------------------- | - | ----------- |  | ----------- | ---------- | ------------- | - | ---------- |  | - | ---------
|                               |  |       |            | Payments due by period
|                               |  | Total |            | Less than 1 year       |   | 1 - 3 years |  | 4 - 5 years |            | After 5 years
|Long term debt                 |  | $     | 28,819,000 |                        | $ | 3,459,167   |  | $           | 8,946,652  |               | $ | 16,413,181 |  | $ |         
|Interest on long-term debt (1) |  |       | 13,942,534 |                        |   | 3,433,081   |  |             | 5,971,757  |               |   | 4,537,696  |  |   |         
|Operating leases (2)           |  |       | 3,833,333  |                        |   | 575,000     |  |             | 1,150,000  |               |   | 1,150,000  |  |   | 958,333  
|Other (3)                      |  |       | 1,257,920  |                        |   | 188,688     |  |             | 377,376    |               |   | 377,376    |  |   | 314,480  
|                               |  |       |            |                        |   |             |  |             |            |               |   |            |  |   |          
|                               |  | $     | 47,852,787 |                        | $ | 7,655,936   |  | $           | 16,445,785 |               | $ | 22,478,253 |  | $ | 1,272,813
|                               |  |       |            |                        |   |             |  |             |            |               |   |            |  |   |          

---

|(1) | Interest is calculated by assuming the Company keeps its line of credit fully advanced and the table assumes a weighted average interest rate of 7.5% until maturity. All long-term
debt matures within 5 years.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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THE SANDS REGENT

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



|(2) | Represents contractual lease obligations to Prospector Gaming Enterprises (PGE) on real property in connection with the Gold Ranch acquisition agreement. Amounts reflect
a minimum base payment schedule. The lease is subject to escalation based on the property meeting certain revenue thresholds. Management does not believe these thresholds will be met without major expansion of the gaming facilities.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | Represents management fees due to PGE in connection with the RV park at Gold Ranch. Future amounts payable are subject to adjustment based on changes in interest rates.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Cautionary Note Regarding Forward-looking Statements

This quarterly report on Form 10-Q/A includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. You can
identify these statements by the fact that they do not relate strictly to historical or current facts. These statements contain words such as may, will, project, might, expect,
believe, anticipate, intend, could, would, estimate, continue or pursue, or the negative or other variations thereof or comparable terminology. In
particular, they include statements relating to, among other things, future actions, strategies, future performance, and future financial results. We have based these forward-looking statements on our current expectations and projections about
future events. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. We undertake no obligation to publicly update any forward-looking statements,
whether as a result of new information, future events or otherwise.

We caution the reader that forward-looking statements involve risks and uncertainties
that cannot be predicted or quantified and, consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors
described below under Risks Related to our Business, as well as other factors described from time to time in our reports filed with the Securities and Exchange Commission.

Risks Relating to our Business

An investment in our common stock involves a high degree of risk. You should consider
the risks described below and the other information contained in this report carefully before deciding to invest in the Company. If any of the following risks actually occur, our business, financial condition and operating results would be
materially harmed. As a result, the trading price of our common stock could decline, and you could lose a part or all of your investment.

Our business
may be adversely impacted if the Reno economy declines.

We heavily market to and rely upon business from Reno area residents. In recent years, Reno has
enjoyed robust business growth and has attracted a number of technology, product distribution and marketing companies. These businesses have created jobs and helped fuel residential development, including the Reno metropolitan area. Should there be
negative changes in the business and job conditions in Reno, our locals business, which is a substantial part of our overall business, could be adversely impacted.

The gaming industry is highly competitive and increased competition could have a material adverse effect on our future operations.

The
gaming industry is highly competitive. As competitive pressures from California Native American casinos increase, other Reno area casinos may intensify their targeting of the Reno area resident market, which is one of our key markets. Increased
competitive pressures in the local market could adversely impact our ability to continue to attract local residents to our facilities, or require us to use more expensive and therefore less profitable promotions to compete more efficiently. In
addition, Native American gaming facilities in California and other jurisdictions in some instances operate under regulatory requirements less stringent than those imposed on Nevada licensed casinos, which could afford them a competitive advantage
in our markets.



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THE SANDS REGENT

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Our business may be adversely impacted by expanded Native American gaming operations in California and the Pacific
Northwest.

Our largest sources of tourist customers are California and the Pacific Northwest, including a large number who drive to Reno from the San
Francisco and Sacramento metropolitan areas. The expansion of Native American casinos in California, Oregon and Washington will be significant on the Reno-Tahoe market. For example, Thunder Valley Casino, a large new Native American casino managed
by Station Casinos, Inc., opened June 9, 2003, 100 miles west of Reno in Rocklin, California. Californias well-documented budgetary problems have state officials renegotiating certain compacts with Native American casinos. Some compacts
have already been changed to allow for additional slot machines. The effect of increased gaming in California and other states is difficult to predict. However, our business would be adversely impacted if Thunder Valley and other casinos attract
patrons who would otherwise travel to Reno. In addition, a significant portion of our customer base is made up of Reno area residents. If other Reno area casinos lose business due to competition from Native American casinos, they may intensify their
marketing efforts to Reno area residents as well which could materially and adversely impact our business and financial results.

Adverse winter weather
conditions in the Sierra Nevada Mountains and Reno-Lake Tahoe area could have a material adverse effect on our results of operations and financial condition.

Adverse winter weather conditions, particularly snowfall, can deter our customers from traveling or make it difficult for them to frequent our facilities. Adverse winter weather would most significantly affect our drive-in customers from
northern California and the Pacific Northwest. If the Reno area itself were to experience prolonged adverse winter weather conditions, our results of operations and financial condition could also be materially adversely affected.

Terrorist attacks may seriously harm our business.

The terrorist
attacks that took place in the United States on September 11, 2001 were unprecedented events that created economic and business uncertainties, especially for the travel and tourism industry. The potential for future terrorist attacks, the
national and international responses, and other acts of war or hostility have created economic and political uncertainties that could materially adversely affect our business, results of operations, and financial condition in ways we currently
cannot predict.

If we lose key personnel, our business could be materially adversely affected

We depend on the continued performance of our Chief Executive Officer and his management team. If we lose the services of our senior management personnel, and cannot
replace such persons in a timely manner, our business could be materially adversely affected.

Our business is subject to restrictions and limitations
imposed by regulatory authorities that could adversely affect us.

The ownership and operation of casino gaming facilities are subject to extensive
state and local regulation. The State of Nevada and the applicable local authorities require various licenses, registrations, permits and approvals to be held by us. The Nevada Gaming Commission may, among other things, limit, condition, suspend, or
revoke or decline to renew a license for any cause deemed reasonably by such licensing authority. If we violate gaming laws or regulations, substantial fines could be levied against us and we could be forced to forfeit a portion of our assets. The
suspension, revocation or non-renewal of any of our licenses or the levy on us of substantial fines or forfeiture of assets would have a material and adverse effect on our business, financial condition and results of operations.

If the State of Nevada or other local municipalities increase gaming taxes and fees, our results of operations could be adversely affected.

State and local authorities raise a significant amount of revenue through taxes and fees on gaming activities. From time to time, legislators and officials have proposed
changes in tax laws, or in the administration of such laws, affecting the gaming industry. In addition, worsening economic conditions could intensify the efforts of state and local governments to raise revenues through increases in gaming taxes. If
the State of Nevada, the cities of Reno, Sparks or Dayton, or Washoe or Lyon County were to increase gaming taxes and fees, our results of operations could be adversely affected.



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THE SANDS REGENT

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Recently issued standards, rules and regulations of governing agencies and bodies could result in material
increases to our corporate expense which could adversely affect our financial results.

We keep abreast of new generally acceptable accounting
principles and rules and regulations issued or adopted by the Financial Accounting Standards Board, the Securities and Exchange Commission, the NASDAQ and other standard setting agencies. These principles, rules and regulations often require us to
expend funds in order to meet additional requirements. As a result, our expenses could materially increase, which could adversely affect our financial results. Recently issued accounting standards affecting our financial results are described in
Note 4 to our consolidated financial statements.

Our substantial indebtedness after recent acquisitions could adversely affect our operations and
financial results.

With our recent amended and restated credit agreement and the Companys recent acquisitions, we now have a bank credit
facility, which, fully extended, amounts to $46.2 million. Our debt was $28.8 million as of September 30, 2005. We expect that our long-term indebtedness will substantially increase in connection with the capital expenditures we anticipate
making as a result of our planned expansion, development and renovation projects. Our substantial indebtedness could have important consequences. For example it could:



| |  |  | make it more difficult for us to satisfy our obligations under our current indebtedness;
| | - |  | ----------------------------------------------------------------------------------------



| |  |  | increase our vulnerability to general adverse economic and industry conditions;
| | - |  | -------------------------------------------------------------------------------



| |  |  | require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, which would reduce the availability of our cash flows to fund working
capital, capital expenditures, expansion efforts and other general corporate purposes;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
| | - |  | --------------------------------------------------------------------------------------------------------------------



| |  |  | place us at a competitive disadvantage compared to our competitors that have less debt;
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | limit, along with the financial and other restrictive covenants in our indebtedness, among other things, our ability to borrow additional funds; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | failure to comply with loan covenants could result in an event of default which, if not cured or waived, could have a significant adverse effect on us.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------

We may be unable to successfully integrate the operations of our recent and future acquisitions and/or experience significant charges to earnings as a result of the
acquisition that may adversely affect our stock price and financial condition.

We have experienced significant growth due to our recent acquisition of
gaming facilities, which is a key strategy to our long term plans. The future success of the Companys acquisitions will depend on a number of factors, including the successful integration of the newly acquired operations with existing
operations. Potential difficulties of combining operations of acquirees with that of the Company include, among others:



| |  |  | retaining key employees;
| | - |  | ------------------------



| |  |  | consolidating administrative infrastructures;
| | - |  | ---------------------------------------------



| |  |  | coordinating sales and marketing functions; and
| | - |  | -----------------------------------------------



| |  |  | minimizing the diversion of managements attention from ongoing business concerns.
| | - |  | ----------------------------------------------------------------------------------

Even if the Company is able to integrate its acquisitions successfully, this integration may not result in the realization of the full benefits and growth opportunities that we expect or these benefits may not be
achieved with the anticipated time frame.

In addition, as a result of the recent acquisitions we have experienced, and will likely continue to experience,
significant charges to earnings for merger and related expenses may include transaction costs or closure costs. These costs may include substantial fees for investment bankers, attorneys, accountants and financial printing costs. Charges that we may
incur in connection with acquisitions could adversely affect our results of operations.

We have experienced material weaknesses in our internal
controls. If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results and our management may not be able to provide its report on the effectiveness of our internal controls as
required by the Sarbanes-Oxley Act of 2002.

Management has identified material weaknesses regarding our internal control over financial reporting. The
Public Company Accounting Oversight Boards Auditing Standard No. 2 defines a material weakness as a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material
misstatement of the annual or interim financial statements will not be prevented or detected. As a result of these material weaknesses, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2005, the end of
the period covered by this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in the



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THE SANDS REGENT

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



reports we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the
SECs rules and forms.

We have taken and continue to take steps to correct the material weakness. The efficiency of the steps we have taken to date
and the steps we are still in the process of taking to improve the reliability of our financial statements is subject to continued management review supported by confirmation and testing by our internal auditors, as well as audit committee
oversight. We cannot be certain that these measures will ensure that we implement and maintain adequate controls over our financial processes and reporting in the future. Any failure to implement required new or improved controls, or difficulties
encountered in their implementation could harm our operating results or cause us to fail to meet our reporting obligations. In addition, we cannot assure you that we will not in the future identify further material weaknesses or significant
deficiencies in our internal control over financial reporting that we have not discovered to date.



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THE SANDS REGENT



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

With
our amended and restated Credit Agreement executed in September 2005 in connection with the acquisition of Dayton Depot Casino, the Company has substantial variable interest rate debt. The Company does not use interest rate derivative instruments to
manage exposure to interest rate changes. Assuming the reducing credit facilities are fully advanced, a principal amount currently equal to $46.2 million, the Company would be subject to substantial market interest rate risks. A one percent increase
in interest rates would result in an increase in interest expense of approximately $462,000 annually.

Additionally, terms of the Companys RV park
management agreement with Prospector Gaming Enterprises (PGE), referenced as (3) in the Commitments and Contingencies section of this report, state that the Company pay monthly an amount equal to 120% of PGEs debt
service on the underlying RV park note, which varies directly with changes in the Prime index. The financial impact to the Company of a full one percent increase in the Prime index is less than $25,000 per year.



|Item 4. | Controls and Procedures
|------- | -----------------------

Evaluation of Disclosure Controls and
Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by the
Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified by the SECs rules and forms, and that such information is accumulated and communicated to our management including
our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, our management recognized that any controls
and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating the cost-benefit
relationship of controls and procedures.

Subsequent to the issuance of the Companys quarterly report on Form 10-Q for the quarter
ended September 30, 2005, the Company determined that errors were made with respect to (i) expenses for stock options which were not recorded for $85,000 and a corresponding understatement of additional paid-in capital, (ii) classification of
$221,000 of other assets, previously recorded as goodwill, as a result of a misallocation of the purchase price among the assets acquired in the purchase of Dayton Depot Casino, and (iii) certain computations and classifications on the Statement of
Cash Flows. As a result, the accompanying Condensed Consolidated Balance Sheet as of September 30, 2005, Condensed Consolidated Statement of Income for the three months ended September 30, 2005 and Condensed Consolidated Statement of Cash Flows for
the three months ended September 30, 2005 have been restated to correct these errors.

Management has concluded, based on the circumstances involving the
restatement of the aforementioned financial statements that, as of September 30, 2005, material weaknesses in internal control over financial reporting existed. Management has determined that the following material weaknesses existed as of September
30, 2005: the lack of a sufficient number of personnel with an appropriate level of accounting knowledge related to the application of generally accepted accounting principles; the lack of a properly designed and implemented closing and financial
reporting process to provide reasonable assurance that the financial statements were prepared in accordance with generally accepted accounting principles; and the lack of effective controls to ensure that a sufficient review of the financial
statements was performed. These weaknesses gave rise to the following additional material weaknesses, each of which resulted in adjustments or reclassifications to our condensed consolidated financial statements:



| |  |  | Controls over the reconciliation of balance sheet general ledger accounts did not operate effectively.
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | Controls over non-routine and complex transactions were not effective to properly evaluate and account for the acquisition of the Dayton Depot Casino.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Controls over the preparation and review of the Condensed Consolidated Statement of Cash Flows were not sufficient and effective.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------



| |  |  | Controls over the proper recording and disclosure of share-based payments were not effective.
| | - |  | ---------------------------------------------------------------------------------------------

These material weaknesses resulted in the errors described above and the restatement of the condensed consolidated financial statements in this Quarterly
Report on Form 10-Q/A for the period ended September 30, 2005.

In light of the Companys decision to restate the financial statements
and the identification of material weaknesses, the Company reassessed the evaluation of the effectiveness of the Companys disclosure controls and procedures that had been made in connection with the original filing of the Companys
Quarterly Report on Form 10-Q for the period ended September 30, 2005. Based on that reassessment, the Companys Chief Executive Officer and Chief Financial Officer concluded that, due to the aforementioned material weaknesses, the
Companys disclosure controls and procedures were not effective as of September 30, 2005. To compensate for the control weaknesses described above, the Company performed additional manual procedures in order to prepare the condensed
consolidated financial statements included in this Quarterly Report on Form 10-Q/A.

Changes in Internal Control Over Financial Reporting

During the first quarter of fiscal 2006, the Company implemented the Microsoft Great Plains financial accounting and reporting system
at all of its business units, and this has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting. The Company plans to continue to implement additional modules of the system
through fiscal year 2006. Based on managements evaluation, the necessary steps have been taken to monitor and maintain appropriate internal controls during the period of change.

Other than as disclosed in the preceding paragraph, there have been no changes in our internal control over financial reporting during the quarter ended
September 30, 2005 that have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



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##### Table of Contents

THE SANDS REGENT

PART II OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

The Company is party to various
lawsuits, which have arisen in the normal course of its business. At the time of the original filing, the liability arising from unfavorable outcomes of lawsuits was not expected to have a material impact on the Companys financial condition or
financial results.



|Item 2. | Changes in Securities
|------- | ---------------------

None



|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

None



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

None



|Item 5. | Other Information
|------- | -----------------

None



|Item 6. | Exhibits
|------- | --------



|(a) | Exhibits
|--- | --------



|             |  |                                                                                                                                                               
|------------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|             | 
|Exhibit 10.1 |  | Amended and Restated Credit Agreement dated September 1, 2005 (incorporated by reference to the Companys Current Report on Form 8-K, filed September 7, 2005.
|             | 
|Exhibit 10.2 |  | Form of restricted Stock Agreement (incorporated by reference to the Companys Current Report on Form 8-K filed September 7, 2005.                            
|             | 
|Exhibit 31.1 |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                           
|             | 
|Exhibit 31.2 |  | Certification of Chief Financial and Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                  
|             | 
|Exhibit 32   |  | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                      



|(b) | Reports on Form 8-K
|--- | -------------------

None



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##### Table of Contents

THE SANDS REGENT

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|                    |  |  |  |                  |  |                        |  |                                                                     
|------------------- |  |  |  | ---------------- |  | ---------------------- |  | --------------------------------------------------------------------
|                    |  |  |  | THE SANDS REGENT
|                    |  |  |  | (Registrant)    
|                    |  |  | 
|Date: June 23, 2006 |  |  |  | By:              |  | /S/ Ferenc B. Szony   
|                    |  |  |  |                  |  |                        |  | Ferenc B. Szony, President and Chief Executive Officer              
|                    |  |  | 
|Date: June 23, 2006 |  |  |  | By:              |  | /S/ Cornelius T. Klerk
|                    |  |  |  |                  |  |                        |  | Cornelius T. Klerk, Chief Financial and Principal Accounting Officer



27