FORM 10-KSB
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
     1934

                  For the fiscal year ended: December 31, 2001

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

      For the transition period from _______________ to __________________

                         Commission file number 0-31737

                    WINDSOR WOODMONT BLACK HAWK RESORT CORP.
                    ----------------------------------------
                 (Name of small business issuer in its charter)

               Colorado                                75-2740870
               --------                                ----------
     (State or other jurisdiction of      (IRS Employer Identification No.)
     incorporation or organization)

                                 111 Richman St.
                           Black Hawk, Colorado 80422
                           --------------------------
                     (Address of principal executive office)

Issuer's Telephone Number (303) 582-3600

Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act: Common Stock,
$0.01 par value (Title of class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

    Yes [X]    No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of issuer's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ ]

State issuer's operating revenues for its most recent fiscal year: $ 2,802,134

We are unable to determine the aggregate market value for the 580,767 shares of
the common stock, $0.01 par value per share, held by non-affiliates because
there is no trading market for our common stock.

The number of shares of common stock of the registrant outstanding as of
December 31, 2001 was 1,000,000.

Document incorporated by reference:

     Document                        Part of Form 10-KSB into which Incorporated
     --------                        -------------------------------------------

Windsor Woodmont Black Hawk Resort                    Part III
Corp.'s Definitive Proxy Statement
for its Annual Meeting of Stockholders
to be held April 10, 2002.

Transitional Small Business Disclosure Format:    Yes  [ ]     No  [X]

<PAGE>


TABLE OF CONTENTS

PART I
                                                                            PAGE
                                                                            ----

    Item 1.  Description of Business ......................................    1
    Item 2.  Description of Property ......................................   24
    Item 3.  Legal Proceedings ............................................   24
    Item 4.  Submission of Matters to a Vote of Security Holders ..........   25


PART II

    Item 5.  Market for Common Equity and Related Stockholder Matters .....   25
    Item 6.  Management's Discussion and Analysis or Plan of Operation ....   26
    Item 7.  Financial Statements .........................................   30
    Item 8.  Changes in and Disagreements With Accountants
               on Accounting and Financial Disclosure .....................   30


PART III

    Item 9.  Directors, Executive Officers, Promoters and Control Persons;
               Compliance with Section 16(a) of the Exchange Act ..........   30
    Item 10. Executive Compensation .......................................   30
    Item 11. Security Ownership of Certain Beneficial Owners and Management   31
    Item 12. Certain Relationships and Related Transactions ...............   31
    Item 13. Exhibits and Reports on Form 8-K .............................   31


SIGNATURES ................................................................   32




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PART I

Item 1. DESCRIPTION OF BUSINESS

     Except for historical information contained herein, the following
discussion contains forward-looking statements that involve risks and
uncertainties. Such forward-looking statements include, but are not limited to,
statements regarding future events and the Company's plans and expectations. The
Company's actual results could differ materially from those discussed herein.
Factors that could cause or contribute to such differences include, but are not
limited to, those discussed below under "Factors That May Affect Future
Results," as well as those discussed elsewhere in this Form 10-KSB.

     We have based the Black Hawk market data and other statistical information
in this Annual Report, including parking data, on information supplied by the
Colorado Division of Gaming (the "Division of Gaming"), the City of Black Hawk
and various public announcements and filings made by some of the casinos in the
Black Hawk market. We have also relied on other sources that we believe are
reliable. While we believe that the information is accurate, we have not
independently verified any of this information or such announcements and
filings, and it is possible they may not be accurate in all material respects.
In addition, the gaming markets in Colorado and in Black Hawk are subject to
continual changes, including changes in the number and size of casinos in such
markets. Because of these changes, our estimates of our casino's expected
position in Colorado and in Black Hawk in terms of size, comparable amenities,
parking and nearby competition could become inaccurate at any time.

     As used in this Annual Report, the terms "our company," "we" and "us" refer
to Windsor Woodmont Black Hawk Resort Corp., the term "first mortgage notes"
refers to the $100 million principal amount of 13% First Mortgage Notes due 2005
which we issued under an indenture dated March 14, 2000, the term "old notes"
refers to the restricted 13% First Mortgage Notes due 2005 all of which were
exchanged for the first mortgage notes and the term "our casino" refers to the
integrated casino, entertainment and parking facility constructed in Black Hawk,
Colorado, operated under the trade name "Black Hawk Casino by Hyatt." No
representation or warranty, express or implied, is made by any of the Hyatt
companies as to the accuracy or completeness of the information in this Annual
Report, and nothing contained in this Annual Report is, or shall be relied upon
as, a promise or representation by any of the Hyatt companies.

COMPANY BACKGROUND

     Windsor Woodmont Black Hawk Resort Corp. (the "Company"), was incorporated
in the State of Colorado on January 9, 1998. The Company owns the Black Hawk
Casino by Hyatt, an up scale, integrated gaming, entertainment and parking
facility located in Black Hawk, Colorado, approximately 40 miles from Denver.
The Black Hawk Casino by Hyatt opened on December 20, 2001. The Black Hawk
Casino by Hyatt is located at 111 Richman Street, Black Hawk, Colorado, at the
desirable four-corners intersection of Highway 119 and Richman Street in the
center of the Black Hawk gaming district. The Company has entered into a casino
management agreement with Hyatt Gaming under which Hyatt Gaming manages the
Black Hawk Casino by Hyatt.

     During 1997 and 1998, Windsor Woodmont, LLC ("Windsor Woodmont") purchased
48 separate parcels of land in Black Hawk, Colorado, to assemble a 106 acre
tract of land with an aggregate of approximately 119,000 gross gaming-zoned
square feet. Windsor Woodmont is a Colorado limited liability company that was
formed for the purpose of assembling and developing the land on which the Casino
is built. In March 2000, the Company issued $100 million principle amount of
First Mortgage Notes due 2005. The proceeds were used to finance the development
and construction of the Casino.

     The members of Windsor Woodmont are individuals and entities affiliated
with real estate development companies based in Dallas, Texas. These companies
are diversified real estate development companies, which over the past 42 years
have developed various types of real estate projects, including hotels, office
buildings, mixed-use projects, shopping centers, multi-family residential
housing and land developments. Windsor Woodmont currently owns approximately
12.27% of Windsor Black Hawk's outstanding shares of common stock.

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DESCRIPTION OF CASINO

     General. The Black Hawk Casino by Hyatt is an upscale gaming facility
providing patrons with a broad selection of gaming activities, dining and
entertainment. The Black Hawk Casino by Hyatt is built on the largest single
parcel of real estate ever assembled for casino development in Black Hawk. It is
the largest casino in Black Hawk, with approximately 425,000 square feet, 57,000
of which is used for gaming. The Black Hawk Casino by Hyatt features the largest
number of gaming machines in Black Hawk with 1,332 state of the art slot
machines and 22 table games. The interior decor resembles the Rocky Mountain
surroundings by using rocks, wood, and landscapes natural to Colorado as part of
the interior design.

     Restaurants. The Black Hawk Casino by Hyatt features a full array of dining
options. Restaurants available include: the Hickory Grill Restaurant, a steak
and seafood restaurant, the Kitchens of the World Action Buffet, a high quality
action-station buffet and a food court featuring various quick service food
offerings. A Wolfgang Puck's Express restaurant opened in March, 2002. In
addition, the Black Hawk Casino by Hyatt includes an indoor/outdoor plaza area
featuring Starbucks coffee and a gift shop.

     Parking. The Black Hawk Casino by Hyatt includes an approximately 300,000
square foot parking garage, with the capacity to park approximately 800 vehicles
in covered parking spaces, 650 adjacent valet spaces, and is able to accommodate
buses and motor coaches. This represents one of the largest on-site parking
facilities in Black Hawk. Our casino also features Black Hawk's largest porte
cochere leading directly into our casino.

     Entertainment. Our non-gaming amenities are located throughout the gaming
floor. The focal point is the Wild Fire Lounge, a circular lounge with a stage
for live entertainment and four large television screens for viewing televised
sporting and other events that is surrounded by 70-foot-high-see-through
fireplaces. The casino also includes a Margarita Bar on the casino floor and
televisions in the food court to entertain guests. The casino contains the Vista
Gallery, a stationary exhibit gallery on the second floor overlooking the gaming
floor.

BUSINESS STRATEGY

     Our business strategy is to establish and maintain a prominent position or
market niche in the Black Hawk gaming district by offering patrons a quality
entertainment experience through superior customer service in an up-scale,
friendly and exciting environment. We promote the casino through the use of the
Hyatt Companies brand name, which customer associate with high quality customer
service. We are dedicated to providing a high level of customer satisfaction and
loyalty by offering a spacious, single-floor Las Vegas style casino featuring
both gaming and non-gaming entertainment using a upscale and distinctive design.
Our casino is built on the largest single parcel of real estate ever assembled
for casino development in Black Hawk. We recognize that consistent quality and a
comfortable atmosphere can differentiate our casino and offer us a competitive
advantage. We believe the distinctive design of our casino combined with its
upscale amenities will attract a wider cross section of Denver metropolitan area
residents. Specifically, we believe that our casino will attract existing and
new individuals in those markets with the opportunity to make a short,
convenient day trip to a casino, where they can engage in a variety of
activities, including fine dining and gaming in an entertaining setting.

MARKETING STRATEGY

     We believe that the primary determinants of success of casinos in the Black
Hawk market have been location and parking. We believe that our casino has an
excellent location and offers sufficient and convenient parking. In addition,
our casino has an opportunity to expand the Black Hawk market by way of numbers
of patrons and to reach higher-spending patrons by offering a higher level of
quality and service than currently exists in Black Hawk. Additionally, the size
of our casino will allow us to better absorb peak period demand. Our marketing
strategy emphasizes the following elements:

     Targeted Customer Base. We target potential customers with above-average
household income levels in the Denver metropolitan area who tend to have
disposable income for gaming and entertainment purposes. We intend to take
advantage of this customer base using our marketing plan built on our Players
Advantage Club, preferred player recognition program. The Players Advantage Club
allows members to receive valuable rewards and exciting promotional offers in
conjunction with their casino play. We plan to capitalize on increased
visitation by residents of Denver and the surrounding suburbs. Our marketing
also focuses on the large number of tourists visiting Colorado. By exploiting
the cross-marketing opportunities with Hyatt and their three large hotel
properties in Colorado, we will be able to target and develop this market and
obtain a competitive advantage. We believe our competitive strengths will allow
us to successfully penetrate this tourist market.

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     Effective Marketing. We will aggressively promote the Black Hawk Casino by
Hyatt through television, radio, billboard, Internet and print advertising. We
attract customers to the Black Hawk Casino by Hyatt through marketing in the
Colorado market through the extensive use of television, radio and print
advertisements, billboards, our Players Advantage Club, and on-going promotions,
gaming tournaments and sweepstakes. The marketing emphasizes the casino's
gaming, quality dining facilities, varied entertainment activities and on-site
parking.

     Customer Service. Our casino will have a management team committed to
superior service, quality and innovation. It is our intention not only to
promote repeat business by developing patron loyalty, but also to appeal to
patrons who currently do not find Black Hawk's attractions sufficiently
compelling to warrant the trip. In addition, Colorado hosts approximately 23
million visitors annually. We believe that if we are able to develop casino
patronage from such visitors, it would have a beneficial impact on our casino.

     Hyatt Gaming. Under our casino management agreement, Hyatt Gaming
recommends and implements marketing plans and strategies for the casino. These
plans and strategies are designed to promote repeat visits and patron loyalty.
Our casino benefits from the previous experience of Hyatt Gaming and the other
Hyatt companies in operating in various jurisdictions and in highly competitive
environments. We believe the Hyatt companies' expertise and reputation enable
the casino to stand out among the existing local operators with respect to
quality of service.

     Additional Marking Strategies. Other marketing strategies include: database
management/direct mail marketing, innovative slot and table game merchandising
and quantifiable drive-in marketing programs. We believe that when provided with
upscale amenities, customers will stay in our casino longer and spend more than
existing Black Hawk customers currently spend. We believe that effective use of
database marketing is among the most efficient means to communicate with active
and potential customers. Hyatt Gaming utilizes player tracking systems to
develop effective marketing and promotional programs by identifying segments of
the population most likely to be attracted to our facility and then tailors
promotions that appeal to this core group of customers.

COMPETITION

     We believe the primary competitive factors in Black Hawk are location,
availability and convenience of parking, number of slot machines and gaming
tables, types and pricing of restaurants and other amenities, name recognition,
customer service, experienced management and overall atmosphere. Competition in
Black Hawk is intense. Certain of our current and future competitors have or may
have more gaming experience than us or Hyatt Gaming and the other Hyatt
companies and/or greater financial resources.

     Of the 21 gaming facilities operating in Black Hawk, eight have over 700
gaming positions. We consider these larger gaming facilities to be our main
competitors. These larger gaming facilities have on-site or nearby parking and
have brand names established in the local market, such as the Isle of Capri, The
Lodge at Black Hawk, Colorado Central Station, the Riviera Black Hawk Casino and
the Mardi Gras Casino. The Riviera Black Hawk Casino, which opened in early
February 2000, features approximately 1,000 gaming machines, and the Mardi Gras
Casino, which opened in early March 2000, features approximately 700 gaming
machines. Colorado Central Station, which has been one of the most successful
casinos in Colorado, is located near our casino and has approximately 770 gaming
machines and approximately 700 valet parking spaces. The Isle of Capri, which
opened in December, 1998, is located near our casino and features approximately
1,150 gaming machines and 1,100 parking spaces. Other competitors in Black Hawk
include the Gilpin Hotel Casino, Canyon Casino, Fitzgerald's Casino and
Bullwhackers Black Hawk.

     Casinos offering hotel accommodations for overnight stay may have a
competitive advantage over our casino. Currently two casinos offer hotel
accommodations, with the total number of hotel rooms in Black Hawk being 287.
The Lodge at Black Hawk provides 50 and the Isle of Capri provides 237 rooms. In
addition, Harvey's Wagon Wheel Casino Hotel, located in Central City, has 118
hotel rooms.

     We may also face increased competition from casinos in Central City.
Historically, Black Hawk has enjoyed an advantage over Central City because the
majority of customers have to drive by and through Black Hawk to reach Central
City. On November 2, 1999, the voters in Central City granted authority to the
Business Improvement District for the sale of approximately $45.2 million in
bonds which would be allocated towards the planning, design and construction of
a nine mile roadway directly connecting Central City with Interstate 70. This
roadway could result in improved access to both Central City and Black Hawk and

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enable patrons to reach Central City without driving through Black Hawk. As of
March 26, 2002, no bonds had been issued in connection with the construction of
the roadway. Our casino also competes, to a limited extent, with the casinos
located in Cripple Creek, because both Black Hawk and Cripple Creek compete for
patrons from Denver. Cripple Creek is located approximately 110 miles to the
south of Black Hawk and 45 miles west of Colorado Springs. The information
contained in this discussion of competition was derived from publicly available
data, except where otherwise stated. While we regard these sources as reliable,
no assurances can be made regarding the accuracy of such information.

     Currently, limited stakes gaming in Colorado is constitutionally authorized
in Central City, Black Hawk, Cripple Creek and two Native American reservations
in southwest Colorado. However, gaming could be approved in other Colorado
communities in the future. The legalization of gaming closer to Denver would
likely have a material adverse impact on our future operating results. Our
casino will also indirectly face competition from other forms of gaming,
including the Colorado state-run lottery, the Power Ball multi-state lottery,
charitable bingo, horse and dog racing, as well as other forms of entertainment.

OPERATING RESTRICTIONS

     An amendment to the Colorado State Constitution permits limited gaming in
the cities of Central City, Black Hawk and Cripple Creek, Colorado. The
amendment defines "limited gaming" as the use of slot machines and the card
games of blackjack and poker, each with a maximum single bet of $5.00. The
amendment restricts limited gaming to the commercial districts of Black Hawk,
Central City and Cripple Creek, as such commercial districts were defined in
city ordinances on specific dates. Limited gaming is governed by the amendment
and the regulations of the Colorado Gaming Commission and Colorado Revised
Statutes Section 12-47.1-101 et seq., hereinafter referred to as the Colorado
Limited Gaming Act. In the case of the City of Black Hawk, limited gaming is
restricted by the amendment to the commercial district of Black Hawk as it
existed on May 4, 1978. The amendment also restricts gaming to structures that
conform to the architectural styles and designs that were common to the areas
prior to World War I and that conform to applicable city ordinances. Under the
amendment, no more than 35% of the square footage of any building and no more
than 50% of any one floor of such building may be used for gaming. Gaming
operations may be conducted 365 days a year but are prohibited between the hours
of 2:00 a.m. and 8:00 a.m. Pursuant to the Colorado Limited Gaming Act, no
limits are imposed on total patron losses and casinos are not allowed to extend
credit to the patrons. Persons under the age of 21 are prohibited from
participating in gaming or lingering in gaming areas.

     Colorado law requires licensees to maintain detailed books and records that
accurately account for all monies and business transactions. Books and records
must be furnished upon demand to the Colorado Gaming Commission or the Division
of Gaming. Detailed and extensive playing procedures, standards, requirements
and rules of play are established for poker, blackjack and slot machines.
Licensees must adopt comprehensive internal control procedures governing their
gaming operations. Such procedures must be approved in advance by the Division
of Gaming and, in certain cases, the Colorado Gaming Commission, and include the
areas of accounting, surveillance, security, cashier operations, key control and
fill and drop procedures, among others.

     No gaming may be conducted in Colorado unless all appropriate licenses are
approved by and obtained from the Colorado Gaming Commission. Violations of
Colorado gaming laws or regulations may be criminal offenses and the person or
entity violating such laws and regulations may be subject to criminal penalties
and/or administrative fines, and may have its gaming license suspended or
revoked.

EMPLOYEES

     Windsor Woodmont currently employees 4 full-time, paid employees. Black
Hawk Casino by Hyatt employs approximately 700 full-time, paid employees. All
Black Hawk Casino by Hyatt personnel retained to provide operations services at
the casino are Hyatt Gaming employees trained by Hyatt Gaming. We believe Hyatt
Gaming will be able to continue to attract and retain a sufficient number of
qualified individuals to operate our casino. However, we cannot assure you that
Hyatt Gaming will be able to continue to do so. Furthermore, we do not know
whether or to what extent such employees will be covered by collective
bargaining agreements.

RECENT DEVELOPMENTS

     On August 20, 2001, Daniel P. Robinowitz resigned from his positions as
Chairman of the Board of Directors, Chief Executive Officer and President of the
Company. Mr. Timothy G. Rose was elected by the Board of Directors to fill the
vacancy on the Board and to fill the positions of President and Chief Executive
Officer created by the resignation of Mr. Robinowitz. Mr. Irving C. Deal was
elected to serve as the Chairman of the Board of Directors.

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     On January 4, 2002, Craig Sullivan resigned from his position as a member
of the Board of Directors. On January 8, 2002, Mr. Garry W. Saunders was elected
by the Board of Directors to fill the vacancy on the board created by the
resignation of Mr. Sullivan. Such election is contingent upon Mr. Saunders
meeting the licensing requirements set forth by the Colorado Division of Gaming.
On March 25, 2002, Mr. Saunders was appointed an independent member of the Audit
Committee.

THE HYATT COMPANIES

     General. The Hyatt name is associated with excellence in hotels and resorts
in North America, Central America, South America, the Caribbean, Europe, Hawaii
and the Asia Pacific region. The first Hyatt hotel opened in 1957. The Hyatt
companies include Hyatt Corporation and its affiliates, including Hyatt Gaming,
and Hyatt International and its affiliates, which are owned, directly or
indirectly, by trusts for the benefit of one or more of the direct lineal
descendants or siblings, natural or adoptive, of Nicholas J. Pritzker, deceased,
or his or their respective current or future spouses. The Hyatt companies
operate 114 hotels and resorts in 85 cities in the United States, Canada and the
Caribbean, and 79 additional hotels and resorts in 35 countries. In addition,
the Hyatt companies operate eight casinos in addition to the Black Hawk Casino
by Hyatt, including the Grand Victoria Resort & Casino by Hyatt in Rising Sun,
Indiana; the Regency Mendoza Argentina Casino Mendoza, Mendoza, Argentina; the
Hyatt Regency Lake Tahoe Resort & Casino in Incline Village, Nevada; the Hyatt
Regency Aruba Resort & Casino in Palm Beach, Aruba; the Hyatt Regency Casino
Thessaloniki in Thessaloniki, Greece; the Hyatt Cerromar Beach Resort & Casino
in Dorado, Puerto Rico; the Hyatt Regency Lake Las Vegas in Henderson, Nevada;
and, under a special arrangement, Casino Niagara in Ontario, Canada.

     Hyatt Gaming. We have entered into a casino management agreement with Hyatt
Gaming. Hyatt Gaming was initially established to manage and operate the Grand
Victoria riverboat gaming complex in Rising Sun, Indiana. An affiliate of Hyatt
Gaming controls the ownership of the Rising Sun development, and Hyatt Gaming
operates the Rising Sun property under a project management agreement entered
into on January 5, 1996. In addition, Hyatt Gaming has entered into a gaming
services agreement with Falls Management Company under which Hyatt Gaming
provides a comprehensive set of operating services to Falls Management Company,
enabling it to perform its duties and obligations as the operator of Casino
Niagara.

     Hyatt Gaming has entered into consulting agreements with Hyatt Gaming
Services, L.L.C. relating to the operation of Casino Niagara and the Grand
Victoria in Rising Sun. Hyatt Gaming Services, L.L.C., a wholly owned subsidiary
of Hyatt Gaming, was formed in 1998 to provide consulting services and advice to
developers, owners, operators and managers of gaming casinos. Hyatt Gaming
Services, L.L.C. has consulting agreements, and provides a range of operating
and other services, with respect to all eight of the casinos operated by the
Hyatt companies.

REGULATORY STRUCTURE

     The Black Hawk Casino by Hyatt received the required licenses and opened on
December 20, 2001.

     Colorado Regulatory Agencies. The Division of Gaming, created under the
Colorado Department of Revenue, regulates limited gaming in Colorado. The
Division of Gaming licenses, implements, regulates and supervises the conduct of
limited gaming under Colorado Constitution Article XVIII, Section 9, the
Colorado Limited Gaming Act. The Division of Gaming has broad authority to
sanction, fine, suspend and revoke a license for violations of the Colorado
Gaming Regulations. Violations of several provisions of the Colorado Gaming
Regulations also can result in criminal penalties. The Colorado Limited Gaming
Act created a Limited Gaming Control Commission (the "Colorado Gaming
Commission") to ensure compliance with gaming laws and regulations.

     Gaming Licenses. All applicants for Colorado gaming licenses must complete
comprehensive applications and forms, pay required fees and provide all
information required by the Colorado Gaming Commission and the Division of
Gaming. The Division of Gaming conducts a thorough background investigation of
each applicant or any person or entities associated with the applicant. The
Division of Gaming may request that investigators from the Colorado Bureau of
Investigation also interview and assist in the background investigation. The
investigation may cover the background, personal history, financial
associations, past associations with casino owners and operators, character,
record and reputation of the applicant and its associated persons. The applicant
pays the full cost of the background investigation. There is no limit on the
cost or duration of the background investigation and the length or delay in the

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approval process may have a material, adverse impact on the ability of the
casino to timely obtain its gaming license. Applicants who do not provide all
requested information during a background investigation may be denied a gaming
license. In addition, all persons loaning monies, goods or real or personal
property to a licensee or applicant, or entering into any agreement with a
licensee or applicant, must provide any information requested by the Division of
Gaming or the Colorado Gaming Commission; and in the discretion of the Division
of Gaming or the Colorado Gaming Commission, these persons must supply all
information relevant to a determination of any such person's suitability for
licensure and must submit to a full background investigation if ordered by the
Colorado Gaming Commission. Failure to promptly provide all information
requested or to submit to a suitability or background investigation may result
in:

     o    the denial of a gaming license application;

     o    the suspension or revocation of an existing license;

     o    termination of any lease, note arrangement or agreement between the
          applicant or licensee and the person requested to provide the
          information; and

     o    other sanctions such as the imposition of fines.

     Applicants and licensees may be required by the Colorado Gaming Commission
to pay the costs of background, suitability or other investigations associated
with the applicant or licensee. Investigations for suitability, background or
any other reason may delay the license application or the performance under any
agreement with a licensee. All agreements, contracts, leases and arrangements in
violation of the Colorado Limited Gaming Act or the rules are void and
unenforceable. If the Colorado Gaming Commission determines that a person or
entity is unsuitable to own interests in the gaming licensee, then the applicant
and/or licensee could be sanctioned, which may include the loss by the casino of
approvals or licenses.

     In addition, the Colorado regulations prohibit a licensee or affiliated
company thereof from paying dividends, interest or other remuneration to any
unsuitable person, or recognizing the exercise of any voting rights by any
unsuitable person. Further, the casino may repurchase the shares of anyone found
unsuitable at the lesser of cost or fair market value with indebtedness
subordinated to the notes and the second mortgage notes held by Hyatt Gaming.

     In addition to its authority to deny an application for a license based on
suitability, the Colorado Gaming Commission has jurisdiction to disapprove a
change in corporate position of the licensee and may have such authority with
respect to any entity or person which is required to be found suitable by the
Colorado Gaming Commission. The Colorado Gaming Commission has the power to
require the licensee to suspend or dismiss managers, officers, directors and
other key employees, or sever relationships with other persons who refuse to
file appropriate applications or to whom the authorities find unsuitable to act
in such capacity; and may have such power with respect to any entity which is
required to be found suitable. Specifically, it should be noted that there are
limited exceptions applicable to licensees that are publicly traded entities
and, generally speaking, no person, including persons who may acquire an
interest in a licensee in a foreclosure, may sell, lease, purchase, convey or
acquire any interest in a retail gaming or operator license or business without
the prior approval of the Colorado Gaming Commission after investigation by the
Division of Gaming.

     Persons found unsuitable by the Colorado Gaming Commission may be required
to terminate immediately any interest in, association or agreement with, or
relationship to a licensee. A finding of unsuitability with respect to any
officer, director, employee, associate, lender or beneficial owner of a licensee
or applicant also may jeopardize the licensee's license or the applicant's
application. The grant of a license may be conditioned upon the termination of
any relationship with unsuitable persons.

     Licensees have a continuing duty to report to the Colorado Gaming
Commission and the Division of Gaming information concerning persons, including
identifying those who have a 5% or greater ownership interest, financial or
equity interest in the licensee, or who have the ability to control or exercise
a significant influence over the licensee, or who loan money to the licensee.
Therefore, the requisite information regarding the holders of the notes and
warrants will have to be periodically reported to the Colorado Gaming Commission
and the Division of Gaming. Any person licensed by the Colorado Gaming
Commission and any associated person of a licensee must report criminal
convictions and criminal charges to the Colorado Gaming Commission.

     Under Colorado law, it is a criminal violation for any person to have a
legal, beneficial, voting or equitable interest, or right to receive profits, in
more than three retail gaming licenses in Colorado. The Colorado Gaming
Commission has defined when a person is considered to have an interest in a
licensee for purposes of this multiple-license prohibition.

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     No manufacturer or distributor of slot machines or associated equipment,
may, without notification being provided to the Division within ten days,
knowingly have an interest in any casino operator, allow any of its officers or
any other person with a substantial interest in such business to have such an
interest, employ any person if that person is employed by a casino operator, or
allow any casino operator or person with a substantial interest in a operator to
have an interest in the manufacture's or distributor's business. A "substantial
interest" means the lesser of (i) as large an interest in an entity as any other
person or (ii) any financial or equity interest equal to or greater than 5%.

     Support or Key Employee License. Gaming employees must hold either a
support or key employee license issued by the Division of Gaming. Every retail
gaming licensee must have a key employee in charge of all limited stakes gaming
activities when limited stakes gaming is being conducted. All persons employed
by Black Hawk Casino by Hyatt, and involved, directly or indirectly, in gaming
operations in Colorado are required to obtain a gaming license. All licenses
must be renewed annually except for key and support employees which must be
renewed every two years.

     Conveyance. With limited exceptions applicable to licensees that are
publicly traded entities, no person may sell, lease, purchase, convey or acquire
any interest in a retail gaming or operator license or business without the
prior approval of the Colorado Gaming Commission. Also, no person may own gaming
equipment without being licensed. Such prohibition could impair the ability of
the holders of the first mortgage notes to liquidate our assets upon any
foreclosure of the liens securing the notes.

     There cannot be a change in our control without the Colorado Gaming
Commission's prior approval. Also, there can be no change in our capital stock
without the Colorado Gaming Commission's prior approval.

     All agreements, contracts, leases or arrangements in violation of
applicable Colorado law or regulations are void and unenforceable. The Colorado
Gaming Commission or the Director of the Division of Gaming may require changes
in gaming contracts (which are any agreements with a licensee, such as the
indenture governing the first mortgage notes) or termination of a gaming
contract.

     Publicly Traded Corporations. In addition to the other requirements of the
gaming laws, the Colorado Gaming Commission has enacted a special rule, Rule
4.5, which imposes additional requirements on publicly traded corporations
holding gaming licenses in Colorado and on gaming licensees in Colorado owned
directly or indirectly by publicly traded corporations. We are deemed to be a
"publicly traded corporation" under Rule 4.5 and we are required to file
periodic reports under the Securities Exchange Act of 1934. While we are deemed
"publicly traded" for purposes of Rule 4.5, the following provisions will apply.

     Under Rule 4.5, licensees to whom Rule 4.5 applies must include in their
articles of organization or similar charter documents certain specified
provisions that:

     o    restrict the rights of the licensee to issue voting interests or
          securities except in accordance with the Colorado gaming laws;

     o    limit the rights of persons to transfer voting interests or securities
          of a licensee except in accordance with the Colorado gaming laws; and

     o    provide that holders of voting interests or securities of a licensee
          found unsuitable by the Colorado Gaming Commission may be required to
          sell their interests or securities back to the issuer at the lesser
          of, in general terms, the holder's investment or the market price as
          of the date of the finding of unsuitability. Alternatively, and with
          authorization by the Colorado Gaming Commission, the holder may, in
          limited circumstances, transfer the voting interests or securities to
          a suitable person as determined by the Colorado Gaming Commission.
          Until the voting interests or securities are held by suitable persons:

     o    the issuer may not pay dividends or interest on them;

     o    the interests or securities may not be voted or entitled to any vote
          and they may not be included in the voting of securities of the
          issuer; and

     o    the issuer may not pay any remuneration in any form to the holder of
          the securities or interests.

                                       7
<PAGE>

Our Amended and Restated Articles of Incorporation contain these provisions.

     Under Rule 4.5 persons who acquire direct or indirect beneficial ownership
of:

     o    5% or more of any class of voting securities of a publicly traded
          corporation involved in gaming in Colorado; or

     o    5% or more of the beneficial interest in a gaming licensee directly or
          indirectly through any class of voting securities of any holding
          company or intermediary company of a licensee

must notify the Colorado gaming authorities within 10 days of such acquisition,
are required to submit all requested information and are subject to a finding of
suitability. All persons who fall under these requirements are referred to in
this discussion as "qualifying persons." Licensees must notify any qualifying
persons of these requirements. A qualifying person whose interests equal 10% or
more must apply to the Colorado Gaming Commission for a finding of suitability
within 45 days after acquiring these securities. Licensees must also notify any
qualifying persons of these requirements. Whether or not notified, qualifying
persons are responsible for complying with these requirements.

     A qualifying person who is an institutional investor under Rule 4.5 and
whose interests equal 15% or more must apply to the Colorado Gaming Commission
for a finding of suitability within 45 days after acquiring the interests. A
qualifying person who is an institutional investor and whose interests equal 10%
or more, but less than 15%, may not be required to apply for suitability,
provided the person fulfills certain reporting requirements.

     Rule 4.5 requires persons found unsuitable by the Colorado Gaming
Commission to be removed from any position as an officer, director, shareholder
or employee of a licensee, or from a holding or intermediary company of a
licensee. Unsuitable persons also are prohibited from any beneficial ownership
of the voting securities of any of those entities. Licensees, or affiliated
entities of licensees, are subject to sanctions for paying dividends to persons
found unsuitable by the Colorado Gaming Commission, or for recognizing voting
rights of, or paying a salary or any remuneration for services to, unsuitable
persons. Licensees or their affiliated entities also may be sanctioned for
failing to pursue efforts to require unsuitable persons to relinquish their
interests. The Colorado Gaming Commission may determine that anyone with a
material relationship to a licensee, or affiliated company, must apply for a
finding of suitability.

     Taxes. The amendment to the Colorado State Constitution further provides
that, in addition to any other applicable license fees, up to a maximum of 40%
of the adjusted gross proceeds of gaming operations may be payable by a licensee
for the privilege of conducting limited gaming in the State of Colorado.
Adjusted gross proceeds of gaming operations is generally defined as the total
amounts wagered, less all payments to players. With respect to games of poker
and other table games, adjusted gross proceeds of gaming operations means those
sums wagered in a hand retained by the licensee as compensation, which must be
consistent with the minimum and maximum amounts established by the Colorado
Gaming Commission. Currently the gaming tax on adjusted gross proceeds of gaming
operations is .25% on adjusted gross gaming proceeds of up to and including $2
million, 2% over $2 million up to and including $4 million, 4% over $4 million
up to and including $5 million, 11% over $5 million up to and including $10
million, 16% over $10 million up to and including $15 million, and 20% over $15
million. The gaming tax is paid monthly with licensees required to file returns
by the 15th of the following month. Gaming taxes are established as of July 1st
for the following 12 months.

     Annual Device Fees. The municipalities of Central City, Black Hawk and
Cripple Creek assess and collect their own device fees. The current annual
device fee in Black Hawk is $750 per device. A credit is extended for the first
fifty (50) gaming devices. As of March 27, 2002, the Company had a total of
1,354 gaming devices and after the credit, pays the annual device fee for 1,304
gaming devices. There is no statutory limit on state or city device fees, which
may be increased at the discretion of the State or the applicable city. Local
device fees may be prorated according to device usage; Black Hawk currently
prorates device fees such that any device used at any time during a calendar
month is subject to the device fee for such calendar month. In addition, a
business improvement fee of approximately $90 per device and a transportation
impact fee of approximately $106 per device also may apply, depending upon the
location of the licensed premises. In the past, the Colorado Gaming Commission
has assessed an annual state device fee, however the Colorado Gaming Commission
has eliminated its annual device fee for gaming machines. We cannot be certain
the Colorado Gaming Commission will not, in the future, decide to assess this
fee. Should the state impose an annual device fee, it may have a significant
effect on business.

                                       8
<PAGE>

     Additional Taxes and Fees. Black Hawk also imposes taxes and fees on other
aspects of the business of gaming licensees, such as parking, alcoholic beverage
licenses and other municipal taxes and fees. Black Hawk may impose increases or
additional fees at its discretion which may have a significant effect upon our
operations.

     Alcohol. The sale of alcoholic beverages in gaming establishments is
subject to strict licensing, control and regulation by state and local
authorities. Alcoholic beverage licenses are revocable and non-transferable.
State and local licensing authorities have full power to deny, limit, condition,
suspend or revoke any such licenses. Persons or entities which directly or
indirectly own 10% or more of a licensee will be required to complete
applications and submit certain personal and financial information and be
subject to investigation. Violation of the state alcoholic beverage laws may
constitute a criminal offense and violators may be subject to criminal
prosecution, incarceration and fines.

     There are various classes of retail liquor licenses under the Colorado
State Liquor Code. A retail gaming tavern license or restaurant liquor license
may be issued to persons who are licensed as a limited gaming establishment
under Colorado law. A retail gaming tavern licensee may sell malt, vinous or
spirituous liquors only by individual drinks for consumption on the premises,
and must also make available sandwiches or light snacks or contract with
concessionaires to provide food services within the same building as the
licensed premises. A restaurant liquor license requires the service of meals and
that at least 25% of the total of food and beverage sales come from the sale of
food. In no event may any person hold, or have an interest in, more than three
retail gaming tavern licenses. Also, a person may not have an interest in more
than one class of liquor license. An application for an alcoholic beverage
license in Colorado requires notice, posting and a public hearing before and
approval by the local liquor licensing authority. In Black Hawk, the licensing
authority is the Black Hawk Board of Aldermen. The Colorado Department of
Revenue, through its Liquor Enforcement Division, also must approve the
application. The Black Hawk Casino by Hyatt has been approved by both the local
licensing authority and the State Division of Liquor Enforcement.

Material Agreements

     Casino Management Agreement. We entered into a casino management agreement
with Hyatt Gaming on February 2, 2000, which was amended on March 14, 2000.
Under the terms of the casino management agreement, Hyatt Gaming operates and
manages our casino. Hyatt Gaming may obtain the services of Hyatt Gaming
affiliates to the extent necessary for Hyatt Gaming to perform its obligations
under the casino management agreement. Hyatt Gaming has entered into a
consulting agreement with its affiliate, Hyatt Gaming Services, LLC, to perform
obligations under the casino management agreement. Hyatt Gaming retains full
responsibility and liability for performance of all obligations under the casino
management agreement and will cause Hyatt Gaming Services to perform under its
consulting agreement in accordance with the terms and provisions of the casino
management agreement. Hyatt Gaming Services provides gaming services to Hyatt
Gaming and other Hyatt companies.

     Duties of Hyatt Gaming. Under the casino management agreement, Hyatt Gaming
operates our casino, as our agent. We and Hyatt Gaming have structured our
relationship under the casino management agreement to create an agency coupled
with an interest so that it is irrevocable except under the terms of the casino
management agreement.

     The obligation of Hyatt Gaming to operate, maintain and manage our casino
includes, without limitation, managing the facility in a manner that is
consistent with the Colorado liquor and gaming laws and regulations, marketing
and advertising services, collection and payment services, service bureau
payroll/personnel systems, establishment and implementation of accounting and
cost controls, legal services, security services and establishment and
implementation of policies and procedures for the operation of our casino.

     Term. The original term of the casino management agreement commenced on
February 2, 2000 and will continue until the fifteenth anniversary of the
opening date of our casino, unless terminated sooner by either us or Hyatt
Gaming. Hyatt Gaming has the right to extend the original term for two
successive periods of five years each. In order to renew, Hyatt Gaming must
provide us with notice at least six months but no more than twelve months prior
to the end of the term in force, and Hyatt Gaming must not have committed an
uncured event of default. Renewal terms will be on the same terms, covenants and
conditions as set forth in the casino management agreement for the original
term. It is a condition of the exercise by Hyatt Gaming of any renewal option
that the simple average annual percentage return on cash equity in our casino,
as of the date such renewal option is exercised, is equal to or greater than
15%.

     Compensation. For each fiscal year, Hyatt Gaming will receive a basic fee
equal to 3% of the adjusted gross receipts of our casino and an incentive fee
equal to 5% of the earnings before interest, taxes, depreciation and
amortization for the appropriate fiscal year. For this purpose, adjusted gross
receipts mean the adjusted gross proceeds of our casino as defined by the
Colorado Limited Gaming Act with certain adjustments to include income from
sources other than gaming, less all gaming taxes. The incentive fee will be paid
only to the extent that the earnings before interest, taxes, depreciation and
amortization is a positive number, and will be subordinated and deferred as set
forth in the indenture governing the first mortgage notes.

                                       9
<PAGE>

     Termination. Within 30 days after the loss of a Hyatt Gaming license
relating to our casino, we would have the right to terminate the casino
management agreement upon delivery of written notice by us to Hyatt Gaming of
such termination. If Hyatt Gaming does not manage our casino profitably or does
not otherwise meet performance criteria, we do not have the ability to terminate
the casino management agreement on that basis.

     Hyatt Gaming has the right to terminate the casino management agreement
after written notice of termination in the event that:

     o    a loss of license event occurs with respect to a project license; or

     o    a loss of license event occurs with respect to Hyatt Gaming or its
          affiliates with respect to another casino as a result of Hyatt
          Gaming's management of our casino or investment in the second mortgage
          notes.

     In addition, we have the right to terminate the casino management agreement
in connection with any sale of our casino to a third party unaffiliated with us
or any of our shareholders after the third anniversary of the opening date of
our casino upon written notice and within certain time limitations. A
termination fee must be paid to Hyatt Gaming. The termination fee generally is
equal to the product of six times the average of the annual management fees
earned by and payable to Hyatt Gaming during the three fiscal years immediately
preceding the termination date.

     Notwithstanding any termination of the casino management agreement in
accordance with the above provisions, we would continue to be liable to Hyatt
Gaming for the payment of all fees and other amounts due or accrued to Hyatt
Gaming under the casino management agreement to the date of such termination.

     Events of Default. Upon an event of default, the non-defaulting party may
give the defaulting party notice of intention to terminate the casino management
agreement. Once an expiration period of fifteen days has passed, the casino
management agreement would end. Some significant events of default are as
follows:

     o    failure to pay the other party amounts due within fifteen days of
          notice of such failure; or

     o    failure to perform in any material respect, with certain exceptions,
          the terms, covenants, undertakings, obligations or conditions set
          forth in the casino management agreement, after proper notice of the
          failure; or

     o    any default under the subordinated loan agreement or certain
          provisions of the intercreditor, subordination and collateral
          agreement; or

     o    insolvency or failure to pay debts as they become due by either party;
          or

     o    assignment by either party for the benefit of its creditors; or

     o    commencement of a bankruptcy or similar proceeding or a proceeding to
          appoint a receiver or similar official; or

     o    any default under any hotel management agreement we subsequently enter
          into with Hyatt Gaming.

     Assignment. Hyatt Gaming may assign or delegate any or all of its rights or
obligations under the casino management agreement, without our consent, to any
assignee affiliate or may assign all of its rights and obligations under the
casino management agreement to any assignee who also acquires all, or
substantially all, of the gaming or hotel assets of Hyatt Corporation or the
affiliated group, as defined in Section 1504 of the Internal Revenue Code of
1986, as amended, of which Hyatt Corporation is a member and assumes its
obligations, including those under the casino management agreement. Upon an
assignment or delegation, Hyatt Gaming's obligations under the casino management
agreement would terminate unless the assignment is to an affiliate assignee. If
the assignment or delegation is to an affiliate assignee, Hyatt Gaming's
obligation will continue as if the assignment had not taken place. The
assignment by Hyatt Gaming of its rights under the casino management agreement
beyond what is provided above requires our approval.

                                       10
<PAGE>

     We have the right to sell, hypothecate or convey our casino or any portion
of our casino, or to assign our interest in the casino management agreement with
the prior approval of Hyatt Gaming. For these purposes a change of control will
be considered an assignment.

     Indemnification. Hyatt Gaming will indemnify and hold harmless us and our
shareholders, directors, officers, employees and agents from any damages,
liabilities, costs, claims or expenses, including attorney's fees, attributable
to Hyatt Gaming's or any Hyatt Gaming affiliate's gross negligence, willful
misconduct, willful or reckless violation of any legal requirements or breach of
the casino management agreement, or based on any self-insurance placed with
Hyatt Gaming in accordance with a Hyatt Gaming self-insurance bid accepted by
us. The cost of such indemnification will be borne solely by Hyatt Gaming or
such Hyatt Gaming affiliate, as the case may be. If the loss is attributable to
any other reason or cause, the cost of such indemnification will be paid by
Hyatt Gaming out of our operating accounts and will be charged against adjusted
net profits and earnings before interest, taxes, depreciation and amortization,
and will be without recourse to Hyatt Gaming or its affiliates.

     We will indemnify and hold harmless Hyatt Gaming and its affiliates and
their respective directors, officers, employees and agents from any and all
liabilities, losses, damages, costs and expenses arising out of or incurred in
connection with the management and operation of our casino or Hyatt Gaming's
position as our agent which are not covered by insurance. This indemnity does
not include losses attributable to gross negligence, willful misconduct, willful
or reckless violations of legal requirements or breach of the casino management
agreement by Hyatt Gaming, its affiliates or their employees or agents.

     Non-Competition. If we or any affiliate owns, develops, operates or
franchises any other casino in Black Hawk or Central City, Hyatt Gaming will
continue to have the right to exercise its renewal options under the casino
management agreement; provided, that the renewal threshold will be reduced from
a 15% to 10% simple average annual percentage return on cash equity after the
first full year of operation of such casino. Notwithstanding the foregoing,
Hyatt Gaming will have the exclusive right of first refusal to manage, in
accordance with the terms of the casino management agreement, any gaming or
hotel facility owned, developed or operated by us or any of our beneficiaries or
their respective affiliates that is located on or utilizes any portion of our
casino or the site related property. We have the right, subject to a first
refusal by Hyatt Gaming, to operate any additional casino project on the site
related property through an independent unaffiliated third party casino
management company.

     Hyatt Gaming has agreed that neither Hyatt Gaming nor any of its affiliates
will develop, operate or franchise any other casino bearing the name "Hyatt" at
any time during the term of the casino management agreement anywhere within the
State of Colorado. Notwithstanding the foregoing, if Hyatt Gaming or a Hyatt
Gaming affiliate controls or shares control as a developer or owner of a casino
in Denver, Colorado or within a five-mile radius of those city limits, Hyatt
Gaming must offer us the opportunity to invest cash equity in order to acquire
up to 45% of Hyatt Gaming's or such Hyatt Gaming affiliate's ownership interest
in such casino on market terms. If such offer is made, Hyatt Gaming or an Hyatt
Gaming affiliate will be free to develop and operate such casino which can bear
the name "Hyatt," regardless of whether we accept Hyatt Gaming's offer. These
restrictions will lapse and be of no further force or effect from and after the
expiration or earlier termination of the casino management agreement.

     Bankruptcy. We have agreed that we will not commence or consent to any
case, proceeding or other action (1) seeking reorganization, arrangement,
adjustment, liquidation, dissolution or composition of our company, or of its
debts, under any law relating to bankruptcy, insolvency, reorganization or
relief of debts, or (2) seeking appointment of a receiver, trustee or similar
official for us, or for all or any part of our property.

     Subordination, Non-Disturbance and Attornment Agreement. We have entered
into a subordination, non-disturbance and attornment agreement with Hyatt Gaming
and the trustee under the indenture governing the first mortgage notes, on
behalf of the holders of the notes. Under this agreement, Hyatt Gaming agrees
that the casino management agreement, including, without limitation, Hyatt
Gaming's rights to payment of any amounts, Hyatt Gaming's rights and remedies
and Hyatt Gaming's liens and other interest, is and will be subject and
subordinate to the indenture governing the first mortgage notes, the deed of
trust and the other documents governing the first mortgage notes.
Notwithstanding the foregoing, we may pay Hyatt Gaming amounts under the casino
management agreement as they come due; however, we may not pay incentive fees
payable under the casino management agreement during periods when the indenture
governing the first mortgage notes prohibits us from making such payments under
the casino management agreement. During such restricted periods, however, the
basic fee and other amounts due to Hyatt Gaming under the casino management
agreement will continue to be paid by us. If we do not continue to pay such
amounts, Hyatt Gaming may terminate the casino management agreement.

                                       11
<PAGE>

     Non-Disturbance and Attornment. As long as no default exists which would
allow us to terminate the casino management agreement, neither we nor the
trustee will terminate the casino management agreement, and Hyatt Gaming's right
to manage our casino in accordance with the terms of the casino management
agreement will not be interfered with by any action of foreclosure upon the
security, title or other interest granted by the deed of trust or any other
documents governing the notes. In addition, should the land on which our casino
will be built, comprising trust property under the deed of trust, be acquired by
another party in connection with foreclosure under the deed of trust, Hyatt
Gaming retains its rights under the casino management agreement against the new
owner. Hyatt Gaming agrees to attorn to the new owner upon the foreclosure under
the deed of trust.

     Miscellaneous. If an event of default occurs under any of the documents
governing the first mortgage notes, the trustee has a right, prior to
foreclosure, to assume all of our rights under the casino management agreement.
The trustee also has a cure period after an event of default caused by us before
Hyatt Gaming can begin actions in response to the default. In the event of
distribution of our assets to creditors by reason of a receivership, dissolution
or bankruptcy proceeding, Hyatt Gaming is subordinate in payment to the holders
of the first mortgage notes, but has the right to terminate the casino
management agreement, unless all amounts, other than the incentive fee, are paid
to it currently. The subordination of obligations to Hyatt Gaming under the
subordination, non-disturbance and attornment agreement will continue until all
holders of the first mortgage notes are paid in full in cash.

     Subdivision Agreement. On December 29, 1997, the Board of Aldermen of the
City of Black Hawk, after holding all necessary public hearings and having
received a recommendation of approval from the Black Hawk Planning Commission,
approved the final plat for the property on which our casino was constructed,
under which Windsor Woodmont, LLC dedicated property for Richman Street. Also on
that date, Windsor Woodmont, LLC entered into the subdivision agreement, as
amended, with the City of Black Hawk, under which we, as Windsor Woodmont, LLC's
assignee, are required to dedicate an additional right-of-way for Richman
Street, and to make certain improvements to Richman Street and to the portion of
Highway 119 that abuts our property. We have assumed all obligations under the
subdivision agreement. Management believes that the Company has complied in all
material respects with these requirements.

     Public Improvements. Pursuant to the subdivision agreement, we have
dedicated and conveyed by special warranty deed, free and clear of all liens and
encumbrances, sufficient additional right-of-way for Richman Street to construct
a 40-foot wide right-of-way and to construct certain improvements to Richman
Street, including, without limitation:

     o    the construction of three 12-foot vehicular lanes with one and
          one-half foot curb and gutters on both sides of the street along the
          entire length of the property from Highway 119 to the northerly
          property boundary line;

     o    the construction of rock-faced retaining walls and erosion control
          along the east side of the Richman Street improvements;

     o    the construction of various sidewalks, street lighting, striping and
          signage; and

     o    other necessary improvements to Richman Street as determined by the
          City of Black Hawk.

     Pursuant to the subdivision agreement we have constructed, in accordance
with the approvals and requirements of the Colorado Department of Transportation
and concurrence with the City of Black Hawk Public Works Department, some
improvements to Highway 119. We have also constructed the signals necessary at
the intersection of Richman Street and Highway 119, constructed and installed
landscaping along the Richman Street and Highway 119 frontage in accordance with
the landscaping plan approved by the City of Black Hawk and constructed and
maintained drainage improvements along the Richman Street and Highway 119
frontages. In addition, we have constructed and are responsible for maintenance
of the channel improvements and flood control facilities that were required as a
result of our request for a conditional letter of map revision permit from the
Federal Emergency Management Agency. Further, in the event of an emergency
requiring an immediate response by the City of Black Hawk related to flood
control structures owned by us, we have agreed to reimburse and indemnify the
City of Black Hawk for all costs and expenses associated with the City of Black
Hawk's response to such emergency. Finally, we have installed and completed, at
our expense, all necessary water lines, sewer lines, fire hydrants, water or
sewer distribution facilities, drainage structures and paved streets, including
curbs and gutters, as approved by the Director of Public Works of the City of
Black Hawk.

                                       12
<PAGE>

     Further, we have conveyed marketable title to the improvements to the City
of Black Hawk, free and clear of all liens or encumbrances, including liens or
encumbrances arising under the indenture governing the first mortgage notes. We
were required to warrant the improvements for one year after certification by
the Director of Public Works of the City of Black Hawk (or other appropriate
party) that the improvements conform with specifications approved by the
Director of Public Works, as appropriate, except that we have agreed to warrant
water improvement for three years. Subject to a provision for force majeure, we
were required to complete the improvements, including the required inspections
of the improvements, by December 31, 2001, and all improvements were complete.
In addition, upon the City of Black Hawk's acceptance of the improvements, the
City of Black Hawk conveyed to us a certain portion of Richman Street as
realigned, and certain rockbolt easements necessary for us to complete the
development.

     Performance Guarantee. The subdivision agreement required that our
obligation to ensure the performance and completion of the public improvements
be secured by an irrevocable letter of credit or other agreed upon securities to
which the City of Black Hawk is the beneficiary. The amount of the irrevocable
letter of credit or other agreed upon securities was required to be equal to
110% of the estimated costs of the public improvements. This collateral security
requirement was satisfied by an irrevocable letter of credit in the amount of
$919,718. The estimated costs of the public improvements was a figure mutually
agreed upon by the City of Black Hawk and us. Upon the approval of the Director
of Public Works of the City of Black Hawk, the City of Black Hawk will retain
for one year at least 20% of the costs of improvements.

     Miscellaneous. The City of Black Hawk's remedies for breach of the
subdivision agreement include, but are not limited to, refusing to issue a
building permit or certificate of occupancy, the revocation of any building
permit previously issued under which construction directly related to such
building permit has not commenced, drawing upon the letter of credit or any
other remedy available at law. We will be required to indemnify the City of
Black Hawk and its representatives against any claims arising from our acts or
these or our agents. We may not transfer or assign any of our rights or
obligations under the subdivision agreement without the prior written consent of
the City of Black Hawk.

Factors that May Affect Our Future Results

     You should carefully consider the following risks, together with all other
information included in this Annual Report. The realization of any of the risks
described below could have a material adverse effect on our business, results of
operations and future prospects and could limit our ability to pay interest
and/or principal on the first mortgage notes.

     Important Factors Related to Forward-Looking Statements and Associated
Risks. This Annual Report contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. In addition, we may from time to time make written or oral
forward-looking statements. Written forward-looking statements may appear in
documents filed with the Securities and Exchange Commission (the "Commission"),
in press releases and in reports to shareholders. The forward-looking statements
included in this Annual Report are based on current expectations that involve a
number of risks and uncertainties. These forward-looking statements are based on
assumptions that competitive and market conditions affecting our casino will not
change materially or adversely, that we will retain key management personnel,
that our forecasts will accurately anticipate market demand and that there will
be no material adverse change in our operations or business. Assumptions
relating to the foregoing involve judgments with respect to, among other things,
future economic, competitive and market conditions and future business
decisions, all of which are difficult or impossible to predict accurately and
many of which are beyond our control. Although management believes that the
assumptions underlying the forward-looking statements are reasonable, any of the
assumptions could prove inaccurate and, therefore, there can be no assurance
that the results contemplated in forward-looking information will be realized.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.

     In addition, as disclosed elsewhere under other risk factors, our business
and operations are subject to substantial risks, which increase the uncertainty
inherent in such forward-looking statements. In light of the significant
uncertainties inherent in the forward-looking information included herein, the
inclusion of such information should not be regarded as a representation by us
or any other person that our objectives or plans will be achieved. The Private
Securities Reform Act of 1995 contains a safe harbor for forward-looking
statements on which we rely in making such disclosures. In connection with this
safe harbor we are hereby identifying important factors that could cause actual
results to differ materially from those contained in any forward-looking
statements made by or on our behalf. Any such statement is qualified by
reference to the cautionary statements included in this Annual Report.

     There is currently no trading market for our securities. The first mortgage
notes are our only securities which have been registered under the Securities
Act of 1933. We do not intend to apply for a listing of the first mortgage notes

                                       13
<PAGE>

on a securities exchange or on any automated dealer quotation system. There is
currently no established market for the first mortgage notes and we cannot
assure you as to the liquidity of any market that may develop for the notes,
your ability to sell the notes or the price at which you would be able to sell
the notes. If such markets were to exist, the first mortgage notes could trade
at prices that may be lower than their principal amount or purchase price
depending on many factors, including prevailing interest rates and the markets
for similar securities. Further, there is no established trading market for our
common stock, and we cannot assure you that one will ever develop.

     The liquidity of, and trading market for, the first mortgage notes also may
be adversely affected by changes in the overall market for high yield securities
and by changes in our financial performance or prospects or in the prospects for
companies in our industry generally. As a result, we cannot assure you that an
active trading market will develop for the first mortgage notes.

     Our substantial debt could adversely affect our financial condition and
prevent us from fulfilling our obligations under our first mortgage notes, our
outstanding warrants or our other debt. We currently have a significant amount
of debt. In addition to our obligation to pay principal and interest on the
first mortgage notes, we are obligated under:

     o    the second mortgage notes held by Hyatt Gaming;

     o    the furniture, fixtures and equipment financing; and

     o    the Black Hawk Business Improvement District Bonds.

In addition, under the terms of the warrant agreement, we are obligated to
repurchase the warrants which were issued in conjunction with the sale of
certain notes. Our substantial debt could have important consequences for you.
For example, it could:

     o    make it more difficult for us to satisfy our obligations with respect
          to our existing notes;

     o    increase our vulnerability to general adverse economic and industry
          conditions;

     o    require us to dedicate a substantial portion of our cash flow from
          operations to service our debt, thereby reducing funds available for
          other business purposes;

     o    limit, along with the financial and other restrictive covenants
          contained in our indebtedness, our ability to borrow additional funds;

     o    limit our flexibility in planning for, and reacting to, changes in our
          business, including capital expenditures;

     o    place us at a competitive disadvantage compared to our competitors
          that have less debt or a lower cost of capital; and

     o    limit our ability to obtain additional future financing for working
          capital, capital expenditures, general corporate or other purposes.

     Despite our current debt level, we may still be able to incur more debt.
This could increase the risks described above. We may be able to incur
additional debt in the future. The indenture governing the first mortgage notes
contains financial and other restrictive covenants, but does not fully prohibit
us from incurring additional debt. We can incur debt for certain specific
purposes, including the Business Improvement District Bonds, the furniture,
fixtures and equipment financing and standby letters of credit or surety bonds.
Additionally, if certain conditions are met, we can incur additional debt in
connection with the construction of a hotel tower and related amenities. If new
debt is added to our current levels, the related risks that we and you now face
could increase.

     We will require a significant amount of cash to service our debt and grow
our business. Our inability to generate adequate cash or refinance our debt may
impact our ability to repay the first mortgage notes or the second mortgage
notes, or to repurchase our outstanding warrants in accordance with the warrant
agreement. Our ability to make payments on or to refinance the first mortgage
notes or the second mortgage notes, or to repurchase the warrants in accordance
with the warrant agreement will depend on our ability to generate cash and
secure financing in the future.

                                       14
<PAGE>

     Our ability to generate cash will depend upon:

     o    our future operating performance;

     o    the demand for the services we provide;

     o    the state of the economy;

     o    competition, particularly in Black Hawk; and

     o    regulatory and other factors affecting our operations and business.

     Many of these factors are beyond our control. If our casino cannot generate
sufficient cash flow, we may be forced to reduce or delay planned capital
expenditures, restructure or refinance our debt or obtain additional equity
capital. We might not be able to implement any of these alternatives on
satisfactory terms or at all.

     We could incur losses which would not be covered by insurance. Although we
have obtained all insurance customary and appropriate for our business, we
cannot assure you that this insurance will be adequate to cover all perils to
which our business or our assets might be subjected. Any losses we incur that
are in excess of our coverages or are not covered by insurance consequently
increase our operating costs.

     We may not be able to maintain our gaming license required by the Colorado
Gaming Commission to operate our casino. The operation of a casino gaming
facility in Colorado requires a Colorado Limited Gaming License. A Colorado
gaming license is a non-transferable, revocable privilege in which the licensee
acquires no vested interest. The Colorado Gaming Commission could choose not to
renew that license if it has concerns about our management, operations, business
practices or associations. Our failure to maintain all required licenses to
conduct limited gaming on our premises would have a material, adverse effect
upon our operations. Additionally, any violation of gaming laws or regulations,
could result in the assessment of substantial fines against us and the persons
involved. The suspension, revocation or non-renewal of any of our licenses or
the levy on us of substantial fines could have a material adverse effect on our
business.

     We may be unable to maintain our liquor license. In addition to a gaming
license, regulatory approval is necessary to maintain our liquor licenses from
the City of Black Hawk and the State of Colorado. Although we do not anticipate
any problem in maintaining our liquor license, our inability to obtain any
required permit or approval could prevent us from operating our casino.

     Under Colorado gaming laws, you may be required to submit to a background
investigation regarding your suitability as a note holder or warrant holder
which could delay any applications for licenses, permits or other
authorizations. The current policy of the Colorado Gaming Commission and the
Division of Gaming does not require note holders to submit to a background
investigation for a suitability determination. The Colorado Gaming Commission
and the Division of Gaming could change that policy at any time and require note
holders to undergo a background investigation.

     In addition, note holders who also own our common stock, whether by the
exercise of a detachable warrant or by any other means, will at least be
required to submit a limited owner application, which will be reviewed by the
Colorado Gaming Commission and the Division of Gaming. The current policy of the
Colorado Gaming Commission and the Division of Gaming does not require
shareholders who are institutional investors to submit to a full background
investigation regarding their suitability. The Colorado Gaming Commission and
the Division of Gaming could change that policy at any time and require
institutional investors to undergo background investigations.

     Our shareholders are required to submit owner applications, which are
reviewed by the Colorado Gaming Commission and the Division of Gaming. Despite
current policy, the Colorado Gaming Commission and the Division of Gaming have
the authority to require any person who is one of our shareholders and any of
our executive employees or agents having the power to exercise a significant
influence over decisions concerning any part of the operation of our casino to
undergo a full background investigation, regardless of whether the shareholder
is an institutional investor and regardless of the number of shares held, which
could further delay the gaming application process.

     We compete with many other gaming facilities and other forms of gaming in
Black Hawk and other cities in Colorado that have legalized gaming. As described
under "Competition," we operate in a very competitive environment. Certain of
our current and future competitors have or may have more gaming experience than
us or Hyatt Gaming and the other Hyatt companies and/or greater financial
resources.

                                       15
<PAGE>

     Of the 21 gaming facilities operating in Black Hawk, eight have over 700
gaming positions, two of which also offer hotel accommodations. We believe that
these larger gaming facilities will be our main competitors. These larger gaming
facilities all have on-site or nearby parking and have brand names established
in the local market, such as the Isle of Capri, The Lodge at Black Hawk,
Colorado Central Station, the Riviera Black Hawk Casino and the Mardi Gras
Casino. The Riviera Black Hawk Casino, which opened in early February 2000,
features approximately 1,000 gaming machines, and the Mardi Gras Casino, which
opened in early March 2000, features approximately 700 gaming machines. Colorado
Central Station, which has been one of the most successful casinos in Colorado,
is located near our casino and has approximately 770 gaming machines and
approximately 700 valet parking spaces. The Isle of Capri, which opened in
December, 1998, is located near our casino and features approximately 1,150
gaming machines and 1,100 parking spaces. Other competitors in Black Hawk
include Gilpin Hotel Casino, Canyon Casino, Fitzgerald's Casino and Bullwhackers
Black Hawk.

     Casinos offering hotel accommodations for overnight stay may have a
competitive advantage over our casino. The number of hotel rooms currently in
Black Hawk is approximately 287, with the Lodge at Black Hawk providing 50 and
the Isle of Capri providing 237. In addition, Harvey's Wagon Wheel Casino Hotel,
located in Central City, has 118 hotel rooms.

     We may also face increased competition from casinos in Central City.
Historically, Black Hawk has enjoyed an advantage over Central City because the
majority of customers have to drive by and through Black Hawk to reach Central
City. On November 2, 1999, the voters in Central City granted authority to the
Business Improvement District for the sale of approximately $45.2 million in
bonds which would be allocated towards the planning, design and construction of
a nine mile roadway directly connecting Central City with Interstate 70. This
roadway could result in improved access to both Central City and Black Hawk and
enable patrons to reach Central City without driving through Black Hawk. As of
March 26, 2002, no bonds had been issued in connection with the construction of
the roadway. Our casino also competes, to a limited extent, with the casinos
located in Cripple Creek, because both Black Hawk and Cripple Creek compete for
patrons from Denver. Cripple Creek is located approximately 110 miles to the
south of Black Hawk and 45 miles west of Colorado Springs. The information
contained in this discussion of competition was derived from publicly available
data, except where otherwise stated. While we regard these sources as reliable,
no assurances can be made regarding the accuracy of such information.

     Currently, limited stakes gaming in Colorado is constitutionally authorized
in Central City, Black Hawk, Cripple Creek and two Native American reservations
in southwest Colorado. However, gaming could be approved in other Colorado
communities in the future. The legalization of gaming closer to Denver would
likely have a material adverse impact on our future operating results. Our
casino will also indirectly face competition from other forms of gaming,
including the Colorado state-run lottery, multi-state lottery, charitable bingo
and horse and dog racing, as well as other forms of entertainment.

     Because of our limited operating history, our business is difficult to
evaluate. We were formed in 1998 and our casino began operations on December 20,
2001. It is difficult for us to predict with accuracy our casino's earning
potential given the inherent uncertainties and variables in the factors
affecting our earnings and our limited operating history. In addition, we do not
have, and Hyatt Gaming and the other Hyatt companies do not have, any experience
in operating or marketing a business in Black Hawk. As a result, you must
evaluate our prospects in light of the risks and difficulties frequently
encountered by companies with limited prior operating histories. We cannot
assure you that we or Hyatt Gaming and its affiliates will be able to
successfully operate or market our casino, that our casino will be profitable or
that we will generate sufficient cash flow to pay interest and principal on our
indebtedness.

     We depend on Hyatt Gaming to staff and manage our casino. We cannot assure
you that our casino management agreement with Hyatt Gaming will not be
terminated or that Hyatt Gaming will always staff and manage our casino. We will
depend upon Hyatt Gaming, as a professional manager, to staff and manage our
casino. There is intense competition to attract and retain qualified management
and other employees in the gaming industry. Hyatt Gaming's inability to recruit
or retain personnel could adversely affect our business.

     Although we have entered into a 15-year casino management agreement with
Hyatt Gaming subject to renewal terms under certain circumstances, we cannot
assure you that the casino management agreement will remain in effect for the
duration of its stated term. Hyatt Gaming may terminate or assign the casino
management agreement upon the occurrence of events described in our casino
management agreement, some of which are not in our control. If the casino
management agreement is terminated early, the loss of the services of Hyatt
Gaming, or an inability to attract and retain another nationally recognized
professional manager, could adversely affect us. We cannot assure you that we
will be able to maintain our relationship with Hyatt Gaming or attract another
nationally recognized manager, if necessary.

                                       16
<PAGE>

     Hyatt Gaming may face difficulties in attracting and retaining qualified
employees for our casino. The operation of our business requires qualified
executives, managers and skilled employees with gaming industry experience and
qualifications to obtain the requisite licenses. Currently, there is a shortage
of skilled labor in the gaming industry. We believe this shortage will make it
increasingly difficult and expensive for Hyatt Gaming to attract and retain
qualified employees. Increasing competition in Black Hawk and competing markets
may lead to higher costs in order to retain and attract qualified employees. We
may incur higher labor costs in order for the casino management to attract
qualified employees from existing gaming facilities. While we believe that Hyatt
Gaming will be able to attract and retain qualified employees, Hyatt Gaming may
have difficulty attracting a satisfactory number, and we may incur higher costs
than expected as a result.

     The management agreement grants Hyatt Gaming indemnification rights and
competition rights which could result in increased costs to us in operating our
casino. Indemnification provisions of the casino management agreement obligate
us to indemnify Hyatt Gaming and its affiliates for certain losses and events.
The casino management agreement provides that we must indemnify Hyatt Gaming and
its affiliates from all liabilities other than those caused by their:

     o    gross negligence;

     o    willful misconduct;

     o    willful or reckless violations of legal requirements; or

     o    breach of the casino management agreement.

     Under certain circumstances, Hyatt Gaming and its affiliates are permitted
to develop and operate a casino in Denver or within a five mile radius of Denver
which could bear the Hyatt name in competition with our casino. Currently,
gaming is not permitted in the Denver area, but we cannot assure you that gaming
will not be legalized in that area in the future. Any such additional
competition could draw customers away from our casino and negatively impact our
operations.

     The management agreement and the indenture may require us to obtain
additional funds if our budgets are inaccurate. The casino management agreement
provides that Hyatt Gaming is not responsible for our budgets or for financial
projections and financial forecasts made in connection with our recent unit
offering. If our budgets are inaccurate, our obligations under the casino
management agreement and under the indenture governing the first mortgage notes
may require us to obtain additional funds to operate our casino.

     Our casino will not benefit from Hyatt hotel system-wide services because
our project does not include a Hyatt hotel. To date, most casinos managed or
operated by Hyatt Gaming or other Hyatt companies are operated in association
with an on-site Hyatt hotel. This association permits these properties access to
certain Hyatt hotel system-wide services, such as the Hyatt hotel chain national
sales force and the Hyatt hotel chain reservations system. Our casino does not
include a Hyatt hotel. The project, therefore, does not participate in, and may
not benefit from, such chain services normally provided to Hyatt hotels.

     If Hyatt Gaming does not manage our casino profitably, we do not have the
ability to terminate the Hyatt Gaming casino management agreement on that basis.
Even if Hyatt Gaming does not manage our casino profitably or does not otherwise
meet performance criteria, we do not have the ability to terminate the Hyatt
Gaming casino management agreement on that basis.

     None of the Hyatt companies is obligated to make any payment on the first
mortgage notes or to make any other payments or equity contributions to or for
us or our operations. The Hyatt companies will not participate in servicing the
principal or interest due on the first mortgage notes. None of the Hyatt
companies has any obligations to make any payments of any kind to the holders of
our notes or to the holders of our warrants, or to make any other payments or
equity contributions to us or our operations.

                                       17
<PAGE>

     The risk of theft could adversely affect our operations. The nature of our
operations entrusts employees of Hyatt Gaming in various positions to handle
large amounts of cash, casino chips and tokens. Although our internal controls
and security and surveillance policies and procedures are designed to limit our
exposure to theft and the associated risk of loss, we cannot assure you that
such theft does not occur or that we will discover any such theft promptly, if
at all. We cannot assure you we will have adequate insurance coverage, in the
event of any such theft. Any theft by our employees or otherwise could have an
adverse affect on our results of operations.

     Adverse weather, road conditions and infrastructure limitations affect our
ability to attract customers. Because we expect the highest level of customer
visits during the summer, a poor summer season could adversely affect our
business. The location of our casino in the Rocky Mountains creates a risk that
it will be subject to inclement weather, particularly snow. Severe weather
conditions could cause significant physical damage to our casino or result in
reduced hours of operation or access to our casino. Black Hawk is served by
winding mountain roads that require cautious driving, particularly in bad
weather, and are subject to driving restrictions and closure. Congestion on the
roads leading to Black Hawk is common during the peak summer season, holidays
and other times and may discourage potential customers from traveling to our
casino, particularly if road construction is in process.

     We expect the highest level of customer visits to occur during the summer
months, because of the more favorable weather conditions. A poor summer season,
due to any reason, including events outside our control, would adversely affect
our business.

     Local economic and competitive conditions, as well as other conditions and
circumstances beyond our control could adversely affect our business. We will be
entirely dependent upon our casino for all of our cash flow. Therefore, we will
be subject to greater risks than a geographically diversified gaming company.
These greater risks include those caused by any of the risks described in this
section, including:

     o    local economic and competitive conditions;

     o    inaccessibility due to road construction or closure on primary access
          routes;

     o    changes in local and state governmental laws and regulations;

     o    natural and other disasters;

     o    a decline in the number of residents near or visitors to Black Hawk;
          or

     o    a decrease in gaming activities in Black Hawk.

     Any of the factors outlined above could adversely affect our ability to
generate sufficient cash flow to make payments on the first mortgage notes in
accordance with the indenture or with respect to our other debt. A recession or
economic slowdown could cause a reduction in visitation to our casino, which
would adversely affect our operating results.

     We face risks that a mining claim may adversely affect our property rights.
Black Hawk is located in an area that was actively mined for many years.
Conflicts between mining claims that have certain statutory priorities and
surface rights derived from the town can affect the use or ownership of property
located in Black Hawk. These conflicts are the result of mining claims which
pre-date the township patent granted on April 11, 1873.

     Although the government agencies responsible for analyzing such claims have
been reluctant to adversely affect ownership rights that have been treated as
settled, occasional claims based on asserted mining rights have been made
adverse to the interests of casino developments and other property in Black
Hawk. These mining claims may be raised in respect of the land we own in Black
Hawk. If raised, these claims or similar challenges to title could distract our
management could force us to make payments to settle the claims. We have
obtained title insurance which we believe will protect the Company against such
claims.

     If we become bankrupt, you may be unable to collect the full value of your
first mortgage notes by foreclosing upon collateral. The first mortgage notes
are secured by a first priority lien on substantially all of our assets other
than:

                                       18
<PAGE>

     o    certain furniture, fixtures and equipment;

     o    the assets of our future unrestricted subsidiaries; and

     o    assets subject to certain permitted liens, as well as by a second
          priority lien on the loan proceeds from the issuance of the second
          mortgage notes.

Under Colorado gaming laws, the trustee under the indenture governing the first
mortgage notes could be precluded from or otherwise limited or delayed in
exercising powers of attorney or selling collateral, including slot machines, at
a foreclosure sale since only persons licensed by the Colorado gaming
authorities may have slot machines in their possession. In addition, the trustee
may encounter difficulty in selling collateral due to various legal
restrictions, including requirements that the purchaser or the operator of the
gaming facility be licensed by state authorities or that prior approval of a
sale or disposition of collateral be obtained. If the trustee sought to operate,
or retain an operator for, our casino, the trustee or its agents would be
required to be licensed under Colorado gaming laws in order to conduct gaming
operations in our casino. Since potential purchasers who wish to operate our
casino must satisfy such requirements, the number of potential purchasers in a
sale of our casino could be less than in the sale of other types of facilities.
Additionally, these requirements may delay the sale of, and may adversely affect
the price paid for, the collateral.

     In addition to gaming law restrictions, the ability of the trustee to
repossess and dispose of collateral will be subject to the procedural and other
restrictions of state real estate law and commercial law and we may not
terminate the casino management agreement upon a foreclosure. If the holders of
the first mortgage notes were undersecured, the trustee may be entitled to a
deficiency judgment under certain circumstances after application of any
proceeds from any foreclosure sale. There can be no assurance, however, that the
trustee would successfully obtain a deficiency judgment, and we cannot predict
what the amount of such judgment would be. In addition, we might not be able to
satisfy any such judgment. The right of the trustee to repossess and dispose of
the collateral following an event of default is likely to be significantly
impaired by applicable bankruptcy laws if a proceeding under the United States
Bankruptcy Code were to be commenced by or against us prior to or possibly even
after the trustee has repossessed and disposed of the collateral. In such
bankruptcy proceeding, the automatic stay would prohibit the trustee from
repossessing or disposing of the collateral without the leave of the bankruptcy
court. If the holders of the first mortgage notes were undersecured in a
bankruptcy case, the trustee will be entitled to assert a secured claim to the
extent of the value of the collateral and an unsecured claim for any deficiency.
In view of the broad discretionary powers of a bankruptcy court, we cannot
predict, following commencement of and during a bankruptcy case:

     o    whether any full or partial payments under the first mortgage notes
          would be made;

     o    whether or when the trustee could foreclose upon or sell the
          collateral;

     o    whether the term of the first mortgage notes could be altered in a
          bankruptcy case without the consent of note holders; or

     o    whether or to what extent holders of the first mortgage notes would be
          compensated for any delay in payment or loss of value of the
          collateral.

     If a bankruptcy court were to determine that the value of the collateral is
not sufficient to repay all amounts due on the first mortgage notes, the holders
of the notes would be undersecured to the extent of any such deficiency.
Applicable federal bankruptcy laws do not permit the payment and/or accrual of
interest, costs and attorneys' fees to the holders of unsecured or undersecured
pre-petition claims against the debtor during the debtor's bankruptcy case.

     Under the provisions contained in the indenture governing the first
mortgage notes regarding defeasance, we may discharge our obligations under the
indenture or have our obligations released with respect to some covenants in the
indenture. In order to do either of these, among other things, we must deposit
with the trustee enough money or securities to make all of the required payments
on the first mortgage notes through maturity or a redemption date. It is
possible that the deposit may be subject to recovery or avoidance as a
preference or fraudulent transfer by us, a bankruptcy trustee or our creditors
under some circumstances. For example, if the amount of the deposit exceeds the
value of the collateral which has been pledged to the holders of the first
mortgage notes, it is possible that the excess may be subject to recovery or
avoidance as a preference or fraudulent transfer if we later are in bankruptcy.
In addition, because the holders of the first mortgage notes will release their
liens at the time the funds are deposited into the account, it is possible that
a bankruptcy court would consider a payment on the notes at redemption or
maturity (if the payment is not contemporaneous with the release of the liens)
subject to recovery or avoidance as a preference or fraudulent transfer by us, a

                                       19
<PAGE>

bankruptcy trustee or our creditors. In addition, it is possible that if we
receive the funds for the deposit for a third party, and that third party
subsequently becomes a debtor in a bankruptcy case, the deposit may be
recoverable under certain circumstances by the third party or the bankruptcy
trustee or creditors of that third party if the original transfer from the third
party to us is deemed to be a preference or fraudulent conveyance. Furthermore,
if we commenced a bankruptcy proceeding after the deposit was paid but before
redemption or maturity of the first mortgage notes, it is possible that a
bankruptcy court would allow us to use the deposited funds during the pendency
of the bankruptcy case as cash collateral, subject to the right of the holders
of the first mortgage notes to receive adequate protection of their interest in
the deposit.

     Certain of our affiliates are involved in activities that are related to
our business and assets. In addition, we have overlapping officers and directors
with our affiliates. In the event that one of our affiliates is the subject of a
proceeding under the Bankruptcy Code, the creditors of such affiliate or the
bankruptcy trustee may argue that the assets and liabilities of the various
affiliated entities, including our company, should be consolidated and our
assets made available for satisfaction of claims against the various affiliated
entities. Although we believe we are a distinct and separate legal entity from
our affiliates, there can be no assurance that in the event of a bankruptcy case
of one of our affiliated entities, a bankruptcy court would not order
consolidation of our assets with those of our affiliates.

     A court could void the transfer of the land from Windsor Woodmont, LLC to
us, which would also make the note holders' security interest in the land
unenforceable. Fraudulent conveyance and avoidance laws permit a court to avoid
or nullify any transfer of a property interest, including the grant of a
security interest or other lien on property, if the court determines that the
transfer was made by a fraudulent conveyance.

     Generally, if a court were to find that

     o    the debtor made the challenged transfer or incurred the challenged
          obligation with the actual intent of hindering, delaying or defrauding
          present or future creditors, or

     o    the debtor

          (1)  received less than reasonably equivalent value or fair
               consideration for incurring the challenged obligation or making
               the challenged transfer, and

          (2)  (A)  was insolvent or was rendered insolvent by reason of
                    incurring the challenged obligation or making the challenged
                    transfer,

               (B)  was engaged or about to engage in a business or transaction
                    for which its assets constituted unreasonably small capital,
                    or

               (C)  intended to incur, or believed that it would incur, debts
                    beyond its ability to pay as such debts matured,

the court could, subject to applicable statutes of limitations, avoid the
challenged obligation or transfer in whole or in part. The court could also
subordinate claims with respect to the challenged obligation or transfer to all
other debts of the debtor. The court's determination as to whether the above is
true at any relevant time will vary depending upon the factual findings and law
applied in any such proceeding.

     Generally, a debtor will be considered insolvent if:

     o    the sum of its debts was greater than the fair saleable value of all
          of its assets at a fair valuation; or

     o    if the present fair saleable value of its assets is less than the
          amount that would be required to pay its probable liability on its
          existing debts, as they become fixed in amount and nature.

Also, a debtor generally will be considered to have been left with unreasonably
small capital if its remaining capital, including its reasonably projected cash
flow, was reasonably likely to be insufficient for its foreseeable needs, taking
into account its foreseeable business operations and reasonably foreseeable
economic conditions.

     With respect to our casino, the transfer of the land from Windsor Woodmont,
LLC presents the most significant potential fraudulent conveyance issue. In
addition, Windsor Woodmont, LLC's creditors could challenge the grant of
security to the holders of the first mortgage notes. In the event the land
transfer is determined to be fraudulent, we would not be the owner of the land
and the security interest granted to the holders of the first mortgage notes may
be unenforceable. We cannot assure you that Windsor Woodmont, LLC's creditors
will not challenge the land transfer or what a court may ultimately determine
with respect to the land transfer.

                                       20
<PAGE>

     Any fraudulent transfer challenges, even if ultimately unsuccessful, could
lead to a disruption of our business and an alteration in the manner in which
that business is managed. As a result, our ability to meet our obligations under
the first mortgage notes or in connection with our other debt, or to purchase
the warrants in accordance with the warrant agreement, may be adversely
affected.

     Some persons who provide services or materials in connection with our
casino may have a lien on the project with priority over the liens granted to
secure the first mortgage notes. Colorado law provides architects, engineers,
contractors, subcontractors, suppliers and others with a mechanic's lien on the
real property being improved by their services or materials in order to secure
their right to be paid. Following compliance with applicable Colorado law, such
parties may foreclose on their mechanic's liens if they are not paid in full.
The priority of all mechanic's liens arising out of a construction project
relates back to the date on which the construction of the project commenced.
Parties who provide services or materials in connection with our casino,
including parties providing services or materials prior to the date of this
Annual Report and/or after the date of this Annual Report will have a lien on
the project, senior in priority to the lien granted to secure the first mortgage
notes.

     With certain exceptions, the disbursement agreement will require that no
periodic payments be released unless unconditional mechanic's lien releases are
obtained from all architects, engineers, contractors, subcontractors, suppliers
and others being paid with the proceeds of such periodic payments, subject only
to retainage amounts.

     Notwithstanding the foregoing, we cannot assure you that enforceable
mechanic's liens will not be senior to the lien granted to secure the first
mortgage notes. Other than the payment bond from Blattner and certain payment
bonds from subcontractors of PCL, neither we nor the trustee under the indenture
governing the first mortgage notes has obtained or will obtain payment or
performance collateral to satisfy any such mechanic's liens, nor have we or the
trustee obtained title insurance protection against such mechanic's liens.

     Additional legalization of gaming in Colorado or the imposition of a tax on
gaming revenues could adversely affect our business. Additional legalization of
gaming in or near any area from which our casino is expected to draw customers
would adversely affect our casino's business. Also, the legalization of various
types of gaming, such as video lottery terminals, in existing venues such as
airports, race tracks or drinking establishments, would adversely affect our
casino's business. See Item 1, "Description of Business--Gaming Licensing
Matters and Alcohol." Colorado law requires statewide voter approval for any
expansion of limited gaming into additional locations and, depending on the
authorization approved by the statewide vote, may also require voter approval
from the locality in question. Several attempts have been made by various
parties in recent years to expand gaming in Colorado.

     In November 2000, voters approved a law that would allow Colorado to
participate in multi-state lotteries. Multi-state lotteries may have a material
adverse effect on the Black Hawk Markets.

     Currently, Colorado law does not authorize video lottery terminals.
However, Colorado law permits the legislature, with executive approval, to
authorize new types of lottery gaming, such as video lottery terminals, at
certain locations. Video lottery terminals are games of chance, similar to slot
machines, in which the player pushes a button that causes a random set of
numbers or characters to be displayed on a video screen. The player may be
awarded a ticket, which can be exchanged for cash or playing credit. Certain
lottery gaming could compete with slot machine gaming.

     In 1997 the state legislature passed, but the Governor vetoed, a bill that
would have permitted video lottery terminals in dog and horse race tracks as
well as casinos, under certain terms and conditions. Video lottery terminals are
games of chance, similar to slot machines, in which the player pushes a button
that causes a random set of numbers or characters to be displayed on a video
screen. Depending on the display, the player may be awarded a ticket, which can
be exchanged for cash or playing credit. There can be no assurance that similar
legislation permitting video lottery terminals in dog and horse race tracks or
other venues will not be considered in the future. For example, in January 1998,
three gaming-related bills were proposed in the State of Colorado. The first of
these bills would require that any proposed casino structure with gross square
footage exceeding 60,000 square feet obtain the approval of the State Historical
Society prior to construction. This bill was defeated in the Senate. Such
legislation, or future legislation, if passed, could significantly delay or
prevent the completion of our casino or require substantial size or design
changes for our casino in order to conform to any conditions to approval by the
State Historical Society or other similar regulatory agency. The second bill,

                                       21
<PAGE>

which was the subject of an initial hearing in the Senate and is similar to the
1997 proposed legislation vetoed by the Governor, would provide for the
installation of up to 500 video lottery terminals in each of the State's five
horse and dog racing tracks. The Governor, to date, has consistently resisted an
expansion of gaming through the device of video lottery terminals. The third
bill, introduced to prevent the installation of video lottery terminals by
specifically defining video lottery terminals as slot machines, was defeated in
committee by the House of Representatives. Legislation permitting or requiring
the installation of video lottery terminals at horse and dog racing tracks or
elsewhere, or future initiatives, if passed, could significantly increase the
competition for gaming customers, thereby adversely affecting business in the
Black Hawk market, including the business of our casino. Additionally, there can
be no assurance that there will be no legislation or future promulgation of
regulations by the Colorado Gaming Commission that would impose additional
restrictions, raise taxes, subject to constitutional limitations, impose
prohibitions on, or assess increased device fees or impose additional fees with
respect to our business. A new governor was elected in 1998 and has taken
office. The new governor may approach limited gaming expansion differently than
his predecessor. If he does so, it may have a material adverse effect on the
Black Hawk market.

     In 1994, Colorado voters refused by a margin of 92% to 8% to permit limited
gaming in Manitou Springs (located near Colorado Springs and Cripple Creek) and
the placement of slot machines in airports. On November 5, 1996, Colorado voters
defeated by a margin of 69% to 31% a proposal to allow gaming in the community
of Trinidad, located on the Colorado-New Mexico border. There can be no
assurance, however, that additional gaming will not be authorized. Additional
gaming may have a material adverse effect on the Black Hawk market.

     Additionally, from time to time, certain federal legislators have proposed
the imposition of a federal tax on gaming revenues. Any such tax could adversely
affect on our financial condition or results of operations.

     New Gaming Legislation could result from the National Gambling Impact and
Policy Commission Report. Federal legislation was enacted that established a
National Gambling Impact and Policy Commission to study the economic impact of
gambling on the United States, the individual states and Native American tribes.
On April 28, 1999, the National Commission voted to recommend the expansion of
gaming be curtailed. In June 1999, the National Commission issued a final report
of its findings and conclusions, together with recommendations for legislative
and administrative actions. Additional federal regulation may result from final
report by the National Gambling Impact and Policy Commission. Any new federal or
state legislation could have a material adverse effect on us.

     Environmental problems are possible and can be costly. Our casino is
located in a 400-square mile area that has been designated by the United States
Environmental Protection Agency as the Clear Creek/Central City National
Priorities List Superfund Site under the Comprehensive Environmental Response,
Compensation and Liability Act, as a result of hazardous substance contamination
caused by historical mining activity in Black Hawk. This is a broad national
priorities list site, within which the EPA has identified several priority areas
of contamination from historical mining activities, including draining mines and
mine dumps, for active investigation and/or remediation. To date, the EPA has
not identified the casino site as being within a priority area nor has it
identified contamination on or from the casino site to require remediation.

     We have been informed that the Superfund Division of the Colorado
Department of Public Health and the Environment, working with the EPA, has
sampled surface water in or near North Clear Creek near where a portion of the
project site called Silver Gulch discharges surface water into North Clear
Creek. We have been informed that based on the results of those samples, the EPA
and the Colorado Superfund Division have expressed preliminary concern that soil
and rock associated with historic mining operations in Silver Gulch may be a
source of contamination to North Clear Creek. Even minor contamination could
form a basis for the EPA or the Colorado Department of Public Health and the
Environment to require owners and operators of properties which have been the
source of contamination to investigate and remediate contamination on or from
their property or to reimburse costs incurred by the government in connection
with such remediation. The casino site could be among the properties suspected
of being a source of contamination. If investigation or remediation of the
casino site were required, the costs associated with investigation and
remediation could have a material adverse effect upon our business.

     Windsor Woodmont, LLC has conducted a phase I and modified phase II
environmental assessment of the site of our casino. The environmental assessment
has identified the remnants of historic mining activities on the site, including
a tunnel, prospect pits, mining waste rock piles, a mine mill, mill tailings and
plugged mine working entrances. The environmental assessment also indicated that
metal analyses of samples of certain soil and rock associated with historic
mining activities were above concentrations allowed by Black Hawk Ordinance No.
93-3 for property proposed for excavation or development and that the soils had
the potential for acid rock drainage.

                                       22
<PAGE>

     As a result of the elevated concentrations of metals in the soil and rock
analyses, Windsor Woodmont, LLC prepared plans regarding the handling,
consolidation and permanent disposal of contaminated soils and rock and
submitted those plans to the City of Black Hawk. Those plans call for any
contaminated soil and rock piles in areas of the property other than Silver
Gulch to be excavated and consolidated in Silver Gulch with contaminated soil
and rock piles historically located there. Although the city does not issue any
specific approvals of environmental plans, it will not issue a construction
permit unless and until the plan has been found satisfactory. The City of Black
Hawk issued our construction permit in April 2000.

     The mining related soil and rock which we have excavated and consolidated
in Silver Gulch has been covered with a protective soil cap, and water flows
onto the Gulch have been managed to attempt to eliminate or significantly reduce
contact of water with the historic mining material already located in Silver
Gulch and the consolidated material. The soil cap was covered with the general
construction and excavation debris from the construction operations necessary to
create the site for our casino. Water quality in Silver Gulch has significantly
improved since the installation of the protective soil cap.

     We cannot assure you that we will not be subject to claims or requirements
for contribution or remediation by private parties, the EPA or the Colorado
Superfund Division relating to previous mining activities conducted at the
casino site, to the disposal of excavated soil and rock from the casino site
which has been consolidated at Silver Gulch, to other contaminated soil and rock
that might be discovered during excavation or construction at the casino site or
to surface water or groundwater contamination potentially connected with
historic mining materials currently located on, or disposed on, the casino site.
Moreover, governmental trustees acting under the Comprehensive Environmental
Response, Compensation and Liability Act could make claims for damages to
natural resources as a result of past mining activity at the casino site as well
as existing conditions or construction activities. Further, conditions that are
imposed in connection with regulatory approvals or permits could cause
construction costs to increase due to costs of handling this excavated material.

     The rate of taxation on gaming profits may increase in the future. The
Colorado Constitution permits a gaming tax of up to 40% on adjusted gross gaming
proceeds. Effective July 1, 1999, the Colorado Gaming Commission has set a
gaming tax rate of .25% on adjusted gross gaming proceeds up to and including $2
million, 2% over $2 million up to and including $4 million, 4% over $4 million
up to and including $5 million, 11% over $5 million up to and including $10
million, 16% over $10 million up to and including $15 million, and 20% over $15
million. These fees are set to pay the costs of ongoing regulation by the
Division of Gaming. Black Hawk has imposed an annual device fee of $750 per
gaming device and it revises the same from time to time. The Colorado Gaming
Commission has eliminated its annual device fee for gaming machines. The
Colorado Gaming Commission may revise the gaming tax or re-impose the state
device fee at any time and has been conducting annual reviews to reconsider and
reevaluate the gaming taxes on or about July 1st of each year. We cannot assure
you that the tax rates applicable to our casino will not be increased in the
future.

     The first mortgage notes are subject to original issue discount tax
consequences. We have allocated a portion of the purchase price per unit issued
in our recent unit offering to each of the note and warrant components of the
units. As a result, the first mortgage notes will be treated as having been
issued at a discount for U.S. federal income tax purposes, and purchasers of the
notes will generally be required to include the accrued portion of this discount
in gross income, as interest, in advance of the receipt of cash payments of this
interest. Prospective investors in our first mortgage notes should consult with
their tax advisors about the application of federal income tax law, as well as
any applicable state, local or foreign tax laws. This Annual Report contains no
information regarding taxation.

     In addition, the applicable high yield discount obligation rules may apply.
We do not believe that these rules will apply; however if they do apply, a
portion of the original issue discount that accrues on the first mortgage notes
may be treated as a dividend generally eligible for the dividends received
deduction in the case of corporate U.S. holders and the rules may defer, and
eliminate in part, our ability to deduct for federal income tax purposes the
original issue discount.

     If a bankruptcy petition were filed by or against us, note holders may
receive a lesser amount for their claim than they would be entitled to receive
under the indenture governing the first mortgage notes, and they may be able to
realize taxable gain or loss upon payment of their claim. If a bankruptcy were
filed by or against us under the U.S. Bankruptcy Code, the claim by a holder of
the first mortgage notes for the principal amount of the notes may be limited to
an amount equal to the sum of:

     (1)  the initial offering price for the notes; and

     (2)  that portion of the original issue discount that does not constitute
          "unmatured interest" for purposes of the U.S. Bankruptcy Code.

                                       23
<PAGE>

     Any original issue discount that was not amortized as of the date of the
bankruptcy filing would constitute unmatured interest. Accordingly, holders of
the first mortgage notes under these circumstances may receive a lesser amount
than they would be entitled to receive under the terms of the indenture
governing the notes, even if sufficient funds are available. In addition, to the
extent that the U.S. Bankruptcy Code differs from the Internal Revenue Code in
determining the method of amortization of original issue discount, a holder of
first mortgage notes may realize taxable gain or loss upon payment of that
holder's claim in bankruptcy.

Item 2. Description of Property

Black Hawk, Colorado

     Black Hawk Casino by Hyatt owns the Black Hawk land, which comprises
approximately 106 acres of land located at the intersection of Richman Street
and Highway 119 in Black Hawk, Colorado. This tract of land is comprised of an
approximately 5.7 acre parcel, on which our new Casino was constructed in 2001,
includes 425,000 square feet of space. 57,000 square feet is currently used for
gaming, parking for approximately 1450 vehicles, three restaurants including:
the Hickory Grill Restaurant, a steak and seafood restaurant, the Kitchens of
the World Action Buffet, a high quality action-station buffet and a food court
featuring various quick service food offerings. A Wolf Gang Puck's Express
restaurant opened in March, 2002. In addition, the Black Hawk Casino by Hyatt
includes an indoor/outdoor plaza area featuring Starbucks coffee and a gift
shop.

Golden, Colorado

     The Company leases approximately 2650 square feet of warehouse space in
Golden, Colorado. This facility serves as a receiving warehouse for the casino.
We have a four year lease at a monthly rate for the year 2002 of $2,098 plus
annual expenses, with the rent escalating annually. The lease terminates on
August 1, 2004.

Dallas, Texas

     We lease approximately 838 square feet on the fifth floor of Northcreek
Place II, 12160 North Abrams Road, Dallas, Texas. This facility houses our
executive offices, is leased from an unaffiliated third party at a base monthly
rental of $1,326.83. The lease terminates on May 15, 2002 and will not be
renewed.

Item 3. Legal Proceedings

     We are involved in certain legal proceedings, claims and litigation,
including those described below. Further, we may become involved in other such
proceedings in the future. The results of legal proceedings cannot be predicted
with certainty. Except as otherwise indicated below, management does not believe
that the Company has potential liability related to any current legal
proceedings and claims that would have material adverse effect on our financial
condition, liquidity or results of operations.

     On July 6, 2001, Paul, Hastings, Janofsky & Walker ("Paul Hastings"), a Los
Angeles and New York Based law firm, which acted as issuers counsel for the
Company in securing the $107,500,000 financing for the Company's casino project,
filed suit in Los Angeles County court seeking damages of approximately $470,000
in legal fees and costs in connection with securing the financing. Paul Hastings
claims it is owed this amount for legal services rendered, approximately
one-half of which is an alleged bonus Paul Hastings claims is due as a result of
the closing of the financing. The Company paid Paul Hastings a total of $800,000
in legal fees and costs. Paul Hastings originally agreed that legal fees would
be in the amount of $500,000. The Company believes that it overpaid Paul
Hastings. The Company has filed counterclaims asserting breach of contract,
misrepresentation, and legal malpractice against Paul Hastings. The case has
been set for trial in early October, 2002 and for a mediation on April 1, 2002.
The Company intends to direct its efforts to a favorable settlement at
mediation, should that prove unsuccessful, the Company intends to vigorously
defend the claim and prosecute its counterclaims. Although the outcome of this
litigation cannot be predicted, management does not believe that an adverse
result would have a material adverse effect on our financial condition,
liquidity or results of operations.

                                       24
<PAGE>

     On August 1, 2001, First Place LLC ("First Place") filed a lawsuit in the
Gilpin County District Court against the Company asserting that it had an
ownership interest in approximately 5,000 square feet of property upon which our
casino is built and operating. First Place is seeking a declaratory judgment
adjudicating the respective interests of it and the Company in this strip of
property. The Company has referred the issue to its title insurance company,
First American Title, which is defending and has agreed to indemnify the
Company. The Company has a $33,500,000 owners title insurance policy with First
American Title. The case is set for trial on June 18, 2002. Although the outcome
of this litigation cannot be predicted, management does not believe that an
adverse result would have a material adverse effect on our financial condition,
liquidity or results of operations.

     On October 22, 2001, GF Gaming ("GF"), a gaming company operating a casino
in Central City, Colorado filed an appeal with the Commission challenging the
issuance of licenses to the Company and Hyatt Gaming on the grounds that the
Colorado Gaming Commission failed to consider whether the casino facility met
the historic architecture intent of the Colorado gaming laws. In December, 2001,
the Colorado Gaming Commission dismissed the appeal based upon lack of standing
and lack of jurisdiction. In February 2002, GF filed a notice of appeal to
continue its challenge in the Colorado Court of Appeals. The Company intends to
vigorously defend this appeal and believes that the appeal is defective on
jurisdictional grounds, and believes that if the appeal proceeds, the Court of
Appeals will uphold the Colorado Gaming Commission's ruling. An adverse decision
would have a material adverse effect on our financial condition, liquidity and
results of operations.

     PCL Construction Services, Inc. ("PCL") acted as the general contractor for
the Company in the construction of the Black Hawk Casino by Hyatt project. The
substantial completion date for the project was originally to have been October
29, 2001 and was subsequently amended by change order to November 15, 2001. In
fact, construction of the casino was not at a point where the casino could open
for business until December 20, 2001 and it is questionable whether "Substantial
Completion," as defined by the construction contract, has occurred as of March
27, 2002. PCL has submitted a pay application to the Company seeking payment of
what PCL believes to be a majority of the balance due on the contract -
approximately $1,240,000 in the form of cost to complete and approximately
$3,600,000 in retainage as of December 31, 2001. In addition to these amounts,
the Company and PCL have disagreed over the scope and proper amount of certain
additional change notices and change orders. The precise amount in dispute over
change notices and change orders has not yet been quantified by the parties. On
February 15, 2002, the Company wrote PCL a letter advising PCL that PCL's pay
applications would not be processed until such time as PCL had completed the
project, including all required punch list items, until there had been final
resolution of any further issues relative to change orders and change notices,
and until PCL and the Company had reached an agreement relative to the amount of
the Company's set off and claims for project mismanagement and completion delay
by PCL. PCL and five of PCL's subcontractors have sent the Company notice of
intent to file liens, however, to the Company's knowledge, no liens have yet
been recorded. We expect that other subcontractors will give notice of their
intent to file liens and to file liens. PCL has not responded to the Company's
February 15th letter. At this point, it appears possible the Company may be
involved in legal action with PCL, PCL's subcontractors, and PCL's surety
relative to the remaining amounts to be paid to PCL, punch lists and project
completion issues, and setoffs and counterclaims which the Company has against
PCL. Although the outcome of any litigation or dispute cannot be predicted at
this time, management does not believe that an adverse result would have a
material adverse effect on our financial condition, liquidity or results of
operations.

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

     No matters were submitted by us to a vote of our security holders through
the solicitation of proxies or otherwise, during the fourth quarter of the
fiscal year covered by this Annual Report.

PART II

Item 5. Market for Common Equity and Related Stockholder Matters

     Market Information Our common stock has not been registered under the
Securities Act of 1933, as amended, and there is no public trading market for
our common stock. No dividends have been declared or paid on our common stock
and we do not intend to pay a dividend on shares of our common stock in the
future. In addition, the payment of cash dividends on our common stock is
subject to any preferences which may be applicable to our series A and series B
preferred stock and our ability to declare dividends on our common stock is
restricted by the terms of the indenture under which the first mortgage notes
were issued and by the terms of our series B preferred stock.

     Holders. As of March 26, 2002, there were 41 holders of record of our
common stock.

                                       25
<PAGE>

     Dividends. No dividends have been declared or paid on our common stock and
we do not intend to pay a dividend on shares of our common stock in the future.
In addition, the payment of cash dividends on our common stock is subject to any
preferences which may be applicable to our series A and series B preferred stock
and our ability to declare dividends on our common stock is restricted by the
terms of our series B preferred stock. In addition, the indenture governing our
first mortgage notes limits our ability to pay dividends. Consequently, no cash
dividends are expected to be paid on our common stock in the foreseeable future.
Further, there can be no assurance that our proposed operations will generate
the funds needed to declare a cash dividend or that we will have legally
available funds to pay dividends. In addition, we may fund part of our
operations in the future from indebtedness, the terms of which may prohibit or
restrict the payment of cash dividends. If a holder of common stock is
disqualified by the regulatory authorities from owning such shares, such holder
will not be permitted to receive any dividends with respect to such stock. See
Item 1, "Description of Business--Gaming Licensing Matters and Alcohol."

Item 6. Management's Discussion and Analysis or Plan of Operation

Selected Financial Data

     The following selected historical financial information has been derived
from the consolidated financial statements of the Company and should be read in
conjunction with the consolidated financial statements and notes thereto, and
Management's Discussion and Analysis of Plan of Operation included elsewhere in
this Form 10-KSB.

<TABLE>
<CAPTION>
                                                                                  For the period from
                                                                                     July 17, 1997
                                                                                  (Date of Inception)
                                               For the Year Ended December 31,          Through
                                         -----------------------------------------    December 31,
                                             2001           2000           1999           1998
                                             ----           ----           ----           ----
<S>                                      <C>            <C>            <C>            <C>
INCOME STATEMENT DATA
Net revenue                              $ 2,802,134           --             --             --
Operating income                             478,163    $      (170)   $  (435,900)   $  (522,275)
                                         -----------    -----------    -----------    -----------
Other income (expense):
Interest income                            1,978,602      3,810,304           --             --
Interest expense                          (5,839,058)    (8,834,934)      (240,500)      (609,321)
Start-up costs                            (4,522,740)      (317,146)          --             --
Write off previously capitalized costs          --             --             --       (3,027,589)
Change in valuation of warrants                 --          (12,536)          --             --
                                         -----------    -----------    -----------    -----------
Other expense, net                        (8,383,196)    (5,354,312)      (240,500)    (3,636.910)
                                         -----------    -----------    -----------    -----------
Net loss                                  (7,905,033)    (5,354,482)      (676,400)    (4,159,185)
Preferred stock dividends                   (551,254)      (417,322)          --             --
                                         -----------    -----------    -----------    -----------
Net loss attributable to
    Common stock                         $(8,456,287)   $(5,771,804)   $  (676,400)   $(4,159,185)
                                         ===========    ===========    ===========    ===========
</TABLE>


     The following discussion should be read in conjunction with, and is
qualified in its entirety by, our financial statements, including the notes
thereto, and the other financial information included elsewhere in this Annual
Report.

Overview

     The Company's project, the Black Hawk Casino by Hyatt (the "casino") opened
on December 20, 2001. Prior to that time, the Company's activities were limited
to the design, financing, construction and opening of the casino.

     On March 14, 2000, we completed the private placement financing
transactions discussed below. Prior to that date, all development activities
were conducted by the LLC and we had no significant assets or liabilities. On
March 14, 2000, the LLC contributed all of its assets and liabilities to us. We
are completing the development of the casino, and focus on the operation of the
casino, which is managed by Hyatt Gaming Management, Inc.

     Prior to March 14, 2000, the LLC was in default on substantially all of its
notes payable, and was significantly past due in payment of its
accounts/construction payable and accrued expenses and had a net members'
deficit of approximately $5 million at December 31, 1999. We obtained funds to

                                       26
<PAGE>

pay off the liabilities which were assumed from the LLC upon completion on March
14, 2000 of a private placement of $100 million principal amount of our first
mortgage notes. Upon consummation of the private placement, the following
transactions also occurred:

o    We amended our articles of incorporation whereby our authorized stock
     consists of 10,000,000 shares of common stock, $0.01 par value per share,
     and 1,000,000 shares of preferred stock, $0.01 par value per share. The
     shares of preferred stock may be issued from time to time in one or more
     series. We designated 29,000 shares of our preferred stock as "series A"
     preferred stock and 30,000 shares of our preferred stock as "series B"
     preferred stock. The holders of both the series A and series B preferred
     stock have no voting rights. The series A preferred stock is
     non-convertible, accrues cumulative, non-compounding dividends at the rate
     of 11% per annum and has a liquidation preference of $100 per share.
     Holders of the series A preferred stock may redeem their shares at a price
     per share equal to their liquidation preference plus accrued and unpaid
     dividends thereon at any time after the later of (1) one year after the
     first mortgage notes are paid in full, whether at maturity or upon
     redemption or repurchase and (2) one year after the second mortgage notes
     issued to Hyatt Gaming are paid in full, whether at maturity or upon
     redemption or repurchase. The series B preferred stock is non-convertible,
     accrues dividends on a cumulative basis, compounding quarterly at a rate of
     7% per annum and has a liquidation preference of $100 per share. Holders of
     the series B preferred stock may redeem their shares at a price equal to
     their liquidation preference plus accrued and unpaid dividends thereon at
     March 15, 2015. Following completion of these transactions, 1,000,000
     shares of common stock, 29,000 shares of series A preferred stock and
     30,000 shares of series B preferred stock are outstanding.

o    The LLC contributed all of its assets and liabilities to us; in exchange
     the LLC received 368,964 shares of our common stock. These shares
     represented approximately 37% of our then outstanding common stock, prior
     to any additional dilution as a result of the warrants issued in the
     private placement and other transactions closing concurrently with the
     private placement. The majority of these shares were transferred to its
     members and to other individuals.

o    Notes payable in the amount of approximately $7.40 million was converted to
     383,461 shares of our common stock and accrued interest in the amount of
     approximately $1.65 million was forgiven.

o    We obtained approximately $4.0 million in net proceeds from the sale of
     247,575 shares of our common stock.

o    We issued $2.9 million of our 11% mandatorily redeemable series A preferred
     stock in satisfaction of $1.7 million of accrued salaries and other project
     development costs and $1.2 million of accounts payable.

o    We issued $3.0 million of our 7.0% mandatorily redeemable series B
     preferred stock in exchange for cash. The series B preferred stock has
     warrants attached that entitle the warrant holders to purchase, at an
     exercise price of $0.01 per share, common stock that will represent, in the
     aggregate, 15% of our fully diluted common stock. These warrants have
     substantially similar rights as the warrants attached to the first mortgage
     notes.

o    We obtained approximately $7.5 million in proceeds from the issuance of
     second mortgage notes and warrants to Hyatt Gaming. The warrants attached
     to the Hyatt Gaming second mortgage notes entitle the warrant holders to
     purchase, at $0.01 per share, common stock that will represent, in the
     aggregate, 1.98% of our fully diluted common stock. These warrants have the
     same rights as the warrants attached to the first mortgage notes.

o    Libra Securities, LLC, (the successor to U.S. Bancorp Libra), as placement
     agent, received warrants that entitle the warrant holders to purchase, at
     $0.01 per share, common stock that will represent, in the aggregate, 4.67%
     of our fully diluted common stock then outstanding. These warrants have the
     same rights as the warrants attached to the first mortgage notes.

o    The LLC has designated 50,000 of the shares it received for options granted
     to various parties who rendered services to the LLC in satisfaction of
     $825,000 of accrued compensation.

o    The warrants attached to the first mortgage notes and the second mortgage
     notes have been valued at $1.64 million and $160,000, respectively. The
     warrants attached to the series B preferred stock have been valued at $1.37
     million. U.S. Bancorp Libra, the placement agent, received warrants with a
     value of $383,000. Due to the put-option feature, the total warrant value
     of $3.6 million has been recorded as a liability in our financial
     statements at December 31, 2000.

                                       27
<PAGE>

Results of Operations

     Prior to the opening of the casino on December 20, 2001 we were in the
development stage. Prior to March 17, 2000 all costs were borne by Windsor
Woodmont, LLC and such costs were reimbursed with proceeds of the first mortgage
note offering and related transactions. Future operating results will be subject
to significant business, economic, regulatory and competitive uncertainties and
contingencies, many of which are beyond our control. While we believe that our
casino will be able to attract a sufficient number of patrons and achieve the
level of activity and revenues necessary to permit us to meet our payment
obligations, including those relating to the first mortgage notes, we cannot
assure you that we will achieve these results.

For the Year Ended December 31, 2001 compared to the Year Ended December 31,
2000

     Our operating income is from the operations of our casino during the period
December 20, 2001 through December 31, 2001. Our other expense, net consists of
interest expense on our outstanding indebtedness, net of interest capitalized
during construction, interest income on our restricted cash and short-term
investments and start up costs.

     General and administrative expenses represents salaries and project
development services which have not been capitalized to our casino project. We
have capitalized salaries which, in management's opinion, are directly
attributable to the development of our casino. Accordingly, the increase in
general and administrative expenses from the year ended December 31, 2001 to the
year ended December 31, 2000 is a result of the opening of our casino on
December 20, 2001 and management's determination of the nature of the services
being performed, resulting in substantially all salaries prior to the opening of
the casino being capitalized in the year ended December 31, 2001.

     Interest income for the year ended December 31, 2001 compared to the year
ended December 31, 2000 decreased as a function of (a) the amount of funds
invested reduced to fund construction costs and (b) a reduction in the interest
rate on invested funds during 2001 compared to 2000.

     Interest charges for the year ended December 31, 2001 totaled approximately
$16.7 million, including $1.4 million in amortization of debt issuance costs. Of
this total, $10.9 million was capitalized and $5.8 million was expensed.
Interest charges for the year ended December 31, 2001 compared to the year ended
December 31, 2000 increased as a result of the issuance of the FF&E loan and the
Black Hawk Business Improvement District bonds, and the fact that the $100
million first mortgage notes and the $7.5 million second mortgage notes were
outstanding for the entire year ended December 31, 2001.

     Start up costs are expensed as incurred. The increase in start up costs for
the year ended December 31, 2001 compared to the year ended December 31, 2000 is
attributable to start up costs being incurred for salaries, benefits, training,
marketing, licensing and other costs in connection with the opening of the
casino.

For the Year Ended December 31, 2000 compared to the Year Ended December 31,
1999

     We do not have any historical operating results other than interest expense
on our outstanding indebtedness, interest income on our restricted cash and
short-term investments, start up costs and the capitalization of certain costs.

     General and administrative expenses represents salaries and project
development services which have not been capitalized to our casino project. We
have capitalized salaries which, in management's opinion, are directly
attributable to the development of our casino. Accordingly, the decrease in
general and administrative expenses from the year ended December 31, 1999 to the
year ended December 31, 2000 is a result of management's determination of the
nature of the services being performed, resulting in substantially all salaries
being capitalized in the year ended December 31, 2000.

     Interest charges for the year ended December 31, 2000 totaled approximately
$13.1 million, including $1.0 million in amortization of debt issuance costs. Of
this total, $4.3 million was capitalized and $8.8 million was expensed. Interest
charges for the year ended December 31, 2000 compared to the year ended December
31, 1999 increased as a result of the issuance of the first mortgage notes and
the $7.5 million second mortgage notes.

     Start up costs are expensed as incurred. The increase in start up costs for
the year ended December 31, 2000 compared to the year ended December 31, 1999 is
attributable to start up costs being incurred and funded with the successful
completion of the note offering in March 2000.

                                       28
<PAGE>
<TABLE>
<CAPTION>

Liquidity and Capital Resources

     Following is a schedule of Total Contractual Cash Obligations and Other
Commercial Commitments as of December 31, 2001.

                                      Payments Due by Period
                                      ----------------------

Contractual Obligations      Total    Less than 1 year   1-3 years      4-5 years    After 5 years
-----------------------      -----    ----------------   ---------      ---------    -------------
<S>                      <C>            <C>            <C>            <C>            <C>
Long-term Debt           $133,640,233   $  4,029,205   $117,731,027   $    284,272   $ 11,595,729
Operating Leases              621,376        185,295        391,137         44,944           --
Total Contractual Cash
Obligations              $134,261,609   $  4,214,500   $118,122,164   $    329,216   $ 11,595,729


                            Amount of Commitment Expiration per Period
                            ------------------------------------------

Other Commercial         Total Amounts  Less than 1      1-3 years      4-5 years     Over 5 years
Commitments                Committed        year
----------------         -------------  -----------      ---------      ---------     ------------
Standby Letters
of Credit                $  1,446,494   $  1,446,494           --             --             --

</TABLE>

     During the year ended December 31, 2001, we completed a $20.8 million
financing to purchase furniture, fixtures and equipment for our casino, and we
completed a $3.0 million financing from the issuance of special improvement
district bonds by the Black Hawk Business Improvement District.

     During the year ended December 31, 2000, we completed debt financing
totaling $107.5 million, a series B preferred stock offering totaling $3.0
million and a common stock offering totaling $4.0 million, net of commissions
paid. We also converted $7.4 million face amount of notes payable to common
stock, and had $1.65 million in accrued interest forgiven. In addition, we
reduced accounts payable and accrued expenses a total of $3.7 million utilizing
$2.9 million in series A preferred stock and $0.8 million of common stock issued
to Windsor Woodmont, LLC.

     Substantially all of our assets are pledged as collateral for long-term
debt. Among other things, the terms of our various loan agreements require our
insurance be placed with carriers with an A. M. Best & Company rating of A or
higher. Our property and liability coverages were negotiated with TIG Insurance
Company, an A rated carrier prior to opening; however, a few days before the
coverage was bound, TIG Insurance Company's A. M. Best rating was downgraded
from A to B++. Due to the timing of the downgrade, coverage was bound with TIG,
but we immediately began to replace the coverage with A rated carriers. As of
March 22, 2002, we were in compliance with all debt covenants.

     We estimate that cash flow from operations and remaining proceeds from the
financing will be sufficient to sustain our operations for an indefinite period
of time. However, if the proceeds from those financings or cash flow from
operations should prove to be inadequate, we are entitled under the indenture to
issue up to $5.0 million of additional notes to The Ravich Revocable Trust of
1989, or its affiliates. We are also entitled under the indenture to issue up to
$30.0 million of additional notes solely for the purpose of financing the
construction of a hotel, parking structure and related facilities. Other than as
stated above, we had no other sources of liquidity prior to commencing
operations. Following the commencement of operations of our casino, we expect to
fund our operating and capital needs from operating cash flows. We estimate that
we will spend approximately $2,000,000 to complete the project during the fiscal
year ended December 31, 2002. We expect to fund these expenditures from our
existing cash reserves and cash flow from operations.

     We cannot assure you that any additional financing, if necessary to meet
liquidity requirements, will be available to us in the future, or that, if
available, any such financing will be on favorable terms. We cannot assure you
that our reasonably foreseeable liquidity needs are or will be accurate or that
new business developments or other unforeseen events will not occur, resulting
in the need to raise additional funds. We expect that the adequacy of our
operating cash flow will depend, among other things, upon patron acceptance of
our casino, the continued development of the Black Hawk market as a gaming
destination, the intensity of the competition, the efficiency of operations,
depth of customer demand, the effectiveness of our marketing and promotional
efforts and the performance by Hyatt Gaming of its management responsibilities.

Significant Accounting Policies and Estimates

     We prepare our Consolidated Financial Statements in conformity with
accounting principles generally accepted in the United States. Certain of our
accounting policies, including the estimated lives assigned to our assets, the
determination of bad debt, asset impairment and self insurance reserves, the
calculation of our income tax liabilities, require that we 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. Our judgments are based on our historical experience, terms of
existing contracts, our observance of trends in the industry, information
provided by our customers and information available from other outside sources,
as appropriate. There can be no assurance that actual results will not differ
from our estimates. To provide an understanding of the methodology we apply, our
significant accounting policies are discussed where appropriate in this
discussion and analysis and in the notes to our Consolidated Financial
Statements.

                                       29
<PAGE>

Recently Issued Accounting Standards

     In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment on Disposal of Long-Lived Assets", effective January 1, 2002. SFAS
No. 144 supercedes SFAS No. 121 and portions of other accounting statements. The
provisions applicable to the Company are substantially the same as those applied
under SFAS No. 121 and the Company, therefore, does not believe that the
adoption of SFAS No. 144 will have a material impact on its results of
operations or financial position. The Company is, however, required to complete
the initial assessment of impairment by 2002.

Item 7. Financial Statements

     The response to this item is submitted as a separate section of this Annual
Report beginning on page F-1.

Item 8. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure

     Effective as of May 31, 2000, we dismissed the accounting firm of
PricewaterhouseCoopers LLP, as our principal independent accountant. The
financial statements of the LLC at December 31, 1999, 1998 and 1997 and for each
of the two years in the period ended December 31, 1999, the period from July 17,
1997 (inception) through December 31, 1997 and the period from July 17, 1997
(inception) through December 31, 1999 were prepared assuming that the company
will continue as a going concern. During the last two fiscal years, there were
not any disagreements with PricewaterhouseCoopers LLP on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure. Further, there were no events of the type listed in
paragraphs (A) through (D) of Item 304(a)(v) of Regulation S-K that would
require us to provide further information.

     On May 31, 2000, we engaged Arthur Andersen LLP as our new principal
independent accountant to audit our financial statements and Arthur Andersen LLP
re-audited our financial statements and those of the LLC at December 31, 1999,
1998 and 1997 and for the fiscal years ended December 31, 1999. Arthur
Andersen's report did not contain a going concern qualification because we
completed our $100 million financing in March 2000 and Arthur Andersen's audit
report is dated June 30, 2000. Neither we nor anyone on our behalf has consulted
Arthur Andersen LLP regarding the application of accounting principles to a
specific completed or contemplated transaction, or the type of audit opinion
that might be rendered on our financial statements.

     The change in accountants was approved by our board of directors.

PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
        with Section 16(a) of the Exchange Act

     This item has been omitted from this Annual Report and is incorporated by
reference to Windsor Woodmont Black Hawk Resort Corporation's definitive proxy
statement to be filed with the Securities and Exchange Commission within 120
days after the end of the fiscal year covered by this report.

Item 10. Executive Compensation

     This item has been omitted from this Annual Report and is incorporated by
reference to Windsor Woodmont Black Hawk Resort Corporation's definitive proxy
statement to be filed with the Securities and Exchange Commission within 120
days after the end of the fiscal year covered by this report.

                                       30
<PAGE>

Item 11. Security Ownership of Certain Beneficial Owners and Management

     This item has been omitted from this Annual Report and is incorporated by
reference to Windsor Woodmont Black Hawk Resort Corporation's definitive proxy
statement to be filed with the Securities and Exchange Commission within 120
days after the end of the fiscal year covered by this report.

Item 12. Certain Relationships and Related Transactions

     This item has been omitted from this Annual Report and is incorporated by
reference to Windsor Woodmont Black Hawk Resort Corporation's definitive proxy
statement to be filed with the Securities and Exchange Commission within 120
days after the end of the fiscal year covered by this report.

Item 13. Exhibits and Reports on Form 8-K

     (a)  Exhibits

     A list of the exhibits included as part of this Form 10-KSB is set forth in
the Exhibit Index that immediately precedes such exhibits, which is incorporated
herein by reference.

     (b)  Reports on Form 8-K

     No reports on Form 8-K were filed by us during our fourth quarter ended
December 31, 2001.




                                       31
<PAGE>


Signatures

     In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                      WINDSOR WOODMONT BLACK HAWK RESORT CORP.
                                      (Registrant)


Date:  March 27, 2002                 By: /s/ Tim Rose
                                      ------------------------------------------
                                      Tim Rose, President and
                                      Chief Executive Officer


In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.


Date:  March 27, 2002                 /s/ Irving C. Deal
                                      ------------------------------------------
                                      Irving C. Deal, Chairman of the Board


Date:  March 27, 2002                 /s/ Tim Rose
                                      ------------------------------------------
                                      Tim Rose, President and Chief Executive
                                      Officer (principal executive officer)


Date:  March 27, 2002                 /s/ Michael L. Armstrong
                                      ------------------------------------------
                                      Michael L. Armstrong, Executive Vice
                                      President, Chief Financial Officer,
                                      Treasurer and Assistant Secretary
                                      (principal financial officer)


Date:  March 27, 2002                 /s/ Donald J. Malouf
                                      ------------------------------------------
                                      Donald J. Malouf, Secretary and Director


Date:  March 27, 2002                 /s/ Jerry L. Dauderman
                                      ------------------------------------------
                                      Jerry L. Dauderman, Vice Chairman of the
                                      Board


Date:  March 27, 2002                 /s/ Jess Ravich
                                      ------------------------------------------
                                      Jess Ravich, Director


Date:  March 27, 2002                 /s/ Garry Saunders
                                      ------------------------------------------
                                      Garry Saunders, Director



                                       32
<PAGE>



                          INDEX TO FINANCIAL STATEMENTS




                                                                            Page
                                                                            ----



Audited Financial Statements of Windsor Woodmont Black Hawk Resort Corp.:
     Report of Independent Public Accountants.............................   F-2
     Consolidated Balance Sheets..........................................   F-3
     Consolidated Statements of Operations................................   F-4
     Consolidated Statements of Comprehensive Loss........................   F-5
     Consolidated Statements of Redeemable Preferred Stock
        and Stockholders' Equity..........................................   F-6
     Consolidated Statements of Cash Flows................................   F-7
     Notes to Consolidated Financial Statements...........................   F-8








<PAGE>


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To the Board of Directors and Stockholders of
Windsor Woodmont Black Hawk Resort Corp.:


     We have audited the accompanying consolidated balance sheets of Windsor
Woodmont Black Hawk Resort Corp. (a Colorado corporation) (the "Company") as of
December 31, 2001 and 2000, and the related consolidated statements of
operations, comprehensive loss, redeemable preferred stock and stockholders'
equity and cash flows for each of the three years in the period ended December
31, 2001. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Windsor Woodmont Black Hawk
Resort Corp. as of December 31, 2001 and 2000, and the results of its operations
and its cash flows for each of the three years in the period ended December 31,
2001, in conformity with accounting principles generally accepted in the United
States.


ARTHUR ANDERSEN LLP
Las Vegas, Nevada
March 15, 2002 (except with respect to the matter
discussed in Note 4, as to which
the date is March 22, 2002)




                                      F-2
<PAGE>
<TABLE>
<CAPTION>

                                      WINDSOR WOODMONT BLACK HAWK RESORT CORP.
                                            CONSOLIDATED BALANCE SHEETS
                                                                              December 31, 2001     December 31, 2000
                                                                              -----------------     -----------------
<S>                                                                             <C>                   <C>
ASSETS
CURRENT ASSETS:
Cash                                                                            $   9,667,138         $     229,204
Cash and cash equivalents, restricted                                               5,012,476            30,122,220
Investments, restricted                                                             6,480,236            33,706,894
Accounts receivable                                                                   223,511
Inventories                                                                           282,745
Prepaid expenses                                                                      859,704
                                                                                -------------         -------------
Total current assets                                                               22,525,810            64,058,318

Property and Equipment, net                                                       124,599,615            54,026,582

OTHER ASSETS:
Investments, restricted                                                                                   2,708,333
Base stock inventories and uniforms, net of accumulated amortization                  279,062
Funds held in escrow and security deposits                                            235,151                50,000
Franchise Fees                                                                         40,000
Deferred financing costs, net of accumulated amortization
    of $2,475,409 and $1,043,710, respectively                                      5,252,182             5,881,114
                                                                                -------------         -------------

TOTAL ASSETS                                                                    $ 152,931,820         $ 126,724,347
                                                                                =============         =============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt                                               $   4,029,205         $        --
Trade accounts payable and accrued expenses                                         1,684,980
Accounts payable related parties                                                    4,925,732
Construction accounts payable                                                       7,344,158             5,633,548
Accrued interest                                                                    3,976,906             4,769,712
Other current liabilities                                                             256,157
                                                                                -------------         -------------
Total current liabilities                                                          22,217,138            10,403,260

NON CURRENT LIABILITIES:
Long-term debt, less current portion                                              128,420,658           105,965,404
Warrants issued on common stock                                                     3,568,600             3,568,600
                                                                                -------------         -------------
Total non current liabilities                                                     131,989,258           109,534,004

REDEEMABLE PREFERRED STOCK:
Series A - 11% dividend, $100 redemption value, 29,000 shares outstanding           2,900,000             2,900,000
Series B - 7% dividend, $100 redemption value, 30,000 shares outstanding            1,754,637             1,684,670
Accrued dividends on preferred stock                                                  968,576               417,322
                                                                                -------------         -------------
Total redeemable preferred stock                                                    5,623,213             5,001,992

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
Common stock, $0.01 par value, 10,000,000 shares authorized,
    1,000,000 shares outstanding                                                       10,000                10,000
Additional paid in capital                                                         12,241,250            12,241,250
Accumulated deficit                                                               (19,209,132)          (10,752,845)
Other comprehensive income                                                             60,093               286,686
                                                                                -------------         -------------
Total stockholders' equity                                                         (6,897,789)            1,785,091
                                                                                -------------         -------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                      $ 152,931,820         $ 126,724,347
                                                                                =============         =============


                                   SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                       F-3
<PAGE>


                    WINDSOR WOODMONT BLACK HAWK RESORT CORP.
                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                           For the Year Ended December 31,
                                      -----------------------------------------
                                         2001            2000           1999
                                      -----------    -----------    -----------
OPERATING REVENUES:
Casino                                $ 2,620,931    $      --      $      --
Food and beverage                         268,154
Other                                      42,054
                                      -----------    -----------    -----------
                                        2,931,139           --             --
Less: Promotional allowances             (129,005)
                                      -----------    -----------    -----------

Net operating revenues                  2,802,134           --             --
                                      -----------    -----------    -----------

OPERATING EXPENSES:
Casino                                  1,028,125
Food and beverage                         265,871
Other operating expenses                  290,681
General and administrative                360,417            170        435,900
Management fees                           132,247
Depreciation and amortization             246,630
                                      -----------    -----------    -----------

Total operating expenses                2,323,971            170        435,900
                                      -----------    -----------    -----------

Operating income/loss                     478,163           (170)      (435,900)

OTHER INCOME (EXPENSE):
Interest income                         1,978,602      3,810,304
Interest expense, net                  (5,839,058)    (8,834,934)      (240,500)
Start up costs                         (4,522,740)      (317,146)
Change in valuation of warrants                          (12,536)
                                      -----------    -----------    -----------
Other expense, net                     (8,383,196)    (5,354,312)      (240,500)
                                      -----------    -----------    -----------

Net loss                               (7,905,033)    (5,354,482)      (676,400)

Preferred stock dividends                 551,254        417,322
                                      -----------    -----------    -----------

Net loss attributable to
    common stock                      $(8,456,287)   $(5,771,804)   $  (676,400)
                                      ===========    ===========    ===========

Loss per share
    Basic                                  ($8.46)        ($7.21)      ($676.40)
    Diluted                                ($8.46)        ($7.21)      ($676.40)

Weighted Average Shares
    Basic                               1,000,000        800,200          1,000
    Diluted                             1,000,000        800,200          1,000



                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                      F-4
<PAGE>


                      WINDSOR WOODMONT BLACK HAWK RESORT CORP.
                    CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS



                                                 For the Year Ended December 31,
                                            -----------------------------------------
                                                2001           2000           1999
                                            -----------    -----------    -----------

Net loss                                    $(7,905,033)   $(5,354,482)   $  (676,400)

Unrealized gain (loss) on securities held
    for sale                                   (226,593)       286,686
                                            -----------    -----------    -----------

Comprehensive loss                          $(8,131,626)   $(5,067,796)   $  (676,400)
                                            ===========    ===========    ===========






                   SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                        F-5
<PAGE>


                                  WINDSOR WOODMONT BLACK HAWK RESORT CORP.
               CONSOLIDATED STATEMENTS OF REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY


                                                        Redeemable
                                                     Preferred Stock                   Common Stock
                                                ----------------------------    ----------------------------
                                                   Shares          Amount          Shares          Amount
                                                ------------    ------------    ------------    ------------
Balance at December 31, 1998                                    $                      1,000    $         10
                                                ------------    ------------    ------------    ------------
Balance at December 31, 1999                                                           1,000              10

Issuance of common stock                                                             999,000           9,990
11% Series A preferred stock                          29,000       2,900,000
7% Series B preferred stock                           30,000       3,000,000
Warrants for common stock attached to
    Series B preferred stock                                      (1,315,330)
Preferred stock dividends                                            417,322
                                                ------------    ------------    ------------    ------------
Balance at December 31, 2000                          59,000       5,001,992       1,000,000          10,000

Amortization of value of warrants attached to
    Series B preferred stock                                          69,967
Preferred stock dividends                                            551,254
                                                ------------    ------------    ------------    ------------
Balance at December 31, 2001                          59,000    $  5,623,213       1,000,000    $     10,000
                                                ============    ============    ============    ============



                                                 Additional                        Other           Total
                                                  Paid In       Accumulated     Comprehensive   Stockholders'
                                                  Capital         Deficit          Income          Equity
                                                ------------    ------------    ------------    ------------
Balance at December 31, 1998                    $        990    $ (4,304,641)   $       --      $ (4,303,641)


Net loss                                                            (676,400)                       (676,400)
                                                ------------    ------------    ------------    ------------
Balance at December 31, 1999                             990      (4,981,041)                     (4,980,041)

Issuance of common stock                          12,240,260                                      12,250,250
Preferred stock dividends                                           (417,322)                       (417,322)
Net loss                                                          (5,354,482)                     (5,354,482)
Change in unrealized gain on investments
available for sale                                                                   286,686         286,686
                                                ------------    ------------    ------------    ------------
Balance at December 31, 2000                      12,241,250     (10,752,845)        286,686       1,785,091

Preferred stock dividends                                           (551,254)                       (551,254)
Net loss                                                          (7,905,033)                     (7,905,033)
Change in unrealized gain on investments
available for sale                                                                  (226,593)       (226,593)
                                                ------------    ------------    ------------    ------------
Balance at December 31, 2001                    $ 12,241,250    $(19,209,132)   $     60,093    $ (6,897,789)
                                                ============    ============    ============    ============


                               SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                    F-6
<PAGE>

                                   WINDSOR WOODMONT BLACK HAWK RESORT CORP.
                                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                            For the Year Ended December 31,
                                                                  -----------------------------------------------
                                                                       2001             2000             1999
                                                                  -------------    -------------    -------------
Cash flows used in operating activities
  Net Loss                                                        $  (7,905,033)   $  (5,354,482)   $    (676,400)
  Adjustments to reconcile net loss
    to net cash provided by operating activities:
    Depreciation and amortization                                       246,630
    Amortization of deferred financing costs                          1,431,699        1,043,710          280,051
    Amortization of debt discount                                       344,226
    Amortization of preferred stock issuance cost                        69,967
    Change in valuation of warrants                                                       12,536
  Changes in working capital:
    Accounts receivable                                                (223,511)
    Inventories                                                        (282,745)
    Prepaid expenses                                                   (859,704)
    Trade accounts payable and accrued expenses                       1,684,980
    Accounts payable related parties                                  4,925,732
    Accrued interest                                                  1,547,427        2,107,225        3,425,891
    Other current liabilities                                           256,157
                                                                  -------------    -------------    -------------
      Net cash (provided by/used in) operating activities             1,235,825       (2,191,011)       3,029,542
                                                                  -------------    -------------    -------------
Cash flows from investing activities:
  Decrease (increase) in funds held in escrow                          (185,151)       1,736,990
  Increase in base stock inventories and uniforms                      (284,344)
  Increase in franchise fees                                            (40,000)
  Increase in property and equipment                                (68,611,052)     (27,092,162)      (4,761,359)
  Decrease (increase) in cash and cash equivalents - restricted      25,109,744      (30,122,220)
  Decrease (increase) in investments - restricted                    29,708,398      (36,128,541)
  (Decrease) increase in construction accounts payable                 (492,719)      (5,339,871)       1,679,347
                                                                  -------------    -------------    -------------
      Net cash provided (used) in investment activities             (14,795,124)     (96,945,804)      (3,082,012)
                                                                  -------------    -------------    -------------
Cash flows from financing activities:
  Deferred offering costs incurred                                     (802,767)      (6,274,954)        (266,870)
  Proceeds from long-term debt                                       23,800,000      105,965,404          465,948
  Payment of long-term debt                                                           (9,339,506)         (12,836)
  Proceeds from preferred stock - Series B                                             1,684,670
  Proceeds from common stock issued for cash                                           4,010,250
  Proceeds from warrants issued for cash                                               3,173,064
                                                                  -------------    -------------    -------------
      Net cash provided by financing activities                      22,997,233       99,218,928          186,242
                                                                  -------------    -------------    -------------
Net change in cash and cash equivalents                               9,437,934           82,113          133,772
Cash and cash equivalents, beginning of period                          229,204          147,091           13,319
                                                                  -------------    -------------    -------------
Cash and cash equivalents, end of period                          $   9,667,138    $     229,204    $     147,091
                                                                  =============    =============    =============

Non Cash Items:
Land and construction in progress reductions
    due to payment settlements and interest forgiven                               $   3,887,221
Construction in progress due to retainage                         $  (2,203,329)   $  (1,642,060)
Deferred financing costs settled with warrants                                     $    (383,000)
Accrued interest forgiven                                                          $  (1,650,346)
Accounts payable settled for less than face value                                  $  (2,236,875)
Notes payable converted to common stock                                            $  (7,415,000)
Accounts payable settled with Series A preferred stock                             $  (2,900,000)
Accounts payable settled with common stock                                         $    (825,000)

Supplemental Cash Flow Information:
Interest Paid, net of amounts capitalized                         $   2,444,438    $   5,381,421


                                SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                     F-7
</TABLE>
<PAGE>

                    WINDSOR WOODMONT BLACK HAWK RESORT CORP.

                          NOTES TO FINANCIAL STATEMENTS


1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation:

     Windsor Woodmont Black Hawk Resort Corp., a Colorado corporation (the
"Company" or "Resort Corp.") was incorporated on January 9, 1998. Windsor
Woodmont, LLC (the "LLC") was formed as a limited liability company, under the
laws of the state of Colorado, on July 17, 1997. These companies were formed for
the purpose of developing and operating an integrated limited stakes gaming
casino, entertainment and parking facility in Black Hawk, Colorado (the
"Project"), which opened December 20, 2001. Prior to December 20, 2001, the
Company and the LLC were development stage enterprises.

     The Company was a wholly owned shell company subsidiary of the LLC with no
significant assets, liabilities or operating activity. In connection with the
Private Placement and other financing transactions described in Note 3, the LLC
contributed all of its assets and liabilities to the Company in exchange for
stock of the Company and the contribution has been accounted for as a
recapitalization of entities under common control whereby the assets and
liabilities are recorded at the historical cost basis of the LLC. The Company
has substantially completed the Project, and is currently operating the Project,
which is managed by Hyatt Gaming Management, Inc. ("Hyatt Gaming"). The LLC's
ownership in the Company was subsequently reduced through the refinancing of the
LLC's debt by conversion into the Company's common stock and the issuance of
additional common stock for cash.

Summary of Significant Accounting Policies:

Cash and Cash Equivalents, Restricted

     The Company considers all highly liquid investments with a maturity at the
time of purchase of six months or less to be cash equivalents. Amounts are held
in several trust accounts by Wells Fargo Bank (as cash disbursement agent) and
are restricted in use to the development of the Black Hawk Casino by Hyatt in
Black Hawk, Colorado or for the 13% First Mortgage Notes interest payments.
Included in restricted cash equivalents are two certificates of deposit in the
amounts of $919,718 and $526,776 which are pledged as collateral on two
irrevocable letters of credit in like amounts which constitute required
collateral for public improvements under the Subdivision Agreement (see Note 6)
and site remediation collateral for a bench excavation permit. The letter of
credit in the amount of $919,718 expires April 30, 2002, and the letter of
credit in the amount of $526,776 expires September 1, 2002.

Investments, Restricted

     The Company accounts for investment securities in accordance with Statement
of Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." SFAS No. 115 addresses the
accounting and reporting requirements in equity securities that have readily
determinable fair values and for all investments in debt securities, and
requires such securities to be classified as either held to maturity, trading,
or available for sale.

     Management determines the appropriate classification of its investment
securities at the time of purchase and reevaluates such determination at each
balance sheet date. At December 31, 2001, and 2000, the short-term investments
consisted of publicly traded corporate debt securities with a maturity date of
12 months or less, and were classified as investments available for sale. As
investments available for sale, they are carried a market value, with unrealized
holding gain or loss reported as a separate component of stockholders' equity.

     Amounts are held in several trust accounts by Wells Fargo Bank (as cash
disbursement agent) and are restricted in use to the development of the Project
or for the 13% First Mortgage Notes interest payments.

     As of December 31, 2001 and 2000, unrealized gains of $60,093 and $286,686,
respectively, have been recognized in the accompanying financial statements.
Income tax expense associated with those unrealized gains totaled $20,432 and
$97,473 for the years ended December 31, 2001 and 2000, respectively. There were
no unrealized gains or income taxes associated with such gains as of December
31, 1999.

                                      F-8
<PAGE>

                    WINDSOR WOODMONT BLACK HAWK RESORT CORP.

                          NOTES TO FINANCIAL STATEMENTS


Inventory

     Inventories are stated at the lower of cost or market, cost being
determined on a first-in, first-out basis.

Warrants Issued on Common Stock

     Warrants issued in connection with the Company's various financing
transactions (see Note 3), contain a "put option" permitting the warrant holder
to redeem the warrant for cash. The value of the warrants was provided by the
Company's Placement Agent, U.S. Bancorp Libra. The warrants issued with the
first mortgage notes and second mortgage notes were valued at $1.64 million and
$160,000, respectively. The warrants issued with the series B preferred stock
have been valued at $1.37 million. The value of warrants issued to the Placement
Agent was $383,000. Due to the cash based put option features of the warrants,
the total warrant value has been recorded as a liability in the accompanying
consolidated balance sheet and recorded at fair value each reporting period. As
of December 31, 2001 and 2000, a liability for the fair market value of the
warrants of $3.57 million was recorded in the accompanying consolidated balance
sheet and a corresponding expense of $12,536 was recorded in the accompanying
consolidated statement of operations for the year ended December 31, 2000.

Construction in Progress

     Construction in progress includes all costs directly attributable to the
Project and, in management's opinion, have continuing value to the Project. When
previously capitalized costs are determined to have no further value to the
Project, such costs are written off in the period in which the determination is
made.

Capitalized Interest

     The Company capitalizes interest costs associated with the debt incurred in
connection with the Project in accordance with Statements of Financial
Accounting Standards No. 34 - "Capitalization of Interest Cost." Interest
capitalization will cease once the Project is substantially complete or is no
longer undergoing construction activities to prepare it for its intended use.
During the years ended December 31, 2001, 2000 and 1999, $10,935,152,
$4,248,787, $2,258,202 of interest expense was capitalized, respectively.

Funds Held in Escrow

     Funds held in escrow at December 31, 2000 represented cash held by the City
of Black Hawk under various bond agreements associated with the construction of
the Project. Funds held in escrow at December 31, 2001, represented the reserve
funds held by the Black Hawk Business Improvement District and miscellaneous
security deposits.

Income Taxes

     The Company accounts for Income Taxes according to Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"). SFAS
109 requires the recognition of deferred tax assets, net of an applicable
valuation allowance, related to net operating loss carry-forwards and certain
temporary differences. The standard requires recognition of a future tax benefit
to the extent that the realization of such benefit is more likely than not.
Otherwise, a valuation allowance is applied.

Deferred Financing Costs

     Debt discount and issuance costs are capitalized and amortized using the
effective interest rate method over the term of the related debt.

                                      F-9
<PAGE>

                    WINDSOR WOODMONT BLACK HAWK RESORT CORP.

                          NOTES TO FINANCIAL STATEMENTS


Base Stock Inventories and Uniforms

     Initial purchases of china, glassware, linens and uniforms are capitalized.
The cost of uniforms are amortized down to 25% net book value over a period of
one year. The cost of glassware, china, silver, etc. are amortized down to 50%
of net book value over a period of one year. Replacements will be expensed as
incurred, unless such replacements represent a major renovation, in which case
the original cost will be written off and the new purchases will be treated as
an initial purchase.

Use of Estimates

     The preparation of financial statements in accordance with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions relating to the reporting of assets and liabilities
and the disclosure of contingent assets and liabilities, and related revenues
and expenses. Actual results could differ from those estimates.

Loss Per Share

     Basic loss per share is computed by dividing net loss applicable to common
stock by the weighted average common shares outstanding during the period.
Diluted loss per share is based on the weighted average number of common shares
outstanding during the respective periods, plus the common equivalent shares, if
dilutive, that would result from the exercise of stock options. Common stock
equivalents for the years ended December 31, 2001 and 2000 were excluded from
the diluted loss per share calculation because their effects would have been
anti-dilutive.

Start-up Costs

     Effective January 1, 1999, Statement of Position 98-5, "Reporting on the
Costs of Start-up Activities", addressed the manner in which the Company
accounts for start-up costs. Start-up costs incurred after January 1, 1999, have
been expensed as incurred. Start-up costs consist of salaries, benefits,
training, marketing, licensing and other costs incurred in connection with the
opening of the Project. During the fiscal year December 31, 2001, 2000 and 1999,
the Company incurred start-up costs of approximately $4.5 million, $0.3 million
and $0, respectively.

Players Club

     In February 2001, the Emerging Issues Task Force ("EITF") of the Financial
Accounting Standards Board issued a partial consensus on EITF 00-22, "Accounting
for "Points" and Certain Other Time-Based or Volume-Based Sales Incentive
Offers, and Offers for Free Products or Services to be Delivered in the Future."
The consensus requires that vendors recognize the cash rebate or refund
obligation associated with time or volume-based cash rebates as a reduction of
revenue based on a systematic and rational allocation of the cost of honoring
rebates or refunds earned and claimed to each of the underlying revenue
transactions that result in progress by the customer toward earning the rebate
or refund. The liability for such obligations should be based on the estimated
amount of rebates or refunds to be ultimately earned, including an estimate of
breakage if it can be reasonably estimated.

     The Company's players' club allows customers to earn certain complimentary
products and/or cash based on the volume of the customers' gaming activity. The
Company has recorded a liability for the estimated cost of the products and/or
cash to be earned by customers. In accordance with EITF 00-22, the Company has
recorded the charge for progress towards the complimentary services/cash rebates
as a reduction of revenues, which totaled $81,812 for the year ended December
31, 2001.

                                      F-10
<PAGE>

                    WINDSOR WOODMONT BLACK HAWK RESORT CORP.

                          NOTES TO FINANCIAL STATEMENTS


Promotional Allowances

     Casino promotional allowances consist principally of the retail value of
complimentary food and beverages. The costs of providing such complimentary
services are classified as casino expenses, and which totaled $103,685 for the
year ended December 31, 2001.

Recently Issued Accounting Standards

     In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment on Disposal of Long-Lived Assets", effective January 1, 2002. SFAS
No. 144 supercedes SFAS No. 121 and portions of other accounting statements. The
provisions applicable to the Company are substantially the same as those applied
under SFAS No. 121 and the Company, therefore, does not believe that the
adoption of SFAS No. 144 will have a material impact on its results of
operations or financial position. The Company is, however, required to complete
the initial assessment of impairment by 2002.

Reclassifications

     Certain amounts in the December 31, 2000 and 1999 financial statements have
been reclassified to conform with the current year presentation.

2. PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

                                                          December 31,
                                                    2001               2000
                                                    ----               ----
Property and equipment
    Land and land improvements                  $  17,915,989      $  18,130,841
    Buildings and improvements                     86,619,705
    Furniture, fixtures and equipment              20,305,269
    Construction in progress                                          35,895,741
                                                -------------      -------------
                                                  124,840,963         54,026,582
    Less: accumulated depreciation and
          amortization                               (241,348)              --
                                                -------------      -------------
    Net property and equipment                  $ 124,599,615      $  54,026,582
                                                =============      =============


     Property and equipment is recorded at cost. Depreciation and amortization
of property and equipment began accumulating upon the commencement of gaming
operations (December 20, 2001) and is computed using the straight-line method
over the following estimated useful lives:

                                                        Years
                                                        -----
     Slot machines                                          3
     Furniture, fixtures and equipment                   5-10
     Buildings and improvements                         15-39


3. PRIVATE PLACEMENT

     On March 14, 2000, the Company successfully completed the issuance of $100
million in first mortgage notes in a Private Placement (the "Private Placement
Notes") which are senior secured obligations collateralized by substantially all
of the Company's assets. The Private Placement Notes bear interest at 13% per
annum, are payable semi-annually, mature in 2005 and contain numerous covenants,
including limitations on the payment of dividends on common stock, the
incurrence of additional indebtedness and the issuance of additional preferred
stock. The Private Placement Notes also have warrants attached that will entitle
the holders to purchase, at $0.01 per share, common stock of the Company that
represent, in the aggregate, 20% of the fully diluted common stock of the

                                      F-11
<PAGE>

                    WINDSOR WOODMONT BLACK HAWK RESORT CORP.

                          NOTES TO FINANCIAL STATEMENTS


Company. The warrants were valued at $1,640,000, are immediately exercisable and
expire in 10 years. Holders of the warrants have the right to put the warrants
to the Company for cash at any time after both (1) the date on which the notes
issued in the Private Placement are paid in full, whether at maturity or
pursuant to redemption or repurchase, and (2) the date on which the second
mortgage notes issued to Hyatt Gaming are paid in full, whether at maturity or
pursuant to redemption or repurchase. The price the Company will pay per warrant
will be based on a fully diluted, per share total enterprise value for the
Company equal to (1)(a) 6.0 multiplied by earnings before interest, taxes,
depreciation, and amortization in each case of the four fiscal quarters
immediately preceding such purchase for which internal financial statements are
available, minus (b) funded debt minus (c) the liquidation preference value of
any outstanding preferred stock, plus (d) the cash to be received upon the
exercise of any warrants, options or convertible securities having an exercise
price less than the fair value of such common stock, divided by (2) the number
of shares of common stock outstanding on a fully diluted basis. The holders of
the warrants also have certain tag along and drag along rights, as defined. Net
proceeds from the Private Placement, after offering expenses, was approximately
$94.8 million. The net proceeds were used to continue to fund the development of
the project and satisfy notes payable.

     Upon consummation of the Private Placement, the following financing
transactions also occurred:

     o    The Company amended its articles of incorporation whereby its
          authorized stock now consists of 10,000,000 shares of common stock,
          $0.01 par value per share, and 1,000,000 shares of preferred stock,
          $0.01 par value per share. The shares of preferred stock may be issued
          from time to time in one or more series.

     o    The Company issued 29,000 shares of its preferred stock as "series A"
          preferred stock and 30,000 shares of its preferred stock as "series B"
          preferred stock. The holders of both the series A and series B
          preferred stock have no voting rights. The series A preferred stock is
          non-convertible, accrues cumulative, non-compounding dividends at the
          rate of 11% per annum and has a liquidation preference of $100 per
          share. Holders of the series A preferred stock may redeem their shares
          at a price per share equal to their liquidation preference plus
          accrued and unpaid dividends thereon at any time after the later of
          (1) one year after the notes issued in the Private Placement are paid
          in full, whether at maturity or upon redemption or repurchase and (2)
          one year after the second mortgage notes issued to Hyatt Gaming are
          paid in full, whether at maturity or upon redemption or repurchase.
          The series B preferred stock is non-convertible, accrues dividends on
          a cumulative basis, compounding quarterly at a rate of 7% per annum
          and has a liquidation preference of $100 per share. Holders of the
          series B preferred stock may redeem their shares at a price equal to
          their liquidation preference plus accrued and unpaid dividends thereon
          at March 15, 2015;

     o    The LLC contributed all of its assets and liabilities to the Company.
          In exchange the LLC received 368,964 shares of common stock of the
          Company. The LLC has allocated 50,000 of the shares it received in
          satisfaction of $825,000 of accrued salaries. Other shares were
          transferred to the Members of the LLC and to certain individuals. Such
          shares represent approximately 37% of the outstanding common stock of
          the Company;

     o    Notes payable in the amount of $7.4 million were converted to 383,461
          shares of common stock of the Company and accrued interest in the
          amount of approximately $1.65 million was forgiven;

     o    The Company obtained approximately $4.0 million in proceeds from the
          sale of 247,575 shares of its common stock;

     o    As described above, the Company issued (a) $2.9 million of its 11%
          mandatorily redeemable series A preferred stock in satisfaction of
          certain accrued salaries and other project development costs ($1.7
          million) and accounts payable ($1.2 million);

     o    As described above, the Company issued $3.0 million of its 7%
          mandatorily redeemable series B preferred stock in exchange for cash.
          The series B preferred stock was sold with warrants valued at
          $1,368,500 that entitle the warrant holders to purchase, at an
          exercise price of $0.01 per share, common stock of the Company that
          represent, in the aggregate, 15% of the fully diluted common stock of
          the Company. These warrants have substantially similar rights as the
          warrants issued in the Private Placement;

                                      F-12
<PAGE>

                    WINDSOR WOODMONT BLACK HAWK RESORT CORP.

                          NOTES TO FINANCIAL STATEMENTS


     o    The Company obtained approximately $7.5 million in proceeds from the
          issuance of second mortgage notes and warrants to Hyatt Gaming. The
          warrants attached to the Hyatt Gaming second mortgage notes were
          assigned a value of $160,000 and entitles the warrant holders to
          purchase, at $0.01 per share, common stock of the Company that
          represent, in the aggregate, 1.98% of the fully diluted common stock
          of the Company. These warrants have the same rights as the warrants
          issued in the Private Placement;

     o    U.S. Bancorp Libra, as placement agent, received warrants with a value
          of $383,000 that entitle the warrant holders to purchase, at $0.01 per
          share, common stock of the Company that represent, in the aggregate,
          4.67% of the fully diluted common stock of the Company. These warrants
          have the same rights as the warrants issued in the Private Placement.

The value assigned to the warrants issued in the Private Placement and other
financing transactions described above were determined by the placement agent.

4. NOTES PAYABLE

     Notes payable consisted of the following at December 31, 2001 and 2000:

<TABLE>
<CAPTION>

                                                                         Principal Balance
                                                                          at December 31,
                                                                   ---------------------------
                                                                        2001          2000
                                                                   ------------   ------------
<S>                                                                <C>              <C>
13% First Mortgage Notes , net of discount, due March 15, 2005     $ 98,943,164     98,615,089
15.5% Second Mortgage Notes, net of discount, due March 15, 2010      9,706,699      7,350,315
FF&E Note, interest at prime + 6.75% (11.5% at Dec. 31, 2001)        20,800,000           --
Black Hawk Business Improvement Bonds, $975,000 at 6% interest,
    due December 1, 2005 + $2,025,000 at 6.75% interest,
    due December 1, 2011                                              3,000,000           --
                                                                   ------------   ------------
                                                                   $132,449,863   $105,965,404
 Less current maturities                                              4,029,205           --
                                                                   ------------   ------------
 Long-term debt                                                    $128,420,658   $105,965,404
                                                                   ============   ============
</TABLE>


     On March 14, 2000 the Company issued first mortgage notes with a face
amount of $100 million, and with a $1.64 million discount related to the
assignment of value to the warrants attached thereto. Simultaneously, the
Company issued second mortgage notes with a face amount of $7.5 million, and
with a $0.16 million discount related to the assignment of value to the warrants
attached thereto. The terms of the second mortgage notes stipulated that prior
to Project opening, interest would be accrued and would be added to principal
upon the opening of the Project. Accordingly, $2,340,233 in accrued interest at
December 20, 2001 (the Project opening date) was added to the second mortgage
note principal balance.

     On October 2, 2001, the Company entered into a loan agreement with Wells
Fargo Bank, as the administrative and collateral agent for the Lenders, to
provide a $20,800,000 credit facility to acquire furniture, fixtures and
equipment for the Project. This loan was fully funded at December 31, 2001.

     In December 2001, the Company obtained proceeds from a municipal bond issue
by the Black Hawk Business Improvement District. The bonds are in the form of a
$975,000 issue bearing 6% interest and due December 1, 2005 and a $2,025,000
issue bearing 6.75% interest and due December 1, 2011. These bonds are the
obligations of the Black Hawk Business Improvement District, and are payable
from property tax assessments levied on the Project. The Black Hawk Business
Improvement District has notified the Company that it will assess the Project

                                      F-13
<PAGE>

                    WINDSOR WOODMONT BLACK HAWK RESORT CORP.

                          NOTES TO FINANCIAL STATEMENTS


twenty semi-annual payments of $211,083, which was arrived at by amortizing the
$3,000,000 at 7% over twenty semi-annual equal payments. The difference in the
interest rate used for the assessment and the interest rate on the bonds is
designed to cover estimated administrative costs of the Black Hawk Business
Improvement District related to this bond issue. The Company has accounted for
the proceeds from this bond offering in accordance with the provisions of EITF
(Emerging Issues Task Force) Issue 91-10: Accounting for Special Assessments and
Tax Increment Financing Entities, and has recorded an obligation for the total
tax assessment. The Company has capitalized the cost of the improvements
involved.

     Substantially all of the Company's assets are pledged as collateral for
long-term debt. Among other things, the terms of our various loan agreements
require the Company's insurance be placed with carriers with an A. M. Best &
Company rating of A or higher. The Company's property and liability coverages
were negotiated with TIG Insurance Company, an A rated carrier prior to opening;
however, a few days before the coverage was bound, TIG Insurance Company's A. M.
Best rating was downgraded from A to B++. Due to the timing of the downgrade,
coverage was bound with TIG, but the Company immediately began to replace the
coverage with A rated carriers. As of March 22, 2002, the Company was in
compliance with all debt covenants.

     The aggregate principal payments due on total long-term debt over the next
five years and thereafter are as follows:

                    For the year ending December 31,
           -----------------------------------------------------
           2002                                    $   4,029,205
           2003                                        7,251,258
           2004                                        9,434,394
           2005                                      101,045,375
           2006                                          284,272
           Thereafter                                 11,595,729
                                                   -------------
                                                   $ 133,640,233
                                                   =============

5. STOCKHOLDERS' EQUITY

     The Company was a wholly owned shell company subsidiary of the LLC with no
significant assets, liabilities or operating activity as of December 31, 1999.
At December 31, 1999, the LLC was owned 50% by DPR 1992 Trust, 25% by Normandy,
Inc, and 25%, by Patricia Deal. Irving C. Deal, the current sole manager of the
LLC, is also the Chief Executive Officer of Normandy, Inc. and the husband of
Patricia Deal. Mr. Deal is also Chairman of the Board of Directors of the
Company.

     In connection with the LLC's contribution of all its assets and liabilities
to the Company described in Note 3, the Members of the LLC agreed to a
disproportionate distribution of shares whereby the DPR 1992 Trust received
27,500 shares in excess of its membership interest. No costs related to this
transaction are reflected in these financial statements.

6. COMMITMENTS AND CONTINGENCIES

Gaming Regulation Licensing

     The Company's ability to conduct gaming operations in the State of Colorado
is subject to the licensability and qualifications of the Company and its common
stockholders. The Company received the required gaming licenses on September 20,
2001. Additionally, upon receipt of a gaming license, such licensing and
qualifications will be reviewed periodically by the gaming authorities in
Colorado and there are no guarantees such licenses will be renewed.

                                      F-14
<PAGE>

                    WINDSOR WOODMONT BLACK HAWK RESORT CORP.

                          NOTES TO FINANCIAL STATEMENTS


Management Agreement

     On February 2, 2000, the Company entered into a management agreement which
was amended on March 14, 2000 (the "Management Agreement") with Hyatt Gaming,
which, in exchange for a fee, will manage the casino operations. The management
fee will be equal to a basic fee of 3% of the adjusted gross receipts and an
incentive fee equal to 5% of the earnings before interest, taxes, depreciation
and amortization for the appropriate fiscal year. The incentive fee shall be
paid only to the extent earnings before interest, taxes, depreciation and
amortization is positive and will be subordinated in payment to the notes issued
in the Private Placement. The Management Agreement can be terminated by either
party upon delivery of written notice if certain events transpire.

Subdivision Agreement

     The LLC entered into a subdivision agreement with the City of Black Hawk,
which has been assigned to the Company whereby the Company is required to
dedicate an additional right-of-way for Richman Street, and to make certain
improvements to Richman Street and to the portion of Highway 119 that abuts the
Project's property. Upon completion of the improvements, the Company will convey
title to the improvements to the City of Black Hawk, free and clear of all liens
or encumbrances, including those under the indenture governing the first
mortgage notes. These conditions were met by the Company prior to the opening of
the Project's operations on December 20, 2001.

Success Fee

     The Company has agreed to pay Daniel P. Robinowitz, the Company's former
Chairman of the Board, President and Chief Executive Officer of the Company, a
"success fee" of up to $800,000. The success fee will be earned when
construction of the Project is complete and the casino is open, and will only be
paid if funds, as defined, are available. While the Project opened on December
20, 2001, final completion of construction has not occurred, and the
availability of funds for this success fee is not assured. Accordingly, no costs
have been accrued under this agreement as of December 31, 2001.

Construction Agreement

     The LLC entered into a construction agreement with PCL Construction
Services, Inc. ("PCL"), which has been assigned to the Company whereby PCL will
build the Project. Subject to certain conditions, PCL has guaranteed that the
cost of the Project will not exceed $44.41 million. Costs in the amount of
approximately $43.17 million have been incurred under this contract as of
December 31, 2001.

Legal Proceedings

     The Company is involved in certain legal proceedings, claims and
litigation, including those described below. The results of legal proceedings
cannot be predicted with certainty. Except as otherwise indicated below,
management does not believe that the Company has potential liability related to
any current legal proceedings and claims that would have material adverse effect
on the Company's financial condition, liquidity or results of operations.

     On July 6, 2001, Paul, Hastings, Janofsky & Walker ("Paul Hastings"), a Los
Angeles and New York Based law firm, which acted as issuers counsel for the
Company in securing the $107,500,000 financing for the Company's casino project,
filed suit in Los Angeles County court seeking damages of approximately $470,000
in legal fees and costs in connection with securing the financing. Paul Hastings
claims it is owed this amount for legal services rendered, approximately
one-half of which is an alleged bonus Paul Hastings claims is due as a result of
the closing of the financing. The Company paid Paul Hastings a total of $800,000
in legal fees and costs. Paul Hastings originally agreed that legal fees would
be in the amount of $500,000. The Company believes that it overpaid Paul
Hastings. The Company has filed counterclaims asserting breach of contract,
misrepresentation, and legal malpractice against Paul Hastings. The case has
been set for trial in early October, 2002 and for a mediation on April 1, 2002.
The Company intends to direct its efforts to a favorable settlement at
mediation, should that prove unsuccessful, the Company intends to vigorously
defend the claim and prosecute its counterclaims. Although the outcome of this
litigation cannot be predicted, management does not believe that an adverse
result would have a material adverse effect on the Company's financial
condition, liquidity or results of operations.

                                      F-15
<PAGE>

                    WINDSOR WOODMONT BLACK HAWK RESORT CORP.

                          NOTES TO FINANCIAL STATEMENTS


     On August 1, 2001, First Place LLC ("First Place") filed a lawsuit in the
Gilpin County District Court against the Company asserting that it had an
ownership interest in approximately 5,000 square feet of property upon which our
casino is built and operating. First Place is seeking a declaratory judgment
adjudicating the respective interests of it and the Company in this strip of
property. The Company has referred the issue to its title insurance company,
First American Title, which is defending and has agreed to indemnify the
Company. The Company has a $33,500,000 owners title insurance policy with First
American Title. The case is set for trial on June 18, 2002. Although the outcome
of this litigation cannot be predicted, management does not believe that an
adverse result would have a material adverse effect on the Company's financial
condition, liquidity or results of operations.

     On October 22, 2001, GF Gaming ("GF"), a gaming company operating a casino
in Central City, Colorado filed an appeal with the Commission challenging the
issuance of licenses to the Company and Hyatt Gaming on the grounds that the
Colorado Gaming Commission failed to consider whether the casino facility met
the historic architecture intent of the Colorado gaming laws. In December, 2001,
the Colorado Gaming Commission dismissed the appeal based upon lack of standing
and lack of jurisdiction. In February 2002, GF filed a notice of appeal to
continue its challenge in the Colorado Court of Appeals. The Company intends to
vigorously defend this appeal and believes that the appeal is defective on
jurisdictional grounds, and believes that if the appeal proceeds, the Court of
Appeals will uphold the Colorado Gaming Commission's ruling. An adverse decision
would have a material adverse effect on the Company's financial condition,
liquidity and results of operations.

     PCL Construction Services, Inc. ("PCL") acted as the general contractor for
the Company in the construction of the Black Hawk Casino by Hyatt project. The
substantial completion date for the project was originally scheduled to have
been October 29, 2001 and was subsequently amended by change order to November
15, 2001. In fact, construction of the casino was not at a point where the
casino could open for business until December 20, 2001 and it is questionable
whether "Substantial Completion," as defined by the construction contract, has
occurred as of March 27, 2002. PCL has submitted a pay application to the
Company seeking payment of what PCL believes to be a majority of the balance due
on the contract - approximately $1,240,000 in the form of cost to complete and
approximately $3,600,000 in retainage as of December 31, 2001. In addition to
these amounts, the Company and PCL have disagreed over the scope and proper
amount of certain additional change notices and change orders. The precise
amount in dispute over change notices and change orders has not yet been
quantified by the parties. On February 15, 2002, the Company wrote PCL a letter
advising PCL that PCL's pay applications would not be processed until such time
as PCL had completed the project, including all required punch list items, until
there had been final resolution of any further issues relative to change orders
and change notices, and until PCL and the Company had reached an agreement
relative to the amount of the Company's set off and claims for project
mismanagement and completion delay by PCL. PCL and five of PCL's subcontractors
have sent the Company notice of intent to file liens, however, to the Company's
knowledge, no liens have yet been recorded. We expect that other subcontractors
will give notice of their intent to file liens and to file liens. PCL has not
responded to the Company's February 15th letter. At this point, it appears
possible the Company may be involved in legal action with PCL, PCL's
subcontractors, and PCL's surety relative to the remaining amounts to be paid to
PCL, punch lists and project completion issues, and setoffs and counterclaims
which the Company has against PCL. Although the outcome of any litigation or
dispute cannot be predicted at this time, management does not believe that an
adverse result would have a material adverse effect on the Company's financial
condition, liquidity or results of operations.

Environmental Issues

     The Project is located in a 400-square mile area that has been designated
by the United States Environmental Protection Agency ("EPA") as the Clear
Creek/Central City National Priorities List Superfund Site under the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"),
as a result of hazardous substance contamination caused by historical mining
activity in Black Hawk. This is a broad national priorities list site, within
which the EPA has identified several priority areas of contamination from
historical mining activities, including draining mines and mine dumps, for
active investigation and/or remediation. To date, the EPA has not identified the
Project site as being within a priority area nor has it identified contamination
on or from the Project site to require remediation.

                                      F-16
<PAGE>

                    WINDSOR WOODMONT BLACK HAWK RESORT CORP.

                          NOTES TO FINANCIAL STATEMENTS


     The Company has been informed that the Superfund Division of the Colorado
Department of Public Health and the Environment ("CDPHE"), working with the EPA,
has sampled surface water in or near North Clear Creek near where a portion of
the Project site called Silver Gulch discharges surface water into North Clear
Creek. The Company has been informed that based on the results of those samples,
the EPA and the Colorado Superfund Division have expressed preliminary concern
that soil and rock associated with historic mining operations in Silver Gulch
may be a source of contamination to North Clear Creek. Even minor contamination
could form a basis for the EPA or CDPHE to require owners and operators of
properties which have been the source of contamination to investigate and
remediate contamination on or from their property or to reimburse costs incurred
by the government in connection with such remediation. The Project site could be
among properties suspected of being a source of contamination. If investigation
or remediation of the Project site were required, the Company could incur
substantial expense.

Lease Commitments

     Minimum rental obligations under all non-cancelable operating leases with
terms of one year or more as of December 31, 2001 are as follows:

                      For the year ending December 31,
           -----------------------------------------------------
           2002                                       $  185,295
           2003                                          167,244
           2004                                          149,277
           2005                                           74,616
           2006                                           44,944
           Thereafter                                       --
                                                      ----------
                                                      $  621,376
                                                      ==========

7. INCOME TAXES

     The income tax benefit associated with the Company's net loss for the year
ended December 31, 2001 and 2000 differs from the amount computed at the federal
income tax statutory rate as a result of the following:

                                            2001           2000
                                            ----           ----
             Amount at statutory rate   $(2,687,711)   $(1,820,524)
             Valuation allowance          2,687,711      1,820,524
                                        -----------    -----------
             Total Provision            $      --      $      --
                                        ===========    ===========

     The components of the deferred taxes at December 31, 2001 and 2000
consisted of the following:

      Deferred tax assets/(liabilities):            2001           2000
    ----------------------------------------        ----           ----
    Net operating loss                          $ 4,772,847    $ 3,352,531
    Start-up costs                                1,742,776        107,830
    Depreciation                                   (355,489)          --
    Accruals and other                               40,728           --
    Warrant valuation                                 4,262          4,262
                                                -----------    -----------
    Net deferred tax asset                      $ 6,205,124    $ 3,464,623
    Valuation Allowance                          (6,205,124)    (3,464,623)
                                                -----------    -----------
        Net deferred tax assets/(liabilities)   $      --      $      --
                                                ===========    ===========


     As discussed in Note 1, prior to the Private Placement, the operations of
the Company were associated with the LLC, which was a nontaxable entity.
Consistent with SFAS 109, deferred tax assets and a corresponding valuation
allowance of $ 1.6 million were recorded at the date the LLC contributed all of
its assets and liabilities to the Company.

                                      F-17
<PAGE>

                    WINDSOR WOODMONT BLACK HAWK RESORT CORP.

                          NOTES TO FINANCIAL STATEMENTS


     At December 31, 2001, the Company had a net operating loss of $14.3
million, which expires $4.4 million in 2021 and $9.9 million in 2020.

     At December 31, 2001, the Company believes that it is not more likely than
not that any of its deferred tax assets are realizable because of the absence of
accurate future projected taxable income. Accordingly, all deferred tax assets
are fully reserved as of December 31, 2001.

8. RELATED PARTY TRANSACTIONS

     One of the Company's directors, Jess Ravich, is the former Chairman and
Chief Executive Officer of U.S. Bancorp Libra, the placement agent for the
Company's unit offering. During the year ended December 31, 2000, in conjunction
with the initial unit offering, the Company paid U.S. Bancorp Libra a placement
fee in the amount of $3,500,000 and warrants to purchase 80,031 shares of the
Company's common stock at $0.01 per share, exercisable until March 15, 2010.

     The Company had a financial consulting arrangement with one of its former
directors, Craig Sullivan. During the year ended December 31, 2001, Mr. Sullivan
earned $208,000 for services related to the FF&E loan from Wells Fargo Bank and
provided $40,000 in additional services. During the year ended December 31,
2000, he was paid $200,000 for services related to the initial unit offering and
has provided $83,785 in additional services. Accounts payable related parties
includes $208,000 payable to Mr. Sullivan at December 31, 2001.

     Mr. Donald Malouf, the Company's Secretary and director provides legal and
professional services to the Company. During the year ended December 31, 2001,
he provided $63,496 in legal services. During the year ended December 31, 2000,
he provided $47,250 in services related to the initial unit offering and $20,091
in additional services. Accounts payable related parties includes $977 payable
to this director at December 31, 2001.

     Hyatt Gaming, the manager of the Project, incurred start-up costs on behalf
of the Project, representing the cost of salaries, benefits, training, marketing
and other costs incurred in connection with the opening of the Project. During
the years ending December 31, 2001 and 2000, Hyatt Gaming incurred start-up
costs totaling $4,333,178 and $166,822, respectively. Accounts payable related
parties includes $3,537,403 at December 31, 2001 due to Hyatt for start-up
costs. Accounts payable related parties includes an additional $1,179,352 due to
Hyatt Gaming for payroll, benefits and other operating costs incurred on behalf
of the Project after opening and through December 31, 2001.

9. STOCK INCENTIVE PLAN

     On April 14, 2000, the Company's board of directors approved the 2000 Stock
Incentive Plan, which provides for the grant of options to purchase an aggregate
of not more than 150,000 shares of the Company's common stock. The purpose of
the plan is to promote the Company's long-term growth and profitability by
providing key people with incentives to improve stockholder value and contribute
to the Company's growth and financial success and by enabling the Company to
attract, retain and reward the best-available persons. The plan was approved by
the shareholders in August, 2000.

     The plan provides for the granting of both incentive stock options
qualifying under Section 422 of the Internal Revenue Code of 1986 and
nonqualified stock options, stock appreciation rights, restricted or
unrestricted stock awards, phantom stock and performance awards. Awards of
incentive stock options under the plan are limited to employees and must have an
exercise price at least equal to the fair market value of our common stock at
the date of grant, but nonqualified stock options may have an exercise price
less than fair market value.

                                      F-18
<PAGE>

                    WINDSOR WOODMONT BLACK HAWK RESORT CORP.

                          NOTES TO FINANCIAL STATEMENTS


     The plan will be administered by the board of directors or by a committee
appointed by the board of directors which determines the persons to be granted
options under the plan, the number of shares subject to each option, the
exercise price of each option and the option period.

     A summary of stock option activity and weighted average exercise prices
follows:

                                                                     Weighted
                                                                     Average
                                                       Number        Exercise
                                                     Of Shares        Price
                                                     ---------       -------
     Balance December 31, 1999                           --            --
     Granted at market price                          108,000        $ 16.50
     Exercised                                           --            --
     Forfeited                                           --            --
                                                      -------        -------
     Balance December 31, 2000                        108,000        $ 16.50
     Granted at market price                           25,000        $ 25.00
     Exercised                                           --            --
     Forfeited                                           --            --
                                                      -------        -------
     Balance December 31, 2001                        133,000        $ 18.10
                                                      =======        =======


     The Company applies Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees," and related interpretations in the accounting
for its stock option plan. Accordingly, no compensation expense has been
recognized related to the Company's plan. If compensation cost for the Plan had
been determined using the fair-value method prescribed by SFAS No. 123,
"Accounting for Stock Based Compensation," the Company's net loss would have
been reduced to the pro-forma amounts indicated below.


                                                       December 31,
                                                 2001               2000
     Net Loss                                    ----               ----
     As reported                              $8,456,287         $5,771,804
     Pro forma                                $8,740,747         $6,009,306

     Loss per share
     Basic and diluted                        $     8.74         $     7.51


     The maximum term of the options is ten years, the number of vested options
at December 31, 2001, was 85,250, and the weighted average of vested options at
December 31, 2001, was $17.12 per share. The weighted average fair value and
remaining contract life of options granted was $18.10 and $16.50 and 8.6 years
and 9.3 years, respectively, for the fiscal year ending December 31, 2001 and
2000. As the Company's stock is not publicly traded, the fair value of each
option was estimated on the grant date using the minimum value method (which
excludes a volatility assumption), with the following assumptions:

                                                      December 31,
                                                  2001           2000
                                                  ----           ----
      Risk-free interest rate                     5.21%          6.21%
      Expected life in years                    10 years       10 years
      Dividend yield                               0.0%           0.0%


                                      F-19
<PAGE>


                                  EXHIBIT INDEX


Exhibit
  No.                       Description
-------                     -----------

3.1(1)      First Amended and Restated Articles of Incorporation of Windsor
            Woodmont Black Hawk Resort Corp.

3.2(1)      First Amended and Restated Bylaws of Windsor Woodmont Black Hawk
            Resort Corp.

4.1(1)      Indenture, dated as of March 14, 2000, by and between Windsor
            Woodmont Black Hawk Resort Corp. and SunTrust Bank, as trustee

4.2(1)      Form of 13% First Mortgage Notes, series B

4.3(1)      Form of series A Warrant certificates dated March 14, 2000 issued to
            unit purchasers for the purchase of up to 342,744 shares of common
            stock, issued to Hyatt Gaming Management, Inc. for the purchase of
            up 33,887 shares of common stock and issued to U.S. Bancorp Libra,
            as placement agent, for the purchase of up to 80,031 shares of
            common stock

4.4(1)      Form of series B Warrant certificates dated March 14, 2000 to
            purchase up to 257,058 shares of common stock issued to the
            purchasers of the series B Preferred Stock

4.5(1)      First Warrant Agreement dated as of March 14, 2000, by and Windsor
            Woodmont Black Hawk Resort Corp. and SunTrust Bank, as warrant
            agent, relating to the issuance to the unit purchasers of warrants
            for the purchase of 342,744 shares of common stock, the issuance to
            Hyatt Gaming Management, Inc. of warrants to purchase 33,887 shares
            of common stock and the issuance to U.S. Bancorp Libra, as placement
            agent, of warrants to purchase 80,031 shares of common stock

4.6(1)      Second Warrant Agreement, dated as of March 14, 2000, by and between
            Windsor Woodmont Black Hawk Resort Corp. and SunTrust Bank, as
            warrant agent, relating to the issuance to the purchasers of the
            series B Preferred Stock of warrants for the purchase of 257,058
            shares of common stock

4.7(1)      A/B Exchange Registration Rights Agreement, dated as of March 14,
            2000, among Windsor Woodmont Black Hawk Resort Corp. and the unit
            purchasers

4.8(1)      Warrant Registration Rights Agreement, dated as of March 14, 2000,
            by and among Windsor Woodmont Black Hawk Resort Corp., each of the
            purchasers of the units, Hyatt Gaming Management, Inc., each of the
            purchasers of the series B Preferred Stock and U.S. Bancorp Libra

10.1(1)     Management Agreement dated as of February 2, 2000, by and between
            Windsor Woodmont Black Hawk Resort Corp. and Hyatt Gaming
            Management, Inc. and First Amendment to Management Agreement

10.2(1)     Subordination, Non-Disturbance and Attornment Agreement dated as of
            March 14, 2000, by and among Windsor Woodmont Black Hawk Resort
            Corp., Hyatt Gaming Management, Inc. and SunTrust Bank, a trustee

<PAGE>


10.3(1)     Architect's Agreement dated as of January 31, 2000 by and between
            Windsor Woodmont, LLC and Paul Steelman, Ltd.

10.4(1)     Construction Management Agreement dated February 1, 2000 by and
            between Windsor Woodmont, LLC and Building Sciences, Inc.

10.5(1)     Construction Agreement dated as of January 11, 2000 by and between
            Windsor Woodmont, LLC and PCL Construction Services, Inc.

10.6(1)     Excavation Agreement dated as of December 31, 1999, by and between
            Windsor Woodmont, LLC and D.H. Blattner & Sons, as amended

10.7(1)     Subdivision Agreement dated December 29, 1997 by and between Windsor
            Woodmont, LLC and the City of Black Hawk, including the First
            Addendum, dated March 25, 1998, Second Addendum, dated May 27, 1998,
            and Third Addendum, dated March 29, 2000, thereto

10.8(1)     Deed of Trust to Public Trustee, Security Agreement, Fixture Filing
            and Assignment of Rents, Leases and Leasehold Interest, dated as of
            March 14, 2000, by Windsor Woodmont Black Hawk Resort Corp.

10.9(1)     Security Agreement, dated as of March 14, 2000, by and between
            Windsor Woodmont Black Hawk Resort Corp. and SunTrust Bank, as
            trustee

10.10(1)    Pledge and Assignment Agreement, dated as of March 14, 2000, by and
            among Windsor Woodmont Black Hawk Resort Corp. in favor of SunTrust
            Bank, as trustee

10.11(1)    Collateral Assignment, dated as of March 14, 2000, by and between
            Windsor Woodmont Black Hawk Resort Corp. in favor of SunTrust Bank,
            as trustee

10.12(1)    Subordinated Loan Agreement, dated as of March 14, 2000, by and
            between Windsor Woodmont Black Hawk Resort Corp. and Hyatt Gaming
            Management, Inc.

10.13(1)    Hyatt Gaming Deed of Trust to Public Trustee, Security Agreement,
            Fixture Filing and Assignment of Rents, Leases and Leasehold
            Interests,, dated as of March 14, 2000, by Windsor Woodmont Black
            Hawk Resort Corp. to the Public trustee of the County of Gilpin,
            Colorado, for the benefit of Hyatt Gaming Management, Inc.

10.14(1)    Hyatt Gaming Security Agreement, dated as of March 14, 2000, by and
            between Windsor Woodmont Black Hawk Resort Corp. and Hyatt Gaming
            Management, Inc.

10.15(1)    Hyatt Gaming Pledge and Assignment Agreement, dated as of March 14,
            2000, by and among Windsor Woodmont Black Hawk Resort Corp. in favor
            of Hyatt Gaming Management, Inc.

10.16(1)    Hyatt Gaming Collateral Assignment, dated as of March 14, 2000, by
            and between Windsor Woodmont Black Hawk Resort Corp. in favor of
            Hyatt Gaming Management, Inc.

10.17(1)    General Assignment made as of March 14, 2000 by Windsor Woodmont,
            LLC in favor of Windsor Woodmont Black Hawk Resort Corp.

<PAGE>


10.18(1)    Intercreditor Subordination and Collateral Agreement, dated as of
            March 14, 2000, by and among SunTrust Bank, as trustee, Hyatt Gaming
            Management, Inc. and Windsor Woodmont Black Hawk Resort Corp.

10.19(1)    Cash Collateral and Disbursement Agreement dated as of March 14,
            2000 by and among SunTrust Bank, as trustee, Windsor Woodmont Black
            Hawk Resort Corp., Hyatt Gaming Management, Inc., Norwest Bank
            Minnesota, N.A., as disbursement agent, First American Heritage
            Title Company, as construction escrow agent, and RE TECH+, Inc., as
            independent construction consultant

10.20(1)    Account Agreement, dated as of March 14, 2000, by and among Windsor
            Woodmont Black Hawk Resort Corp., SunTrust Bank, as trustee, and
            Norwest Bank Minnesota, N.A., as securities intermediary

10.21(1)    Interim Interest Reserve Account Agreement, dated as of March 14,
            2000, by and among Windsor Woodmont Black Hawk Resort Corp.,
            SunTrust Bank, as trustee, and Norwest Bank Minnesota, N.A., as
            securities intermediary

10.22(1)    Interest Reserve Account Agreement, dated as of March 14, 2000, by
            and between Windsor Woodmont Black Hawk Resort Corp. and SunTrust
            Bank, as trustee and securities intermediary

10.23(1)    Hyatt Gaming Account Agreement, dated as of March 14, 2000, by and
            among Windsor Woodmont Black Hawk Resort Corp., Hyatt Gaming
            Management, Inc. and Norwest Bank Minnesota, N.A., as securities
            intermediary

10.24(1)    Shareholders Agreement, dated as of March 14, 2000

10.25(1)    Office Lease between Dallas Office Portfolio, L.P., as landlord, and
            Windsor Woodmont Black Hawk Resort Corp., as tenant

10.26(1)    Site Improvement Agreement, dated March 29, 2000, by and between the
            City of Black Hawk, Colorado, and Windsor Woodmont Black Hawk Resort
            Corp.

10.27(1)    Escrow Agreement, dated March 29, 2000, by and between the City of
            Black Hawk, Colorado, Windsor Woodmont Black Hawk Resort Corp. and
            Norwest Bank Minnesota, N.A.

10.28(1)    Settlement Agreement, dated January 31, 2000, by and between Windsor
            Woodmont, LLC and D.H. Blattner & Sons, Inc.

10.29(1)    Escrow Agreement, dated March 28, 2000, by and among D.H. Blattner &
            Sons, Inc. Windsor Woodmont Black Hawk Resort Corp. and Norwest Bank
            Minnesota, N.A.

10.30(1)    Incentive Stock Option Plan

16.1(1)     Letter from PricewaterhouseCoopers re: change in certifying
            accountant

99.1        Arthur Anderson LLP Certification Letter

------------------------

(1)  Filed as an exhibit to Windsor Woodmont Black Hawk Resort Corp.'s
     Registration Statement on Form S-4 filed July 12, 2000, as amended (File
     No. 333-41292), and incorporated herein by reference.