##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


FORM 10-Q/ A


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934 
|          
|           |  | For the quarterly period ended March 31, 2005                                               
|          
|OR        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
|          
|           |  | For the transition period
    from           to                                             

Commission file number 333-110484


ATLANTIC COAST ENTERTAINMENT HOLDINGS, INC.


(Exact name of registrant as specified in its charter)


|                                                                                                                                                   |  |                                         
|-------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------
|DELAWARE                                                                                                                                           |  | 54-2131349                              
|(State or other jurisdiction of
    (incorporation or organization)                                                                                |  | (I.R.S. Employer
    Identification No.)
|                                                                                                                                                  
|C/o Sands Hotel & Casino
    Indiana Avenue & Brighton Park
    Atlantic City, New Jersey(Address of registrants principal executive
    offices) |  | 08401(Zip Code)                         

(609) 441-4633


(Registrants telephone number, including area code)


þ o


o þ




|                                            |  |                              |  |                            
|------------------------------------------- |  | ---------------------------- |  | ---------------------------
|Registrant                                  |  | Class                        |  | Outstanding at May 10, 2005
|                                            |  |                              |  |                            
|Atlantic Coast Entertainment Holdings, Inc. |  | Common stock, $.01 par value |  | 2,882,938 shares           









---



##### Table of Contents



EXPLANATORY NOTE




2



---










TABLE OF CONTENTS


|                       |  |                                                                                                                                         |  |      |    | 
|---------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                       |  |                                                                                                                                         |  | Page |   
|                       |  |                                                                                                                                         |  |      |   
|Part I                 |  | FINANCIAL INFORMATION                                                                                                                   |  |      |    | 
|                      
|Item 1.                |  | Unaudited Condensed Combined Financial
    Statements                                                                                   |  |      | 4  | 
|                       |  | Condensed Combined Balance Sheets as of
    March 31, 2005 and December 31, 2004 (Restated)
    (unaudited)                             |  |      | 4  | 
|                       |  | Condensed Combined Statements of Operations
    for the three months ended March 31, 2005 and
    March 31, 2004 (Restated) (unaudited) |  |      | 5  | 
|                       |  | Condensed Combined Statements of Cash Flows
    for the three months ended March 31, 2005 and
    March 31, 2004 (Restated) (unaudited) |  |      | 6  | 
|                       |  | Notes to Condensed Combined Financial
    Statements (unaudited)                                                                        |  |      | 7  | 
|Item 2.                |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations                                               |  |      | 10 | 
|Item 3.                |  | Quantitative and Qualitative Disclosures
    About Market Risk                                                                          |  |      | 19 | 
|Item 4.                |  | Controls and Procedures                                                                                                                 |  |      | 19 | 
|                      
|Part II                |  | OTHER INFORMATION                                                                                                                       |  |      |    | 
|                      
|Item 6.                |  | Exhibits                                                                                                                                |  |      | 20 | 
|EX-31.1: CERTIFICATION
|EX-31.2: CERTIFICATION
|EX-32.1: CERTIFICATION
|EX-32.2: CERTIFICATION



3



---



##### Table of Contents






PART I. FINANCIAL INFORMATION







|        |                                                  
|------- | -------------------------------------------------
|Item 1. | UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS

ATLANTIC COAST ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARY





CONDENSED COMBINED BALANCE SHEETS


|                                           |                                                                                                    |                             |         |         |                   |   |         |         |         | 
|------------------------------------------ | -------------------------------------------------------------------------------------------------- | --------------------------- | ------- | ------- | ----------------- | - | ------- | ------- | ------- | 
|                                           |                                                                                                    | As of                       |         |         | As of             |  
|                                           |                                                                                                    | March 31, 2005              |         |         | December 31, 2004 |  
|                                           |                                                                                                    |                             |         |         |                   |  
|                                           |                                                                                                    | (Restated)                  |         |         |                  
|                                           |                                                                                                    | (Dollars in thousands,      |        
|                                           |                                                                                                    | except share related data)  |        
|                                           |                                                                                                    | (Unaudited)                 |        
|ASSETS                                    
|Current Assets:                            |                                                                                                    |                             |         |         |                   |   |         |        
|                                           | Cash and cash equivalents                                                                          |                             | $       | 14,929  |                   |   | $       | 12,756  |        
|                                           | Accounts receivable, net                                                                           |                             |         | 4,371   |                   |   |         | 5,100   |        
|                                           | Other current assets                                                                               |                             |         | 10,016  |                   |   |         | 7,533   |        
|                                           |                                                                                                    |                             |         |         |                   |  
|                                           |                                                                                                    | Total Current Assets        |         |         | 29,316            |   |         |         | 25,389  | 
|                                           |                                                                                                    |                             |         |         |                   |  
|                                           | Property and equipment, net                                                                        |                             |         | 168,237 |                   |   |         | 171,640 |        
|                                           | Obligatory investments, net                                                                        |                             |         | 11,830  |                   |   |         | 11,647  |        
|                                           | Deferred financing costs and other assets                                                          |                             |         | 7,557   |                   |   |         | 8,113   |        
|                                           |                                                                                                    |                             |         |         |                   |  
|                                           |                                                                                                    | Total Other Assets          |         |         | 19,387            |   |         |         | 19,760  | 
|                                           |                                                                                                    |                             |         |         |                   |  
|TOTAL ASSETS                               |                                                                                                    | $                           | 216,940 |         |                   | $ | 216,789 |        
|                                           |                                                                                                    |                             |         |         |                   |  
|                                          
|LIABILITIES AND SHAREHOLDERS EQUITY      
|Current Liabilities:                       |                                                                                                    |                             |         |         |                   |   |         |        
|                                           | Line of credit                                                                                     |                             | $       | 4,000   |                   |   | $       |        |        
|                                           | Accounts payable-trade                                                                             |                             |         | 5,271   |                   |   |         | 6,710   |        
|                                           | Accrued expenses                                                                                   |                             |         | 8,886   |                   |   |         | 7,428   |        
|                                           | Accrued payroll and related expenses                                                               |                             |         | 7,503   |                   |   |         | 6,818   |        
|                                           | Accounts payable-related party                                                                     |                             |         | 588     |                   |   |         | 371     |        
|                                           | Current portion of capital lease obligation                                                        |                             |         | 236     |                   |   |         | 248     |        
|                                           |                                                                                                    |                             |         |         |                   |  
|                                           |                                                                                                    | Total Current Liabilities   |         |         | 26,484            |   |         |         | 21,575  | 
|                                           |                                                                                                    |                             |         |         |                   |  
|Long-Term Liabilities:                     |                                                                                                    |                             |         |         |                   |   |         |        
|                                           | Long-term debt, less current portion                                                               |                             |         | 66,259  |                   |   |         | 66,259  |        
|                                           | Capital lease obligations, less current portion                                                    |                             |         | 385     |                   |   |         | 432     |        
|                                           | Other                                                                                              |                             |         | 5,496   |                   |   |         | 4,920   |        
|                                           |                                                                                                    |                             |         |         |                   |  
|                                           |                                                                                                    | Total Long-Term Liabilities |         |         | 72,140            |   |         |         | 71,611  | 
|                                           |                                                                                                    |                             |         |         |                   |  
|Commitments and Contingencies              |                                                                                                    |                             |         |         |                   |   |         |        
|Shareholders Equity:                      |                                                                                                    |                             |         |         |                   |   |         |        
|                                           | Common Stock, $.01 par value share; 20,000,000 shares
    authorized; 2,882,938 shares outstanding |                             |         | 29      |                   |   |         | 29      |        
|                                           | Additional paid-in capital                                                                         |                             |         | 124,083 |                   |   |         | 126,550 |        
|                                           | Warrants outstanding                                                                               |                             |         | 43,587  |                   |   |         | 43,587  |        
|                                           | Accumulated deficit                                                                                |                             |         | (49,383 | )                 |   |         | (46,563 | )      
|                                           |                                                                                                    |                             |         |         |                   |  
|                                           |                                                                                                    | Total Shareholders Equity  |         |         | 118,316           |   |         |         | 123,603 | 
|                                           |                                                                                                    |                             |         |         |                   |  
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY |                                                                                                    | $                           | 216,940 |         |                   | $ | 216,789 |        
|                                           |                                                                                                    |                             |         |         |                   |  



4



---



##### Table of Contents



ATLANTIC COAST ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARY





CONDENSED COMBINED STATEMENTS OF OPERATIONS


|                                           |                                      |                               |           |            |                |   |           |        |        |  
|------------------------------------------ | ------------------------------------ | ----------------------------- | --------- | ---------- | -------------- | - | --------- | ------ | ------ | -
|                                           |                                      | Three Months                  |           |            | Three Months   |  
|                                           |                                      | Ended                         |           |            | Ended          |  
|                                           |                                      | March 31, 2005                |           |            | March 31, 2004 |  
|                                           |                                      |                               |           |            |                |  
|                                           |                                      |                               |           | (Restated) |               
|                                           |                                      | (Dollars in thousands, except |          
|                                           |                                      | share related data)           |          
|                                           |                                      | (Unaudited)                   |          
|REVENUES:                                  |                                      |                               |           |            |                |   |           |       
|                                           | Casino                               |                               | $         | 37,341     |                |   | $         | 38,119 |       
|                                           | Hotel                                |                               |           | 2,294      |                |   |           | 2,288  |       
|                                           | Food and beverage                    |                               |           | 4,866      |                |   |           | 4,990  |       
|                                           | Other                                |                               |           | 807        |                |   |           | 927    |       
|                                           |                                      |                               |           |            |                |  
|                                           |                                      | Gross revenues                |           |            | 45,308         |   |           |        | 46,324 |  
|                                           | Less promotional allowances          |                               |           | (5,343     | )              |   |           | (5,334 | )     
|                                           |                                      |                               |           |            |                |  
|                                           |                                      | Net revenues                  |           |            | 39,965         |   |           |        | 40,990 |  
|                                           |                                      |                               |           |            |                |  
|COSTS AND EXPENSES:                        |                                      |                               |           |            |                |   |           |       
|                                           | Casino                               |                               |           | 11,827     |                |   |           | 12,214 |       
|                                           | Hotel                                |                               |           | 703        |                |   |           | 655    |       
|                                           | Food and beverage                    |                               |           | 1,566      |                |   |           | 2,027  |       
|                                           | Other                                |                               |           | 209        |                |   |           | 203    |       
|                                           | Selling, general and administrative  |                               |           | 22,864     |                |   |           | 21,016 |       
|                                           | Depreciation and amortization        |                               |           | 4,026      |                |   |           | 3,567  |       
|                                           | Provision for obligatory investments |                               |           | 238        |                |   |           | 368    |       
|                                           | Gain on sale of assets               |                               |           | (4         | )              |   |           |       |       
|                                           |                                      |                               |           |            |                |  
|                                           |                                      | Total costs and expenses      |           |            | 41,429         |   |           |        | 40,050 |  
|                                           |                                      |                               |           |            |                |  
|INCOME (LOSS) FROM OPERATIONS              |                                      |                               | (1,464    | )          |                |   | 940       |       
|                                           |                                      |                               |           |            |                |  
|OTHER INCOME (EXPENSE):                    |                                      |                               |           |            |                |   |           |       
|                                           | Interest income                      |                               |           | 107        |                |   |           | 71     |       
|                                           | Interest expense                     |                               |           | (1,193     | )              |   |           | (3,190 | )     
|                                           | Debt restructuring costs             |                               |           | (23        | )              |   |           | (710   | )     
|                                           |                                      |                               |           |            |                |  
|                                           |                                      | Total other expense, net      |           |            | (1,109         | ) |           |        | (3,829 | )
|                                           |                                      |                               |           |            |                |  
|LOSS BEFORE INCOME TAXES                   |                                      |                               | (2,573    | )          |                |   | (2,889    | )     
|Provision for income taxes                 |                                      |                               | 247       |            |                |   | 267       |       
|                                           |                                      |                               |           |            |                |  
|NET LOSS                                   |                                      | $                             | (2,820    | )          |                | $ | (3,156    | )     
|                                           |                                      |                               |           |            |                |  
|Basic/diluted loss per common share        |                                      | $                             | (0.98     | )          |                | $ | (1.09     | )     
|                                           |                                      |                               |           |            |                |  
|Weighted average common shares outstanding |                                      |                               | 2,882,938 |            |                |   | 2,882,938 |       
|                                           |                                      |                               |           |            |                |  



5



---



##### Table of Contents



ATLANTIC COAST ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARY





CONDENSED COMBINED STATEMENTS OF CASH FLOWS


|                                                    |                                                                                               |                                       |        |            |                |   |        |        |        |  
|--------------------------------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------- | ------ | ---------- | -------------- | - | ------ | ------ | ------ | -
|                                                    |                                                                                               | Three Months                          |        |            | Three Months   |  
|                                                    |                                                                                               | Ended                                 |        |            | Ended          |  
|                                                    |                                                                                               | March 31, 2005                        |        |            | March 31, 2004 |  
|                                                    |                                                                                               |                                       |        |            |                |  
|                                                    |                                                                                               |                                       |        | (Restated) |               
|                                                    |                                                                                               | (In thousands)                        |       
|                                                    |                                                                                               | (Unaudited)                           |       
|CASH FLOWS FROM OPERATING ACTIVITIES:               |                                                                                               |                                       |        |            |                |   |        |       
|                                                    | Net Loss                                                                                      |                                       | $      | (2,820     | )              |   | $      | (3,156 | )     
|                                                    | Adjustments to reconcile net loss to net cash provided by (used
    in) operating activities: |                                       |        |            |                |   |        |        |       
|                                                    | Depreciation and amortization                                                                 |                                       |        | 4,026      |                |   |        | 3,567  |       
|                                                    | Provision for obligatory investments                                                          |                                       |        | 238        |                |   |        | 368    |       
|                                                    | Gain on sale of assets                                                                        |                                       |        | (4         | )              |   |        |       |       
|                                                    | Changes in operating assets and liabilities:                                                  |                                       |        |            |                |   |        |        |       
|                                                    |                                                                                               | Accounts receivable, net              |        |            | 729            |   |        |        | 76     |  
|                                                    |                                                                                               | Other assets                          |        |            | (1,946         | ) |        |        | 865    |  
|                                                    |                                                                                               | Accounts payable and accrued expenses |        |            | 704            |   |        |        | (4,584 | )
|                                                    |                                                                                               | Other liabilities                     |        |            | 576            |   |        |        | 71     |  
|                                                    |                                                                                               |                                       |        |            |                |  
|Net cash provided by (used in) operating activities |                                                                                               |                                       | 1,503  |            |                |   | (2,793 | )     
|                                                    |                                                                                               |                                       |        |            |                |  
|CASH FLOWS FROM INVESTING ACTIVITIES:               |                                                                                               |                                       |        |            |                |   |        |       
|                                                    | Acquisition of property and equipment                                                         |                                       |        | (571       | )              |   |        | (2,118 | )     
|                                                    | Purchase of obligatory investments                                                            |                                       |        | (553       | )              |   |        | (517   | )     
|                                                    | Cash proceeds from sale of property and equipment                                             |                                       |        | 4          |                |   |        |       |       
|                                                    | Cash proceeds from sale of obligatory investments                                             |                                       |        | 132        |                |   |        | 9      |       
|                                                    |                                                                                               |                                       |        |            |                |  
|Net cash used in investing activities               |                                                                                               |                                       | (988   | )          |                |   | (2,626 | )     
|                                                    |                                                                                               |                                       |        |            |                |  
|CASH FLOWS FROM FINANCING ACTIVITIES:               |                                                                                               |                                       |        |            |                |   |        |       
|                                                    | Proceeds from borrowing on line of credit                                                     |                                       |        | 4,000      |                |   |        |       |       
|                                                    | Debt issuance cost                                                                            |                                       |        | (33        | )              |   |        |       |       
|                                                    | Related party payables                                                                        |                                       |        | 217        |                |   |        | 4,100  |       
|                                                    | Payments on capital lease obligation                                                          |                                       |        | (59        | )              |   |        |       |       
|                                                    | Return of capital of GB Holdings, Inc.                                                        |                                       |        | (2,467     | )              |   |        |       |       
|                                                    |                                                                                               |                                       |        |            |                |  
|Net cash provided by financing activities           |                                                                                               |                                       | 1,658  |            |                |   | 4,100  |       
|                                                    |                                                                                               |                                       |        |            |                |  
|                                                    | Net increase (decrease) in cash and cash equivalents                                          |                                       |        | 2,173      |                |   |        | (1,319 | )     
|                                                    | Cash and cash equivalents  beginning of period                                               |                                       |        | 12,756     |                |   |        | 16,904 |       
|                                                    |                                                                                               |                                       |        |            |                |  
|Cash and cash equivalents  end of period           |                                                                                               | $                                     | 14,929 |            |                | $ | 15,585 |       
|                                                    |                                                                                               |                                       |        |            |                |  
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:  |                                                                                               |                                       |        |            |                |   |        |       
|Cash paid for interest                              |                                                                                               | $                                     | 89     |            |                | $ | 6,050  |       
|                                                    |                                                                                               |                                       |        |            |                |  
|Cash paid for income taxes                          |                                                                                               | $                                     | 88     |            |                | $ | 88     |       
|                                                    |                                                                                               |                                       |        |            |                |  
|Interest capitalized                                |                                                                                               | $                                     | 2      |            |                | $ | 28     |       
|                                                    |                                                                                               |                                       |        |            |                |  



6



---



##### Table of Contents






ATLANTIC COAST ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARY


NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS




|        |                                                 
|------- | ------------------------------------------------
|Note 1. | Organization, Business and Basis of Presentation





| |                      
| | ---------------------
| | Basis of Presentation











|        |            
|------- | -----------
|Note 2. | Restatement



7



---



##### Table of Contents



ATLANTIC COAST ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARY


NOTES TO CONDENSED COMBINED FINANCIAL
STATEMENTS  (Continued)




|                                                                                                      |                            |                |         |         |          |   |         |         | 
|----------------------------------------------------------------------------------------------------- | -------------------------- | -------------- | ------- | ------- | -------- | - | ------- | ------- | 
|                                                                                                      |                            | March 31, 2005 |        
|                                                                                                      |                            |                |        
|                                                                                                      |                            | As             |         |         | As       |  
|                                                                                                      |                            | Previously     |         |         | Restated |  
|                                                                                                      |                            | Reported       |         |         |          |  
|                                                                                                      |                            |                |         |         |         
|ASSETS                                                                                                |                            |                |         |         |          |   |         |        
|Current Assets:                                                                                       |                            |                |         |         |          |   |         |        
|Cash and cash equivalents                                                                             |                            | $              | 14,929  |         |          | $ | 14,929  |        
|Accounts receivable, net                                                                              |                            |                | 4,371   |         |          |   | 4,371   |        
|Deferred financing costs                                                                              |                            |                | 2,127   | (1)     |          |   |        |        
|Other current assets                                                                                  |                            |                | 9,809   |         |          |   | 10,016  |        
|                                                                                                      |                            |                |         |         |          |  
|                                                                                                      | Total current assets       |                |         | 31,236  |          |   |         | 29,316  | 
|                                                                                                      |                            |                |         |         |          |  
|Property and equipment, net                                                                           |                            |                | 168,237 |         |          |   | 168,237 |        
|Obligatory investments, net                                                                           |                            |                | 11,830  |         |          |   | 11,830  |        
|Deferred financing costs and other assets                                                             |                            |                | 3,970   | (1)     |          |   | 7,557   |        
|Other assets                                                                                          |                            |                | 1,667   |         |          |   |        |        
|                                                                                                      |                            |                |         |         |          |  
|                                                                                                      | Total other assets         |                |         | 17,467  |          |   |         | 19,387  | 
|                                                                                                      |                            |                |         |         |          |  
|                                                                                                      |                            | $              | 216,940 |         |          | $ | 216,940 |        
|                                                                                                      |                            |                |         |         |          |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                  |                            |                |         |         |          |   |         |        
|Current liabilities:                                                                                  |                            |                |         |         |          |   |         |        
|Line of credit                                                                                        |                            | $              | 4,000   |         |          | $ | 4,000   |        
|Current portion capital leases                                                                        |                            |                | 236     |         |          |   | 236     |        
|Accounts payable-trade                                                                                |                            |                | 3,912   | (2)     |          |   | 5,271   |        
|Accounts payable-related party                                                                        |                            |                | 588     |         |          |   | 588     |        
|Accrued payroll and related expenses                                                                  |                            |                | 7,503   |         |          |   | 7,503   |        
|Accrued expenses                                                                                      |                            |                | 10,245  | (2)     |          |   | 8,886   |        
|                                                                                                      |                            |                |         |         |          |  
|                                                                                                      | Total current liabilities  |                |         | 26,484  |          |   |         | 26,484  | 
|Long-term debt                                                                                        |                            |                | 66,259  |         |          |   | 66,259  |        
|Non-current capital leases                                                                            |                            |                | 385     |         |          |   | 385     |        
|Other                                                                                                 |                            |                | 5,496   |         |          |   | 5,496   |        
|Commitments and Contingencies                                                                         |                            |                |         |         |          |   |         |        
|Shareholders Equity:                                                                                 |                            |                |         |         |          |   |         |        
|Common stock, $0.1 par value per share; 20,00,000 shares
    authorized; 2,882,938 shares outstanding |                            |                | 29      |         |          |   | 29      |        
|Additional paid-in capital                                                                            |                            |                | 83,934  | (3)     |          |   | 124,083 |        
|Warrants outstanding                                                                                  |                            |                | 43,587  |         |          |   | 43,587  |        
|Accumulated deficit                                                                                   |                            |                | (9,234  | )(3)    |          |   | (49,383 | )      
|                                                                                                      |                            |                |         |         |          |  
|                                                                                                      | Total shareholders equity |                |         | 118,316 |          |   |         | 118,316 | 
|                                                                                                      |                            |                |         |         |          |  
|                                                                                                      |                            | $              | 216,940 |         |          | $ | 216,940 |        
|                                                                                                      |                            |                |         |         |          |  












8



---



##### Table of Contents



ATLANTIC COAST ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARY


NOTES TO CONDENSED COMBINED FINANCIAL
STATEMENTS  (Continued)




|        |                                  
|------- | ---------------------------------
|Note 3. | Transactions with Related Parties











|        |               
|------- | --------------
|Note 4. | Line of Credit









|        |                              
|------- | -----------------------------
|Note 5. | Commitments and Contingencies

Legal Proceedings




9



---



##### Table of Contents








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



OVERVIEW




| |                                  
| | ---------------------------------
| | Financial Statements Presentation











10



---



##### Table of Contents



RESULTS OF OPERATIONS




Revenues








| |                       
| | ----------------------
| | Promotional Allowances





| |                      
| | ---------------------
| | Departmental Expenses







11



---



##### Table of Contents







| |                                    
| | -----------------------------------
| | General and Administrative Expenses





| |                              
| | -----------------------------
| | Depreciation and Amortization





| |                 
| | ----------------
| | Interest Expense



LIQUIDITY AND CAPITAL RESOURCES




| |        
| | -------
| | Summary







| |                     
| | --------------------
| | Operating Activities



12



---



##### Table of Contents





| |                     
| | --------------------
| | Investing Activities







| |                     
| | --------------------
| | Financing Activities















13



---



##### Table of Contents











| |                                         
| | ----------------------------------------
| | Private Securities Litigation Reform Act



Risk Factors Related to the Business of The Company




| |                                                                    
| | -------------------------------------------------------------------
| | The Sands must maintain its casino license in order to
    operate.



14



---



##### Table of Contents







| |                                                                                  
| | ---------------------------------------------------------------------------------
| | The Company may need to increase capital expenditures to
    compete effectively.





| |                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If the Company fails to offer competitive products and
    services or maintain the loyalty of The Sands patrons, its
    business will be adversely affected.





| |                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Companys quarterly operating results are subject
    to fluctuations and seasonality, and if the Company fails to
    meet the expectations of securities analysts or investors, the
    Companys share price may decrease significantly.





| |                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------
| | Increased state taxation of gaming and hospitality
    revenues could adversely affect the Companys results of
    operations.





15



---



##### Table of Contents









| |                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------
| | Energy price increases may adversely affect the
    Companys costs of operations and revenues of The
    Sands.





| |                                                                                                        
| | -------------------------------------------------------------------------------------------------------
| | A downturn in general economic conditions may adversely
    affect the Companys results of operations.







| |                                                                                                                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Acts of terrorism and the uncertainty of the outcome and
    duration of the activity in Iraq and elsewhere, as well as other
    factors affecting discretionary consumer spending, have impacted
    the gaming industry and may harm the Companys operating
    results and the Companys ability to insure against certain
    risks.



16



---



##### Table of Contents





| |                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------
| | The Company may incur losses that would not be covered by
    insurance and the cost of insurance will increase.





| |                                                                               
| | ------------------------------------------------------------------------------
| | There are risks related to the creditworthiness of patrons
    of the casinos.





| |                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Companys success depends in part on the
    availability of qualified management and personnel and on the
    Companys ability to retain such employees.



Risk Factors Related to the Gaming Industry




| |                                           
| | ------------------------------------------
| | The gaming industry is highly competitive.





| |                                                                                                      
| | -----------------------------------------------------------------------------------------------------
| | Pending and enacted gaming legislation from neighboring
    States and New Jersey may harm The Sands.



17



---



##### Table of Contents



















18



---



##### Table of Contents





| |                                                                                                            
| | -----------------------------------------------------------------------------------------------------------
| | Holders of Atlantic Holdings Common Stock, Warrants, and
    3% Notes are subject to the CCC and the NJCCA.








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








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





19



---



##### Table of Contents












PART II.     OTHER
INFORMATION







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

|     |  |                                                                                                             
|---- |  | ------------------------------------------------------------------------------------------------------------
|31.1 |  | Certification of Principal Executive Officer, pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.
|31.2 |  | Certification of Principal Financial Officer, pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.
|32.1 |  | Certification of Chief Executive Officer, pursuant to
    Section 906 of the Sarbanes-Oxley Act 2002.       
|32.2 |  | Certification of Chief Financial Officer, pursuant to
    Section 906 of the Sarbanes-Oxley Act 2002.       

20



---



##### Table of Contents



SIGNATURES






| |                                            
| | -------------------------------------------
| | ATLANTIC COAST ENTERTAINMENT HOLDINGS, INC.
|
| | /s/ Denise Barton                          
| |                                            
| | Denise Barton                              
| | Chief Financial Officer                    



21



---



##### Table of Contents



EXHIBITS INDEX


|            |    |             |  |                                                                                                             
|----------- | -- | ----------- |  | ------------------------------------------------------------------------------------------------------------
|Exhibit No. |    | Description
|            |    |            
|            | 31 | .1          |  | Certification of Principal Executive Officer, pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.
|            | 31 | .2          |  | Certification of Principal Financial Officer, pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.
|            | 32 | .1          |  | Certification of Chief Executive Officer, pursuant to
    Section 906 of the Sarbanes-Oxley Act 2002.       
|            | 32 | .2          |  | Certification of Chief Financial Officer, pursuant to
    Section 906 of the Sarbanes-Oxley Act 2002.