**SECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

 

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**FORM 10-Q/A**

**(Amendment No. 1)**

 

**ý**** QUARTERLY REPORT UNDERSECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**For thequarterly period ended: September 30, 2003**

 

**OR**

 

**o**** TRANSITION REPORT PURSUANTTO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**For thetransition periodfrom           to           **

 

**Commissionfile number 333-53211**

 

**Hard Rock Hotel, Inc.**

(Exact name of registrantas specified in its charter)

 

| **Nevada**                                                                         |   | **88-0306263**                        |
|------------------------------------------------------------------------------------|--------|---------------------------------------|
| (State or other  jurisdiction of incorporation or organization)                    |   | (I.R.S. Employer  Identification No.) |
|                                                                               |   |                                  |
| **4455  Paradise Road, Las Vegas NV**                                              |   | **89109**                             |
| (Address of principal  executive offices)                                          |   | (Zip Code)                            |
|                                                                               |   |                                  |
| Registrant’s telephone  number, including area code:  **(702) 693-5000** |

 

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Indicate by check mark whether the registrant (1) hasfiled all reports required to be filed by Section 13 or 15(d) of theSecurities Exchange Act of 1934 during the preceding 12 months (or for suchshorter period that the registrant was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days. Yes ýNo o

 

Indicate by check mark whether the registrant is an accelerated filer(as defined in Rule 12b-2 of the Exchange Act). Yes oNo ý

 

APPLICABLE ONLY TOCORPORATE ISSUERS:

 

Indicate the number of shares outstanding of each ofthe issuer’s classes of common stock, as of the latest practicable date.

 

Common Stock outstandingby class as of November 14, 2003

 

| **Class of  Common Stock** |   | **Shares** |
|----------------------------|--------|------------|
| Class A Common Stock       |   | 12,000     |
| Class B Common Stock       |   | 64,023     |

 

 

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This Form 10-Q/A amendsPart I, Item 1 of the Registrant’s quarterly report on Form 10-Qas of and for the three-month and nine-month periods ended September 30,2003 as filed on November 14, 2003, and is being filed to reflect therestatement of the Registrant’s Condensed Financial Statements included thereinas discussed in note 6.  This Form10-Q/A has not otherwise been modified or updated from disclosures as presentedin the original Form 10-Q except as required to reflect the effects of therestatement.

 

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Part I                    FINANCIAL INFORMATION

Item 1.                                                     FinancialStatements

 

HARD ROCK HOTEL, INC.

CONDENSED BALANCE SHEETS 

(in thousands, exceptshare amounts)

(unaudited)

 
|                                                                                                                                                      |   | **September 30,****2003** |    | **December 31,  2002**     | ** ** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|---------|---------------------------------|------------|
|                                                                                                                                                      |   |                           |    | **(as  restated, see  note 6)** |       |
| ASSETS                                                                                                                                                    |   |                           |    |                            |       |
|                                                                                                                                                      |   |                           |    |                            |       |
| Current assets:                                                                                                                                           |   |                           |    |                            |       |
| Cash and cash equivalents                                                                                                                                 |   | $                              | 16,162  |                            | $          | 9,139 |   |
| Accounts receivable, net of allowance for  doubtful accounts of $1,945 and $1,951 as of September 30, 2003 and  December 31, 2002, respectively |   | 6,131                          |    | 10,035                          |       |
| Inventories                                                                                                                                               |   | 1,526                          |    | 1,736                           |       |
| Prepaid expenses and other current assets                                                                                                                 |   | 1,826                          |    | 1,855                           |       |
| Related party receivable                                                                                                                                  |   | 388                            |    | 116                             |       |
| Total current assets                                                                                                                                      |   | 26,033                         |    | 22,881                          |       |
|                                                                                                                                                      |   |                           |    |                            |       |
| Property and equipment, net of accumulated  depreciation and amortization                                                                                 |   | 166,057                        |    | 165,073                         |       |
| Deferred income taxes                                                                                                                                     |   | 867                            |    | 817                             |       |
| Other assets                                                                                                                                              |   | 4,356                          |    | 1,815                           |       |
|                                                                                                                                                      |   |                           |    |                            |       |
| TOTAL ASSETS                                                                                                                                              |   | $                              | 197,313 |                            | $          | 190,586 |   |
|                                                                                                                                                      |   |                           |    |                            |       |
| Current liabilities:                                                                                                                                      |   |                           |    |                            |       |
| Accounts payable                                                                                                                                          |   | $                              | 3,434   |                            | $          | 3,564 |   |
| Construction related payables                                                                                                                             |   | 1,530                          |    | 179                             |       |
| Related party payable                                                                                                                                     |   | 244                            |    | 92                              |       |
| Accrued expenses                                                                                                                                          |   | 13,381                         |    | 14,733                          |       |
| Interest payable                                                                                                                                          |   | 6,166                          |    | 2,910                           |       |
| Current portion of long-term debt                                                                                                                         |   | 1,411                          |    | 1,084                           |       |
| Total current liabilities                                                                                                                                 |   | 26,166                         |    | 22,562                          |       |
|                                                                                                                                                      |   |                           |    |                            |       |
| Deferred income taxes                                                                                                                                     |   | 596                            |    | 696                             |       |
| Qualified subordinated notes to related  parties                                                                                                          |   | 50,037                         |    | —                          |       |
| Long-term debt                                                                                                                                            |   | 158,991                        |    | 143,289                         |       |
| Total long-term liabilities                                                                                                                               |   | 209,624                        |    | 143,985                         |       |
| Total liabilities                                                                                                                                         |   | 235,790                        |    | 166,547                         |       |
|                                                                                                                                                      |   |                           |    |                            |       |
| Commitments and contingencies:                                                                                                                            |   |                           |    |                            |       |
| Preferred stock, 9 1⁄4% Series A Cumulative,  no par value, redeemable, 40,000 shares authorized, 28,000 shares issued and  outstanding                |   | —                         |    | 37,411                          |       |
| Preferred stock, 9 1⁄4% Series B Cumulative,  no par value, redeemable, one share authorized, issued and outstanding                                   |   | —                         |    | 25,280                          |       |
| Shareholders’  deficiency:                                                                                                                           |   |                           |    |                            |       |
| Common stock, Class A voting, no par value,  40,000 shares authorized, 12,000 shares issued and outstanding                                               |   | —                         |    | —                          |       |
| Common stock, Class B non-voting, no par  value, 160,000 shares authorized, 64,023 shares issued and outstanding                                          |   | —                         |    | —                          |       |
| Paid-in capital                                                                                                                                           |   | 7,508                          |    | 7,508                           |       |
| Accumulated deficit                                                                                                                                       |   | (45,985                        | )       | (46,160                         | )          |
| Total shareholders’ deficiency                                                                                                                       |   | (38,477                        | )       | (38,652                         | )          |
|                                                                                                                                                      |   |                           |    |                            |       |
| TOTAL LIABILITIES AND SHAREHOLDERS’  DEFICIENCY                                                                                                      |   | $                              | 197,313 |                            | $          | 190,586 |   |

 

*Theaccompanying notes are an integral part of these interim unaudited condensedfinancial statements.*

 

3

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HARD ROCK HOTEL, INC.

CONDENSEDSTATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(unaudited)

 
|                                                  |   | **Three  months Ended  September 30,** |       | **Nine  months Ended  September 30,** |       |
|-------------------------------------------------------|--------|---------------------------------------------|------------|--------------------------------------------|------------|
|                                                  |   | **2003**                                    |       | **2002**                                   |       | **2003** |   | **2002** |   |
| Revenue:                                              |   |                                        |       |                                       |       |   |   |   |   |
| Casino                                                |   | $                                           | 15,225     |                                       | $          | 15,217 |   | $ | 43,272 |   | $ | 42,363 |   |
| Lodging                                               |   | 8,015                                       |       | 6,833                                      |       | 23,111 |   | 20,655 |   |
| Food and beverage                                     |   | 12,406                                      |       | 10,212                                     |       | 35,804 |   | 31,830 |   |
| Retail                                                |   | 2,256                                       |       | 2,219                                      |       | 6,492 |   | 6,844 |   |
| Other income                                          |   | 2,123                                       |       | 1,987                                      |       | 5,810 |   | 5,603 |   |
| Gross revenues                                        |   | 40,025                                      |       | 36,468                                     |       | 114,489 |   | 107,295 |   |
| Less:   promotional allowances                   |   | (2,787                                      | )          | (2,736                                     | )          | (8,392 | ) | (8,099 | ) |
| Net revenues                                          |   | 37,238                                      |       | 33,732                                     |       | 106,097 |   | 99,196 |   |
|                                                  |   |                                        |       |                                       |       |   |   |   |   |
| Costs and expenses:                                   |   |                                        |       |                                       |       |   |   |   |   |
| Casino                                                |   | 8,281                                       |       | 8,503                                      |       | 25,030 |   | 24,767 |   |
| Lodging                                               |   | 1,981                                       |       | 1,856                                      |       | 5,765 |   | 5,373 |   |
| Food and beverage                                     |   | 6,474                                       |       | 5,568                                      |       | 18,576 |   | 16,155 |   |
| Retail                                                |   | 958                                         |       | 925                                        |       | 2,819 |   | 2,923 |   |
| Other                                                 |   | 1,076                                       |       | 1,032                                      |       | 2,957 |   | 2,950 |   |
| Marketing                                             |   | 2,314                                       |       | 2,265                                      |       | 5,551 |   | 5,862 |   |
| Related party expenses                                |   | 1,071                                       |       | 1,001                                      |       | 3,276 |   | 2,779 |   |
| General and administrative                            |   | 5,293                                       |       | 4,539                                      |       | 14,691 |   | 12,730 |   |
| Depreciation and amortization                         |   | 2,990                                       |       | 2,826                                      |       | 8,766 |   | 8,483 |   |
| Pre-opening                                           |   | 37                                          |       | 100                                        |       | 60 |   | 100 |   |
| Total costs and expenses                              |   | 30,475                                      |       | 28,615                                     |       | 87,491 |   | 82,122 |   |
|                                                  |   |                                        |       |                                       |       |   |   |   |   |
| Income from operations                                |   | 6,763                                       |       | 5,117                                      |       | 18,606 |   | 17,074 |   |
|                                                  |   |                                        |       |                                       |       |   |   |   |   |
| Other income (expense):                               |   |                                        |       |                                       |       |   |   |   |   |
| Interest income                                       |   | 12                                          |       | 14                                         |       | 27 |   | 40 |   |
| Interest expense                                      |   | (4,940                                      | )          | (3,256                                     | )          | (11,974 | ) | (9,942 | ) |
| Loss on early extinguishments of debt                 |   | —                                      |       | —                                     |       | (4,258 | ) | — |   |
| Other, net                                            |   | 53                                          |       | 4                                          |       | 20 |   | (40 | ) |
|                                                  |   |                                        |       |                                       |       |   |   |   |   |
| Income before provision for income taxes              |   | 1,888                                       |       | 1,879                                      |       | 2,421 |   | 7,132 |   |
|                                                  |   |                                        |       |                                       |       |   |   |   |   |
| Income tax (benefit) provision                        |   | —                                      |       | —                                     |       | (100 | ) | — |   |
| NET INCOME                                            |   | 1,888                                       |       | 1,879                                      |       | 2,521 |   | 7,132 |   |
|                                                  |   |                                        |       |                                       |       |   |   |   |   |
| Preferred stock dividends                             |   | —                                      |       | (1,386                                     | )          | (2,346 | ) | (4,029 | ) |
| Income applicable to common shareholders              |   | $                                           | 1,888      |                                       | $          | 493 |   | $ | 175 |   | $ | 3,103 |   |
|                                                  |   |                                        |       |                                       |       |   |   |   |   |
| BASIC AND DILUTED NET INCOME PER SHARE:               |   |                                        | ** ** |                                       | ** ** |   | ** ** |   | ** ** |
|                                                  |   |                                        |       |                                       |       |   |   |   |   |
| Applicable to common shareholders                     |   | $                                           | 24.83      |                                       | $          | 6.48 |   | $ | 2.30 |   | $ | 40.82 |   |
|                                                  |   |                                        |       |                                       |       |   |   |   |   |
| Weighted average number of common shares  outstanding |   | 76,023                                      |       | 76,023                                     |       | 76,023 |   | 76,023 |   |

 

*Theaccompanying notes are an integral part of these interim unaudited condensedfinancial statements.*

 

4

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HARD ROCK HOTEL, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(in thousands, exceptsupplemental schedule)

(unaudited)

 
|                                                                                                                 |   | **Nine  Months Ended  September 30,** |   |
|----------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|--------|
|                                                                                                                 |   | **2003**                                   |   | **2002** |   |
| Cash flows from operating activities:                                                                                |   |                                       |   |   |   |
| Net income                                                                                                           |   | $                                          | 2,521  |   | $ | 7,132 |   |
| Adjustments to reconcile net income to net  cash provided by operating activities:                                   |   |                                       |   |   |   |
| Depreciation and amortization                                                                                        |   | 8,766                                      |   | 8,483 |   |
| Provision for losses on accounts receivable                                                                          |   | 223                                        |   | 217 |   |
| Amortization of loan fees                                                                                            |   | 462                                        |   | 553 |   |
| (Gain) loss on sales of property and  equipment                                                                      |   | (20                                        | )      | 40 |   |
| Loss on early extinguishment of debt                                                                                 |   | 4,258                                      |   | — |   |
| Changes in operating assets and  liabilities:                                                                        |   |                                       |   |   |   |
| Accounts receivable                                                                                                  |   | 3,681                                      |   | (29 | ) |
| Inventories                                                                                                          |   | 210                                        |   | 332 |   |
| Prepaid expenses and other current assets                                                                            |   | 29                                         |   | (964 | ) |
| Related party receivable                                                                                             |   | (272                                       | )      | — |   |
| Accounts payable                                                                                                     |   | (130                                       | )      | 765 |   |
| Related party payable                                                                                                |   | 152                                        |   | (1,465 | ) |
| Deferred income taxes                                                                                                |   | (150                                       | )      | — |   |
| Accrued expenses                                                                                                     |   | (1,352                                     | )      | (880 | ) |
| Interest payable                                                                                                     |   | 3,256                                      |   | 2,725 |   |
| Net cash provided by operating activities                                                                            |   | 21,634                                     |   | 16,909 |   |
|                                                                                                                 |   |                                       |   |   |   |
| Cash flows used in investing activities:                                                                             |   |                                       |   |   |   |
| Purchases of property and equipment                                                                                  |   | (9,765                                     | )      | (4,710 | ) |
| Proceeds from sales of property and equipment                                                                        |   | 35                                         |   | 56 |   |
| Construction payables                                                                                                |   | 1,351                                      |   | (992 | ) |
| Decrease (increase) in other assets                                                                                  |   | (13                                        | )      | 250 |   |
| Net cash used in investing activities                                                                                |   | (8,392                                     | )      | (5,396 | ) |
|                                                                                                                 |   |                                       |   |   |   |
| Cash flows used in financing activities:                                                                             |   |                                       |   |   |   |
| Net proceeds from borrowings                                                                                         |   | 157,385                                    |   | — |   |
| Other debt issuance costs                                                                                            |   | (1,191                                     | )      | — |   |
| Payment of accrued dividends on preferred  stock                                                                     |   | (15,000                                    | )      | — |   |
| Principal payments on long-term debt                                                                                 |   | (144,373                                   | )      | (9,595 | ) |
| Premium on early retirement of long-term  debt                                                                       |   | (3,040                                     | )      | — |   |
| Net cash used in financing activities                                                                                |   | (6,219                                     | )      | (9,595 | ) |
|                                                                                                                 |   |                                       |   |   |   |
| Net increase in cash and cash equivalents                                                                            |   | 7,023                                      |   | 1,918 |   |
| Cash and cash equivalents, beginning of  period                                                                      |   | 9,139                                      |   | 8,591 |   |
| Cash and cash equivalents, end of period                                                                             |   | $                                          | 16,162 |   | $ | 10,509 |   |
|                                                                                                                 |   |                                       |   |   |   |
| Supplemental disclosures of cash flow  information:                                                                  |   |                                       |   |   |   |
| Cash paid during the period for interest,  (net of amount capitalized of $36 in the period ended September 30, 2003) |   | $                                          | 8,256  |   | $ | 6,624 |   |
| Cash paid during the period for income  taxes, net                                                                   |   | $                                          | 100    |   | $ | — |   |

 

*The accompanying notes are an integral partof these interim unaudited condensed financial statements.*

 

5

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Supplemental Schedule ofNon-Cash Investing and Financing Activities:

 

In conjunctionwith the issuance of $140,000,000 of Second Lien Notes and a $40,000,000 SeniorSecured Credit Facility (of which the $20,000,000 Revolving Credit Facilityportion was not drawn upon as of September 30, 2003) during May 2003,issuance costs of $2,450,000 and $567,000, respectively, were withheld from theproceeds, therefrom.

 

DuringMay 2003, the Company issued $50,037,000 of Qualified Subordinated Notesto related parties and redeemed and retired the 9 1/4% Series A CumulativePreferred Stock and the 9 1/4% Series B Cumulative Preferred Stock.

 

The value ofthe 9 1/4% Series A Cumulative Preferred Stock increased by approximately$2,404,000 in unpaid accrued dividends for the nine-month period endedSeptember 30, 2002.

 

The value ofthe 9 1/4% Series B Cumulative Preferred Stock increased by approximately$1,625,000 in unpaid accrued dividends for the nine-month periods endedSeptember 30, 2002.

 

The Companypurchased $402,000 and $1,349,000 of equipment in exchange for indebtedness forthe nine-month periods ended September 30, 2003 and 2002, respectively.

 

6

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1.                                       BASISOF PRESENTATION

 

Hard Rock Hotel, Inc. (the “Company”), a Nevada corporationincorporated on August 30, 1993, operates a hotel-casino in Las Vegas,Nevada (the “Resort”).  Lily PondInvestments, Inc. (“Lily Pond”), a Nevada corporation controlled and majorityowned by Peter Morton, owns all of the voting shares and 93% of the non-votingshares of the Company.  Mr. Morton hasgranted a sublicense to the Company, pursuant to which the Company holds theexclusive right to use the “Hard Rock Hotel” trademark for the Company’soperations in Las Vegas.  Thesefinancial statements have been prepared in accordance with accountingprinciples generally accepted in the United States of America and withinstructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, certain notes and other informationhave been condensed or omitted from these interim financial statements and theydo not include all information required by accounting principles generallyaccepted in the United States of America for complete financial statements.  In the opinion of management, alladjustments (consisting of normal recurring adjustments) considered necessaryfor a fair presentation have been included. The preparation of financial statements in conformity with accountingprinciples generally accepted in the United States of America requiresmanagement to make estimates and assumptions that affect the reported amountsof assets and liabilities and disclosure of contingent assets and liabilitiesat the date of the financial statements and the amounts of revenues and expensesduring the reporting period.  Actualresults could differ from these estimates. Operating results for the nine-month periods ended September 30,2003 are not necessarily indicative of future financial results or the resultsthat may be expected for the year ending December 31, 2003.  The unaudited interim financial statementscontained herein should be read in conjunction with the audited financialstatements and footnotes for the year ended December 31, 2002.

 

2.                                       LONG-TERMDEBT

 

In May 2003,the Company obtained funding of approximately $137.6 million in net proceedsfrom the offering of $140.0 million aggregate principal amount of its 8.875%Second Lien Notes due 2013 (the “2013 Notes”) and paid additional costs ofapproximately $1.2 million in conjunction with this issuance in cash.  Concurrent with the execution of the 2013Notes, the Company secured a $40 million Senior Secured Credit Facility (the“Facility”) through a group of banks at a cost of approximately $0.6 millionwhich was withheld from the net proceeds. The Facility consists of a $20 million, five-year senior secured termloan (the “Term Loan”) and a $20 million senior secured revolving creditfacility (the “Revolving Credit Facility”). As of September 30, 2003, the Company had $140.0 millionoutstanding in 2013 Notes, $20.0 million outstanding on its Term Loan and hadno balance outstanding on the Revolving Credit Facility.  The 2013 Notes are contractuallysubordinated in right of payment to all indebtedness incurred pursuant to theFacility and the liens and security interests securing the obligations of theCompany under the 2013 Notes are contractually subordinated to the lienssecuring the obligations of the Company under the Facility.

 

The net proceedsfrom the issuance of the 2013 Notes together with the borrowings under theFacility and cash on hand, were used to redeem and repurchase the Company’s$120.0 million 9.25% Senior Subordinated Notes due in 2005, repay the entire$18.0 million balance outstanding on its $30.0 million senior revolving creditfacility, repay $1.3 million of purchase money indebtedness, to pay $15.0million of the accrued dividends on the Company’s preferred stock, to pay costsand expenses related to the foregoing, to finance working capital and to provideliquidity to fund general and corporate purposes.  A loss on early extinguishment of debt of $4.3 millionrelated to a $3.0 million premium paid to the holders of the Company’s9.25% Notes which were tendered or called during the three months ended June 30,2003 and due to a $1.3 million write-off of unamortized deferred debtissuance costs related to the tendered and called notes.

 

The Companyexchanged all of its outstanding preferred stock and the remaining accrued andunpaid dividends thereon for an aggregate principal amount of juniorsubordinated notes equal to approximately $50.0 million (the “JuniorNotes”).  Upon issuance of the JuniorNotes, the Company’s preferred stock ceased to remain outstanding.

 

Junior Subordinated Notes

 

Interest on theJunior Notes is payable on each January 15 and July 15, commencing onJanuary 15, 2004, and may be paid in cash or in kind at the Company’soption, provided that interest will be paid in kind if a payment of suchinterest in cash would cause a default under the 2013 Notes or theFacility.  The Junior Notes require thatany semi-annual interest payment in cash be equal to the lesser of (x) 50% ofthe amount of interest accrued on the Junior Notes since the most recentinterest payment date and (y) the amount of interest that the Company ispermitted to pay in cash without causing a default under the 2013 Notes or theFacility.  For interest payments payablein cash, interest accrues at a rate per annum equal to 9.875%, and for interestpayments payable in kind, interest accrues at a rate per annum equal to10.50%.  The Company has been accruing50% of the interest on the Junior Notes at the cash rate and 50% at the in kindrate based on anticipated continued compliance with the covenants of the 2013Notes and the Facility through the next scheduled interest payment date.  The Junior Notes are contractuallysubordinated to the 2013 Notes and the Facility and any other senior debt ofthe Company.  The Junior Notes mature onJanuary 15, 2014 but are subject to redemption at the option of theCompany, in whole or in part, at any time on or after January 15, 2009, ata premium to the principal amount thereof that decreases on each subsequentanniversary date, plus accrued interest to the date of redemption.  The Junior Notes contain covenantsrestricting the Company’s ability to, among other things, sell or otherwisedispose of its assets, pay dividends, incur additional indebtedness, makeacquisitions or merge or consolidate with another entity and enter into transactionswith affiliates.  The Company was incompliance with these covenants as of September 30, 2003.

 

7

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2013 Notes

 

Interest on the2013 Notes is payable on each June 1 and December 1 beginningDecember 1, 2003.  The 2013 Notesare secured by a security interest in substantially all of the Company’sexisting and future assets, other than licenses which may not be pledged underapplicable law.  The security interestis junior to the security interest in the assets securing our obligation underour Facility and except for permitted secured purchase money indebtedness.  The 2013 Notes are subject to redemption atthe option of the Company, in whole or in part, at any time on or afterJune 1, 2008, at a premium to the face amount ($140 million) thatdecreases on each subsequent anniversary date, plus accrued interest to thedate of redemption.  The 2013 Notescontain covenants restricting or limiting the ability of the Company to, amongother things, pay dividends, create liens or other encumbrances, incuradditional indebtedness, issue certain preferred stock, sell or otherwisedispose of a portion of its assets, make acquisitions or merge or consolidatewith another entity and enter into transactions with affiliates.  The Company was in compliance with thesecovenants as of September 30, 2003.

 

# Facility

 

The Facility contains certain covenants including, among other things,financial covenants, limitations on the Company from disposing of capitalstock, entering into mergers and certain acquisitions, incurring liens orindebtedness, issuing dividends on stock, and entering into transactions withaffiliates.  The Company is incompliance with these covenants as of September 30, 2003.  The Facility is secured by substantially allof the Company’s property at the Las Vegas site.  Interest on the Facility accrues on all individual borrowings atan interest rate determined at the option of the Company, at either the LIBORIndex plus an applicable margin (not to exceed 3.5% (applicable margin was3.25% at September 30, 2003) and aggregating 4.4% at September 30,2003), or the Base Rate, defined as the higher of the Federal Funds Rate plus0.5%, or the reference rate, as defined, plus an applicable margin (not toexceed 2.25%).  The Company chose theLIBOR Index for all of its borrowings outstanding at September 30,2003.  These margins are dependent uponthe Company’s total debt to EBITDA ratio, as defined.  Interest accrued on the Base Rate borrowings is due monthly, up tothe maturity date, while interest on LIBOR borrowings is due quarterly up tothe maturity date.  The Company was incompliance with these covenants as of September 30, 2003.

 

3.                                       LEGAL AND REGULATORY PROCEEDINGS

 

The Company is a defendant in various lawsuits relating to routinematters incidental to its business.

 

Management provides an accrual for estimated losses that may occur anddoes not believe that the outcome of any pending claims or litigation, in theaggregate, will have a material adverse effect on the Company’s financialposition, results of operations or liquidity beyond the amounts recorded in theaccompanying balance sheet as of September 30, 2003.

 

4.                                       RECENTACCOUNTING PRONOUNCEMENTS

 

In January 2003, theFinancial Accounting Standards Board (“FASB”) issued Interpretation No. 46,**“Consolidation of Variable InterestEntities”.  This interpretation of Accounting Research Bulletin No. 51,**“Consolidated Financial Statements”addresses consolidation by business enterprises of variable interest entities,which have certain characteristics.  In October 2003, the FASB issued aFASB Staff Position regarding this Interpretation to defer the effective datefor applying the provisions of the Interpretation for interests held by publiccompanies in variable interest entities or potential variable interest entitiescreated before February 1, 2003.  The Interpretation is now generallyeffective for financial statements of interim or annual periods ending afterDecember 15, 2003.  We currently do not expect the adoption of thisstandard to have a material impact on our financial statements.

 

In April 2002,the FASB issued Statements of Financial Accounting Standards (“SFAS”) No. 145,Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No.13, and Technical Corrections.   Themost significant provisions of this statement relate to the rescission ofStatement No. 4, Reporting Gains and Losses from Extinguishment of Debt and italso amends other existing authoritative pronouncements to make varioustechnical corrections, clarify meanings, or describe their applicability underchanged conditions.  Under this newstatement, any gain or loss on extinguishment of debt that was classified as anextraordinary item in prior periods presented that does not meet certaindefined criteria must be reclassified. The Company adopted this statement on January 1, 2003, and the adoptiondid not have a material effect on its financial statements.

 

In April 2003, the FASB issued SFAS No. 149, “Amendment to Statement133 on Derivative Instruments and Hedging Activities.”  SFAS No. 149amends and clarifies accounting for derivative instruments, including certainderivative instruments embedded in other contracts, and for hedging activitiesunder SFAS No. 133.  SFAS No. 149 isapplied prospectively and is effective for contracts entered into or modifiedafter June 30, 2003, except for SFAS No. 133 implementation issues thathave been effective for fiscal quarters that began prior to June 15, 2003and certain provisions relating to forward purchases and sales on securitiesthat do not yet exist. The Company has completed its evaluation of SFAS 149 andhas determined that there is no material effect on its financial statements asof September 30, 2003 as it does not engage in derivative activities.

 

In May 2003, the FASB issued SFAS No. 150, Accounting for CertainFinancial Instruments with Characteristics of both Liabilities and Equity.  SFAS No. 150 establishes standards for how anissuer classifies and measures certain financial instruments withcharacteristics of both liabilities and equity. It requires that an issuerclassify a financial instrument that is within its scope as a liability (or anasset in some circumstances).  SFAS No.150 is effective for financial instruments entered into or modified after May 31,2003, and otherwise is effective at the beginning of the first interim period beginningafter June 15, 2003.  We adoptedthe standard on July 1, 2003.  TheCompany has completed its evaluation of SFAS 150 and has determined that thereis no material effect on its financial statements.

 

5.                                       CONSTRUCTIONCOMMITMENT

 

OnApril 9, 2003, the Company entered into a $1.3 million conditional saleagreement for the purchase of four full color live video LED sign systems ofwhich approximately $1.0 million has been paid as of September 30, 2003.  During August 2003, the Company enteredinto an agreement to expand its parking garage facility by 380 spaces forapproximately $4.0 million of which approximately $1.2 million has been paid asof September 30, 2003.

 

6.             RESTATEMENT

 

Subsequent tothe issuance of the Company’s Form 10-Q for the period ended September 30,2003, the Company’s management determined that both their 9 1⁄4% Series A andSeries B Preferred Stock should have been classified in the mezzanine sectionof the accompanying condensed balance sheet as of December 31, 2002, ratherthan as long-term liabilities.  As aresult, the accompanying condensed balance sheet as of December 31, 2002 hasbeen restated from the amounts previously reported.  Total long-term liabilities and total liabilities were previouslyreported as $206,676 and $229,238, respectively.  As restated they are reported as $143,985 and $166,547,respectively.  The preferred stockbalances of $37,411 and $25,280 have also been reclassified to the mezzaninesection of the condensed balance sheet. There was no effect to the accompanying condensed financial statementsas of and for the periods ended September 30, 2003 and 2002 as a result of thisreclassification.

 

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SIGNATURES

 

Pursuant to the requirements of the SecuritiesExchange Act of 1934, as amended, the Registrant has duly caused this report tobe signed on its behalf by the undersigned thereunto duly authorized.

 

 
|                               | HARD ROCK HOTEL,  INC.                                      |
|------------------------------------|-------------------------------------------------------------|
|                               |                                                        |
| Date:  November 26, 2003 | /s/ JAMES D.  BOWEN                                         |   |
|                               | James D. Bowen                                              |
|                               | Chief Financial  Officer                                    |
|                               | (Principal  Financial Officer And Duly  Authorized Officer) |

 

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Exhibit Index

 
| **Exhibit  Number** |   | **Description**                                                                                                                                                                           |
|---------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1(1)              |   | Second Amended and Restated Certificate of Incorporation of the  Company.                                                                                                                 |
| 3.2(2)              |   | Certificate of Amendment of Second Amended and Restated Articles of  Incorporation.                                                                                                       |
| 3.3(1)              |   | Second Amended and Restated By-Laws of the Company.                                                                                                                                       |
| 4.1(6)              |   | Indenture, dated as of May 30, 2003, by and between the Company  and U.S. Bank National Association, as trustee, relating to the 87/8% Second  Lien Notes due 2013.                  |
| 4.2(6)              |   | Form of Global 87/8% Second Lien Notes due 2013 (included in Exhibit  4.1)                                                                                                                |
| 4.3(6)              |   | Registration Rights Agreement, dated as of May 30, 2003, by and  between the Company and Banc of America Securities LLC, as representative of  the Initial Purchasers.               |
| 4.4(6)              |   | Intercreditor Agreement, dated as of May 30, 2003, among the  Company, U.S. Bank, N.A. and Bank of America, N.A.                                                                     |
| 4.5(6)              |   | Form of Junior Subordinated Notes.                                                                                                                                                        |
| 10.1(6)             |   | Credit Agreement, dated as of May 30, 2003, between the Company,  Bank of America, N.A. and the lenders referred to therein.                                                         |
| 10.2(6)             |   | Second Lien Notes Security Agreement, dated as of May 30, 2003,  between the Company and U.S. Bank, N.A.                                                                             |
| 10.3(6)             |   | Second Lien Notes Trademark Security Interest Assignment, dated as of  May 30, 2003, between the Company and U.S. Bank, N.A.                                                         |
| 10.4(6)             |   | Second Lien Notes Copyright Security Interest Assignment, dated as of  May 30, 2003, between the Company and U.S. Bank, N.A.                                                         |
| 10.5(6)             |   | Exchange Agreement, dated as of May 30, 2003, between the  Company, Peter A. Morton and Desert Rock, Inc.                                                                            |
| 10.6(1)             |   | Amended and Restated Supervisory Agreement, dated as of  October 21, 1997, between the Company and Peter A. Morton.                                                                  |
| 10.7(3)             |   | Employment Agreement, dated November 8, 2000, between the  Company and James D. Bowen.                                                                                               |
| 10.8(4)             |   | Amendment to Employment Agreement, dated September 7, 2001, between  the Company and James D. Bowen.                                                                                 |
| 10.9(5)             |   | Employment Agreement, dated as of May 24, 2002, between the  Company and Don Marrandino.                                                                                             |
| 10.10(1)            |   | Trademark Sublicense Agreement, dated October 24, 1997, between  the Company and Peter A. Morton.                                                                                    |
| 10.11(1)            |   | Amendment No. 1 to Trademark Sublicense Agreement, dated as of  March 23, 1998, between the Company and Peter A. Morton.                                                             |
| 10.12(6)            |   | Amendment No. 2 to Trademark Sublicense Agreement, dated as of  May 30, 2003, between the Company and Peter A. Morton.                                                               |
| 10.13(6)            |   | Security Agreement, dated as of May 30, 2003, between the  Company, Bank of America, N.A. and the lenders referred to therein.                                                       |
| 10.14(6)            |   | Trademark Security Interest Assignment, dated as of May 30,  2003, between the Company and Bank of America, N.A.                                                                     |
| 10.15(6)            |   | Copyright Security Interest Assignment, dated as of May 30,  2003, between the Company and Bank of America, N.A.                                                                     |
| 10.16(6)            |   | Form of Hard Rock Hotel, Inc. 1999 Performance Awards Plan                                                                                                                                |
| 10.17(7)            |   | Employment Agreement, dated June 19, 2003, between the Company  and Kevin Kelley                                                                                                     |
| 31.1                |   | Certification of Chief Executive Officer Pursuant to Section 302  of the Sarbanes-Oxley Act of 2002                                                                                  |
| 31.2                |   | Certification of Chief Financial Officer Pursuant to Section 302  of the Sarbanes-Oxley Act of 2002                                                                                  |
| 32.1                |   | Certification of Chief Executive Officer and Chief Financial Officer  Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to  Section 906 of the Sarbanes-Oxley Act of 2002 |

 

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(1)                                  Incorporated byreference to designated exhibit to our Registration Statement on Form S-4,filed with the Securities and Exchange Commission on May 21, 1998 (FileNo. 333- 53211).

 

(2)                                  Incorporated byreference to designated exhibit to our Report on Form 10-Q, filed with theSecurities and Exchange Commission for the quarter ended August 31, 1999(File No. 333-53211).

 

(3)                                  Incorporated byreference to designated exhibit to our Report on Form 10-Q, filed with theSecurities and Exchange Commission for the quarter ended September 30,2000 (File No. 333-53211).

 

(4)                                  Incorporated byreference to designated exhibit to our Report on Form 10-Q, filed with theSecurities and Exchange Commission for the quarter ended September 30,2001 (File No. 333-53211).

 

(5)                                  Incorporated byreference to designated exhibit to our Report on Form 10-Q, filed with the Securitiesand Exchange Commission for the quarter ended September 30, 2002 (File No.333-53211).

 

(6)                                  Incorporated byreference to designated exhibit to our Registration Statement on Form S-4,filed with the Securities and Exchange Commission on July 8, 2003 (FileNo. 333- 106863).

 

(7)                                  Incorporated byreference to designated exhibit to our Report on Form 10-Q, filed with theSecurities and Exchange Commission for the quarter ended June 30, 2003 (FileNo. 333-53211).

 

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