** **

**U.S. SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON,D.C. 20549**

 

##### **FORM 10–QSB**

 
| **ý** |   | **QUARTERLY REPORT UNDER SECTION 13  OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD  ENDED SEPTEMBER 30, 2001.** |
|------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|

 

###### **OR**

 
| **o**  |   | **TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES  EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________________** |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|
|   |   | **TO ______________.**                                                                                                                  |

** **

 

                                                                                                                                                       **Commission File No.    0–20630   **

 

**FULL HOUSE RESORTS, INC.**

(Exact name of small business issuer as specified inits charter)

 

| **Delaware**                                                               |   | **13–3391527**                   |
|----------------------------------------------------------------------------|--------|---------------------------------------|
| (State or other  jurisdiction of incorporation or organization)            |   | (I.R.S. Employer  Identification No.) |
|                                                                       |   |                                  |
| **2300 W. Sahara Ave., Suite  450,  Box 23, Las Vegas,  Nevada** |   | **89102**                             |
| (Address of  principal executive offices)                                  |   | (zip code)                            |

 

 

**(702) 221–7800**

(Registrant's telephone number)

 

Check whether the issuer(1) filed all reports required to be filed by Section 13 or 15(d) of theSecurities Exchange Act of 1934 during the past 12 months (or for such shorterperiod that the registrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90 days.

 

Yes ý          No o

 

**APPLICABLEONLY TO CORPORATE ISSUERS**

 

As of November 10, 2001,Registrant had 10,340,380 shares of its $.0001 par value common stock outstanding.

 

 

 

 

 

**FULLHOUSE RESORTS, INC.**

**TABLE OFCONTENTS**

 
|      |                  |                                                                                                               |   |
|-----------|-----------------------|--------------------------------------------------------------------------------------------------------------------|--------|
|      |                  |                                                                                                               |   |
| PART I.   | Financial Information |                                                                                                               |
|      |                  |                                                                                                               |   |
|      | Item 1.               | Unaudited Condensed Consolidated Financial  Statements                                                             |   |
|      |                  |                                                                                                               |   |
|      |                  | Unaudited  Condensed Consolidated Balance Sheets as of September 30, 2001 and December  31, 2000                   |   |
|      |                  |                                                                                                               |   |
|      |                  | Unaudited Condensed  Consolidated Statements of Operations for the three months ended September  30, 2001 and 2000 |   |
|      |                  |                                                                                                               |   |
|      |                  | Unaudited Condensed Consolidated  Statements of Operations for the nine months ended September 30, 2001 and  2000  |   |
|      |                  |                                                                                                               |   |
|      |                  | Unaudited  Condensed Consolidated Statements of Cash Flows for the nine months ended  September 30, 2001 and 2000  |   |
|      |                  |                                                                                                               |   |
|      |                  | Notes  to Unaudited Condensed Consolidated Financial Statements                                                    |   |
|      |                  |                                                                                                               |   |
|      | Item  2.              | Management's  Discussion and Analysis of Financial Condition and Results of Operations                             |   |
|      |                  |                                                                                                               |   |
| PART  II. |                  | Other Information                                                                                                  |   |
|      |                  |                                                                                                               |   |
|      |                  | Signatures                                                                                                         |   |
|      |                  |                                                                                                               |   |
|           |                       |                                                                                                                    |        |  |

 

**FULL HOUSE RESORTS, INC. ANDSUBSIDIARIES**

#### **UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS**

 

 
| **ASSETS**                                                                                                                                                                         |   | **SEPTEMBER 30,**

**2001** | ** **           | **DECEMBER 31,**

**2000** | ** **           |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|----------------------|----------------------------|----------------------|
|                                                                                                                                                                               |   |                        |                 |                       |                 |
| CURRENT  ASSETS:                                                                                                                                                                   |   |                        |                 |                       |                 |
| Cash  and cash equivalents                                                                                                                                                         |   | $                           | 279,083              |                       | $                    | 455,143 |   |
| Receivables                                                                                                                                                                        |   | 315,693                     |                 | -                          |                 |
| Prepaid  expenses                                                                                                                                                                  |   | 149,765                     |                 | 92,804                     |                 |
| Total  current assets                                                                                                                                                              |   | 744,541                     |                 | 547,947                    |                 |
|                                                                                                                                                                               |   |                        |                 |                       |                 |
| LAND  HELD FOR DEVELOPMENT                                                                                                                                                         |   | 2,472,000                   |                 | 4,621,670                  |                 |
| FIXTURES  AND EQUIPMENT, net                                                                                                                                                       |   | 29,020                      |                 | 47,202                     |                 |
| INVESTMENTS  IN JOINT VENTURES                                                                                                                                                     |   | 352,138                     |                 | 3,192,634                  |                 |
| GOODWILL,  net                                                                                                                                                                     |   | -                           |                 | 379,713                    |                 |
| NOTES  RECEIVABLE                                                                                                                                                                  |   | 957,291                     |                 | 1,667,269                  |                 |
| GAMING  CONTRACT RIGHTS, net                                                                                                                                                       |   | 5,453,594                   |                 | -                          |                 |
| DEFERRED  TAX ASSET                                                                                                                                                                |   | 1,491,925                   |                 | 294,900                    |                 |
|                                                                                                                                                                               |   |                        |                 |                       |                 |
| DEPOSITS  AND OTHER ASSETS                                                                                                                                                         |   | 14,782                      |                 | 2,701,344                  |                 |
| TOTAL                                                                                                                                                                              |   | $                           | 11,515,291           |                       | $                    | 13,452,679 |   |
|                                                                                                                                                                               |   |                        |                 |                       |                 |
| **LIABILITIES  AND STOCKHOLDERS' EQUITY**                                                                                                                                          |   |                        |                 |                       |                 |
| CURRENT  LIABILITIES:                                                                                                                                                              |   |                        |                 |                       |                 |
| Accounts  payable                                                                                                                                                                  |   | $                           | 16,265               |                       | $                    | 18,106 |   |
| Payable  to joint ventures                                                                                                                                                         |   | -                           |                 | 27,831                     |                 |
| Current  portion of long-term debt                                                                                                                                                 |   | 3,000,000                   |                 | -                          |                 |
| Accrued  expenses                                                                                                                                                                  |   | 141,849                     |                 | 182,024                    |                 |
| Total  current liabilities                                                                                                                                                         |   | 3,158,114                   |                 | 227,961                    |                 |
|                                                                                                                                                                               |   |                        |                 |                       |                 |
| LONG–TERM  DEBT, net of current portion                                                                                                                                       |   | 900,000                     |                 | 3,150,000                  |                 |
|                                                                                                                                                                               |   |                        |                 |                       |                 |
| COMMITMENTS  AND CONTINGENCIES                                                                                                                                                     |   |                        |                 |                       |                 |
| STOCKHOLDERS'  EQUITY:                                                                                                                                                             |   |                        |                 |                       |                 |
| Cumulative  preferred stock, par value $.0001, 5,000,000 shares authorized; 700,000  shares issued and outstanding; aggregate liquidation preference of $4,042,500  and $3,885,000 |   | 70                          |       | 70                         |       |
| Common  stock, par value $.0001, 25,000,000 shares authorized; 10,340,380 shares  issued and outstanding                                                                           |   | 1,034                       |            | 1,034                      |            |
| Additional  paid in capital                                                                                                                                                        |   | 17,429,889                  |                 | 17,429,889                 |                 |
| Accumulated  deficit                                                                                                                                                               |   | (9,973,816                  | )                    | (7,356,275                 | )                    |
| Total  stockholders' equity                                                                                                                                                        |   | 7,457,177                   |                 | 10,074,718                 |                 |
| TOTAL                                                                                                                                                                              |   | $                           | 11,515,291           |                       | $                    | 13,452,679 |   |

 

See notes tounaudited condensed consolidated financial statements.

 

**FULL HOUSE RESORTS, INC. ANDSUBSIDIARIES**

**UNAUDITED CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONS**

** **

 

 
|                                                                     |   | **THREE MONTHS ENDED**

**SEPTEMBER  30****,** |          |
|--------------------------------------------------------------------------|--------|------------------------------------------------|---------------|
|                                                                     |   | **2001**                                       |          | **2000** |   |
| OPERATING  REVENUES:                                                     |   |                                           |          |   |   |
| Joint  ventures                                                          |   | $                                              | 911,025       |   | $ | 1,132,115 |   |
| Management  fees                                                         |   | 628,071                                        |          | - |   |
| Total  operating revenues                                                |   | 1,539,096                                      |          | 1,132,115 |   |
|                                                                     |   |                                           |          |   |   |
| OPERATING  COSTS AND EXPENSES:                                           |   |                                           |          |   |   |
| Joint  venture pre-opening costs                                         |   | -                                              |          | 255,188 |   |
| Development  costs                                                       |   | 408,586                                        |          | - |   |
| General  and administrative                                              |   | 388,908                                        |          | 464,314 |   |
| Impairment                                                               |   | 4,593,800                                      |          | - |   |
| Depreciation  and amortization                                           |   | 187,971                                        |          | 132,634 |   |
| Total  operating costs and expenses                                      |   | 5,579,265                                      |          | 852,136 |   |
| INCOME  (LOSS) FROM OPERATIONS                                           |   | (4,040,169                                     | )             | 279,979 |   |
|                                                                     |   |                                           |          |   |   |
| Interest  expense                                                        |   | (75,216                                        | )             | (84,257 | ) |
| Interest  and other income                                               |   | 2,235                                          |          | 2,460 |   |
|                                                                     |   |                                           |          |   |   |
| INCOME  (LOSS) BEFORE INCOME TAXES                                       |   | (4,113,150                                     | )             | 198,182 |   |
|                                                                     |   |                                           |          |   |   |
| INCOME  TAX BENEFIT (PROVISION)                                          |   | 1,349,589                                      |          | (137,989 | ) |
|                                                                     |   |                                           |          |   |   |
| NET  INCOME (LOSS)                                                       |   | (2,763,561                                     | )             | 60,193 |   |
|                                                                     |   |                                           |          |   |   |
| Less,  undeclared dividends on cumulative preferred stock                |   | 52,500                                         |          | 52,500 |   |
|                                                                     |   |                                           |          |   |   |
| NET  INCOME (LOSS) APPLICABLE TO COMMON SHARES                           |   | $                                              | (2,816,061    | ) | $ | 7,639 |   |
|                                                                     |   |                                           |          |   |   |
| NET  INCOME (LOSS) PER COMMON SHARE, Basic and Diluted                   |   | $                                              | (0.27         | ) | $ | 0.00 |   |
|                                                                     |   |                                           |          |   |   |
| Weighted  average number of common shares Outstanding, Basic and Diluted |   | 10,340,380                                     |     | 10,340,380 |     |

 

 

 

 

See notes tounaudited condensed consolidated financial statements.

 

 

 

 

 

**FULL HOUSE RESORTS, INC. AND SUBSIDIARIES**

#### **UNAUDITEDCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS**

 

 
|                                                      |   | **NINE MONTHS ENDED**

**SEPTEMBER 30,** |       |
|-----------------------------------------------------------|--------|------------------------------------------|------------|
|                                                      |   | **2001**                                 |       | **2000** |   |
| OPERATING  REVENUES:                                      |   |                                     |       |   |   |
| Joint  ventures                                           |   | $                                        | 2,717,790  |   | $ | 2,899,428 |   |
| Management  fees                                          |   | 1,221,496                                |       | - |   |
| Total  operating revenues                                 |   | 3,939,286                                |       | 2,899,428 |   |
|                                                      |   |                                     |       |   |   |
| OPERATING  COSTS AND EXPENSES:                            |   |                                     |       |   |   |
| Joint  venture pre-opening costs                          |   | 122,441                                  |       | 512,781 |   |
| Development  costs                                        |   | 855,519                                  |       | - |   |
| General  and administrative                               |   | 1,267,827                                |       | 1,389,301 |   |
| Impairment                                                |   | 4,593,800                                |       | - |   |
| Depreciation  and amortization                            |   | 503,369                                  |       | 398,249 |   |
| Total  operating costs and expenses                       |   | 7,342,956                                |       | 2,300,331 |   |
| INCOME  (LOSS) FROM OPERATIONS                            |   | (3,403,670                               | )          | 599,097 |   |
|                                                      |   |                                     |       |   |   |
| Interest  expense                                         |   | (234,900                                 | )          | (249,563 | ) |
| Interest  and other income                                |   | 8,416                                    |       | 8,364 |   |
|                                                      |   |                                     |       |   |   |
| INCOME  (LOSS) BEFORE INCOMES TAXES                       |   | (3,630,154                               | )          | 357,898 |   |
|                                                      |   |                                     |       |   |   |
| INCOME  TAX BENEFIT (PROVISION)                           |   | 1,012,613                                |       | (333,011 | ) |
|                                                      |   |                                     |       |   |   |
| NET  INCOME (LOSS)                                        |   | (2,617,541                               | )          | 24,887 |   |
|                                                      |   |                                     |       |   |   |
| Less,  undeclared dividends on cumulative preferred stock |   | 157,500                                  |       | 157,500 |   |
|                                                      |   |                                     |       |   |   |
| NET  INCOME (LOSS) APPLICABLE TO COMMON SHARES            |   | $                                        | (2,775,041 | ) | $ | (132,613 | ) |
|                                                      |   |                                     |       |   |   |
| NET  INCOME (LOSS) PER COMMON SHARE, Basic and Diluted    |   | $                                        | (0.27      | ) | $ | (0.01 | ) |
|                                                      |   |                                     |       |   |   |
| Weighted  average number of common shares                 |   |                                     |       |   |   |
| Outstanding,  Basic and Diluted                           |   | 10,340,380                               |       | 10,340,380 |   |

 

 

 

 

 

See notes tounaudited condensed consolidated financial statements.

 

 

 

 

 

 

 

**FULL HOUSE RESORTS, INC. ANDSUBSIDIARIES**

#### **UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS**

 

 
|                                                                                      |   | **NINE MONTHS ENDED**

**SEPTEMBER 30,** |          |
|-------------------------------------------------------------------------------------------|--------|------------------------------------------|---------------|
|                                                                                      |   | **2001**                                 |          | **2000** |   |
| CASH  FLOWS FROM OPERATING ACTIVITIES:                                                    |   |                                     |          |   |   |
| Net  income (loss)                                                                        |   | $                                        | (2,617,541    | ) | $ | 24,887 |   |
| Adjustments  to reconcile net income (loss) to net cash provided by operating activities: |   |                                     |     |   |     |
| Depreciation  and amortization                                                            |   | 503,369                                  |          | 398,249 |   |
| Amortization  of deferred compensation expense                                            |   | -                                        |          | 41,580 |   |
| Impairment                                                                                |   | 4,593,800                                |          | - |   |
| Expired  purchase option                                                                  |   | 250,000                                  |          | - |   |
| Equity  in income of joint ventures                                                       |   | (2,595,349                               | )             | (2,386,647 | ) |
| Distributions  from joint ventures                                                        |   | 2,498,924                                |          | 2,296,079 |   |
| Changes  in operating assets and liabilities:                                             |   |                                     |          |   |   |
| Receivables                                                                               |   | (315,693                                 | )             | 34,057 |   |
| Prepaid  expenses                                                                         |   | (56,961                                  | )             | (78,454 | ) |
| Other  assets                                                                             |   | (7,567                                   | )             | (80,857 | ) |
| Deferred  taxes                                                                           |   | (1,197,025                               | )             | 206,801 |   |
| Accounts  payable and accrued expenses                                                    |   | (42,017                                  | )             | 39,514 |   |
|                                                                                      |   |                                     |          |   |   |
| Net  cash provided by operating activities                                                |   | 1,013,940                                |          | 495,209 |   |
|                                                                                      |   |                                     |          |   |   |
| CASH  FLOWS FROM INVESTING ACTIVITIES:                                                    |   |                                     |          |   |   |
| Purchases  of 50% joint venture interest                                                  |   | (1,800,000                               | )             | - |   |
| Advances  on note receivable                                                              |   | (140,000                                 | )             | - |   |
| Deposits  on purchase options                                                             |   | -                                        |          | (75,000 | ) |
| Receivables  from joint ventures                                                          |   | -                                        |          | (135,938 | ) |
|                                                                                      |   |                                     |          |   |   |
| Net  cash used in investing activities                                                    |   | (1,940,000                               | )             | (210,938 | ) |
|                                                                                      |   |                                     |          |   |   |
| CASH  FLOWS FROM FINANCING ACTIVITIES:                                                    |   |                                     |          |   |   |
| Proceeds  from line of credit                                                             |   | 1,800,000                                |          | - |   |
| Repayment  of line of credit                                                              |   | (1,050,000                               | )             | (400,000 | ) |
|                                                                                      |   |                                     |          |   |   |
| Net  cash provided by (used in) financing activities                                      |   | 750,000                                  |          | (400,000 | ) |
|                                                                                      |   |                                     |          |   |   |
| NET  DECREASE IN CASH AND CASH EQUIVALENTS                                                |   | (176,060                                 | )             | (115,729 | ) |
| CASH  AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                           |   | 455,143                                  |          | 438,800 |   |
|                                                                                      |   |                                     |          |   |   |
| CASH  AND CASH EQUIVALENTS, END OF PERIOD                                                 |   | $                                        | 279,083       |   | $ | 323,071 |   |

 

See notes tounaudited condensed consolidated financial statements.

 

 

**FULL HOUSE RESORTS, INC. ANDSUBSIDIARIES**

 

## **NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

 

 

**1.             SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES**

 

***Interim Condensed Consolidated Financial Statements -***The interim condensed consolidated financial statements of Full House Resorts,Inc. (the "Company") included herein reflect all adjustments whichare, in the opinion of management, necessary to present fairly the financialposition and results of operations for the interim periods presented.  All such adjustments are of a normalrecurring nature. Certain information and note disclosures normally included infinancial statements prepared in accordance with accounting principlesgenerally accepted in the United States of America have been omitted pursuantto the rules and regulations of the Securities and Exchange Commission.

 

These unauditedcondensed consolidated financial statements should be read in conjunction withthe consolidated financial statements and notes thereto included in theCompany's Annual Report on Form 10–KSB for the year ended December 31,2000.  The results of operations for theperiod ended September 30, 2001 are not necessarily indicative of the resultsto be expected for the year ending December 31, 2001.

 

***Consolidation –*** The unauditedcondensed consolidated financial statements include the accounts of the Companyand all its majority–owned subsidiaries. Prior to March 31, 2001, we had four joint ventures with GTECH that wereaccounted for using the equity method. On March 31, 2001 we purchased GTECH’s 50% interest in three of theseventures which are now wholly owned by the Company, and accordingly are nolonger accounted for using the equity method.  All material intercompany accounts and transactions have beeneliminated.

 

***Reclassifications* -**Certain prior yearamounts have been reclassified to conform with the current year presentation.

 

**2.             RECENT ACCOUNTING PRONOUNCEMENTS**

 

In July 2001, theFinancial Accounting Standards Board (“FASB”) issued SFAS No. 141, “BusinessCombinations” and SFAS No. 142, “Goodwill and Other Intangible Assets.”  SFAS 141 prohibits the pooling of interestsmethod of accounting for business combinations initiated after June 30,2001.  SFAS 142, which will be effectivefor the Company in January 2002, requires, among other things, thediscontinuance of goodwill amortization. In addition, the standard includes provisions for the reclassificationof certain existing intangibles as goodwill, reassessment of the useful livesof existing intangibles, and ongoing assessments of potential impairment ofexisting goodwill.

 

As of September 30, 2001our goodwill, net of accumulated amortization, had been reduced to zero. Thecarrying value of the Hard Rock licensing and development rights have also beenreduced to zero as a result of the impairment provision discussed in Note 3.  Other existing intangibles consist of netGaming Contract Rights of $5,453,594. The Company has not yet determined the impact, if any, that thisstatement will have on its consolidated financial position or results ofoperations.

 

In June 2001, the FASB issued SFAS No. 143 “Accounting for AssetRetirement Obligations” which addresses financial accounting and reporting forobligations associated with the retirement of tangible long-lived assets andthe associated asset retirement costs. This Statement applies to legal obligations associated with theretirement of long-lived assets that result from the acquisition, construction,development and / or normal operation, except for certain obligations oflessees.  This Statement is effectivefor fiscal years beginning after June 15, 2002.  The Company is assessing the impact of SFAS No. 143 on itsfinancial position and results of operations.

 

In August 2001, the FASB issued SFAS No. 144 “Accounting for theImpairment or Disposal of Long-Lived Assets” which addresses financialaccounting and reporting for the impairment or disposal of long-lived assetsand supersedes FASB Statement No. 121, “Accounting for the Impairment ofLong-Lived Assets and for Long-Lived Assets to Be Disposed Of.”   The provisions of this Statement areeffective for fiscal years beginning after December 15, 2001 and interimperiods within those fiscal years.  TheCompany is assessing the impact of SFAS No. 144 on its financial position andresults of operations.

 

**3.             IMPAIRMENT**

 

In September 2001, the Company, in accordance with SFAS No. 121,"Accounting for the Impairment of Long-Lived Assets and for Long-LivedAssets to Be Disposed Of," recorded an impairment charge of $4,593,800.

 

During the third quarter, our discussions with various potentialpartners for the development of the Hard Rock - Biloxi project concluded withno agreement.  Based upon thetiming requirements in our agreements with Hard Rock, and the currentconditions in the tourism industry we do not reasonably expect to be able todevelop this project as planned.  As aresult of these circumstances, we have reviewed the carrying values of ourMississippi investments which include a one acre parcel of land acquired for$4,621,670, the Hard Rock license acquired for $2,000,000, and developmentpermits and plans carried at $444,130.  We have recorded an Impairment provision of $4,593,800, to reduce thecarrying value to $2,472,000, which represents the net realizable value of ourland parcel.

 

In November 1998,we executed a series of agreements with Hard Rock Cafe International related tothe proposed development project in Biloxi, Mississippi.  Pursuant to a licensing agreement, we paid aterritory fee of $2,000,000 and have the right to develop and operate a Hard RockCasino in Biloxi. The Company and Allen E. Paulson formed a limited liabilitycompany, equally owned, for the purpose of developing this project.  Mr. Paulson agreed to contribute a gamingvessel (the former Treasure Bay barge in Tunica, MS.), and we agreed tocontribute our rights to the Hard Rock agreements.  In June 2001, we agreed to dissolve this company with each partyretaining their respective rights and assets. We then entered negotiations with interested parties to develop thisproject in various alternative forms.

 

Although we continueto pursue the development of a Hard Rock in Biloxi, in September 2001, ourdiscussions with potential partners concluded with no agreements.  Based upon the timing requirements in ouragreements with Hard Rock, and the current conditions in the tourism industrywe do not reasonably expect to be able to develop this project as planned.  As a result of these circumstances, we havereviewed the carrying values of our Mississippi investments and recorded anImpairment provision of $4,593,800.

 

 

 

 

 

 

**4.             JOINT VENTURE ACQUISITION**

 

                OnMarch 30, 2001 we acquired GTECH’s 50% interest in three joint venture projectsthat had been equally owned by the two companies: Gaming Entertainment, LLC,owner of an agreement continuing through August 2002, with the Coquille Tribe,which conducts gaming at The Mill Casino in Oregon; Gaming EntertainmentMichigan, LLC, owner of a Management Agreement with the Nottawaseppi Huron Bandof Potawatomi to develop and manage a gaming facility near Battle Creek; andGaming Entertainment California, LLC owner of a Management Agreement with theTorres-Martinez Band of Desert Cahuilla Indians to develop and manage a gamingfacility near Palm Springs.

 

                Thepurchase price was $1,800,000, and was funded through our existing creditfacility.  As part of this transaction,GTECH has extended the due date of our $3,000,000 promissory note from January25, 2001 until January 25, 2002, with interest at prime.  Also as part of this transaction, GTECH isno longer required to provide the necessary financing for the two developmentprojects (Michigan and California) that we acquired.  This transaction did not include our other joint venture withGTECH, Gaming Entertainment (Delaware), LLC, owner of a management agreementcontinuing through 2011, to manage Midway Slots & Simulcast in Harrington,Delaware.

 

                Inaddition to the gaming contract rights, we acquired the other 50% interest in anote receivable from the Michigan tribe in the amount of $396,146.  The excess purchase price over the fairvalue of assets acquired was allocated to the gaming contract rights acquiredbased on the discounted present value of expected future cash flows.  The excess purchase price of $1,403,854 wasallocated as follows:
|                |   | **Value** |      | **Amortization**
**Term** |      |
|---------------------|--------|-----------|-----------|---------------------------|-----------|
| Michigan contract   |   | $         | 1,141,682 |                      | 8.0 years |   |
| California contract |   | 182,776   |      | 8.0 years                 |      |
| Oregon contract     |   | 79,396    |      | 1.4 years                 |      |
|                |   | $         | 1,403,854 |                      |      |   |

 

As part of theMichigan and California management agreements with the tribes, we have advancedfunds for tribal operations and the construction of a tribal communitycenter.  The Notes Receivable isattributable to this funding, and the repayment obligation is dependent on thefuture profitable operation of the tribes’ gaming enterprise.  In August 2001, we received a notice fromthe Torres-Martinez Tribe in California purporting to sever ourrelationship.  We are in the process ofdiscussing an appropriate resolution of this matter that includes reimbursementfor costs that we incurred on the Tribe’s behalf.  Our Notes Receivable on the balance sheet includes a $25,000advance due from this Tribe and our Gaming Contract Rights includesapproximately $170,000 attributable to this contact.  We have incurred an aggregate of approximately $1 million,including interest, on behalf of this Tribe. We believe that the balance sheet amounts are recoverable based upon theexpressed intentions of the Tribe, as well as the contractual rights that wecontinue to hold.

 

**5.             GAMING CONTRACT RIGHTS**

 

                Asa result of the GTECH acquisition, the three joint ventures that had previouslybeen accounted for using the equity method are now wholly owned consolidatedentities.  A substantial portion of ourinvestment in these joint ventures was comprised of previously contributedMichigan gaming rights of $4,155,213 that we acquired in 1995.  Now that these are wholly-owned consolidatedentities, these previously contributed rights are reflected in Gaming ContractRights, along with the rights acquired in the GTECH acquisition of $1,403,854.

 
| Contributed Michigan gaming rights |   | $         | 4,155,213 |   |
|------------------------------------|--------|-----------|-----------|--------|
| Acquired gaming rights             |   | 1,403,854 |      |
| Less accumulated amortization      |   | (105,473  | )         |
| Gaming Contract Rights, net        |   | $         | 5,453,594 |   |

 

                TheInvestments in Joint Ventures on the balance sheet now reflects our ownershipinterest in only the Delaware LLC.

 

**6.         JOINT VENTURE INVESTMENTS**

 

                ThroughMarch 30, 2001 we had four joint ventures with GTECH.  The Delaware venture, which continues as a joint venture withGTECH, manages a slot operation at Harrington Raceway in Harrington.  As of March 31, 2001, the other threeprevious joint ventures became wholly owned by us, and accordingly are nolonger accounted for using the equity method. The Oregon venture developed the Mill Casino in North Bend for theCoquille Indian Tribe.   The Michiganventure, which has a management agreement with a Tribe in Battle Creek, and theCalifornia venture, which has an agreement with a Tribe in Thermal are bothstill in the development stage. Successful development and, ultimately, sustaining profitable operationsis dependent upon future events, including appropriate regulatory approvals andadequate market demand.  These twoventures have not generated any revenues, and the costs incurred to date relateto pre-opening expenses such as payroll, legal, and consulting.

 

 

 

                       SUMMARYINFORMATION FOR THE THREE MONTH PERIODS ENDED SEPTEMBER 30,
|                    |   |         |      |       |   |         |   |           |   |
|-------------------------|--------|--------------|-----------|------------|--------|--------------|--------|----------------|--------|
| **2001**                |   | **Delaware** |      | **Oregon** |   | **Michigan** |   | **California** |   |
|                    |   |         |      |       |   |         |   |           |   |
| Revenues                |   | $            | 4,855,060 |       | $      | -            |   | $              | -      |   | $ | - |   |
| Income  from operations |   | 1,822,049    |      | -          |   | -            |   | -              |   |
| Net  income             |   | 1,822,049    |      | -          |   | -            |   | -              |   |
|                         |        |              |           |            |        |              |        |                |        |  |  |  |  |

 

 

 

 
| **2000**                       |   | **Delaware** |      | **Oregon** |   | **Michigan** |   | **California** |   |
|--------------------------------|--------|--------------|-----------|------------|--------|--------------|--------|----------------|--------|
|                           |   |         |      |       |   |         |   |           |   |
| Revenues                       |   | $            | 4,376,355 |       | $      | 655,602      |   | $              | -      |   | $ | - |   |
| Income  (loss) from operations |   | 1,612,829    |      | 651,402    |   | (465,159     | )      | (45,218        | )      |
| Net  income (loss)             |   | 1,612,829    |      | 651,402    |   | (465,159     | )      | (45,218        | )      |
|                                |        |              |           |            |        |              |        |                |        |  |  |  |  |

 

 

 

                       SUMMARY INFORMATION FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30,

 
| **2001**                       |   | **Delaware** |       | **Oregon** |   | **Michigan** |   | **California** |   |
|--------------------------------|--------|--------------|------------|------------|--------|--------------|--------|----------------|--------|
|                           |   |         |       |       |   |         |   |           |   |
| Revenues                       |   | $            | 13,425,391 |       | $      | 570,137      |   | $              | -      |   | $ | - |   |
| Income  (loss) from operations |   | 4,870,846    |       | 564,734    |   | (197,522     | )      | (47,360        | )      |
| Net  income (loss)             |   | 4,870,846    |       | 564,734    |   | (197,522     | )      | (47,360        | )      |
|                                |        |              |            |            |        |              |        |                |        |  |  |  |  |

 

 

 

 
| **2000**                       |   | **Delaware** |       | **Oregon** |   | **Michigan** |   | **California** |   |
|--------------------------------|--------|--------------|------------|------------|--------|--------------|--------|----------------|--------|
|                           |   |         |       |       |   |         |   |           |   |
| Revenues                       |   | $            | 11,341,554 |       | $      | 1,799,978    |   | $              | -      |   | $ | - |   |
| Income  (loss) from operations |   | 4,009,667    |       | 1,789,189  |   | (963,307     | )      | (89,256        | )      |
| Net  income (loss)             |   | 4,009,667    |       | 1,789,189  |   | (963,307     | )      | (89,256        | )      |
|                                |        |              |            |            |        |              |        |                |        |  |  |  |  |

 

**7.        SEGMENT INFORMATION**

 

Since the GTECHacquisition transaction, we now view our business in three primary businesssegments.  The Operations segmentincludes the performance of the Delaware and Oregon projects.  The Development segment includes costsassociated with our activities in Michigan, California, and Mississippi.  The Corporate segment reflects themanagement and administrative expenses of the business.

 

 

                     SUMMARYINFORMATION FOR THE THREE MONTH PERIODS ENDED SEPTEMBER 30,

 
|                           |   |           |      |            |   |          |   |             |   |
|--------------------------------|--------|----------------|-----------|-----------------|--------|---------------|--------|------------------|--------|
| **2001**                       |   | **Operations** |      | **Development** |   | **Corporate** |   | **Consolidated** |   |
| Revenues                       |   | $              | 1,539,096 |            | $      | -             |   | $                | -      |   | $ | 1,539,096 |   |
| Development  / Impairment      |   | -              |      | 5,002,386       |   | -             |   | 5,002,386        |   |
| Income  (loss) from operations |   | 1,482,897      |      | (5,128,167      | )      | (394,899      | )      | (4,040,169       | )      |
| Net  income (loss)             |   | 916,565        |      | (3,418,861      | )      | (261,265      | )      | (2,763,561       | )      |
|                                |        |                |           |                 |        |               |        |                  |        |  |  |  |  |

 

 

 
|                             |   |           |      |            |   |          |   |             |   |
|----------------------------------|--------|----------------|-----------|-----------------|--------|---------------|--------|------------------|--------|
| **2000**                         |   | **Operations** |      | **Development** |   | **Corporate** |   | **Consolidated** |   |
| Revenues                         |   | $              | 1,132,115 |            | $      | -             |   | $                | -      |   | $ | 1,132,115 |   |
| Pre-opening  / Development costs |   | -              |      | 255,188         |   | -             |   | 255,188          |   |
| Income  (loss) from operations   |   | 1,089,926      |      | (339,566        | )      | (470,381      | )      | 279,979          |   |
| Net  income (loss)               |   | 593,135        |      | (224,114        | )      | (308,828      | )      | 60,193           |   |
|                                  |        |                |           |                 |        |               |        |                  |        |  |  |  |  |

 

 

 

 

                      SUMMARY INFORMATION FOR THE NINE MONTH PERIODS ENDED SEPTEMBER30,

 
|                           |   |           |      |            |   |          |   |             |   |
|--------------------------------|--------|----------------|-----------|-----------------|--------|---------------|--------|------------------|--------|
| **2001**                       |   | **Operations** |      | **Development** |   | **Corporate** |   | **Consolidated** |   |
| Revenues                       |   | $              | 3,939,286 |            | $      | -             |   | $                | -      |   | $ | 3,939,286 |   |
| Development  / Impairment      |   | -              |      | 5,571,760       |   | -             |   | 5,571,760        |   |
| Income  (loss) from operations |   | 3,784,699      |      | (5,961,946      | )      | (1,226,423    | )      | (3,403,670       | )      |
| Net  income (loss)             |   | 2,165,873      |      | (3,977,391      | )      | (806,024      | )      | (2,617,541       | )      |
|                                |        |                |           |                 |        |               |        |                  |        |  |  |  |  |

 

 

 
|                             |   |           |      |            |   |          |   |             |   |
|----------------------------------|--------|----------------|-----------|-----------------|--------|---------------|--------|------------------|--------|
| **2000**                         |   | **Operations** |      | **Development** |   | **Corporate** |   | **Consolidated** |   |
| Revenues                         |   | $              | 2,899,428 |            | $      | -             |   | $                | -      |   | $ | 2,899,428 |   |
| Pre-opening  / Development costs |   | -              |      | 512,781         |   | -             |   | 512,781          |   |
| Income  (loss) from operations   |   | 2,772,861      |      | (765,915        | )      | (1,407,849    | )      | 599,097          |   |
| Net  income (loss)               |   | 1,439,706      |      | (489,033        | )      | (925,786      | )      | 24,887           |   |
|                                  |        |                |           |                 |        |               |        |                  |        |  |  |  |  |

 

 

 

Primarily as aresult of the Impairment provision of $4,593,800 discussed in Note 3, partiallyoffset by the $1,800,000 GTECH acquisition discussed in Note 4, the approximateidentifiable assets for our Development segment have declined from previousperiods.

 
| **Identifiable  Assets:** |   | **Operations** |    | **Development** |   | **Corporate** |   | **Consolidated** |    |
|---------------------------|--------|----------------|---------|-----------------|--------|---------------|--------|------------------|---------|
| September  30, 2001       |   | $              | 668,000 |            | $      | 10,374,000    |   | $                | 473,000 |   | $ | 11,515,000 |   |
| December  31, 2000        |   | 232,000        |    | 12,369,000      |   | 852,000       |   | 13,453,000       |    |
|                           |        |                |         |                 |        |               |        |                  |         |  |  |  |  |

 

 

 

 

 

**Item2.     Management's Discussion andAnalysis of Financial Condition and Results of Operations.**

 

**Results of Operations for the Threeand Nine Months Ended September 30, 2001 Compared to Three and Nine MonthsEnded September 30, 2000**

 

                This report contains certain forward lookingstatements made pursuant to the Private Securities Litigation Reform Act of1995, such as statements relating to our development plans and expectations,and financing availability.  Thesestatements are subject to risks and uncertainties discussed in this report andin our other filings with the Securities and Exchange Commission, which couldcause actual results or timing to differ materially from that implied by suchstatements.

 

**                Revenues. **As a result of theacquisition of GTECH’s interest in three joint venture projects, ourclassification of revenues is not directly comparable to prior periods.  The revenues related to our Delawarecontract continue to be reported as joint venture revenue, but as of March 31,2001, the revenue related to the Oregon contract is now reported as managementfees.

 

**               **Totaloperating revenues increased $406,981, or 36% for the three month period and$1,039,858, also 36% for the nine month period as compared to the same periodsin 2000.  These increases are due toimproved performance in Delaware and the acquisition of the additional 50%interest in Oregon.

 

                Revenues for the latter part of September, and thefull month of October, have not been significantly impacted by the events ofSeptember 11, 2001 and the subsequent softening in certain segments of thegaming and tourism markets.

 

***Delaware Joint Venture.*** Our share of income from the Delaware jointventure was $911,025, an increase of $104,611 for the three month period, and$2,435,423, an increase of $430,590 for the nine month period.  On May 11, 2000 we opened an expansion ofthe Harrington facility, and these revenue increases are primarily attributableto the increased gaming capacity, coupled with continuing growth in the market.

 

***Oregon.***  Our management fees from the Oregon contract were $628,071 forthe three month period compared to joint venture revenue of $325,701, in theprior year.  Oregon related revenues forthe nine month period were $1,503,863 compared to $894,595 in the prior year.  These increases primarily reflect theincrease in our ownership percentage. Additionally, continued growth in the market contributed to revenueincreases at the facility that partially offset the fee percentage reductionfrom 12% of revenue to 11% in accordance with the management agreement.

 

**                Costand Expenses.**As a result of our acquisition of GTECH’sinterest in three joint venture projects, our classification of expenses is notdirectly comparable to prior periods. The expenses related to our California and Michigan projects, which hadbeen reported as joint venture pre-opening costs, as of March 31, 2001 are nowreported as development costs.

 

                **Pre-opening and Development**.  Total development related costs (Jointventure pre-opening costs and Development costs) for the California andMichigan projects were $408,586 compared to $255,188 for the three monthperiod, and $727,960 compared to $512,781 for the nine month period.  The majority of these costs were due toincreased activities related to the Michigan venture with the Huron PotawatomiTribe in Battle Creek.  These costs wereprimarily for legal and consulting fees to assist the Tribe in obtainingsuitable land and complying with the requirements of the Indian GamingRegulatory Act, as well as land option payments.

 

                During the three month periods there were no other developmentcosts.  For the nine month periods, weexpensed $250,000 in the first quarter of 2001 related to the expiration of aland purchase option in Biloxi Mississippi that we chose not to exercise orrenew.

 

**                Generaland Administrative Expenses*.***   General and administrative expensesdecreased by $75,406 and $121,474 for the respective three and nine monthperiods ended September 30, 2001.  Thesedecreases are primarily due to reduced payroll expenses and legal fees.

 

                **Impairment*.***    The Impairment provision of $4,593,800, recorded in the thirdquarter, results from an assessment of the carrying values of our Mississippiassets which totaled $7,065,800, and the reduction of this carrying value to$2,472,000 which represents the estimated net realizable value of the landparcel.  The impairment assessment isdiscussed more fully in Note 3 of the condensed consolidated financialstatements.

 

**Depreciation and Amortization.    **Amortization expenseincreased $55,337 for the three month period and $105,120 for the nine monthperiod.  These increases reflect theamortization of the Gaming Rights acquired in the GTECH acquisition transactionwhich is described in Notes 4 and 5 of the condensed consolidated financialstatements.  Goodwill has been fullyamortized as of September 30, 2001.

 

**Interest Expense*.***  Interest expense decreased by $9,041 for thethree month period and $14,663 for the nine month period.  These decreases are a result of changes inthe amounts outstanding under our bank line, coupled with a decrease ininterest rates.

 

**Interest and Other Income*.***  Interest and other income was comparable inboth the three and nine  month periodsand is primarily due to earnings on invested cash balances.

 

**Income Tax Benefit (Provision)*.***   The income tax benefit for the current yearperiods is a result of the expected tax benefit from the realization of theImpairment provision recorded in the third quarter.  The effective tax rate reflects a combination of state taxes on jointventure earnings combined with the tax effect of non-deductible amortizationexpenses.  For federal tax purposes wehave net operating loss carryforwards of approximately $1,335,000 which may becarried forward to offset future taxable income.  The loss carryforwards expire in 2010 through 2019.  The availability of the loss carryforwardsmay be limited in the event of a significant change in ownership of the Companyor that of our subsidiaries.

 

 

 

 

**Liquidity and Capital Resources**

 

At September 30,2001, we had cash and cash equivalents of $279,083.  For the nine months ended September 30, 2001, cash of $1,013,940was provided by operating activities, as compared to $495,209 in the prior yearperiod.  The increase is primarily dueto increased earnings before recognition of the Impairment provision.  Net cash used in investing activities was$1,940,000, representing $1,800,000 for the GTECH acquisition transaction, andloans of $140,000 to the Michigan Tribe. In the prior year period, $210,938 was used in investing activities, foroptions and deposits related to the Biloxi project as well as joint ventureactivities in Michigan.  Financingactivities consisted of draws and repayments on our credit line.   A draw of $1,800,000 was used to fund theGTECH acquisition transaction.  As aresult of these factors, there was a net decrease in cash and cash equivalentsof $176,060 during the nine months ended September 30, 2001.

 

On March 30, 2001, we acquired GTECH’s 50% interest inthree joint venture projects that had been equally owned by the two companies:Gaming Entertainment, LLC, owner of an agreement continuing through August2002, with the Coquille Tribe, which conducts gaming at The Mill Casino inOregon; Gaming Entertainment Michigan, LLC, owner of a Management Agreementwith the Nottawaseppi Huron Band of Potawatomi to develop and manage a gamingfacility near Battle Creek; and Gaming Entertainment California, LLC owner of aManagement Agreement with the Torres-Martinez Band of Desert Cahuilla Indiansto develop and manage a gaming facility near Palm Springs.

 

The purchase price was $1,800,000, and was fundedthrough our existing credit facility. As part of this transaction, GTECH has extended the due date of our$3,000,000 promissory note from January 25, 2001 until January 25, 2002, withinterest at prime.  Also as part of thistransaction, GTECH is no longer required to provide the necessary financing forthe two development projects (Michigan and California) that we acquired.  Since we do not have the financial resourcesto fund these projects alone, we are actively pursuing alternative means offinancing these developments.

 

                This transaction did notinclude our other joint venture with GTECH, Gaming Entertainment (Delaware),LLC, owner of a management agreement continuing through 2011, to manage MidwaySlots & Simulcast in Harrington, Delaware. As a result of this continuing agreement with GTECH, our receipt ofrevenues from the operations of our Delaware joint venture project is governedby the terms of the related agreement. It provides that net cash flow (after certain deductions) is to bedistributed monthly to Full House and GTECH. While we do not believe that this arrangement will adversely impact ourliquidity, our continuing cash flow is dependent on the operating performanceof this joint venture, and the ability to receive monthly distributions.

 

                Our long-term debt represents the $3,000,000 balanceon the GTECH promissory note (classified as current portion of long-term debt)and $900,000 due under the bank line of credit, described below, which was usedto fund the GTECH acquisition.  Weexpect to repay these amounts with a combination of cash from operations andleveraging our ownership of the gaming contracts acquired.

 

                We have a $2 million line of credit with CoastCommunity bank in Mississippi. The line bears interest at prime plus 1⁄2%, withinterest payable monthly.  Anyoutstanding principal is due at maturity in February 2002.  At September 30, 2001, there was $900,000outstanding at a rate of 6%.

 

                As part of the Michigan and California managementagreements with the tribes, we have advanced funds for tribal operations andthe construction of a tribal community center. The Notes Receivable is attributable to this funding, and the repaymentobligation is dependent on the future profitable operation of the tribes’gaming enterprise.  In August 2001, wereceived a notice from the Torres-Martinez Tribe in California purporting tosever our relationship.  We are in theprocess of discussing an appropriate resolution of this matter that includesreimbursement for costs that we incurred on the Tribe’s behalf.  Our Notes Receivable on the balance sheetincludes a $25,000 advance due from this Tribe and our Gaming Contract Rightsincludes approximately $170,000 attributable to this contact.  We have incurred an aggregate ofapproximately $1 million, including interest, on behalf of this Tribe.  We believe that the balance sheet amountsare recoverable based upon the expressed intentions of the Tribe, as well asthe contractual rights that we continue to hold.

 

In November 1998,we executed a series of agreements with Hard Rock Cafe International related tothe proposed development project in Biloxi, Mississippi.  Pursuant to a licensing agreement, theCompany has the right to develop and operate a Hard Rock Casino in Biloxi.  We have paid a territory fee of$2,000,000.  In September 1998, theCompany and Allen E. Paulson formed a limited liability company, equally owned,for the purpose of developing this project. Mr. Paulson agreed to contribute a gaming vessel (the former TreasureBay barge in Tunica, MS.), and we agreed to contribute our rights to the HardRock agreements.  In June 2001, weagreed to dissolve this company with each party retaining their respectiverights and assets.

 

Although wecontinue to pursue the development of a Hard Rock in Biloxi, in September 2001,our discussions with potential partners concluded with no agreements.  Based upon the timing requirements in ouragreements with Hard Rock, and the current conditions in the tourism industrywe do not reasonably expect to be able to develop this project as planned.  As a result of these circumstances, we havereviewed the carrying values of our Mississippi investments and recorded anImpairment provision of $4,593,800.

 

As of September30, 2001, Full House had cumulative undeclared and unpaid dividends in theamount of $1,942,500 on the 700,000 outstanding shares of its 1992–1Preferred Stock. Such dividends are cumulative whether or not declared, and arecurrently in arrears.

 

                **QuantitativeDisclosure About Market Risk. **Marketrisk is the risk of loss from changes in market rates or prices, such asinterest rates and commodity prices.  Weare exposed to market risk in the form of changes in interest rates and thepotential impact such changes may have on our variable rate debt.  We have not invested in derivative basedfinancial instruments.

 

                **Recent Accounting Pronouncements**.  In July 2001, the Financial AccountingStandards Board issued SFAS No. 141, “Business Combinations” and SFAS No. 142,“Goodwill and Other Intangible Assets.” SFAS 141 prohibits the pooling of interests method of accounting forbusiness combinations initiated after June 30, 2001.  SFAS 142, which will be effective for the Company in January2002, requires, among other things, the discontinuance of goodwillamortization.  In addition, the standardincludes provisions for the reclassification of certain existing intangibles asgoodwill, reassessment of the useful lives of existing intangibles, and ongoingassessments of potential impairment of existing goodwill.

 

                As of September 30, 2001 ourgoodwill, net of accumulated amortization, had been reduced to zero. Thecarrying value of the Hard Rock licensing and development rights have also beenreduced to zero as a result of the impairment provision discussed in Note3.  Other existing intangibles consistof net Gaming Contract Rights of $5,453,594. The Company has not yet determined the impact, if any, that thisstatement will have on its consolidated financial position or results ofoperations.

 

                In June 2001, theFASB issued SFAS No. 143 “Accounting for Asset Retirement Obligations” whichaddresses financial accounting and reporting for obligations associated withthe retirement of tangible long-lived assets and the associated assetretirement costs.  This Statementapplies to legal obligations associated with the retirement of long-livedassets that result from the acquisition, construction, development and / ornormal operation, except for certain obligations of lessees.  This Statement is effective for fiscal yearsbeginning after June 15, 2002.  TheCompany is assessing the impact of SFAS No. 143 on its financial position andresults of operations.

 

                In August 2001, the FASB issuedSFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets”which addresses financial accounting and reporting for the impairment ordisposal of long-lived assets and supersedes FASB Statement No. 121,“Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assetsto Be Disposed Of.”   The provisions ofthis Statement are effective for fiscal years beginning after December 15, 2001and interim periods within those fiscal years. The Company is assessing the impact of SFAS No. 144 on its financialposition and results of operations.

 

 

### **PART II**– OTHERINFORMATION

 

**Item 1.  Legal Proceedings**

 

In the FullHouse Resorts, Inc. v. Lone Star Casino Corporation v. Allen E. Paulsonlitigation, more fully described in the Company’s 10-KSB for December 31, 2001,the appeal by Lone Star of the trial court’s dismissal for failure to prosecutewas granted by the Mississippi Court of Appeals.  This matter has been remanded back to the trial court for furtherproceedings.

.

**Item 3.  Defaults upon Senior Securities**

 

As of September30, 2001, cumulative dividends were $1,942,500, which were undeclared, unpaidand were in arrears, with respect to our Series 1992–1 Preferred Stock,which class ranks prior to our Common Stock with regard to dividend and liquidationrights.

 

# **Item 6.  Exhibits and Reports on Form 8-K**

 

(a)           Exhibits  - None

(b)           Reportson Form 8–K - None

 

 

 

**SIGNATURES**

 

Pursuant to therequirements of the Securities Exchange Act of 1934, as amended, the Companyhas duly caused this report to be signed on its behalf by the undersigned,thereunto duly authorized.

 

 
|                          | **FULL HOUSE RESORTS, INC.**                           |
|-------------------------------|--------------------------------------------------------|
|                          |                                                   |
| Date:  November 14, 2001 |                                                   |
|                          |                                                   |
|                          | By                                                     |  /s/ MICHAEL P. SHAUNNESSY |
|                          |  Michael P. Shaunnessy, Executive V.P. -  Finance |
|                          | (Principal  Accounting and Financial Officer)          |