##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2009
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For
the transition period from  to
 Commission File No. 1-32583
 FULL HOUSE RESORTS, INC.
 (Exact name of registrant as specified in its charter)
 Delaware(State or other jurisdiction 
of incorporation or organization)
    
    13-3391527(I.R.S. Employer
Identification No.)4670 S. Fort Apache, Ste. 190
Las Vegas, Nevada(Address of principal executive offices)
    
    89147(Zip Code)
 (702) 221-7800  (Registrants telephone number, including area code)
 þ o
 o o
  Large Accelerated Filer o
    
    Accelerated Filer
o
    
    Non Accelerated Filer o
    
    Smaller Reporting Company
þ(Do not check if a smaller reporting company)
 Yes o No þ




---



##### 



FULL HOUSE RESORTS, INC.
INDEX
 PagePART I. Financial InformationItem 1. Consolidated Financial StatementsConsolidated Balance Sheets as of June 30, 2009 (Unaudited), and December 31, 2008
    
    
    3Unaudited Consolidated Statements of Operations for the three and six months ended June 30, 2009 and 2008
    
    
    4Unaudited Consolidated Statements of Stockholders Equity for the six months ended June 30, 2009 and 2008
    
    
    5Unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 2009 and 2008
    
    
    6Notes to Consolidated Financial Statements (Unaudited)
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    16Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    28Item 4(T). Controls and Procedures
    
    
    28PART II. Other InformationItem 1. Legal Proceedings
    
    
    28Item 4. Submission of Matters to a Vote of Security Holders
    
    
    29Item 6. Exhibits
    
    
    30Signatures
    
    
    31Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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##### Table of Contents



FULL HOUSE RESORTS, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 June 30,
    
    
    December 31,2009
    
    
    2008(Unaudited)ASSETSCurrent assetsCash and equivalents
    
    $
    4,538,364
    
    
    $
    5,304,755Notes receivables related to tribal casino project
    
    
    4,480,546
    
    
    
    Accounts receivable, net of allowance for doubtful accounts of $2,146 and $20,000
    
    
    63,383
    
    
    
    597,848Prepaid expenses
    
    
    674,147
    
    
    
    504,021Deferred tax asset
    
    
    170,219
    
    
    
    293,598Deposits and other
    
    
    106,159
    
    
    
    143,20910,032,818
    
    
    
    6,843,431Property and equipment, net of accumulated depreciation of $5,465,981 and $4,985,766
    
    
    8,319,892
    
    
    
    8,630,024Long-term assets related to tribal casino projectsNotes receivable
    
    
    927,336
    
    
    
    5,114,767Contract rights, net of accumulated amortization of $755,889 and $729,228
    
    
    16,768,891
    
    
    
    16,795,55217,696,227
    
    
    
    21,910,319Other long-term assetsGoodwill
    
    
    10,308,520
    
    
    
    10,308,520Deposits and other
    
    
    916,680
    
    
    
    775,82911,225,200
    
    
    
    11,084,349$
    47,274,137
    
    
    $
    48,468,123LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesCurrent portion of long-term debt
    
    $
    
    
    
    $
    225,224Accounts payable
    
    
    196,396
    
    
    
    239,059Accrued expenses
    
    
    1,094,812
    
    
    
    1,021,8171,291,208
    
    
    
    1,486,100Long-term debt due to joint venture affiliate, including accrued interest of $220,062 and $153,610 net of current portion
    
    
    3,509,051
    
    
    
    3,137,600Long-term debt, net of current portion
    
    
    925,264
    
    
    
    3,066,639Deferred tax liability
    
    
    1,692,394
    
    
    
    1,594,4247,417,917
    
    
    
    9,284,763Stockholders equityCommon stock, $.0001 par value, 25,000,000 shares authorized; 19,358,276 and
19,350,276 shares issued
    
    
    1,936
    
    
    
    1,935Additional paid-in capital
    
    
    42,598,644
    
    
    
    42,356,098Treasury stock, 1,356,595 and 1,210,414 shares at cost
    
    
    (1,654,075
    )
    
    
    (1,502,182
    )Deficit
    
    
    (5,569,393
    )
    
    
    (6,272,559
    )35,377,112
    
    
    
    34,583,292Non-controlling interest in consolidated joint venture
    
    
    4,479,108
    
    
    
    4,600,06839,856,220
    
    
    
    39,183,360$
    47,274,137
    
    
    $
    48,468,123
   3




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##### Table of Contents



FULL HOUSE RESORTS, INC. AND SUBSIDIARIES
 
 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
 Three months
    
    
    Six monthsended June 30,
    
    
    ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008RevenuesCasino
    
    $
    1,886,289
    
    
    $
    1,804,463
    
    
    $
    3,755,231
    
    
    $
    3,769,512Food and beverage
    
    
    458,890
    
    
    
    551,828
    
    
    
    889,624
    
    
    
    1,135,813Other operating income
    
    
    19,624
    
    
    
    30,679
    
    
    
    39,885
    
    
    
    51,2682,364,803
    
    
    
    2,386,970
    
    
    
    4,684,740
    
    
    
    4,956,593Operating costs and expensesCasino
    
    
    559,485
    
    
    
    677,550
    
    
    
    1,139,394
    
    
    
    1,277,336Food and beverage
    
    
    484,012
    
    
    
    555,045
    
    
    
    964,672
    
    
    
    1,155,318Project development costs
    
    
    15,319
    
    
    
    35,840
    
    
    
    31,014
    
    
    
    70,632Selling, general and administrative
    
    
    1,519,075
    
    
    
    1,737,469
    
    
    
    3,048,969
    
    
    
    3,332,090Depreciation and amortization
    
    
    280,981
    
    
    
    324,693
    
    
    
    571,533
    
    
    
    595,2342,858,872
    
    
    
    3,330,597
    
    
    
    5,755,582
    
    
    
    6,430,610Operating gains (losses)Equity in net income of
unconsolidated joint
venture, and related
guaranteed payments
    
    
    839,700
    
    
    
    1,032,046
    
    
    
    2,091,876
    
    
    
    2,194,783Unrealized
gains (losses)
on notes receivable,
tribal governments
    
    
    40,220
    
    
    
    (61,840
    )
    
    
    293,969
    
    
    
    1,836,684Impairment loss
    
    
    (30,000
    )
    
    
    (85,000
    )
    
    
    (30,000
    )
    
    
    (85,000
    )849,920
    
    
    
    885,206
    
    
    
    2,355,845
    
    
    
    3,946,467Operating income (loss)
    
    
    355,851
    
    
    
    (58,421
    )
    
    
    1,285,003
    
    
    
    2,472,450Other income (expense)Interest and other income
    
    
    12,936
    
    
    
    36,929
    
    
    
    35,590
    
    
    
    95,677Interest expense
    
    
    (58,353
    )
    
    
    (118,491
    )
    
    
    (147,162
    )
    
    
    (298,385
    )Income (loss) from continuing operations before income
taxes
    
    
    310,434
    
    
    
    (139,983
    )
    
    
    1,173,431
    
    
    
    2,269,742Income taxes
    
    
    (205,253
    )
    
    
    (15,108
    )
    
    
    (591,225
    )
    
    
    (660,404
    )Income (loss) from continuing operations net of income
taxes
    
    
    105,181
    
    
    
    (155,091
    )
    
    
    582,206
    
    
    
    1,609,338Income from discontinued operations, net of income taxes
of $23,377 in 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38,141Net income (loss)
    
    
    105,181
    
    
    
    (155,091
    )
    
    
    582,206
    
    
    
    1,647,479Plus loss (less net income) attributable to
noncontrolling interest in consolidated joint venture
    
    
    61,780
    
    
    
    188,434
    
    
    
    120,960
    
    
    
    (575,246
    )Net income attributable to the Company
    
    $
    166,961
    
    
    $
    33,343
    
    
    $
    703,166
    
    
    $
    1,072,233Income from continuing operations attributable to the
Company per common shareBasic and diluted
    
    $
    0.01
    
    
    $
    0.00
    
    
    $
    0.04
    
    
    $
    0.06Income from discontinued operations attributable to the
Company per common shareBasic and diluted
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    0.00Net income attributable to the Company per common shareBasic and diluted
    
    $
    0.01
    
    
    $
    0.00
    
    
    $
    0.04
    
    
    $
    0.06Weighted-average number of common shares outstandingBasic and diluted
    
    
    17,996,525
    
    
    
    19,342,276
    
    
    
    18,049,495
    
    
    
    19,342,276Amounts attributable to the Company common shareholders:Income from continuing operations, net of tax
    
    $
    166,961
    
    
    $
    33,343
    
    
    $
    703,166
    
    
    $
    1,034,092Income from discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38,141Net income attributable to the Company
    
    $
    166,961
    
    
    $
    33,343
    
    
    $
    703,166
    
    
    $
    1,072,233
   4




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FULL HOUSE RESORTS, INC. AND SUBSIDIARIES
 
 UNAUDITED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 Additional
    
    
    
    
    
    
    
    
    
    
    TotalSix months ended
    
    Common stock
    
    
    Treasury stock
    
    
    paid-in
    
    
    
    
    
    
    Noncontrolling
    
    
    stockholdersJune 30, 2009
    
    Shares
    
    
    Dollars
    
    
    Shares
    
    
    Dollars
    
    
    capital
    
    
    Deficit
    
    
    Interest
    
    
    equityBeginning balance
    
    
    19,350,276
    
    
    $
    1,935
    
    
    
    1,210,414
    
    
    $
    (1,502,182
    )
    
    $
    42,356,098
    
    
    $
    (6,272,559
    )
    
    $
    4,600,068
    
    
    $
    39,183,360Previously deferred
share-based compensation
recognized
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    222,147
    
    
    
    
    
    
    
    
    
    
    
    222,147Issuance of common stock
    
    
    8,000
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    20,399
    
    
    
    
    
    
    
    
    
    
    
    20,400Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    146,181
    
    
    
    (151,893
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (151,893
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    703,166
    
    
    
    (120,960
    )
    
    
    582,206Ending balance
    
    
    19,358,276
    
    
    $
    1,936
    
    
    
    1,356,595
    
    
    $
    (1,654,075
    )
    
    $
    42,598,644
    
    
    $
    (5,569,393
    )
    
    $
    4,479,108
    
    
    $
    39,856,220
 Additional
    
    
    
    
    
    
    
    
    
    
    TotalSix months ended
    
    Common stock
    
    
    Treasury stock
    
    
    paid-in
    
    
    
    
    
    
    Noncontrolling
    
    
    stockholdersJune 30, 2008
    
    Shares
    
    
    Dollars
    
    
    Shares
    
    
    Dollars
    
    
    capital
    
    
    Deficit
    
    
    Interest
    
    
    equityBeginning balance
    
    
    19,342,276
    
    
    $
    1,934
    
    
    
    
    
    
    
    
    
    
    $
    41,557,043
    
    
    $
    (7,890,849
    )
    
    $
    4,232,775
    
    
    $
    37,900,903Previously deferred
share-based compensation
recognized
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    420,635
    
    
    
    
    
    
    
    
    
    
    
    420,635Issuance of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,072,233
    
    
    
    575,246
    
    
    
    1,647,479Ending balance
    
    
    19,342,276
    

  $
    1,934
    
    
    
    
    
    
    
    
    
    
    $
    41,977,678
    
    
    $
    (6,818,616
    )
    
    $
    4,808,021
    
    
    $
    39,969,017
   5




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##### Table of Contents



FULL HOUSE RESORTS, INC. AND SUBSIDIARIES
 
 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Six monthsended
June 30,2009
    
    
    2008Net cash provided by operating activities
    
    $
    1,687,055
    
    
    $
    631,558Cash flows from investing activities:Acquisition of contract rights and other assets
    
    
    
    
    
    
    (2,085,082
    )Purchase of property and equipment
    
    
    (236,958
    )
    
    
    (314,746
    )Advances to tribal governments
    
    
    
    
    
    
    (71,336
    )Proceeds from sale of assets
    
    
    400
    
    
    
    6,961,020Proceeds from repayment of tribal advances
    
    
    
    
    
    
    9,253,467Other
    
    
    854
    
    
    
    8,856Net cash (used in) provided by investing activities
    
    
    (235,704
    )
    
    
    13,752,179Cash flows from financing activities:Payments on long-term debt
    
    
    (2,366,599
    )
    
    
    (17,589,021
    )Proceeds from borrowings from joint venture affiliate
    
    
    305,000
    
    
    
    1,260,112Purchase of treasury stock
    
    
    (151,893
    )
    
    
    Loan fees
    
    
    (4,250
    )
    
    
    Net cash used in financing activities
    
    
    (2,217,742
    )
    
    
    (16,328,909
    )Net decrease in cash and equivalents
    
    
    (766,391
    )
    
    
    (1,945,172
    )Cash and equivalents, beginning of period
    
    
    5,304,755
    
    
    
    7,975,860Cash and equivalents, end of period
    
    $
    4,538,364
    
    
    $
    6,030,688
   6




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##### Table of Contents



FULL HOUSE RESORTS, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 1.
    
    BASIS OF PRESENTATION
   Consolidation of Variable
Interest Entities
 Noncontrolling Interests in Consolidated Financial Statements  an Amendment of ARB
No. 51
  7




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##### Table of Contents



2.
    
    SHARE-BASED COMPENSATION
  3.
    
    INVESTMENT IN UNCONSOLIDATED JOINT VENTURE
     Three months
    
    
    Six monthsended June 30,
    
    
    ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Unaudited summary
information for GEDs
operations:Management fee revenues
    
    $
    2,037,554
    
    
    $
    1,897,000
    
    
    $
    4,021,758
    
    
    $
    4,181,483Net income
    
    
    1,895,298
    
    
    
    1,793,741
    
    
    
    3,744,570
    
    
    
    3,974,272Net income
attributable to Full
House Resorts:
    
    $
    947,649
    
    
    $
    896,871
    
    
    $
    1,872,285
    
    
    $
    1,987,136
 4.
    
    FAIR VALUE MEASUREMENTS
 , Fair Value Measurements Determining the Fair
Value of a Financial Asset when the market for that asset is not active
  8




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##### Table of Contents



Determining Fair Value When the
Volume and Level of Activity for the Assets or Liability Have Significantly Decreased and
Identifying Transactions That are Not Orderly
     
    
    S&P 500, average benchmark investment returns (medium-term horizon risk
premiums);
 
    
    Risk free investment return equal to the trailing 10-year average for 90-day
treasury bills;
 
    
    Investment beta factor equal to the average of a peer group of similar entities
in the hotel and gaming industry;
 
    
    Project-specific adjustments based on the status of the project (i.e.,
litigation, regulatory approvals, tribal politics, etc.), and typical size premiums
for micro-cap and low-cap companies.
 5.
    
    NOTES RECEIVABLE, TRIBAL GOVERNMENTS
   9




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##### Table of Contents



June 30,
    
    
    December 31,2009
    
    
    2008Contractual (stated) amount (including interest)FireKeepers Development Authority
    
    $
    5,000,000
    
    
    $
    5,000,000Other
    
    
    1,280,475
    
    
    
    1,281,329$
    6,280,475
    
    
    $
    6,281,329Estimated fair value of notes receivable
related to tribal casino projects:FireKeepers Development Authority
    
    $
    4,480,546
    
    
    $
    4,097,002Other
    
    
    927,336
    
    
    
    1,017,765$
    5,407,882
    
    
    $
    5,114,767
      10




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##### Table of Contents



FireKeepersDevelopmentTotal
    
    
    Authority
    
    
    Other tribesBalances, January 1, 2009
    
    $
    5,114,767
    
    
    $
    4,097,002
    
    
    $
    1,017,765Other
    
    
    (854
    )
    
    
    
    
    
    
    (854
    )Unrealized gains included in earnings
    
    
    293,969
    
    
    
    383,544
    
    
    
    (89,575
    )Balances, June 30, 2009
    
    $
    5,407,882
    
    
    $
    4,480,546
    
    
    $
    927,336
 6.
    
    CONTRACT RIGHTS
  AccumulatedJune 30, 2009
    
    Cost
    
    
    Amortization
    
    
    Carrying valueFireKeepers project, initial cost
    
    $
    4,155,213
    
    
    $
    
    
    
    $
    4,155,213FireKeepers project, additional
    
    
    13,210,373
    
    
    
    (755,889
    )
    
    
    12,454,484Other projects
    
    
    159,194
    
    
    
    
    
    
    
    159,194$
    17,524,780
    
    
    $
    (755,889
    )
    
    $
    16,768,891
 AccumulatedDecember 31, 2008
    
    Cost
    
    
    Amortization
    
    
    Carrying ValueFireKeepers project, initial cost
    
    $
    4,155,213
    
    
    $
    
    
    
    $
    4,155,213FireKeepers project, additional
    
    
    13,210,373
    
    
    
    (729,228
    )
    
    
    12,481,145Other projects
    
    
    159,194
    
    
    
    
    
    
    
    159,194$
    17,524,780
    
    
    $
    (729,228
    )
    
    $
    16,795,552
 7.
    
    LONG-TERM DEBT
  June 30,
    
    
    December 31,2009
    
    
    2008Long-term debt, due to joint venture affiliate:Promissory note, expected to mature in 2011,
interest at 1% above the prime rate (4.25% at June
30, 2009 and December 31, 2008)
    
    $
    3,509,051
    
    
    $
    3,137,600Long-term debt, other:Reducing revolving loan, initial $16.0 million
limit on January 31, 2007, due January 31, 2022,
interest at 2.1% above the five year LIBOR/Swap
rate, adjusted annually (7.24% at June 30, 2009 and
7.39% at December 31, 2008)
    
    $
    925,264
    
    
    $
    2,469,275Promissory note to Peters Family Trust, $1.25
million on January 31, 2007, paid in full as of
June 30, 2009, interest at a fixed annual rate of
7.44%
    
    
    
    
    
    
    822,588925,264
    
    
    
    3,291,863Less current portion
    
    
    
    
    
    
    (225,224
    )$
    925,264
    
    
    $
    3,066,639
  11




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##### Table of Contents



Reducing Revolving Loan (the Revolver).
  Green Acres.
 Peters Family Trust Promissory Note.
  Annual periods ending      June 30,2010
    
    $
    2011
    
    
    3,509,0512012
    
    
    2013
    
    
    2014
    
    
    Thereafter
    
    
    925,264$
    4,434,315
  8.
    
    SEGMENT REPORTING
   12




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##### Table of Contents



Casino
    
    
    Development/Operations
    
    
    Management
    
    
    Corporate
    
    
    Consolidated2009Revenues
    
    $
    2,364,803
    
    
    $
    
    
    
    $
    
    
    
    $
    2,364,803Selling, general and administrative expense
    
    
    401,892
    
    
    
    132,552
    
    
    
    984,631
    
    
    
    1,519,075Depreciation and amortization
    
    
    246,778
    
    
    
    13,500
    
    
    
    20,703
    
    
    
    280,981Operating gains
    
    
    
    
    
    
    849,920
    
    
    
    
    
    
    
    849,920Operating income (loss)
    
    
    672,637
    
    
    
    690,507
    
    
    
    (1,007,293
    )
    
    
    355,851Net income (loss) attributable to Company
    
    
    673,462
    
    
    
    654,345
    
    
    
    (1,160,846
    )
    
    
    166,9612008Revenues
    
    $
    2,386,935
    
    
    $
    
    
    
    $
    35
    
    
    $
    2,386,970Selling, general and administrative expense
    
    
    517,503
    
    
    
    159,287
    
    
    
    1,060,679
    
    
    
    1,737,469Depreciation and amortization
    
    
    295,406
    
    
    
    9,576
    
    
    
    19,711
    
    
    
    324,693Operating gains
    
    
    
    
    
    
    885,206
    
    
    
    
    
    
    
    885,206Operating income (loss)
    
    
    341,431
    
    
    
    681,030
    
    
    
    (1,080,882
    )
    
    
    (58,421
    )Net income (loss) attributable to Company
    
    
    342,648
    
    
    
    796,891
    
    
    
    (1,106,196
    )
    
    
    33,343
  Casino
    
    
    Development/Operations
    
    
    Management
    
    
    Corporate
    
    
    Consolidated2009Revenues
    
    $
    4,684,740
    
    
    $
    
    
    
    $
    
    
    
    $
    4,684,740Selling, general and administrative expense
    
    
    848,558
    
    
    
    256,473
    
    
    
    1,943,938
    
    
    
    3,048,969Depreciation and amortization
    
    
    503,662
    
    
    
    26,950
    
    
    
    40,921
    
    
    
    571,533Operating gains
    
    
    
    
    
    
    2,355,845
    
    
    
    
    
    
    
    2,355,845Operating income (loss)
    
    
    1,228,452
    
    
    
    2,044,068
    
    
    
    (1,987,517
    )
    
    
    1,285,003Net income (loss) attributable to Company
    
    
    1,227,892
    
    
    
    1,926,120
    
    
    
    (2,450,846
    )
    
    
    703,1662008Revenues
    
    $
    4,956,535
    
    
    $
    
    
    
    $
    58
    
    
    $
    4,956,593Selling, general and administrative expense
    
    
    905,516
    
    
    
    181,781
    
    
    
    2,244,793
    
    
    
    3,332,090Depreciation and amortization
    
    
    539,282
    
    
    
    28,728
    
    
    
    27,224
    
    
    
    595,234Operating gains
    
    
    
    
    
    
    3,946,467
    
    
    
    
    
    
    
    3,946,467Operating income (loss)
    
    
    1,079,082
    
    
    
    3,666,645
    
    
    
    (2,273,277
    )
    
    
    2,472,450Net income (loss) attributable to Company
    
    
    1,084,136
    
    
    
    2,904,940
    
    
    
    (2,954,984
    )
    
    
    1,034,092
  13




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##### Table of Contents



Casino
    
    
    Development/Operations
    
    
    Management
    
    
    Corporate
    
    
    Consolidated2009Assets
    
    $
    20,058,534
    
    
    $
    22,628,158
    
    
    $
    4,587,445
    
    
    $
    47,274,137Property and equipment, net
    
    
    8,152,215
    
    
    
    1,106
    
    
    
    166,571
    
    
    
    8,319,892Goodwill
    
    
    10,308,520
    
    
    
    
    
    
    
    
    
    
    
    10,308,520Liabilities
    
    
    499,331
    
    
    
    3,725,868
    
    
    
    3,192,718
    
    
    
    7,417,9172008Assets
    
    $
    20,843,467
    
    
    $
    22,057,472
    
    
    $
    6,074,874
    
    
    $
    48,975,813Property and equipment, net
    
    
    8,748,209
    
    
    
    1,731
    
    
    
    225,413
    
    
    
    8,975,353Goodwill
    
    
    10,308,520
    
    
    
    
    
    
    
    
    
    
    
    10,308,520Liabilities
    
    
    682,404
    
    
    
    2,643,434
    
    
    
    5,680,958
    
    
    
    9,006,796
 9.
    
    CONTINGENCIES
 Economic conditions and related risks and uncertainties.The United States is currently
experiencing a widespread recession accompanied by, among other things, weakness in the
commercial and investment banking systems, resulting in reduced credit and capital financing
availability, and highly curtailed gaming and other recreational activities, and general
discretionary consumer spending, and is also engaged in war, all of which are likely to
continue to have far-reaching effects on economic conditions in the country for an
indeterminate period. The effects and duration of these developments and related risks and
uncertainties on the Companys future operation and cash flows, including its access to
capital or credit financing, cannot be estimated at this time, but may likely be
significant.Uninsured cash deposits.The Company frequently has cash on deposit substantially in excess
of federally-insured limits, and the risk of losses related to such concentrations may be
increasing as a result of recent economic developments described in the preceding paragraph.
However, the extent of loss, if any, to be sustained as a result of any future failure of a
bank or other financial institution is not subject to estimation at this time.Legal matters. On June 19, 2009, HRI initiated arbitration against the Company regarding
their Management Reorganization Agreement dated June 18, 2007. The dispute arises over the
proper calculation of the member distribution to the Company under the agreement.
Specifically, HRI seeks a ruling that the quarterly calculation of the baseline member
distribution payable to the Company should be based on the prior years management fee paid
to the Company, exclusive of the multiplier set forth in the agreement. Management is
contesting the claim. In accordance with the applicable requirements of Statement of
Financial Accounting Standards 5, Accounting for Contingencies, at this stage of the
dispute, the Company is unable to predict the likelihood of any outcome or estimate the
minimum amount of potential loss, if any, and accordingly, has made no provision.
 10.
    
    STOCK REPURCHASE PLAN
 In July 2008, the Company announced a stock repurchase plan (the Repurchase Plan). Under
the Repurchase Plan, the Companys board of directors authorized the repurchase of up to
$1,000,000 of shares of our common stock in the open market or in privately negotiated
transactions from time to time, in compliance with Rule 10b-18 of the Securities and
Exchange Act of 1934, subject to market conditions, applicable legal requirements and other
factors. In October 2008, the Companys board of directors authorized the repurchase of an
additional $1,000,000 of the Companys common stock, and extended the expiration of the
Repurchase Plan to April 30, 2009. Through June 30, 2009, the Company had repurchased
1,356,595 shares for the treasury at a weighted average-price per share of $1.22, costing
$1,654,075, (including commissions and other related transaction costs). The Repurchase
Plan did not obligate the Company to acquire any specified number or value of common stock,
and it has expired.
  14




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##### Table of Contents



11.
    
    SUBSEQUENT EVENTS
    15




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##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations.
 Safe harbor provision
   
    
    our growth strategies;
    
    our development and potential acquisition of new facilities;
    
    risks related to development and construction activities;
    
    anticipated trends in the gaming industries;
    
    patron demographics;
    
    general market and economic conditions;
    
    access to capital and credit, including our ability to finance future business
requirements;
    
    the availability of adequate levels of insurance;
    
    changes in federal, state, and local laws and regulations, including
environmental and gaming license legislation and regulations;
    
    regulatory approvals;
    
    competitive environment;
    
    risks, uncertainties and other factors described from time to time in this and
our other SEC filings and reports.
  Overview
   16




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Critical accounting estimates and policies
   Assets related to tribal casino projects
 Recognition of Interest
Income and Balance Sheet Classification of Structured Notes
    17




---



##### Table of Contents




    
    the Federal Bureau of Indian Affairs (BIA) recognizes the tribe;
    
    the tribe has the right to acquire land to be used as a casino site;
    
    the Department of the Interior has put the land into trust as a casino site;
    
    the tribe has a gaming compact with the state government;
    
    the NIGC has approved a proposed management agreement; and
    
    other legal or political obstacles exist or are likely to occur.
  
    
    a certain minimum monthly priority payment to the tribe;
    
    repayment of various senior debt associated with construction and equipping of the
casino with interest accrued thereon;
    
    repayment of various debt with interest accrued thereon due to us;
    
    management fee to us;
    
    other obligations; and
    
    the remaining funds distributed to the tribe.
 Notes receivable
  Fair Value Measurements Determining the Fair
Value of Financial Asset when the market for that asset is not active
   18




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##### Table of Contents



June 30, 2009
    
    
    December 31, 2008Aggregate face amount of the notes receivable (including interest)
    
    $
    6,280,475
    
    
    $
    6,281,329Estimated years until opening of casino:FireKeepers
    
    
    .10
    
    
    
    .75Montana
    
    
    2.00
    
    
    
    1.75Discount rate:FireKeepers
    
    
    19
    %
    
    
    17
    %Montana
    
    
    26
    %
    
    
    23
    %Estimated probability of the casino opening as expected:FireKeepers
    
    
    99
    %
    
    
    96
    %Montana
    
    
    70
    %
    
    
    70
    %
   
    
    S&P 500, 10 and 15-year average benchmark investment returns (medium-term horizon risk
premiums);
    
    Risk-free investment return equal to the trailing 10-year average for 90-day Treasury
Bills;
    
    Investment beta factor equal to the unlevered five-year average for the hotel/gaming
industry; and
    
    Project-specific adjustments based on typical size premiums for micro-cap and
low-cap companies using 10 and 15-year averages, and the status of outstanding required
regulatory approvals and/or litigation, if any.
    19




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##### Table of Contents



Accounting by Creditors for Impairment of a
Loan
 Contract rights
   Summary of assets related to tribal casino projects
  June 30,
    
    
    December 31,2009
    
    
    2008Michigan project:Notes receivable, tribal governments
    
    $
    4,480,546
    
    
    $
    4,097,002Contract rights, net
    
    
    16,609,697
    
    
    
    16,636,35821,090,243
    
    
    
    20,733,360Other projects:Notes receivable, tribal governments
    
    $
    927,336
    
    
    
    1,017,765Contract rights, net
    
    
    159,194
    
    
    
    159,1941,086,530
    
    
    
    1,176,959$
    22,176,773
    
    
    $
    21,910,319
  20




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##### Table of Contents



21




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##### Table of Contents



NorthernJune 30, 2009
    
    FireKeepers
    
    
    Nambé Pueblo
    
    
    Cheyenne Tribe
    
    
    TotalNotes receivable
    
    $
    4,480,546
    
    
    $
    408,755
    
    
    $
    518,581
    
    
    $
    5,407,882Contract rights
    
    
    16,609,697
    
    
    
    
    
    
    
    159,194
    
    
    
    16,768,891Total
    
    $
    21,090,243
    
    
    $
    408,755
    
    
    $
    677,775
    
    
    $
    22,176,773
  Consolidation of Variable Interest Entities
 Recently issued accounting pronouncements
 The FASB Accounting Standards Codification and
the Hierarchy of Generally Accepted Accounting Principles  a replacement of FASB Statement No.
162
 Results of continuing operations
 Three Months Ended June 30, 2009, Compared to Three Months Ended June 30, 2008
 Operating revenues.
 Operating costs and expenses.
 Project development costs.
  22




---



##### Table of Contents



Selling, general and administrative expense.
 Operating gains
 Other income (expense).
 Income taxes.
 Six Months Ended June 30, 2009, Compared to Six Months Ended June 30, 2008
 Operating revenues.
 Operating costs and expenses.
 Project development costs.
 Selling, general and administrative expense.
 Operating gains
  23




---



##### Table of Contents



Other income (expense).
 Income taxes.
 Liquidity and capital resources
       24




---



##### Table of Contents



FireKeepers project
    25




---



##### Table of Contents



Other projects
     26




---



##### Table of Contents



Seasonality
  Regulation and taxes
   Off-balance sheet arrangements
   27




---



##### Table of Contents



Item 3.
    
    Quantitative and qualitative disclosures about market risk
    
 Item 4(T).
    
    Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
 Changes in Internal Control Over Financial Reporting
 
 PART II  OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings.
   28




---



##### Table of Contents



Item 4.
    
    Submission of Matters to a Vote of Security Holders
   In Favor
    
    
    WithheldElection of Kenneth R. Adams
    
    
    13,297,115
    
    
    
    179,882Election of Carl G. Braunlich
    
    
    13,295,237
    
    
    
    181,760Election of Kathleen M. Caracciolo
    
    
    13,290,729
    
    
    
    186,268Election of Andre M. Hilliou
    
    
    13,142,258
    
    
    
    334,739Election of Lee A. Iacocca
    
    
    13,100,661
    
    
    
    376,336Election of Mark J. Miller
    
    
    13,144,910
    
    
    
    332,087Election of J. Michael Paulson
    
    
    12,873,330
    
    
    
    603,667
 In Favor
    
    
    Against
    
    
    AbstainRatification of PBTK as independent registered public accounting firm
    
    
    13,354,715
    
    
    
    70,972
    
    
    
    51,309
  29




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##### Table of Contents



Item 6.
    
    Exhibits
 10.1
    
    
    Amendment to Reducing Revolving Loan Agreement dated as of the
25th day of June, 2009, by and between the Company and
Nevada State Bank, incorporated by reference to Exhibit 10.1, to the
Companys Form 8-K filed on July 1, 2009.10.2
    
    
    Amendment to Reducing Revolving Promissory Note dated as of the
25th day of June, 2009, by and between the Company and
Nevada State Bank, incorporated by reference to Exhibit 10.2, to the
Companys Form 8-K filed on July 1, 2009.31.1
    
    
    Certification of principal executive officer pursuant to 18 U.S.C.
section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002*31.2
    
    
    Certification of principal financial officer pursuant to 18 U.S.C.
section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002*32.1
    
    
    Certification of principal executive officer pursuant to 18 U.S.C.
section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002*32.2
    
    
    Certification of principal financial officer pursuant to 18 U.S.C.
section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002*
 
 *
    
    Filed herewith  30




---



##### Table of Contents



SIGNATURES
  Date: August 10, 2009
    FULL HOUSE RESORTS, INC.By:
    /s/ MARK MILLERMark MillerChief Financial Officer and Chief Operating Officer
(on behalf of the Registrant and
as principal financial officer)  31




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##### Table of Contents



EXHIBIT INDEX
 10.1
    
    
    Amendment to Reducing Revolving Loan Agreement dated as of the
25th day of June, 2009, by and between the Company and
Nevada State Bank, incorporated by reference to Exhibit 10.1, to the
Companys Form 8-K filed on July 1, 2009.10.2
    
    
    Amendment to Reducing Revolving Promissory Note dated as of the
25th day of June, 2009, by and between the Company and
Nevada State Bank, incorporated by reference to Exhibit 10.2, to the
Companys Form 8-K filed on July 1, 2009.31.1
    
    
    Certification of principal executive officer pursuant to 18 U.S.C.
section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002*31.2
    
    
    Certification of principal financial officer pursuant to 18 U.S.C.
section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002*32.1
    
    
    Certification of principal executive officer pursuant to 18 U.S.C.
section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002*32.2
    
    
    Certification of principal financial officer pursuant to 18 U.S.C.
section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002*
 
 *
    
    Filed herewith