<PAGE>   1
================================================================================

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                  FORM 10-QSB

(Mark One)

[ X ]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES 
                              EXCHANGE ACT OF 1934

         For the quarterly period ended:  December 31, 1996

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

         For the transition period from ___________ to ___________


                         Commission File Number: 0-11532



                            INLAND CASINO CORPORATION

        (Exact name of small business issuer as specified in its charter)

             Utah                                          33-0618806
(State or other jurisdiction of                         (I.R.S. Employer
incorporation or organization)                         Identification No.)


          4225 Executive Square, Suite 1650, La Jolla, California 92037
                    (Address of principal executive offices)

         Issuer's telephone number, including area code: (619) 546-9383

                                 Not Applicable
--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

         Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. 
                       Yes  X   No
                           ---    ---

                      APPLICABLE ONLY TO CORPORATE ISSUERS

            State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: as of February 12,
1997, 3,854,548 shares of common stock, $.001 par value per share, were
outstanding.

         Transitional Small Business Disclosure Format (check one) Yes  No  X
                                                                      --   ---
================================================================================




<PAGE>   2
                            INLAND CASINO CORPORATION


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                           Page
                                                                          Number
                                                                          ------
<S>                                                                       <C>
PART I.  FINANCIAL INFORMATION

      ITEM 1.  FINANCIAL STATEMENTS (Unaudited):

             Balance Sheets -
             June 30, 1996 and December 31, 1996.......................... 1

             Statements of Operations -
             Three months ended December 31, 1995 and 1996................ 2
             Six months ended December 31, 1995 and 1996.................. 3

             Statements of Cash Flows -
             Six months ended December 31, 1995 and 1996.................. 4

             Notes to Interim Financial Statements........................ 5

      ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS
                          OR PLAN OF OPERATION............................ 12

PART II.  OTHER INFORMATION

      ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF 
                          SECURITY HOLDERS................................ 17
      
      ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K........................... 18
</TABLE>


                                       (i)

<PAGE>   3
                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

                            INLAND CASINO CORPORATION
                                 BALANCE SHEETS
                       JUNE 30, 1996 AND DECEMBER 31, 1996



<TABLE>
<CAPTION>
                                                                       June 30, 1996   December 31, 1996
                                                                       -------------   -----------------
                                                                                          (Unaudited)
<S>                                                                      <C>              <C>        
                                     ASSETS

CURRENT ASSETS:
          Cash                                                           $ 4,347,985      $ 3,492,340
          Notes receivable                                                                  1,121,009
          Accounts receivable                                                 91,154          481,974
          Deposits and prepaid expenses                                       53,130          129,634
                                                                         -----------      -----------

                    Total current assets                                   4,492,269        5,224,957


PROPERTY AND EQUIPMENT, NET                                                  167,213          183,196
DEFERRED CONTRACT COSTS, NET                                               6,505,327        6,030,720
RESTRICTED CASH AND OTHER INVESTMENTS                                      2,397,993
DEFERRED TAXES                                                               462,126          294,126
DEPOSITS AND OTHER ASSETS                                                    145,074          103,324
                                                                         -----------      -----------

                    Total assets                                         $11,772,009      $14,234,316
                                                                         ===========      ===========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:

          Advances of future consulting fees                             $ 2,385,814      $ 2,980,739
          Current portion of long-term debt                                  279,946          279,946
          Accounts payable and accrued expenses                              449,289        1,080,769
          Income taxes payable                                               210,880          297,680
                                                                         -----------      -----------

                    Total current liabilities                              3,325,929        4,639,134
                                                                         -----------      -----------

LONG TERM DEBT:
          Note payable, less current portion                                 620,054        4,120,054
                                                                         -----------      -----------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
          Common stock, $.001 par, 100,000,000 shares
            authorized, 12,541,793 and 3,854,548 shares
            outstanding at June 30, 1996 and December 31,
            1996, respectively                                             2,352,554            3,855
          Retained earnings                                                5,473,472        5,471,273
                                                                         -----------      -----------
                    Total shareholders' equity                             7,826,026        5,475,128
                                                                         -----------      -----------

                    Total liabilities and shareholders' equity           $11,772,009      $14,234,316
                                                                         ===========      ===========
</TABLE>



                                       1
<PAGE>   4
                            INLAND CASINO CORPORATION
                            STATEMENTS OF OPERATIONS
              FOR THE THREE MONTHS ENDED DECEMBER 31, 1995 AND 1996
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                           1995                1996
                                                       ------------       ------------
<S>                                                    <C>                <C>         
Revenue                                                $  1,688,922       $  3,808,317

Costs and expenses:
     General and administrative expenses                  1,874,338          2,188,231
     Amortization of deferred contract costs                564,180            635,720
                                                       ------------       ------------
                                                          2,438,518          2,823,951
                                                       ------------       ------------

Operating profit (loss)                                    (749,596)           984,366

Other income and (expense):
     Interest income                                                            76,843
     Interest expense                                        (1,229)          (103,250)
                                                       ------------       ------------
                                                             (1,229)           (26,407)
                                                       ------------       ------------
Income (loss) before income taxes                          (750,825)           957,959

Income tax provision (credit)                              (335,000)           402,000
                                                       ------------       ------------

Net income (loss)                                      $   (415,825)      $    555,959
                                                       ============       ============

Earnings (loss) per share                              $      (0.03)      $       0.14
                                                       ============       ============

Shares used in the computation of income per
common and common equivalent share                       12,541,657          4,110,823
                                                       ============       ============
</TABLE>



                                       2
<PAGE>   5
                            INLAND CASINO CORPORATION
                            STATEMENTS OF OPERATIONS
               FOR THE SIX MONTHS ENDED DECEMBER 31, 1995 AND 1996
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                           1995               1996
                                                       ------------       ------------
<S>                                                    <C>                <C>         
Revenue                                                $  4,341,216       $  7,758,317

Costs and expenses:
     General and administrative expenses                  3,580,487          4,066,623
     Amortization of deferred contract costs              1,102,507          1,240,091
                                                       ------------       ------------
                                                          4,682,994          5,306,714
                                                       ------------       ------------

Operating profit (loss)                                    (341,778)         2,451,603

Other income and (expense):
     Interest income                                                           133,497
     Interest expense                                        (2,922)          (119,000)
                                                       ------------       ------------
                                                             (2,922)            14,497
                                                       ------------       ------------
Income (loss) before income taxes                          (344,700)         2,466,100

Income tax provision (credit)                              (132,000)         1,117,000
                                                       ------------       ------------

Net income (loss)                                      $   (212,700)      $  1,349,100
                                                       ============       ============

Earnings (loss) per share                              $      (0.02)      $       0.18
                                                       ============       ============

Shares used in the computation of income per
common and common equivalent share                       12,541,657          7,326,303
                                                       ============       ============
</TABLE>




                                       3
<PAGE>   6

                            INLAND CASINO CORPORATION
                            STATEMENTS OF CASH FLOWS
               FOR THE SIX MONTHS ENDED DECEMBER 31, 1995 AND 1996
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                    1995              1996
                                                                -----------       -----------
<S>                                                             <C>               <C>        
Net cash generated by (used in) operating activities:
      Net income (loss)                                         $  (212,700)      $ 1,349,100
      Adjustments to reconcile net income to net cash
          provided by operating activities:
          Amortization and depreciation                           1,118,861         1,265,295
          Deferred taxes                                            126,000           168,000
           Changes in assets and liabilities:
               Notes receivable                                  (1,121,009)
               Accounts receivable                                  (37,000)         (390,820)
               Prepaid expenses, deposits and other assets         (333,344)          (34,754)
               Accounts payable and accrued expenses                115,007           631,480
               Income taxes payable                                (380,986)           86,800
                                                                -----------       -----------
Net cash generated by operating activities                          395,838         1,954,092
                                                                -----------       -----------

 Cash used in investing activities:
      Purchases of furniture and equipment                          (73,528)          (41,185)
      Deferred contract costs                                       (891,856)        (765,484)
      Acquisition of revenue bonds and restricted cash                             (2,397,993)
                                                                                  -----------
 Net cash used in investing activities                             (965,384)       (3,204,662)
                                                                -----------       -----------
Cash flows generated by (used in) financing activities:
      Increase  in advances of future
       consulting fees                                              622,875           594,925
      Payment of notes payable                                      (19,713)
      Repurchase and cancellation of common stock                    (1,320)         (200,000)
                                                                -----------       -----------
Net cash provided by financing activities                           601,842           394,925
                                                                -----------       -----------

Increase (decrease) in cash                                          32,296          (855,645)

Cash, beginning of period                                         1,423,826         4,347,985
                                                                -----------       -----------

Cash, end of period                                             $ 1,456,122       $ 3,492,340
                                                                ===========       ===========

Supplemental Disclosures of Cash Flow Information:

     Interest expense paid                                      $     2,922    $          -
                                                                ===========       ===========
     Interest income received                               $           -         $    57,862
                                                                ===========       ===========
     Income taxes paid                                          $    16,152       $   212,000
                                                                ===========       ===========
     Income tax refund received                                 $   192,316    $          -
                                                                ===========       ===========
     Repurchase of common stock by issuance of
        notes payable                                       $           -         $ 3,500,000
                                                                ===========       ===========
</TABLE>




                                       4
<PAGE>   7
                            INLAND CASINO CORPORATION
                      NOTES TO INTERIM FINANCIAL STATEMENTS
                                DECEMBER 31, 1996


1.   PRESENTATION OF INTERIM FINANCIAL INFORMATION.


Basis of Presentation - The accompanying interim unaudited financial statements
have been prepared by Inland Casino Corporation, a Utah corporation (the
"Company" or "Inland Casino"), in conformity with generally accepted accounting
principles for interim financial information and with the rules and regulations
of the U.S. Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such regulations. The interim unaudited financial statements reflect
all normal, recurring adjustments and disclosures which are, in the opinion of
management, necessary for a fair presentation. The results of operations for the
interim periods are not necessarily indicative of the results of the full fiscal
year. The interim financial statements should be read in conjunction with the
Company's Annual Report on Form 10-KSB for the fiscal year ended June 30, 1996.


Earnings per share - Earnings per common and common equivalent share are
computed using the weighted average number of shares outstanding for the three
and six month periods ended December 31, 1995 and 1996. Equivalent shares are
those issuable upon the assumed exercise of stock options reflected under the
treasury stock method using the average market price of the Company's shares
during the periods when their effect is dilutive.


2. REORGANIZATION AND MERGER. Effective July 1, 1994, Inland Casino Partners, a
California general partnership ("ICP"), and its partners, Inland Casino
Corporation, a Nevada Corporation ("ICC I"), and Eagle Edge Partners ("EEP"),
combined to form a new Delaware Corporation, Inland Casino Corporation ("ICC
II"). Such transaction is hereinafter referred to as the "Roll-Up Transaction".


On May 22, 1995, the merger of ICC II into and with Twin Creek Exploration Co.,
Inc. ("Twin Creek"), a Utah corporation, became effective (the "Merger"). To
effect the merger, the common stock of Twin Creek was reverse split 1 for 100
and the shareholders of ICC II received 11,930,406 shares, representing
approximately 95% of the shares outstanding after the merger. The surviving
company was renamed Inland Casino Corporation ("Inland Casino"), and the fiscal
year end was changed from September 30 to June 30. The transaction was accounted
for as a recapitalization using the carryover basis of the assets and
liabilities of ICC II. Accordingly, the financial statements reflect the
financial condition, results of operations and cash flows of ICC II, and its
predecessors, for periods prior to the merger date, and combined with Twin Creek
from that date forward.

3. BUSINESS AND BASIS OF ACCOUNTING. The Company provides operational and other
consulting services for gaming operations under consulting agreements with
Native American Indian Tribes. Currently, the Company provides services to The
Barona Group of Capitan Grande Band of Mission Indians (the "Barona Tribe") in
connection with the Barona Tribe's operation of a gaming facility located north
of Lakeside, California, in eastern San Diego County. In addition, the Company
provides services to the Klamath and Modoc Tribes and the Yahooskin Band of
Snake Indians (the"Klamath Tribes") in connection with the planned Kla-Mo-Ya
Casino, to be constructed near Chiloquin, in south-central Oregon. The Company
reports revenues and expenses using the accrual method of accounting. All of the
Company's fee revenue for the three and six months ended December 31, 1995 and
1996 was generated




                                       5
<PAGE>   8
                            INLAND CASINO CORPORATION
                NOTES TO INTERIM FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 1996


from services provided to the Barona Tribe, with the exception of $65,817 in
fees earned for consulting work performed for a tribe in New Mexico during the
three months ended December 31, 1996.

4. AGREEMENTS WITH THE BARONA TRIBE. Prior to April 1, 1996, the Company
managed, operated and maintained certain gaming and food and beverage operations
in California on behalf of the Barona Tribe in accordance with the terms and
conditions of a certain Gaming Management Agreement (the "Operations Agreement")
with the Barona Tribe, under a grant of authority from the Barona General
Council. The Company's revenue from fees under the Operations Agreement was
based upon a percentage of profits or the excess of revenue over certain
expenses generated from the gaming operations as defined in the Operations
Agreement. In March 1996, the Company entered into a Consulting Agreement with
the Barona Tribe, with an effective date of April 1, 1996, relating to the
operations of the Barona Casino (the "Initial Consulting Agreement"). In May
1996, after the parties recognized an inadvertent mistake in the provision
relating to consulting fees had been made, the Company and the Barona Tribe
agreed to an Amended and Restated Consulting Agreement (the "Barona Consulting
Agreement" or "Consulting Agreement"). In addition, the Company and the Barona
Tribe entered into a Mutual Release releasing each other from certain rights,
duties and obligations set forth in the Operations Agreement (the "Release").
The Barona Consulting Agreement and the Release have effective dates of April 1,
1996.

The Barona Consulting Agreement provides for an initial term of three years,
with an option to extend the agreement for an additional five year period. Under
the terms of the Barona Consulting Agreement, the Barona Tribe has the right to
draw from the gross revenues of the Barona Casino an annual income stream at
least equal to the distributions received by the Barona Tribe for the twelve
month period ended December 31, 1995, and fees paid or payable to the Company
may accordingly be reduced.

In March 1996, the Barona Tribe submitted the Initial Consulting Agreement to
the NIGC and in May 1996 the NIGC determined that the Initial Consulting
Agreement was not a management agreement and, therefore not subject to NIGC
approval, and forwarded such agreement to the Bureau of Indian Affairs (the
"BIA").

In January 1997, the Company entered into a settlement agreement with the NIGC
regarding the Company's relationship with the Barona Tribe. Under the terms of
the settlement agreement, the NIGC held that the relationship between the Barona
Tribe and the Company had benefited the Barona Tribe, and that the Company had
not violated any law. The Company agreed to reimburse the NIGC for
administrative, investigative and legal expenses in the aggregate amount of
$250,000. In addition, the Company agreed to contribute $2 million to the Barona
Tribe for general improvement on the reservation, payable in five equal annual
installments, commencing in January 1997. The $250,000 reimbursement to NIGC was
accrued as an expense as of December 31, 1996, and the Company will account for
the $2 million in payments as deferred contract costs, which will be amortized
over the remaining life of the Consulting Agreement with the Barona Tribe.

In January 1997, the Company submitted the Consulting Agreement to the NIGC.
Although there can be no assurance that the NIGC will conclude that the
Consulting Agreement is not a management agreement, the Company believes that,
based upon its prior ruling with respect to the Initial Consulting Agreement,
and based on its findings in the settlement agreement, the NIGC will make a
similar determination with respect to the Consulting Agreement. If the BIA
determines that the Initial Consulting Agreement and/or



                                       6
<PAGE>   9
                            INLAND CASINO CORPORATION
                NOTES TO INTERIM FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 1996


the Consulting Agreement is subject to its review, there can be no assurance
that such Agreements will be approved by the BIA. Failure to approve the Initial
Consulting Agreement or the Consulting Agreement may have a material adverse
effect on the business and financial condition of the Company.

5. CONSULTING AGREEMENT WITH THE KLAMATH TRIBES. In June 1996, the Company
entered into a consulting agreement (the "Klamath Agreement") with the Klamath
Tribes. The Klamath Tribes plan to build and operate the Kla-Mo-Ya Casino, to be
constructed near Chiloquin, in south-central Oregon. The opening date of the
facility is scheduled for mid-summer of 1997.

Under the terms of the Company's consulting agreement with the Klamath Tribes,
the Company will consult with and advise the Tribes, provide technical
assistance and training, and provide services as may be directed by the Tribes
in such areas as organization and administration, financing, planning and
development, gaming activities, internal controls, accounting systems and
procedures, engineering and maintenance, housekeeping, human resources,
marketing and advertising, purchasing, surveillance, security and food and
beverage operations.

The Kla-Mo-Ya Casino project is to be constructed on a 42-acre site which has
been acquired by the Klamath Tribes, and which is in the process of being
converted to fee simple property and transferred to the U. S. Government to be
held in trust for the benefit of the Tribes. In connection with the acquisition
of the 42-acre parcel, the Company loaned $1,121,009 to the Klamath Tribes
pursuant to the terms of an 8.25% unsecured promissory note. The loan was repaid
in January 1997. The Klamath Tribes plan to construct a temporary gaming
facility on the site, at an estimated cost of approximately $9.5 million.
Funding for the land purchase and construction of the facility has been obtained
by the sale and issuance of $4,735,000 in revenue bonds issued by the Tribes. In
connection with such bond financing, the Company expended $879,933 to purchase
revenue bonds with a face amount of $900,000. As a condition of the bond
financing, the Company agreed to purchase and hold at least $500,000 face amount
of the such bonds for a five year period. In January 1997, the Company sold
$200,000 face amount of such bonds for $197,415. Preopening costs and expenses
of approximately $1.5 million are being financed by loans made pursuant to a
bank credit agreement with the Klamath Tribes. The Company has pledged to such
bank a certificate of deposit for $1,518,000 as collateral for such loans. In
addition, the Klamath Tribes plan to obtain lease financing for approximately
$3.4 million in gaming and other equipment, signage, furniture and fixtures.

Under the terms of the Tribal State Compact for Regulation of Class III Gaming
between The Klamath Tribes and the State of Oregon (the "Compact"), the Klamath
Tribes plan to open the Kla-Mo-Ya Casino initially as a temporary facility which
will permit the operation of 300 video lottery terminals for a twenty-four-month
period. Under the terms of the Compact, at the end of the twenty-four-month
period, the Klamath Tribes must either increase the square footage of the casino
facility to provide that the video lottery terminal area comprises no more than
fifteen percent (15%) of the total square footage of the casino facility, or
reduce the video lottery terminal area (and therefore the number of terminals or
machines) to equal fifteen percent (15%) of the square footage of the temporary
facility. There is no assurance that financing can be obtained by the Klamath
Tribes to complete either the construction of a permanent facility or the
conversion of the temporary facility into a permanent facility.

If the Klamath Tribes are unable to open the Kla-Mo-Ya Casino or experience long
delays in its opening, or if cash flow from its operations is not adequate to
pay its obligations, the Company may lose all or a portion of its investment in
the revenue bonds it purchased and its certificate of deposit pledged as




                                       7
<PAGE>   10
                            INLAND CASINO CORPORATION
                NOTES TO INTERIM FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 1996


collateral for bank loans to the Klamath Tribes, which could have a material
adverse effect on the financial condition of the Company.

As of December 31, 1996, the Company incurred costs and expenses and made
initial payments to certain contractors totalling approximately $428,000 on
behalf of the Klamath Tribes. In January 1997, the Company received
reimbursement for these payments from the Klamath Tribes. The Company has signed
contracts for the construction of the Kla-Mo-Ya Casino totalling approximately
$1,250,000 as of December 31, 1996. The Company is currently in the process of
assigning those contracts to the Klamath Tribes. While the Company believes that
all liabilities under the construction contracts will be assumed directly by the
Klamath Tribes, payments, if any, that the Company is required to make which are
not reimbursed by the Klamath Tribes, could result in losses to the Company,
which could have a material adverse effect on the Company's financial condition.

The term of the Klamath Agreement is 5 years, commencing with the date of
opening of the Kla-Mo-Ya Casino. At any time after the first full year of the
Agreement, the Tribes may terminate the Agreement by giving 30 days' notice to
the Company, during which time the Agreement will remain in effect, and by
paying the Company an amount equal to 12 times the average consulting fees paid
over the past 12 months. The Klamath Tribes will not be required to make these
early termination payments essentially if, upon review and investigations, the
Company does not meet the criteria necessary to qualify as a vendor to Indian
gaming, as determined by the State of Oregon, the Klamath Tribes or the NIGC.
Either party may terminate the Agreement in the event the other party (i)
commits or knowingly allows to be committed any act of theft or embezzlement; or
(ii) commits a material breach of the Agreement, defined as a failure of either
party to perform any duty or obligation required under the Agreement. In
addition, the Tribes may terminate the Agreement if the Company commits a
material breach of any of the Company's representations or fails to disclose
pertinent information that adversely affects its ability to carry out its
responsibilities under the Agreement. After notice and time to cure, remedies
for breach include the Company's meeting and conferring in good faith with the
Tribes' Executive Committee and binding arbitration before the American
Arbitration Association in the State of Oregon.

For services rendered pursuant to the Klamath Agreement, the Company will
receive a base consulting fee of $25,000 per month, commencing from the opening
of the Kla-Mo-Ya Casino if the Casino earns an operating profit of at least
$50,000 per month, and will receive additional consulting fees if certain
operating levels are reached. From June 1996 through to the planned opening of
the casino, the Company will be reimbursed for its out-of-pocket costs and
expenses related to the Kla-Mo-Ya Casino.

Since the Compact permits the Tribe to offer Class III games at its casino, as
that term is defined in the Indian Gaming Regulatory Act and which would include
many of the games allowed in the State of Oregon, including blackjack and video
lottery terminals, the Klamath Agreement must be reviewed by the National Indian
Gaming Commission (the "NIGC") The Klamath Agreement was submitted by the Tribe
to the NIGC, and in January 1997 the NIGC determined that such agreement was not
a management agreement and, therefore not subject to NIGC approval, and
forwarded such agreement to the BIA. If the BIA determines that the Klamath
Agreement is subject to its review, there can be no assurance that such
agreement will be approved by the BIA. Failure to approve Klamath Agreement may
have a material adverse effect on the business and financial condition of the
Company.




                                       8
<PAGE>   11
                            INLAND CASINO CORPORATION
                NOTES TO INTERIM FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 1996


The State of Oregon requires that vendors providing goods and services to Indian
gaming operations apply and receive approval by the Gaming Division of the
Oregon State Police. The Company has completed and submitted its application,
but there is no assurance that the Company will receive such approval. The
Klamath Tribes will operate the Kla-Mo-Ya Casino under the provisions of the
Compact with the State of Oregon.

6. DEFERRED CONTRACT COSTS. Pursuant to oral agreements with the Barona Tribe,
the Company has agreed to fund, or to arrange acceptable financing for, the
construction of facility improvements, furniture and equipment, the
establishment of initial working capital and the losses, if any, of the Barona
Casino's operations. Because the Barona Tribe will not allow its land to be
encumbered and has not assumed liability for any of these obligations, the
Company has capitalized those costs incurred as deferred contract costs, since
(i) the Company had the ultimate responsibility for such costs incurred in
connection with developing the Barona Casino and (ii) management believes that
these costs are fully recoverable over the life of the Operations Agreement and
the Consulting Agreement through receipt of fee income from the Barona Casino.
However, given the nature of the asset, if the recoverability is determined to
be not probable, the Company will expense the unamortized portion. On an ongoing
basis, the Company reviews the valuation and recoverability of these unamortized
deferred contract costs. As part of this review, the Company estimates the
discounted present value of the future projected net income generated by the
Barona Casino and the resulting revenue to the Company to determine whether
impairment has occurred.

Through March 31, 1996, amortization of these deferred costs was calculated as
the greater of the amortization using (i) the straight-line method over the
remaining term of the Operations Agreement or (ii) an accelerated method,
whichever is greater. The accelerated amortization was equal to the excess of
fees earned over 30% of Casino operating income. Beginning April 1, 1996,
amortization of the deferred costs is calculated using the straight-line method
over the remaining term of the Consulting Agreement. Under the terms of the
Operations Agreement and the Consulting Agreement, title to the Barona Casino
facilities, furniture and equipment rests solely with the Barona Tribe, unless
the Barona Tribe agrees otherwise. The Consulting Agreement can be terminated by
the Barona Tribe for any material breach by the Company, as defined in such
Agreement. Management is not aware of any material breach of the Consulting
Agreement.

7. COMMON STOCK REPURCHASE. On March 4, 1996, the Company repurchased 1,908,865
shares of its common stock and an option to purchase 894,780 shares of its
common stock from Jack R. Smith, a former executive officer, director, and
principal shareholder of the Company, for consideration totaling $1,400,000. The
purchase price consisted of a $500,000 cash payment and issuance of a $900,000,
7% unsecured promissory note, payable in three equal annual installments of
principal and interest of $342,947. In addition, if the Company's common stock
reaches certain levels during measurement periods prior to March 1998 and 1999,
Mr. Smith will be entitled to receive up to $250,000 for each measurement
period. On September 30, 1996, pursuant to a Stock Purchase and Settlement and
Release Agreement dated September 27, 1996 (the "Stock Purchase Agreement") by
and among Jonathan Ungar, Alan Henry Woods and the Company, the Company
purchased 3,424,913 shares of its common stock from Mr. Ungar, a former director
of the Company, and 3,353,331 shares of its common stock from Mr. Woods. The
terms of the Stock Purchase Agreement include (i) a cash payment of $200,000
upon closing, (ii) the issuance of unsecured promissory notes in the principal
amount of $3,500,000, with interest at the rate of 10%, payments of interest
only for the first three years, followed by three equal




                                       9
<PAGE>   12
                            INLAND CASINO CORPORATION
                NOTES TO INTERIM FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 1996

annual installments of principal repayment, with interest on the remaining
balance commencing September 30, 1997, (iii) a contingent obligation (the
"Initial Contingent Obligations") to issue a total of $9,856,488 in unsecured
promissory notes ($4,981,276 in principal amount to Mr. Ungar and $4,875,212 in
principal amount to Mr. Woods) including $2,000,000 in principal amount of notes
each year for four years and $1,856,488 in principal amount of notes to be
issued in a fifth year, each note with interest at 10%, payment of interest only
for three years, followed by three equal annual installments of principal plus
interest on the remaining principal balance, and (iv) another contingent
obligation to issue an additional $3,000,000 in principal amount ($1,515,000 to
Mr. Ungar and $1,485,000 to Mr. Woods) in unsecured promissory notes (or cash,
if the Company has closed a firm commitment underwritten public offering of
securities of not less than $35 million prior to the contingencies being met)
when and if certain conditions are met, with interest at the then "preferred" or
"prime" rate of interest charged to the Company by the Company's principal bank,
with interest only for three years from the date of issuance, followed by two
equal annual installments of principal, plus interest on the remaining principal
balances.


The obligations to issue the Initial Contingent Obligations (i.e., $2,000,000 in
notes for four years and $1,856,488 in notes for a fifth year) are contingent
upon the Company's retained earnings balance being at least $4,000,000 for the
fiscal year ending immediately prior to the date the notes are to be issued.
Dividends paid by the Company and certain other payments, if any, are to be
added back to the retained earnings balance for purposes of this contingency
calculation. The period for determining the Company's obligation to issue each
of the $2,000,000 and $1,856,488 in principal amount of notes is an eight year
period commencing with the fiscal year ending June 30, 1997. If the $4,000,000
retained earnings test is not met in one year, the Company is not obligated to
issue the notes in that year. However, the test is to be made each year for
eight successive years commencing with the fiscal year ending June 30, 1997, but
each year can be used only once during the eight year period, and only five out
of the eight years may be used. The Second Contingent Obligation is subject to
the following conditions: (i) the Barona Tribe enters into a Class III Gaming
Compact (the "Compact") with the State of California which permits the operation
of video gaming machines at the Barona Casino in San Diego County; (ii) at the
time that the Barona Tribe enters into the Compact, the Company has a consulting
agreement or similar contractual arrangement with the Barona tribe: and (iii)
consulting fees paid to the Company by the Barona Tribe relating to the Barona
Casino for any consecutive 12-month period within five years after the Barona
Tribe has entered into the Compact, equals or exceeds one and one-half times
such consulting fees for the year ended June 30, 1996. The Company intends to
record as the additional cost of the repurchase of its common stock, each
contingent obligation as each contingency or condition is met. All payments
pursuant to the Stock Purchase Agreement are further subject to compliance with
certain state law provisions and the Company's Articles of Incorporation
concerning repurchase transactions.

8. COMMITMENTS AND CONTINGENCIES - LITIGATION. Indian Gaming is the subject of
numerous lawsuits in various court jurisdictions at both federal and state
levels. These court cases are attempting to define the permissible gaming
activities on Indian reservations, the states' rights or limitations on control
of gaming, and numerous other issues. The Barona Tribe is not a party to these
cases nor is the Barona Reservation within the jurisdiction of certain courts in
which many of these cases will be decided; therefore, the impact, if any, on the
operations of the Barona Casino cannot be determined at this time.

The impact of decisions in various cases, however, could have a significant
impact on the operations of Barona Casino and the Company when decided.
Specifically, current cases are addressing the legality of electronic gaming
equipment and certain card games in California (currently used in the Barona
Casino)



                                       10
<PAGE>   13
                            INLAND CASINO CORPORATION
                NOTES TO INTERIM FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 1996



and the enforcement rights applicable to Federal and State governments. Various
courts have ruled in different cases, or in different hearings on the same case,
both in the states' favor and in the tribes' favor on the same or similar
issues. There are appeals remaining in a number of cases and other cases may
rise. Until there are definitive rulings by the courts, the legality of the
gaming activities in California will not be known.

On June 30, 1994, the U.S. Attorney of the Southern District of California
announced a verbal understanding with a number of Southern California tribes,
including the Barona Tribe, that would allow the Barona Tribe to continue to
operate without expansion of gaming activities until one or more of the
following occurs:

-        A compact with the State of California is negotiated or the Secretary
         of the Interior that expressly authorizes gaming, such as certain card
         or electronic/video gaming, which have not been previously addressed; 

-        Entry of final judgments and exhaustion of all appellate remedies in
         certain suits pending before federal courts;

-        Enactment of federal legislation that authorizes the operation of the
         electronic/video games at issue without a tribal-state compact;

-        Amendment of the NIGC's regulations to include the electronic/video
         games within the definition of gaming or permissible technologic aids
         thereto which are not subject to State compact; or

-        Material breach of the understanding by the tribes.

Management is not aware of any violations of the verbal understanding by the
Barona Tribe or any other Indian Tribe which is a party to such understandings.


The Company is also subject to claims and lawsuits which arise in the ordinary
course of business. The Company does not anticipate any material losses with
respect to such existing or pending claims and lawsuits.



                                       11
<PAGE>   14
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION


OVERVIEW

From its formation through March 31, 1996, the Company provided services for the
Barona Tribe at the Barona Casino under the terms of the Operations Agreement,
including providing assistance to the Barona Tribe in the development and
expansion of the "Big Top" facility at the Barona Casino. Through March 31,
1996, the Company earned fees based upon a percentage of the "net profits"
generated by the Barona Casino. As used in this Report, the term "net profits"
is not intended to mean net profits as defined by generally accepted accounting
principles or by the Indian Gaming Regulatory Act ("IGRA"). Generally, the
Operations Agreement defined "net profit" as the total amount of moneys
remaining from monthly gross receipts after payment of the operating expenses
for such month which amount shall be calculated on a cash basis. The Company
provided certain personnel, at its expense, to operate the activities at the
Barona Casino, and it entered into agreements such as leases or other contracts
for the Barona Casino in which the Company was the obligor (e.g., leases for
gaming equipment, the Big Top lease, etc.).

Effective April 1, 1996, the Company commenced providing consulting services to
the Barona Tribe pursuant to the Consulting Agreement. The Company and the
Barona Tribe also entered into a Mutual Release, effective April 1, 1996,
releasing each other from their respective duties and obligations under the
Operations Agreement.

As part of its obligation to the Barona Tribe under the Operations Agreement,
Inland Casino provided significant financing for the construction and expansion
of the Barona Casino. The financing costs have been recognized as an asset in
the financial statements of the Company, designated as deferred contract costs,
and are being amortized to expense over the combined lives of the Operations and
Consulting Agreements through March 1999. The recovery of these deferred costs
is achieved through the fees earned by Inland Casino pursuant to the agreements
with the Barona Tribe. Construction financing obligations with the Barona Tribe,
such as those described herein, are incurred upon the recommendation of the
Company and are subject to acceptance by the Barona Tribe.

In addition to its obligations under the Consulting Agreement and collateral
contracts for the benefit of the Barona Tribe, the Company's consulting
activities include assisting clients in arranging financing to support casino
construction projects and monitoring of Indian Gaming legislative and litigation
matters.

In June 1996, the Company began providing consulting services for the
Confederated Tribes of Siletz Indians of Oregon (the "Siletz Tribes") at the
Chinook Winds Gaming and Convention Center in Lincoln City, Oregon, and with the
Associated Tribes of Northwest Indians in Oregon. In October 1996, the
consulting agreement with the Siletz Tribes was terminated.

Also in June 1996, the Company entered into a consulting agreement with the
Klamath Tribes to assist with the development, construction and eventual
operation of the Kla-Mo-Ya Casino, to be constructed near Chiloquin, in
south-central Oregon. The opening date of the facility is scheduled for
mid-summer of 1997. Under the terms of its agreement with the Klamath Tribes,
the Company will not receive fees for consulting services until the facility is
opened and operating, and earning at least $50,000 in operating profits. In
connection with the financing of the Kla-Mo-Ya Casino project, the Company
expended $879,933 to purchase revenue bonds with a face amount of $900,000, as
part of a $4,735,000 face amount of bond financing. In January 1997, the Company
sold $200,000 face amount of such bonds for $197,415. In addition to the bond
financing, the Company pledged a certificate of deposit for $1,518,000 as
collateral for bank loans to the Klamath Tribes, and signed contracts for the
construction of the Kla-Mo-Ya Casino totalling approximately $1,250,000 as of
December 31, 1996. The Company is currently in the process of assigning the
contracts to the Klamath Tribes. While the Company believes that all liabilities
under the construction contracts will be assumed by the Klamath Tribes,
payments, if any, that the Company is required to make which are not reimbursed
to the Company by the Klamath Tribes, could result in losses to the Company,
which could have a material adverse effect on the Company's financial 



                                       12
<PAGE>   15

condition. If the Klamath Tribes are unable to complete the construction of the
Kla-Mo-Ya Casino, or for any other reason are unable to open and operate the
Kla-Mo-Ya Casino, or if the Kla-Mo-Ya Casino sustains operating losses after
opening, the Company may lose a portion or all of its approximately $700,000
investment in revenue bonds and its pledged $1,518,000 certificate of deposit,
which could have a material adverse effect on the Company's financial condition.


RESULTS OF OPERATIONS


THREE MONTHS ENDED DECEMBER 31, 1995 COMPARED WITH THE THREE MONTHS ENDED
DECEMBER 31, 1996.

REVENUE. Revenue increased 125.5% from $1,688,922 for the three months ended
December 31, 1995 to $3,808,317 for the three months ended December 31, 1996, as
a result of higher profit margins at the Barona Casino during the same
three-month period. The Company's revenue was solely from fees earned under
agreements with the Barona Tribe; namely, the Operations Agreement during the
three months ended December 31, 1995, and the Consulting Agreement during the
three months ended December 31, 1996, with the exception of $65,817 in fees
earned from consulting services provided to a tribe in New Mexico during the
three months ended December 31, 1996.

OPERATING EXPENSES. General and administrative expenses increased 16.7% from
$1,874,338 for the three months ended December 31, 1995 to $2,188,231 for the
three months ended December 31, 1996, resulting primarily from increases in
professional and other consulting fees, an increase in the provision for
doubtful accounts to cover anticipated losses resulting from certain consulting
engagements, increases in travel expenses incurred in connection with consulting
work in Oregon and New Mexico, an increase in compensation expense (reflecting a
net increase in the number of full-time employees from 23 to 30 from December
31, 1995 to December 31, 1996 and increases in salaries and other benefits),
increases in allowable political contributions, and increases in costs incurred
in connection with the NIGC settlement agreement. The increases were partially
offset by decreases in sponsorships costs, other promotional costs, charitable
contributions and business development costs.

Amortization of deferred contract costs increased 12.7% from $564,180 for the
three months ended December 31, 1995 to $635,720 for the three months ended
December 31, 1996, resulting primarily from calculating amortization on a higher
asset value for the three months ended December 31, 1996.

OTHER INCOME AND EXPENSE. For the three months ended December 31, 1996, interest
income was $76,843 compared to zero for the three months ended December 31,
1995. Prior to April 1, 1996, while the Company performed services at the Barona
Casino under the terms of the Operations Agreement with the Barona Tribe, it was
determined by management that as long as the Company had outstanding advances of
future fees due to the Barona Casino, interest earned on excess cash balances
would be paid to the Barona Casino. Commencing April 1, 1996, the effective date
on which the Consulting Agreement between the Company and the Barona Tribe
replaced the Operations Agreement, the Company began to realize interest income
on its cash balances available for investment.

Interest expense increased from $1,229 for the three months ended December 31,
1995 to $103,250 for the three months ended December 31, 1996, primarily as a
result of accrued interest during the three months ended December 31, 1996 on
notes payable issued in March 1996 in connection with the repurchase of
1,908,865 shares of the Company's common stock from a former officer and
director of the Company, and in September 1996 in connection with the repurchase
of 6,778,244 shares of the Company's common stock from two major shareholders,
including a former director of the Company.

INCOME TAX PROVISION. The Company recorded an income tax provision $402,000 for
the three months ended December 31, 1996, based on income before income taxes of
$957,959 for the period, compared to an income tax credit of $335,000 based on
an operating loss of $750,825 for the three months ended December 31, 1995.




                                       13
<PAGE>   16
SIX MONTHS ENDED DECEMBER 31, 1995 COMPARED WITH THE SIX MONTHS ENDED DECEMBER
31, 1996.

REVENUE. Revenue increased 78.7% from $4,341,216 for the six months ended
December 31, 1995 to $7,758,317 for the six months ended December 31, 1996, as a
result of higher profit margins at the Barona Casino during the same six-month
period. With the exception of $65,817 in fees earned from consulting services
provided to a tribe in New Mexico, the Company's revenue was solely from fees
earned under agreements with the Barona Tribe; namely, the Operations Agreement
during the six months ended December 31, 1995, and the Consulting Agreement
during the six months ended December 31, 1996.

OPERATING EXPENSES. General and administrative expenses increased 13.6% from
$3,580,487 for the six months ended December 31, 1995 to $4,066,623 for the six
months ended December 31, 1996, resulting primarily from increases promotional
costs, an increase in the provision for doubtful accounts to cover anticipated
losses resulting from certain consulting engagements, increases in professional
and other consulting fees, an increase in compensation expense (reflecting a net
increase in the number of full-time employees and increases in salaries and
other benefits), increases in allowable political contributions, increases in
costs incurred in connection with the NIGC settlement agreement, and increases
in travel expenses incurred in connection with consulting work in Oregon and New
Mexico. The increases were partially offset by decreases in sponsorship costs
and charitable contributions.

Amortization of deferred contract costs increased 12.5% from $1,102,507 for the
six months ended December 31, 1995 to $1,240,091 for the six months ended
December 31, 1996, resulting primarily from calculating amortization on a higher
asset value for the six months ended December 31, 1996.

OTHER INCOME AND EXPENSE. For the six months ended December 31, 1996, interest
income was $133,497 compared to zero for the six months ended December 31, 1995.
Prior to April 1, 1996, while the Company performed services at the Barona
Casino under the terms of the Operations Agreement with the Barona Tribe, it was
determined by management that as long as the Company had outstanding advances of
future fees due to the Barona Casino, interest earned on excess cash balances
would be paid to the Barona Casino. Commencing April 1, 1996, the effective date
on which the Consulting Agreement between the Company and the Barona Tribe
replaced the Operations Agreement, the Company began to realize interest income
on its cash balances available for investment.

Interest expense increased from $2,922 for the six months ended December 31,
1995 to $119,000 for the six months ended December 31, 1996, primarily as a
result of accrued interest during the six months ended December 31, 1996 on
notes payable issued in March 1996 in connection with the repurchase of
1,908,865 shares of the Company's common stock from a former officer and
director of the Company, and in September 1996 in connection with the repurchase
of 6,778,244 shares of the Company's common stock from two major shareholders,
including a former director of the Company.


INCOME TAX PROVISION. The Company recorded an income tax provision $1,117,000
for the six months ended December 31, 1996, based on income before income taxes
of $2,466,100 for the period, compared to an income tax credit of $132,000 based
on an operating loss of $344,700 for the six months ended December 31, 1995.


LIQUIDITY AND CAPITAL RESOURCES.

During the six months ended December 31, 1996, the Company's cash position
decreased $855,645 from the June 30, 1996 balance of $4,347,985, to $3,492,340
at December 31, 1996. The decrease was principally due to the use of cash for
investing activities of $3,204,662, partially reduced by net cash generated by
operating activities of $1,954,090 during the period and by cash flows generated
by financing activities of $394,925.

Notes receivable increased as a result of a $1,212,009 loan to the Klamath
Tribes for land acquisition, which was repaid in January 1997. Accounts
receivable increased $390,820 during the six months ended 



                                       14
<PAGE>   17
December 31, 1996 primarily as a result of $428,123 in construction and other
costs paid on behalf of the Klamath Tribes in connection with the development of
the Kla-Mo-Ya Casino, which was also repaid in January 1997.

Accounts payable and accrued expenses increased $631,480 as a result of accrued
costs and expenses associated with the NIGC settlement agreement, accrued
expenses incurred in connection with consulting contracts, and accrued interest
on notes payable issued in connection with the repurchase of common stock.

Deferred contract costs have been financed principally by cash generated from
operations, advances of future fees from the Barona Casino, working capital and
advances and capital contributions from shareholders. From the inception of the
Company through December 31, 1996, in addition to its general and administrative
expenses, the Company's most significant expenditure has been the funding of the
deferred contract costs related to an expansion of the facilities at the Barona
Casino. Net cash provided by operations from fees earned during this same period
was insufficient by itself to fund the deferred contract costs. In addition to
fees earned under the Operations and Consulting Agreements, the Company also has
received advances against future fees from the Barona Tribe and received capital
contributions from its shareholders. The increase in deferred contract costs
from $13,160,953 at June 30, 1996 to $13,926,437 at December 31, 1996, was
financed primarily by an increase of $594,925 in advances of future fees from
the Barona Casino during the same period. At December 31, 1996, outstanding
advances of future fees from the Barona Casino were $2,980,739. Advances do not
bear interest and are due on demand.

Cash flows used in financing activities for the six months ended December 31,
1996 include the purchase of a $1,518,000 bank certificate of deposit, which has
been pledged as collateral by the Company to secure loans made pursuant to a
bank credit agreement with the Klamath Tribes to finance preopening costs and
expenses of approximately $1.5 million, and an $879,933 investment in $900,000
face amount of revenue bonds issued by the Klamath Tribes. In January 1997, the
Company sold $200,000 face amount of the revenue bonds for $197,415, reducing
its net investment in the bonds to $682,578. Cash flows used in financing
activities also include $200,000 in payments related to the repurchase of shares
of common stock. Cash flows generated by financing activities during the six
months ended December 31, 1996 included an increase of $594,925 in advances of
future fees from the Barona Casino.

Long term debt increased $3,500,000, as a result of the issuance of notes
payable in connection with the repurchase of shares of common stock.

It is the Company's intention to assist the Barona Tribe in funding, or finding
acceptable sources of funding for future improvements in the Barona Casino.
Depending on the nature and extent of the improvement project, to the extent
practicable, it is the Company's intent to first explore funding such
improvement projects from the Company's working capital and through advances of
future fees, before seeking outside debt or equity financing. However, outside
sources of financing may be required or sought at any time.

Inland Casino has announced plans to expand and improve the existing facilities
at the Barona Casino, which expansion is subject to the approval of the Barona
Tribe and also is subject to obtaining appropriate financing. The expansion will
not increase the number of gaming devices, but is expected to expand off-track
betting and other non-gaming activities, as permitted under the verbal agreement
with the U.S. Attorney for the Southern District of California and the compact
with the State of California concerning off-track betting. This proposed
expansion project is estimated to cost up to $17.5 million and the Company and
the Barona Tribe are exploring financing alternatives for the project.

The Barona Casino and all of the related facilities are capital improvements
upon land which belongs to the Barona Tribe. As such, the Company has no
ownership whatsoever in any of the improvements to such land. All of these
improvements belong to the Barona Tribe.





                                       15
<PAGE>   18

In October, 1996, the Company cancelled a bank credit agreement. Pursuant to
such agreement, among other things, the Company granted to the bank a security
interest in the Company's assets and an immediately exerciseable warrant to
purchase 40,000 shares of the Company's common stock at a price of $5.00 per
share. Pursuant to such cancellation, the bank agreed to cancel the credit
agreement and terminate its security interest in the Company's assets, but
retained the warrant. During the six months ended December 31, 1996 and all
prior periods, the Company did not utilize such credit facility.

SEASONALITY.

The Barona Casino is located approximately 30 miles east of downtown San Diego,
California where the population is relatively stable throughout the year,
although it peaks to some extent due to tourism during the summer months and to
a lesser extent during the winter months. On the basis of its experience to
date, the Company anticipates that the Barona Casino's business may peak in
summer and, to some extent, in winter, and may decline somewhat in early spring
and late fall. However, at this time, the Company cannot accurately predict the
continued effect of seasonality on its business.

INFLATION.

To date, inflation has not had a material impact on the Company's financial
condition or its results of operations.

ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS AND FORWARD-LOOKING 
STATEMENTS.

ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS.

Gaming on Indian land is extensively regulated by Federal, State and Tribal
governments. The present regulatory environment is extremely uncertain because
of certain pending litigation and legislation. Adverse findings for any of the
Indian tribes in any of the pending actions could have a material adverse effect
on the operations of Inland Casino, as would criminal and civil enforcement
actions taken by federal agencies which could be commenced before the outcome of
such litigation is known.

In addition, the Company's Consulting Agreements with the Barona Tribe and the
Klamath Tribes have not yet been approved by all regulatory authorities. If the
Consulting Agreements (particularly, the Barona Consulting Agreement) are not
approved or are significantly modified from the standpoint of consulting
revenue, such action would have a material adverse effect on the business and
financial condition of the Company.

In any event, any material reduction in fees payable to the Company, whether as
a result of a modification to the agreements between the Company and the Barona
Tribe as a result of regulatory compliance requirements or weakness in the
operations of the Barona Casino, could have a material adverse effect on the
business and financial condition of the Company, if the Company could not either
reduce expenses or increase revenues from other sources.

FORWARD-LOOKING STATEMENTS.

Included in the Notes to the Interim Financial Statements, this Item 2.
Management's Discussion and Analysis or Plan of Operation and elsewhere in this
Report are certain forward-looking statements reflecting the Company's current
expectations. Although the Company believes that its expectations are based on
reasonable assumptions, there can be no assurance that the Company's financial
goals or expectations will be realized. Numerous factors may affect the
Company's actual results and may cause results to differ materially from that
expressed in forward-looking statements made by or on behalf of the Company.
Some of these factors include the uncertainty involved in the regulatory
approval process relating to the Consulting Agreement and the Klamath Agreement,
the outcome of a variety of pending litigation and legislation at the federal
and state levels regarding Indian gaming; the availability of funding
alternatives to fulfill certain contemplated development projects at the Barona
Casino and the Kla-Mo-Ya Casino; and general economic factors affecting the
gaming industry in general and Indian gaming in particular in the respective
geographic markets within which the Company competes.



                                       16
<PAGE>   19
                          PART II - OTHER INFORMATION

ITEM 4.  SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS

On December 12, 1996, the Company held its Annual Meeting of Shareholders. At
such Meeting, the following matters were approved by the shareholders:

         (a) Duane M. Eberlein, Forrest J. Gerard, Andrew B. Laub, Jana McKeag,
G. Fritz Opel, Arthur R. Pfizenmayer, Cornelius E. ("Neil") Smyth and L. Donald
Speer II were each elected to serve as directors of the Company to hold office
for a term of one year and until their respective successors are elected and
qualified. The tabulation of the votes cast for election of Directors was as
follows:


<TABLE>
<CAPTION>
     Nominee                       Votes For              Votes Withheld
     -------                       ---------              --------------
<S>                                <C>                          <C>
Duane M. Eberlein                  3,542,246                    80
Forrest J. Gerard                  3,542,271                    55
Andrew B. Laub                     3,542,256                    70
Jana McKeag                        3,542,326                     0
G. Fritz Opel                      3,542,216                   110
Arthur R. Pfizenmayer              3,542,246                    80
Cornelius E. ("Neil") Smyth        3,542,271                    55
L. Donald Speer II                 3,542,266                    60
</TABLE>


and

         (b) The Company's 1996 Nonemployee Directors Stock Option Plan was
approved. The tabulation of the votes was as follows:

<TABLE>
<S>                                <C>      
Votes For                          3,495,956
Votes Against                         41,171
Abstentions                            9,123
Broker Non-Votes                       6,729
</TABLE>



                                       17
<PAGE>   20



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.


  (a)    Exhibits.

         Exhibit No.

          3.1       Amended and Restated Articles of Incorporation of the
                    Company (formerly known as Twin Creek Exploration Co.,
                    Inc.), previously filed as Exhibit 3.1 to the Company's
                    Annual Report on Form 10-KSB for the fiscal year ended June
                    30, 1995, filed with the U.S. Securities and Exchange
                    Commission (the "Commission") on October 12, 1995 (File No.
                    0-11532), which is hereby incorporated herein by reference.

          3.2       Amended and Restated By-laws of the Company (formerly known
                    as Twin Creek Exploration Co., Inc.), previously filed as
                    Exhibit 3.1 to the Company's Quarterly Report on Form 10-QSB
                    for the quarterly period ended March 31, 1996, filed with
                    the Commission on May 17, 1996 (File No. 0-11532), which is
                    hereby incorporated herein by reference.

          10.1      Standard Form of Agreement Between Owner and Architect,
                    dated October 24, 1996 between Inland Casino Corporation,
                    Consultant, and Gaming Environments Design, Inc., in
                    connection with the development and construction of the
                    Kla-Mo-Ya Casino by the Klamath Tribes.

          10.2 (a)  Letter Agreement dated October 24, 1996 between Inland
                    Casino Corporation and Nelson-Bourdages, Inc. P.S., for
                    structural engineering consulting services in connection
                    with the development and construction of the Kla-Mo-Ya
                    Casino by the Klamath Tribes.

          10.2 (b)  Letter Agreement dated October 24, 1996 between Inland
                    Casino Corporation and Nelson-Bourdages, Inc. P.S., for
                    civil engineering consulting services in connection
                    with the development and construction of the Kla-Mo-Ya
                    Casino by the Klamath Tribes.

          10.3      Abbreviated Form of Agreement Between Owner and Contractor,
                    dated December 3, 1996 between Inland Casino Corporation and
                    Pacific Industries Northwest, Inc., in connection with the
                    development and construction of the Kla-Mo-Ya Casino by the
                    Klamath Tribes.

          10.4      Standard Form of Agreement Between Contractor and
                    Subcontractor, dated January 3, 1997 between Inland Casino
                    Corporation and Coit Power Incorporated, in connection with
                    the development and construction of the Kla-Mo-Ya Casino by
                    the Klamath Tribes.

          10.5      Standard Form of Agreement Between Contractor and
                    Subcontractor, dated January 6, 1997 between Inland Casino
                    Corporation and Bellet Construction, in connection with the
                    development and construction of the Kla-Mo-Ya Casino by the
                    Klamath Tribes.



                                       18
<PAGE>   21
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K (Continued).


  (a)    Exhibits.(Continued)

         Exhibit No.

          10.6      Standard Form of Agreement Between Contractor and
                    Subcontractor, dated January 6, 1997 between Inland Casino
                    Corporation and L.J. Barney and Sons, in connection with the
                    development and construction of the Kla-Mo-Ya Casino by the
                    Klamath Tribes.

          10.7      Standard Form of Agreement Between Contractor and
                    Subcontractor, dated January 22, 1997 between Inland Casino
                    Corporation and Powley Plumbing, Inc., in connection with
                    the development and construction of the Kla-Mo-Ya Casino by
                    the Klamath Tribes.

           27       Financial Data Schedule.



(b)      Reports on Form 8-K.

During the three months ended December 31, 1996, a Current Report on Form 8-K
dated October 1, 1996 was filed by the Company, disclosing under Item 5. Other
Events the terms of the repurchase of 6,778,244 shares of the Company's common
stock from two of its principal shareholders on September 30, 1996, pursuant to
that certain Stock Purchase and Settlement and Release Agreement by and among
the Company, Jonathan Ungar and Alan Henry Woods, dated September 27, 1996 (the
"Stock Purchase Agreement"). The Stock Purchase Agreement and certain related
promissory notes were filed as exhibits under Item 7 of the Report.




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<PAGE>   22
                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                       INLAND CASINO CORPORATION,
                                       a Utah Corporation (Registrant)

Date:  February 14, 1997               By:  /S/ Duane M. Eberlein
                                       --------------------------
                                       Duane M. Eberlein
                                       Vice President, Chief Financial
                                       Officer and Secretary
                                       (Principal Financial and
                                       and Accounting Officer)






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<PAGE>   23

                                  EXHIBIT INDEX

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

       3.1      Amended and Restated Articles of Incorporation of the Company
                (formerly known as Twin Creek Exploration Co., Inc.), previously
                filed as Exhibit 3.1 to the Company's Annual Report on Form
                10-KSB for the fiscal year ended June 30, 1995, filed with the
                U.S. Securities and Exchange Commission (the "Commission") on
                October 12, 1995 (File No. 0-11532), which is hereby
                incorporated herein by reference.

       3.2      Amended and Restated By-laws of the Company (formerly known as
                Twin Creek Exploration Co., Inc.), previously filed as Exhibit
                3.1 to the Company's Quarterly Report on Form 10-QSB for the
                quarterly period ended March 31, 1996, filed with the Commission
                on May 17, 1996 (File No. 0-11532), which is hereby incorporated
                herein by reference.

      10.1      Standard Form of Agreement Between Owner and Architect, dated 
                October 24, 1996 between Inland Casino Corporation, Consultant,
                and Gaming Environments Design, Inc., in connection with the
                development and construction of the Kla-Mo-Ya Casino by the
                Klamath Tribes.

      10.2 (a)  Letter Agreement dated October 24, 1996 between Inland Casino
                Corporation and Nelson-Bourdages, Inc. P.S., for structural
                engineering consulting services in connection with the
                development and construction of the Kla-Mo-Ya Casino by the
                Klamath Tribes.

      10.2 (b)  Letter Agreement dated October 24, 1996 between Inland Casino
                Corporation and Nelson-Bourdages, Inc. P.S., for civil
                engineering consulting services in connection with the
                development and construction of the Kla-Mo-Ya Casino by the
                Klamath Tribes.

      10.3      Abbreviated Form of Agreement Between Owner and Contractor, 
                dated December 3, 1996 between Inland Casino Corporation and
                Pacific Industries Northwest, Inc., in connection with the
                development and construction of the Kla-Mo-Ya Casino by the
                Klamath Tribes.

      10.4      Standard Form of Agreement Between Contractor and 
                Subcontractor, dated January 3, 1997 between Inland Casino
                Corporation and Coit Power Incorporated, in connection with the
                development and construction of the Kla-Mo-Ya Casino by the
                Klamath Tribes.

      10.5      Standard Form of Agreement Between Contractor and 
                Subcontractor, dated January 6, 1997 between Inland Casino
                Corporation and Bellet Construction, in connection with the
                development and construction of the Kla-Mo-Ya Casino by the
                Klamath Tribes.





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<PAGE>   24
                           EXHIBIT INDEX (Continued)

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

      10.6      Standard Form of Agreement Between Contractor and Subcontractor,
                dated January 6, 1997 between Inland Casino Corporation and L.J.
                Barney and Sons, in connection with the development and
                construction of the Kla-Mo-Ya Casino by the Klamath Tribes.

      10.7      Standard Form of Agreement Between Contractor and Subcontractor,
                dated January 22, 1997 between Inland Casino Corporation and
                Powley Plumbing, Inc., in connection with the development and
                construction of the Kla-Mo-Ya Casino by the Klamath Tribes.

      27        Financial Data Schedule.











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