DIAMONDHEAD CASINO CORP (Form: 10-12G, Received: 03/31/2015 10:29:49)

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As filed with the Securities and Exchange Commission on March 31, 2015

File No. 001-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

FORM 10

GENERAL FORM FOR REGISTRATION OF SECURITIES PURSUANT TO SECTION 12(b) or (g) OF THE SECURITIES EXCHANGE ACT OF 1934

DIAMONDHEAD CASINO CORPORATION

(Exact name of registrant as specified in charter)

Delaware		59-2935476
(State of Incorporation)		(I.R.S. EIN)

1013 Princess Street, Alexandria, Virginia 22314

(Address of principal executive offices/zip code)

Registrant’s telephone number, including area code: 703-683-6800

Securities to be registered pursuant to Section 12(b) of the Act: None

Securities to be registered pursuant to Section 12(g) of the Act: Common Stock par value $ .001

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Accelerated filer o

Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company x

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TABLE O F CONTENTS

Item 1.	Business	1

Item 1A.	Risk Factors	17

Item 2.	Financial Information	17

Item 3.	Properties	29

Item 4.	Security Ownership of Certain Beneficial Owners and Management	31

Item 5.	Directors and Executive Officers	35

Item 6	Executive Compensation	37

Item 7.	Certain Relationships and Related Transactions, and Director Independence	41

Item 8.	Legal Proceedings	42

Item 9 .	Market Price of and Dividends on Registrant’s Common Equity and Related Stockholder Matters	43

Item 10.	Recent Sales of Unregistered Securities	45

Item 11.	Description of Registrant’s Securities to be Registered	46

Item 12.	Indemnification of Officers and Directors	47

Item 13.	Financial Statements and Supplementary Data	48

Item 14.	Changes and Disagreements with Accountants on Accounting and Financial Disclosure	48

Item 15	Financial Statements and Exhibits	48

	Signatures	51

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FORWARD LOOKING STATEMENTS

This Registration Statement on Form 10 contains forward-looking statements and involves risks and uncertainties that could materially affect the Company’s future plans, business strategy, expected results of operations, liquidity, cash flows, and business prospects. These statements include, among other things, statements regarding our ability to implement our business plan and business strategy, our ability to obtain financing to sustain the Company, our ability to finance our future development and future operations, our ability to attract key personnel, and our ability to operate profitably in the future. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those reflected in the forward-looking statements. Any statements contained in this document that are not statements of historical fact may be deemed to be forward-looking statements. You can identify forward-looking statements as those that are not historical in nature, particularly those that use terminology such as “may”, “will”, “should”, “expects”, “anticipates”, “contemplates”, “estimates”, “believes”, “intends”, “plans”, “projects”, “predicts”, “potential” or “continue” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider risks and uncertainties relating to various factors, including, but not limited to, financing, licensing, construction and development, competition, legal actions, federal, state, county and/or city government actions, general financing conditions, and general economic conditions.

The Company’s actual results may differ significantly from results projected in the forward-looking statements. We undertake no obligation to revise or update forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements

Throughout this Registration Statement references to “we”, “our”, “us”, “Diamondhead Casino Corporation”, the “Company”, and similar terms refer to Diamondhead Casino Corporation and its wholly-owned subsidiaries, unless the context indicates otherwise.

ITEM 1. BUSINESS

The Company is a Delaware corporation which was incorporated on November 15, 1988, under the name “Europa Cruises Corporation.” In 1989, the Company became a publicly-held company. On November 22, 2002, the Company amended its Certificate of Incorporation to change its name to “Diamondhead Casino Corporation.” The Company currently has three subsidiaries.

The Company has no current operations in any state. The Company has had no income or revenue from any operations since 2000. The Company currently has no employees other than two persons who serve in executive officer capacities.

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Previous Florida Operations

From inception through approximately August of 2000, the Company operated gambling vessels in international waters. The vessels sailed from various state ports into international waters where gaming operations were conducted. From approximately 1994 through August of 2000, operations were conducted primarily out of ports located in Miami Beach, Florida, Ft. Myers Beach, Florida, and Madeira Beach, Florida. By the end of 2000, the Company had divested itself of its gaming operations to satisfy financial obligations to its vendors, lenders and taxing authorities and to focus its resources on the development of a casino resort in Diamondhead, Mississippi. The Company has had no gaming operations since 2000. The Company has no current operations in Florida, no offices in Florida, and no employees in Florida.

Mississippi

The Company is a single asset entity. It owns, through its wholly-owned subsidiary, Mississippi Gaming Corporation, an approximate 404 acre undeveloped property located at 7051 Interstate 10, Diamondhead, Mississippi 39525 (hereafter “the Diamondhead Property” or “the Property”). The Company intends to develop the Property beginning with a casino resort. The Company is in the early development stages of the project. There can be no assurance that the substantial funds required for the design and construction of the project can be obtained or obtained on acceptable terms. Moreover, there can be no assurance that if the requisite financing for the project is obtained and the project is constructed, that the project will be successful. The Company has no current operations in Mississippi, no offices in Mississippi, and no employees in Mississippi.

Property Zoning

The Diamondhead Property is located entirely within the City of Diamondhead and Hancock County. The City of Diamondhead incorporated in February of 2012. On October 15, 2012, the Mayor and City Council adopted a Zoning Ordinance in which the City of Diamondhead zoned the entire Property as “C-2 - Interstate Commercial/Gaming/Resort.” Thus, the requisite City zoning is currently in place for a casino.

Land-Based Gaming

All references in this section to Mississippi law are qualified in their entirety by reference to the actual text of the law.

On August 29, 2005, Hurricane Katrina struck the Gulf coast of the United States causing extensive damage to Louisiana and Mississippi, including Biloxi, Gulfport, and Bay St. Louis, Mississippi. Hurricane Katrina damaged or destroyed most of the casinos on the Gulf coast. Prior to Hurricane Katrina, Mississippi law required that casinos on the Gulf coast be built in, on, or above the water and be located a minimum of fifty percent below mean high tide.

On October 17, 2005, in response to the devastation caused by Hurricane Katrina, Mississippi passed new legislation that allows casinos located in certain statutorily-described areas, including

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St. Louis Bay, where the Diamondhead Property is located, to be constructed on land no more than 800 feet from the mean high-water line. Under Mississippi’s new legislation, the part of the structure in which licensed gaming activities are conducted must be located entirely in an area which is located no more than eight hundred (800) feet from the mean high-water line (as defined in Section 29-15-1 of the Mississippi Code) of the waters within the State of Mississippi, which lie adjacent to the State of Mississippi south of the three (3) most southern counties in the State of Mississippi, including the Mississippi Sound, St. Louis Bay, Biloxi Bay and Pascagoula Bay or, with regard to Harrison County only, no farther north than the southern boundary of the right-of-way for U.S. Highway 90, whichever is greater. In the case of a structure that is located in whole or part on shore, the part of the structure in which licensed gaming activities are conducted must lie adjacent to state waters south of the three (3) most southern counties in the State of Mississippi, including the Mississippi Sound, St. Louis Bay, Biloxi Bay and Pascagoula Bay. When the site upon which the structure is located consists of a parcel of real property, easements and rights-of-way for public streets and highways are not construed to interrupt the contiguous nature of the parcel, nor is the footage contained within the easements and rights-of-way counted in the calculation of the distances specified above.

The Company intends to take advantage of the Mississippi legislation that allows casinos to be built on land.

Annual In-Lieu Tidelands Assessment

Since the Company intends to construct a casino on land in Mississippi, the Company will no longer require a tidelands lease from the Secretary of State. Under Mississippi’s prior law, which required that the Company’s casino be in, on, or above water and a minimum of fifty percent at or below mean high tide, the Company would have required a tidelands lease to lease water-bottoms owned by the State.

However, on or about October 17, 2005, when Mississippi passed new legislation permitting casinos to be built on land in certain locations, Mississippi also passed a companion law that requires any person possessing a license under the Mississippi Gaming Control Act, who operates a gaming establishment in any of the three most southern counties of the State (including Hancock County in which the Company’s Property is located), and who does not lease public trust tidelands from the State, to pay an annual in-lieu tidelands assessment to the Public Trust Tidelands Assessments Fund. For calendar year 2006, the annual in-lieu tidelands assessment was between $400,000 and $750,000, based on an escalating scale which is measured by the capital investment in the part of the structure in which the licensed gaming activities are conducted. For each calendar year thereafter, the Secretary of State is required to review and adjust the value of the capital investment and the annual in-lieu tidelands assessment due. Such review and adjustment shall be tied to the Consumer Price Index.

This annual in-lieu tidelands assessment will apply to any casino constructed on land on the Diamondhead Property.

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Mississippi Gaming Site Approval

In the State of Mississippi, in addition to local zoning, a proposed gaming site must obtain Gaming Site Approval. Only the Mississippi Gaming Commission has the authority to grant Gaming Site Approval. On or about May 29, 2014, the title holder of the Property, Mississippi Gaming Corporation, a wholly-owned subsidiary of the Company, applied for gaming site approval for a fifty (50) acre site on the Diamondhead Property. In its Notice of Intent, the applicant anticipated the casino would contain approximately 1250 slot machines and approximately 40 table games and contain an estimated 80,000 square feet of gaming space. On August 21, 2014, the Mississippi Gaming Commission granted Gaming Site Approval for a fifty acre site on the Diamondhead Property.

The Mississippi Gaming Commission found, in pertinent part, as follows: 1) that in accordance with the Mississippi Gaming Control Act of 1990, codified as Miss. Code Ann . § 75-76-1 et seq., Miss. Code Ann . § 19-3-79, and Miss. Code Ann. §97-33-1, as amended, the citizens of Hancock County, Mississippi voted to authorize gaming in Hancock County, and thus gaming is legal at qualifying locations within Hancock County, Mississippi; that the proposed gaming area is within 800 feet of the mean high water line of the Bay of St. Louis and is thus a legal gaming site under the Mississippi Control Act of 1990, as amended, and 13 Mississippi Administrative Code Part 2 Rule 2.2(a)(1) and (3); and that the Proposed Site is properly zoned for gaming.

The Gaming Site Approval was granted for a period expiring three years after the date Approval to Proceed with Development is granted. The Property owner has not yet applied for Approval to Proceed with Development.

Additional Permits, Authorizations and Approvals Are Required

In addition to Gaming Site Approval, the development of the Diamondhead Property requires the Company to obtain additional permits, authorizations and approvals from various federal, state, county, and/or city agencies, boards and commissions, which may include, but not be limited to, the following: U.S. Army Corps of Engineers, Environmental Protection Agency, U.S. Fish and Wildlife Service, U.S. Coast Guard, Port and Harbor Commission, Mississippi Gaming Commission, Mississippi Department of Marine Resources, Mississippi Commission on Environmental Quality, Mississippi Department of Transportation, Hancock County, and/or the City of Diamondhead. The regulatory environment relating to such permits, authorizations and approvals is uncertain and subject to constant change. There can be no assurance that all permits, authorizations and/or approvals can be obtained, or that if obtained, that they will be renewed. While there is no pending environmental litigation, the foregoing permits, authorizations and approvals remain subject to future litigation and the actions of environmental groups and various federal, state, county and/or local governments and agencies, including, but not limited to, the foregoing. The Company will be required to spend significant funds to pay the architects, surveyors, engineers, accountants, attorneys, consultants and other experts required to prepare and process the applications required for the permits, authorizations and approvals required. The amount ultimately required is unknown at this time, but the Company does not have sufficient funds required for this purpose. There can be no assurance the Company will be able to obtain the funds required for this purpose or can obtain the funds required on acceptable terms.

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Uncertain Regulatory and Political Environment

The political environment in which the Company and/or its subsidiaries intend to operate is also uncertain, dynamic and subject to rapid change. Existing operators often propose and support legislation and/or litigation designed to make it difficult or impossible for competition to enter a market. This political and regulatory environment makes it impossible to predict the effects that the adoption of and changes in gaming laws, rules and regulations and/or competition will have on development of a gaming resort. Moreover, legislatures in states in which gaming is legal often consider wide-ranging legislation and regulations which could adversely affect operations and expected revenues. Likewise, the federal government often considers legislation which could adversely affect operations and expected revenues. More recently, certain states have legalized internet gaming. The long term effects of legalizing internet gaming on the casino industry in general and on the Company’s proposed casino operation, are unknown.

Anti-Gaming Referenda

On at least three separate occasions since 1998, certain anti-gaming groups have proposed referenda that, if adopted, would have banned gaming in Mississippi and required that gaming entities cease operations within two years after the ban. All three of the proposed referenda were ruled illegal by Mississippi State trial courts. If such a referendum were to be approved by the voters, it would have a material adverse effect on the Company.

Mississippi Regulation

The Company has no current operations in Mississippi and does not operate any gaming facility in Mississippi. The Company intends to develop its Diamondhead property as a destination casino resort.

Assuming it is successful in developing its resort, the Company and its subsidiaries and/or affiliates will be subject to federal, state, county, city and local, laws, rules, ordinances and regulations with respect to the operation of any gaming facility. The following is intended to serve as a partial description of the Mississippi regulatory environment in which the Company or its subsidiaries or joint venture partner(s) would seek approvals to construct and operate a gaming facility and is not intended to be a complete, precise, or up-to-date recitation of all applicable laws, rules, regulations or ordinances that might affect the Company’s operations or with which the Company would be required to comply. Additional or more restrictive laws, rules and regulations could be adopted at any time or gambling could be completely banned.

The location of, ownership of, and operation of gaming facilities in Mississippi are subject to extensive state and local regulation, primarily through the licensing and control of the Mississippi Gaming Commission and the Mississippi State Tax Commission. The Company and/or its subsidiaries must register and be licensed under the Mississippi Gaming Control Act and its gaming operations will be subject to the regulatory control of the Mississippi Gaming Commission, the Mississippi State Tax Commission and various state, county and local regulatory agencies.

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The Mississippi Gaming Control Act gives the Mississippi Gaming Commission (the “Commission”) extensive power to enforce the Act and adopt regulations in furtherance of the Act (the “Mississippi Regulations”). The laws, regulations and supervisory procedures of Mississippi and the Mississippi Gaming Commission seek to: (1) prevent unsavory or unsuitable persons from having any direct or indirect involvement with gaming at any time or in any capacity; (2) establish and maintain responsible accounting practices and procedures; (3) maintain effective control over the financial practices of licensees, including establishing minimum procedures for internal fiscal affairs and safeguarding of assets and revenues, providing reliable record keeping and making periodic reports to the Mississippi Gaming Commission; (4) prevent cheating and fraudulent practices; (5) provide a source of state and local revenues through taxation and licensing fees; and (6) ensure that gaming licensees, to the extent practicable, employ Mississippi residents. The regulations are subject to amendment and interpretation by the Commission. Changes in Mississippi law or the regulations or the Commission’s interpretation thereof may limit or otherwise materially affect the types of gaming that may be conducted and could have a material adverse effect on Mississippi gaming operations.

Approval Process

The Commission has divided the approval process into two separate phases: (1) gaming site approval; and (2) approval to proceed with development.

1. Gaming Site Approval

Mississippi Gaming Corporation, which holds title to the Property and is a wholly-owned subsidiary of the Company, obtained Gaming Site Approval on August 21, 2014. With respect to gaming site approval, approval constitutes only the Commission’s finding that the location complies with applicable gaming laws and regulations. Gaming site approval does not entitle the recipient to proceed with development, nor does it constitute a license to engage in gaming or a right to a gaming license. Gaming site approval is a revocable privilege and no holder acquires any vested right therein. The Mississippi Gaming Commission reserves the right to revoke any site approval should the circumstances change that would make the site illegal or unsuitable.

An application for gaming site approval in the three most southern counties must include evidence satisfactory to the Commission in support thereof including: (1) a survey indicating the specific location of the property; (2) the current use of any adjacent property as well as the location of the nearest residential area, church and school; (3) evidence that all applicable zoning ordinances allow gaming at the proposed site; and (4) a survey establishing the mean high water line, performed by a qualified surveyor for performance of tidal surveys.

Gaming establishments in the three most southern counties in the State of Mississippi, including Hancock County, are permitted to be permanent inland structures. No point in the gaming area may be more than eight hundred (800) feet from the nineteen (19) year mean high water line. Harrison County establishments south of Highway 90 may exceed the eight hundred (800) foot measurement up to the southern boundary of Highway 90. All public easements and rights-of-way for public streets and highways are excluded from the 800 foot measurement. Any point of

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reference used to determine the 800 foot distance from the mean high water line must be located on the applicant or licensee’s premises. The applicant or licensee must own and/or lease the land that is contiguous both to the parcel used to conduct gaming and the point of reference used to determine the mean high water line, and this land must be shown to be an integral part of the project. The Commission has final authority in reviewing and approving each site as it pertains to meeting the requirements of this regulation.

2. Approval to Proceed with Development

With respect to obtaining the Commission’s approval to proceed with development, the following information, together with documentation to support this information, must be submitted to the Commission:

1) Architectural plans or renderings showing details of all proposed construction and renovation for the project, together with a footprint of the project and a description of the construction and type of parking facilities, as well as parking lot capacity. Commission approval requires that the project include a 500-car, or larger parking facility in close proximity to the casino complex, and infrastructure facilities shall include a 300-room, or larger hotel of at least a three diamond rating as defined by an acceptable travel publication to be determined by the Commission. In addition, infrastructure facilities must include a restaurant capable of seating at least 200 people and a fine dining facility capable of seating at least 75 people, and the casino floor must be at least 40,000 square feet. The project will also have or support an amenity that will be unique to the market and will encourage economic development and promote tourism. The Commission will have authority in determining the quality of the amenity and the ultimate approval of the amenity, and may, in its discretion, reduce the requirements above should it determine that there is a justification to do so in certain markets. The Commission will further determine, in its discretion, if the prerequisite hotel and dining facilities may be supplanted by an amenity of high value to the overall tourism market in that the amenity will likely encourage economic development and promote tourism. As used herein, infrastructure facilities are not such items as parking facilities, roads, sewage and water systems, or civic facilities normally provided by cities and/or counties.

The qualifying infrastructure must be owned or leased by (i) the holder of the site approval, or (ii) an affiliated company of the holder of the site approval where both the affiliated company and the holder of the site approval have identical direct or indirect equity ownership. This regulation shall apply to any new applicant for a gaming license for a new gaming facility and to the acquisition or purchase of a licensee or gaming facility for which gaming operations have ceased prior to the time of acquisition or purchase. It does not apply to any licensee which has been licensed by the Commission, or to any person which has received Approval to Proceed with Development from the Commission prior to December 31, 2013 (or to such licensee upon any licensing renewal after such date.)

Any change to the plan, or placement or design of the establishment, cruise vessel or vessel, shall be submitted in advance to the Executive Director for determination of whether such a change constitutes a material change. If the Executive Director determines that a material change has occurred, Commission approval is required for same.

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2) Statements reflecting the total estimated cost of construction or renovation of the establishment, vessel, or cruise vessel and shore and dock facilities, distinguishing between known costs and projections, and separately identifying: facility design expense; land acquisition costs; site preparation costs; construction costs or renovation costs; equipment acquisition costs; costs of interim financing; organization, administrative and legal expenses; projected permanent financing costs; qualified infrastructure costs; and non-qualifying infrastructure costs.

3) A construction schedule for completion of the project, including an estimated date of project completion, indicating whether a performance bond will be required by the applicant to be furnished by the contractor.

4) Current financial statements, including, at a minimum, a balance sheet and profit and loss statement for the proposed licensee.

5) A detailed statement of the sources of funds for all construction and renovation proposed by the site development plans. Any funding, whether equity or debt, to be obtained, must be supported by firm written commitments satisfactory to the Commission. The applicant will have 120 days in which to close all financing and start construction or the approval is deemed void.

6) Evidence that the following agencies (if applicable) were notified of the development and/or do not oppose the site development: U.S. Corps of Engineers, U.S. Coast Guard, Mississippi Department of Transportation, Mississippi Department of Environmental Quality, Department of Marine Resources, Port and Harbor Commission, Levee Board, City and County government, and such other agencies as the Executive Director deems appropriate.

The application for a Gaming Operator’s License must be filed no later than ninety (90) days after the Commission grants approval to proceed with development. The gaming site approval will expire three (3) years from the date approval to proceed with development is granted unless the Commission grants an extension. Approval to proceed with development is not subject to sale, assignment or transfer.

Opening of a Casino

Before any gaming facility may open to the public, all infrastructure requirements must be fully operational. The development shall be completed in accordance with the approved plan and be ready for operation within the gaming site approval time period. Gaming site approval may be extended within the discretion of the Commission.

Application Information Required is Extensive and Must be Complete and Accurate

In addition to other information required by law and Commission regulations, an applicant must provide complete information regarding the proposed operation, including but not limited to, a certification that any establishment to be used by the proposed operation has been inspected and approved by all appropriate authorities; fingerprints for each individual applicant; the nature, source, and amount of any financing; the proposed uses of all available funds; the amount of funds available after opening for the actual operation of the establishment; and economic

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projections for the first three years of operation of the establishment. Each applicant must provide complete information regarding his or her background for the ten-year period preceding submission of the application.

Every application to become a license holder must contain the following additional information: actual establishment blueprints, including a layout of each floor stating the projected use of each area; the number of miles from the nearest population center and a description of transportation facilities serving that population center, a description of the casino size and configuration of slot machines, video games of chance and table games; a description of the availability of fire protection and the adequacy of law enforcement at the establishment and emergency evacuation plans for hurricane and flooding disasters; a description of the arrangements for food and drink concessions, the names and addresses of the concessionaires and the terms of the concession contracts, if applicable; the type of slot machines and video games of chance to be used and the proposed distributors and manufacturers of this equipment; a description of the physical location, size and floor plan of the section of the establishment reserved for patrons under 21 years of age and plans for activities and staffing for this section; periods of time that the gaming areas will be in operation; a description of the proposed management of the facility, management personnel by function, and tip distribution policies; all known feasibility studies made available to the applicant which have been done on the type of gaming in the particular locale where the applicant intends to conduct gaming, and a description of procurement policies that emphasize the utilization of Mississippi employees, resources, and goods and services in the operation of the gaming establishment.

Timetable for Financing and Construction

License applicants must submit, simultaneously with submission of their completed application, a timetable for financing arrangements (including applications for approval of public offerings or private placements), and commencement and completion of construction activities, setting forth the date upon which gaming activities will commence. The timetable will be subject to approval by the Commission and monitored for compliance by the Executive Director. The Commission may grant extensions of time upon the recommendation of the Executive Director. License applicants must not advertise or promote the opening of their proposed casino nor the commencement of employee training for their proposed casino until the applicant is granted a license by the Mississippi Gaming Commission. Applicants may request a waiver of this regulation from the Executive Director, which waiver, if granted would be subject to revocation.

Unsuitable Locations

The Executive Director may recommend that an application for a license be denied if the Executive Director believes that the place or location for which the license is sought is unsuitable for the conduct of gaming operations. The Commission may deny an application for a state gaming license if it deems that the place or location for which the license is sought is unsuitable for the conduct of gaming operations. Without limiting the generality of the foregoing, the following locations may be deemed unsuitable: premises located within the immediate vicinity of residential areas, churches, schools and children’s public playgrounds; premises where gaming is contrary to any county or city ordinance, including, but not limited to, zoning ordinances

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restricting the permissible locations for gaming facilities, so long as such ordinances do not have the effect of absolutely excluding or prohibiting legal gaming; premises which fail to meet federal, state or local health and safety standards, and any other applicable laws or regulations; premises frequented by minors; premises lacking adequate supervision or surveillance; premises difficult to police or where adequate fire protection may be difficult; any other premises where the conduct of gaming would be inconsistent with the public policy of the State of Mississippi.

Building Standards

Any establishment to be constructed for gaming will be required to meet the Southern Standard Building Code. If the local county or city has a building code, then the local code will be the applicable standard. The Commission requires, as a condition of licensure, that gaming establishments meet strict hurricane emergency standards and procedures.

Objection by County or Municipality

Whenever the Commission receives a completed application for a gaming license proposing to operate a gaming establishment in a particular county or municipality, the Executive Director, within ten days after receipt of the application, must notify the board of supervisors of the county and, if applicable, the chief executive of the municipality in which the proposed operation will be located of the receipt of the application and specify the name of the applicant and the proposed location for the gaming establishment. The county or municipality in which the applicant proposes to operate may file a duly enacted resolution specifying any objections or endorsements with the Executive Director.

Individual Licensing of Shareholders of Corporate Licensee

The Commission may request persons, affiliated entities and greater than 5% equity owners to submit an application for finding of suitability in which event the application must be submitted within thirty days of the request.

All Officers and Directors of a Corporation Must be Licensed

All officers and directors of a corporation which holds or applies for a state gaming license must be licensed individually and, if in the judgment of the Mississippi Gaming Commission the public interest will be served by requiring any or all of the corporation’s individual stockholders, lenders, holders of evidence of indebtedness, underwriters, key executives, agents, or employees to be licensed, the corporation shall require such persons to apply for a license. An officer or director shall apply for a license within thirty days after he becomes an officer or director. A person required to be licensed pursuant to a decision of the commission must apply for a license within thirty days after the executive director requests him to do so.

Licensing is a Privilege and Revocable

It is the declared policy of the State of Mississippi that all establishments where gambling games are conducted or operated must be licensed and controlled so as to better protect the public health,

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safety, morals, good order and welfare of its inhabitants. Any license, registration, finding of suitability, or approval by the Commission is deemed to be a revocable privilege and no person holding such a license, registration, finding of suitability, or approval is deemed to have any vested rights therein.

An application for a state gaming license or any other affirmative Commission action is seeking the granting of a privilege and the burden of proving his qualification to receive any license, registration, finding of suitability or approval, is at all times on the applicant. The applicant must document compliance with all applicable federal, state and local rules, regulations and permit requirements. An applicant must accept any risk of adverse publicity, embarrassment, criticism, or other action, or financial loss which may result from action with respect to an application and expressly waive any claim for damages as a result thereof. An application for a license, finding of suitability, or registrations constitutes a request to the Executive Director for a recommendation and to the Commission for a decision upon the applicant’s general suitability, character, integrity, and ability to participate or engage in , or be associated with, the gaming industry in the manner or position sought by the application, or the manner or position generally similar thereto.

Certain Commission Considerations for Licensing

The Commission will consider various factors when deciding whether to issue a license to conduct gaming in an establishment, including but not limited to, the following: revenue provided by a facility to the state and local communities through direct taxation on its operation and indirect revenues from tourism, ancillary businesses, creation of new industry and taxes on employees and patrons. It will consider whether the proposed establishment is: economically viable and properly financed, planned in a manner that provides for adequate security for all aspects of its operation and for people working, visiting, or traveling to the establishment; planned in a manner which promotes efficient and safe operation; is planned in a manner that provides efficient, safe, and enjoyable use by patrons of the establishment and parking facilities, concessions, the casino, access to cashier windows and rest rooms; compliance with state and federal laws regarding fire, health, construction, zoning, and other similar matters; whether the applicant will employ the persons necessary to operate the establishment in a manner consistent with the needs, safety, and interests of persons who will be in the establishment; the population of the area to be served by the establishment and the location of other establishments within and without the state. The Commission will consider the character and reputation of all persons identified with ownership and operation of the establishment and their capability to comply with rules of the Commission and the Mississippi Code; whether the proposed operation will maximize development; whether it is beneficial to Mississippi tourism, the number and quality of employment opportunities for Mississippians created and promoted by the proposed operation, and the amount and type of shore developments associated with the establishment.

A license which authorizes a holder to operate a gaming establishment is granted for no longer than three years from the date of issue and may be granted for a period of less than three years based within the discretion of the Commission.

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Gaming Licenses

Neither the Company nor any of its subsidiaries has a license to operate a casino in Mississippi or in any other jurisdiction. Gaming licenses require the periodic payment of fees and taxes and are not transferable except in accordance with applicable Mississippi law and regulations and with the prior approval of the Commission. Gaming licenses in Mississippi are issued for a maximum term of three years and must be renewed periodically thereafter. There can be no assurance that the Company or any of its subsidiaries will be licensed. There can be no assurance that if licensed, new licenses can be obtained at the end of any particular licensure period. Moreover, the Commission may, at any time, and for any cause it deems reasonable, revoke, suspend, condition or limit a license or approval to own shares of stock in a company that operates in Mississippi. The Mississippi Act also requires that a publicly traded company register under the Act. The Company and/or its subsidiaries will be required to periodically submit detailed financial, operating and other reports to the Commission and Mississippi State Tax Commission. A violation under a gaming license held by a subsidiary of a Company operating in Mississippi could be deemed a violation of all other licenses, if any, then held by the Company. Numerous transactions, including substantially all loans, leases, sales of securities and similar financing transactions entered into by any subsidiary of the Company operating a casino in Mississippi must be reported to or approved by the Commission. In addition, the Commission may, at its discretion, require additional information about the operations of the Company.

Edson R. Arneault, Chairman of the Board of Directors of the Company and Chief Executive Officer of Casino World, Inc., a wholly-owned subsidiary of the Company, though not currently licensed, has previously held gaming licenses in Pennsylvania, West Virginia, Ohio, and Nevada. Deborah Vitale, President and Chief Executive Officer of the Company, though not currently licensed, has previously held a gaming license in Colorado.

Finding of Suitability

The following persons must apply for a finding of suitability and must be found suitable by the Commission in order to be involved with a licensee: i) each person who serves as Chairman of the Board of Directors of any corporation, public or private, licensed or registered by the Commission; and ii) each person who has a vote on any issue before the Board of Directors of any corporation, public or private, licensed or registered by the Commission and who is also an employee of the corporation or any of its subsidiaries. In addition, the following persons shall apply for a finding of suitability: i) each person who serves as Chairman of the audit or compliance committee of any corporation, public or private, licensed or registered by the Commission, and ii) any executive, employee, or agent of a gaming licensee that the Commission determines as having the power to exercise a significant influence over decisions concerning any part of the operation of a gaming licensee. If the nature of the job changes from that for which the applicant is found suitable, he may be required to submit himself to a new determination of her or his suitability.

The Commission can require any employee to be found suitable if it finds that the public interest and policies set forth in the Act will be served thereby. The Commission is not restricted by job

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titles, but will consider the functions and responsibilities of the person, including but not limited to, persons acting in the capacity of a property level general manager, assistant general manager, or executive level personnel actively and directly engaged in the administration or supervision of the activities of a licensee. Any executive, employee or agent of a gaming licensee who is listed or should be listed in an annual employee report may be required to apply for a finding of suitability.

A finding of suitability is granted for a period of no longer than ten years from the date of issue. A finding of suitability may be granted for a period of less than ten years within the discretion of the Commission. A holder of a finding of suitability must file with the Investigations Division of the Commission by June 30th of each year, the “Investigations Division Annual Report,” providing all information requested on forms provided by the Commission and any other information requested by the Executive Director. A holder of a finding of suitability must immediately inform the Commission of any arrest or conviction.

The Commission has full and absolute power and authority, at any time, to deny any application or limit, condition, restrict, revoke or suspend any license, registration, finding of suitability or approval, or fine any person licensed, registered, found suitable or approved, for any cause deemed reasonable by the commission. The Commission has the power, at any time, to investigate and require the finding of suitability of any record or beneficial stockholder of the Company. The Act requires that each person who, individually or in association with others, acquires, directly or indirectly, beneficial ownership of more than 5% of any class of voting securities of a publicly traded corporation registered with the Mississippi Gaming Commission, must notify the Mississippi Gaming Commission of this acquisition. The Act also requires that each person who, individually or in association with others, acquires, directly or indirectly, beneficial ownership of more than 10% of any class of voting securities of a publicly traded corporation registered with the Commission must be found suitable by the Mississippi Gaming Commission and pay the costs and fees that the Commission incurs in conducting the investigation.

Any person who fails or refuses to apply for a finding of suitability or a license within thirty days after being ordered to do so by the Commission may be found unsuitable. Any person found unsuitable and who holds, directly or indirectly, any beneficial ownership of the Company’s securities beyond such time as the Commission prescribes, may be guilty of a misdemeanor.

The Company may be required to disclose to the Commission upon request, the identities of holders of any debt or other securities. Under the Act, the Commission may, in its discretion, (1) require holders of debt securities of registered corporations to file applications; (2) investigate such holders; and (3) require the holders to be found suitable to own such securities.

The Mississippi regulations provide that a change in control of a Company may not occur without the prior approval of the Commission. Mississippi law prohibits the Company from making a public offering of its securities without the approval of the Commission if any part of the proceeds of the offering is to be used to finance the construction, acquisition or operation of gaming facilities in Mississippi or to retire or extend obligations incurred for one or more such

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purposes. The Commission has the authority to grant a continuous approval of securities offerings subject to renewal every three years by certain issuers.

Employees associated with gaming in Mississippi must obtain work permits that are subject to immediate suspension under certain circumstances. The Commission will refuse to issue a work permit to a person who has been convicted of a felony, committed certain misdemeanors or knowingly violated the Mississippi Gaming Control Act, and it may refuse to issue a work permit to a gaming employee for any other reasonable cause.

The Company believes there may be persons with prior felony convictions, who are affiliated with certain shareholders, who beneficially own in excess of 5% of a class of voting stock of the Company, who may be found unsuitable by the Mississippi Gaming Commission. Article X of the Company’s Articles of Incorporation, as amended, provides that the “Company may repurchase or redeem shares, at fair market value, held by any person or entity whose status as a shareholder, in the opinion of the Company’s Board of Directors, jeopardizes the approval, continued existence, or renewal by any gaming regulatory authority, of a contract to manage gaming operations, or any other tribal, federal or state license or franchise held by the Company or any of its subsidiaries.” However, there can be no assurance the Company would have sufficient funds to purchase shares held by such a person or entity. In the event the Company were unable to purchase such shares, its ability to obtain a license could be materially and adversely affected.

License Fees and Taxes

License fees and taxes are payable to the State of Mississippi and to the counties and cities in which the Mississippi Gaming Subsidiary’s respective operations will be conducted. The license fee payable to the State of Mississippi is based upon “gaming receipts”, which are generally defined as gross receipts less payouts to customers as winnings. The fee equals 4% of the first $50,000 or less of gross revenue per calendar month, plus 6% of the next $84,000 of gross revenue per calendar month, plus 8% of gross revenue over $134,000 per calendar month. License fees paid in any taxable year are allowed as a credit against the Mississippi State income tax liability of a licensee for that taxable year.

A licensee must pay an annual license fee of $5,000. In addition, each licensee must pay a license fee based on the number of games it operates. If it operates over 35 games, the fee is equal to $81,200 plus $100 for each game over 35 games. In addition to state gaming license fees or taxes, a municipality or county may impose a gross revenue fee upon a licensee based on all gaming receipts derived from the establishment equal to approximately 4%. An additional license tax may apply to gaming devices.

Beer, Wine and Liquor Licensing

The sale of alcoholic beverages by casinos, including beer and wine, is subject to licensing, regulation and control by both the local jurisdiction and the Alcoholic Beverage Control Division (the “ABC”) of the Mississippi Department of Revenue. All licenses are revocable and non-transferable. The ABC has full power to limit, condition, suspend or revoke any license, and any disciplinary action could, and revocation would, have a material adverse impact upon the

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operations of an affected casino, its financial condition and its results of operations.

Extensive Non-Gaming Laws and Regulations

In addition to the foregoing, the Company and/or its subsidiaries will be subject to additional federal, state, county and city, safety, food, alcohol, health, employment, and other laws, rules, regulations and ordinances that apply to non-gaming businesses generally. In addition, Regulations adopted by the Financial Crimes Enforcement Network of the U.S. Treasury Department require currency transactions in excess of $10,000 occurring within a gaming day to be reported, including identification of the patron by name and social security number. Substantial penalties can be imposed for failure to comply with these and numerous other regulations. The foregoing is just one example of the pervasiveness of the non-gaming laws, rules, regulations and ordinances that would apply to a casino operator.

Competition

There is intense competition in the Mississippi market in which the Company intends to operate and in surrounding markets. The Company will compete directly with other existing gaming facilities located in Mississippi and in bordering states, including Louisiana. The Company will also be competing directly and indirectly, with gaming facilities throughout the United States and throughout the world, as well as with Native American gaming operations which enjoy certain tax advantages. The Company expects this competition to increase as new gaming operators enter these markets, existing competitors expand their operations, gaming activities expand in existing jurisdictions, gaming is legalized in new jurisdictions, and legalized gaming expands on the internet. Assuming it is successful in developing a destination casino resort, the Company will also be competing with other forms of gaming and entertainment, including but not limited to, bingo, online gambling, pull tab games, card parlors, sports-book operations, pari-mutuel betting, dog racing, lotteries, jai-alai, video lottery terminals, and video poker terminals.

The following chart identifies casinos which are located in Mississippi and with which the Company will compete. Except for distances, the information contained in the chart is derived from the Mississippi Gaming Commission’s Quarterly Survey Information (Property Data) for the period October 1, 2014 through December 31, 2014.

							Approximate
							Distance to
	Gaming	Slot	Table	Poker	Hotel	Total	Diamondhead
COASTAL REGION	Sq. Ft	Games	Games	Games	Rooms	Parking	(in miles)

Beau Rivage
Casino	75,744	1,936	83	16	1,740	3,959	35
Boomtown Casino	51,665	945	16	0	0	1,490	33
Golden Nugget	54,728	1,210	54	9	705	1,346	35
Hard Rock Casino	53,800	1,302	51	4	479	1,802	35
Harrah’s Gulf
Coast	31,275	774	31	0	494	2,705	35

IP Casino Resort
Spa	81,733	1,701	62	13	985	3,700	33
Palace Casino	38,000	884	26	0	234	1,590	33

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Treasure Bay
Casino	28,140	817	26	0	207	1,096	31
Island View Casino	82,935	1,942	42	0	565	4,250	23
Hollywood Casino	56,300	1,152	19	5	291	1,700	12
Silver Slipper
Casino	36,826	947	28	0	0	1,700	15

Region Totals	591,146	13,610	438	47	5,700	25,338

NORTHERN REGION

Bally’s Tunica
Casino	46,535	945	17	0	238	1,699	377
Fitzgerald’s Casino
Tunica	38,457	1,040	20	0	506	1,795	379
Gold Strike Casino
Resort	54,205	1,372	59	0	1,133	2,412	373
Hollywood Casino-
Tunica	55,000	1,095	20	6	494	1,801	379
Horseshoe Casino
And Hotel	63,000	1,123	76	24	507	1,775	373
Isle of Capri-Lula	63,500	904	20	0	486	1,500	345
Resorts Tunica
Hotel & Casino	42,902	800	14	0	201	2,738	378
Sam’s Town-
Tunica	66,000	1,181	29	0	842	4,308	378
Tunica Roadhouse
Casino	31,000	699	24	0	135	4,265	373

Region Totals	460,599	9,159	279	30	4,542	22,293

CENTRAL REGION

Ameristar Casino
Hotel	72,210	1,533	27	10	149	3,063	210
Diamondjacks
Casino & Hotel	28,000	640	13	0	122	631	211
Harlow’s Casino
Resort	33,000	755	13	0	105	1,500	285
Isle of Capri Casino
—Natchez	17,634	625	6	0	121	908	200
Lady Luck Casino	25,000	1,186	8	0	89	948	212
Magnolia Bluffs
Casino	16,032	468	16	0	0	427	199
Riverwalk
287 Casino	25,000	692	15	0	80	748	211
Trop Casino
Greenville	22,822	602	13	0	40	734	287

Region Totals	239,698	6,501	111	10	706	8,959

STATE TOTALS	1,291,443	29,270	828	87	10,948	56,590

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Louisiana Competition

The Company believes that its greatest competition will come from the Mississippi Gulf Coast casinos because of their close proximity to the Diamondhead Property. While the Company’s primary competition will come from the Mississippi Gulf Coast casinos, the Company’s Diamondhead, Mississippi casino will also compete with casinos and other gaming located in the adjacent State of Louisiana.

Louisiana has four land-based casinos. Inasmuch as the Company’s casino will be land-based, the Company’s primary competition is expected to come from Harrah’s land-based casino located in downtown New Orleans. This casino is approximately one hour from the Diamondhead site. Three of the land-based casinos in Louisiana are Indian casinos, which are located in Marksville in central Louisiana and in Kinder and Charenton in southern Louisiana. These are not expected to represent significant competition because of their distance from the Diamondhead site.

Fifteen riverboat casinos are authorized to operate in Louisiana. There are six riverboat casinos in Shreveport-Bossier, three in Lake Charles, which is approximately 246 miles from the Diamondhead Property; three in East Baton Rouge Parish, which is approximately 123 miles from the Diamondhead Property, and one each in Kenner, Harvey and Amelia, which are approximately 73, 71, and 139 miles, respectively, from the Diamondhead Property. As of June 30, 2013, there were 2,044 video poker outlets and 14,108 video poker devices in the 31 parishes in Louisiana where video poker gaming had been approved in the State. These machines are authorized in bars, restaurants, hotels, off-track betting parlors and truck stops. Louisiana also has racetrack gaming. The cumulative effect of the foregoing could be seen as having a significant competitive effect on the Diamondhead Property project.

ITEM 1A. RISK FACTORS

Smaller reporting companies are not required to provide the information required by this item.

ITEM 2. FINANCIAL INFORMATION

Liquidity, Capital Resources, and Financial Results

This section should be read together with the consolidated financial statements and related notes thereto, for the fiscal years ended December 31, 2014 and 2013, attached as Item 13 to this Form 10.

Overview

The Company’s current priority is the development of a casino resort on its Property located in Diamondhead, Mississippi. The Company’s management, financial resources and assets will be devoted towards the development of this Property. There can be no assurance that the Property can be developed or, that if developed, that the project will be successful.

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Liquidity

The Company has incurred continued losses over the past several years and certain conditions raise substantial doubt about the Company’s ability to continue as a going concern . As reflected in the accompanying consolidated financial statements, the Company incurred a loss applicable to common shareholders of $3,377,375 and $1,414,526 for the years ending December 31, 2014 and 2013, respectively, and expects continued losses for the foreseeable future. The net losses included a charge for the change in fair value of a derivative liability in the amount of $1,904,233 in 2014 and a charge in the amount of $352,892 for stock-based compensation in 2013. General and administrative expenses incurred totaled $974,844 and $625,148 for the years ending December 31, 2014 and 2013 respectively. The table below depicts the major categories comprising those expenses:

	December 31,		December 31,
DESCRIPTION	2014		2013
Payroll and Related Taxes	$	544,409	$	300,812
Director Fees	71,250		60,000
Legal, Audit and Other Contracted Services	168,045		104,161
Rents and Insurances	89,688		87,943
All Other Expenses	101,452		72,232

Total General and Administrative Expense	$	974,844	$	625,148

The Company has had no operations since it ended its gambling cruise ship operations in 2000. Since that time, the Company has concentrated its efforts on the development of its Diamondhead, Mississippi Property . The development of the Diamondhead Property is dependent on obtaining the necessary capital, unilaterally, or in conjunction with one or more partners, through equity and/or debt financing, to master plan, design, obtain permits for, construct, staff, open, and operate a casino resort. In order to raise capital to continue to pay ongoing costs and expenses, the Company has borrowed funds and offered, through Private Placements, convertible instruments more fully described in Note 5 to the attached consolidated financial statements.

Private Placement Dated February 14, 2014

Pursuant to a Private Placement Memorandum dated February 14, 2014, the Company offered up to a maximum of $3,000,000 of Collateralized Convertible Senior Debentures to accredited or institutional investors. The Offering was conducted contingent on the deposit into Escrow of the purchase price for all of the Debentures offered in the principal amount of $3,000,000. The Debentures were offered in three tranches as follows:

Tranche 1: The Company offered $1,000,000 of First Tranche Collateralized Convertible Senior Debentures in the aggregate principal amount of $1,000,000 (the “First Tranche Debentures”), subject to certain conditions. The First Tranche Debentures were originally convertible, at a Conversion Price of $.30 per share into an aggregate of 3,333,333 shares of Common Stock of

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the Company. The minimum principal amount of First Tranche Debentures that could be purchased was $50,000.

On March 31, 2014, subscriptions in the amount of $3,000,000 were received in Escrow and accepted by the Company. Thus, the First Closing occurred on that date. The Escrow Agent released $1,000,000 to the Company and the Company issued First Tranche Debentures in the aggregate principle amount of $1,000,000. The First Tranche Debentures bear interest at 4% per annum after 180 days and are secured by a lien on the Company’s Mississippi property.

The First Tranche Debentures were originally convertible into 3,333,333 shares of Common Stock when and if:

1) the Second Closing Obligations described in the Memorandum had been met; and 2) the average closing price of the Common Stock on the principal trading market for the Company’s Common Stock was 150% or more of the Conversion Price for the thirty consecutive business days immediately prior to the Conversion Date.

The First Tranche Debentures would be converted into Common Stock without any required action on the part of the Debenture Holders and the lien securing the First Tranche Debentures would be released.

The “Second Closing Obligations,” as originally described in the Memorandum, were as follows:

1. The Company has filed its Annual Reports on Form 10-K for the years ended December 31, 2011 and 2012, and any other Annual Report on Form 10-K that would have been required to have been filed as of the date of the Second Closing;

2. The Company has filed its Quarterly Reports on Form 10-Q for the periods ended September 30, 2011, March 31, 2012, June 30, 2012, September 30, 2012, March 31, 2013, June 30, 2013 and September 30, 2013, and any other Quarterly Report on Form 10-Q that would have been required to have been filed as of the date of the Second Closing;

3. The Company and its subsidiaries have filed their federal and state tax returns for the years ended 2011 and 2012;

4. The Company has held an Annual Meeting of Stockholders in accordance with applicable state and Federal law, at which the stockholders of the Company approved an increase in the number of authorized shares of Common Stock of the Company from fifty million to one hundred million, or the Company has otherwise obtained such approval by written consent of its stockholders pursuant to Section 228 of the Delaware General Corporation Law;

5. The Company is otherwise able to issue and deliver fully paid and non-assessable shares of Common Stock to the investors of this Offering in accordance with the terms of the Private Placement Memorandum;

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6. The Company has obtained an updated property survey and preliminary engineering estimates for the construction of a casino/hotel on the Property;

7. The Company has obtained a site location engineering study identifying viable locations(s) for the placement of the proposed casino/hotel on the Property; and

8. The Company has obtained preliminary architectural estimates for the construction of the casino/hotel on the Property.

However, on June 18, 2014, the SEC issued an Order of Suspension of Trading with respect to the Company’s securities. The Order stated, among other things, that “[t]he Commission was of the opinion that the public interest and the protection of investors require[d] a suspension of trading” and the Commission ordered, pursuant to Section 12(k) of the Securities Exchange Act of 1934, that trading in the Company’s securities be suspended from June 18, 2014 through July 1, 2014. On June 18, 2014, the SEC also issued an Order Instituting Administrative Proceedings (“OIP”) and Notice of Hearing Pursuant to Section 12(j) of the Securities Exchange Act of 1934, alleging that the Company was delinquent in its periodic filings with the SEC, having not filed any periodic reports since it filed its Form 10-Q for the period ended June 30, 2011 and, therefore, that the Company had failed to comply with Securities Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder.

On June 27, 2014, the Company filed an Answer to the OIP in which it admitted that it had not filed certain periodic reports since it filed its Form 10-Q for the period ended June 30, 2011. On July 29, 2014, the Company attended a prehearing conference at which it requested an in-person hearing. On August 11, 2014, the SEC issued an Initial Decision on Default and Order for Motion for Summary Disposition as to Diamondhead Casino Corporation. The SEC found that there were no issues of material fact that required an in-person hearing, granted the Division leave to file a motion for summary disposition, and set a briefing schedule for the parties to file their briefs.

The Board of Directors of the Company determined that defending the Company against the OIP would likely have resulted in extensive, time-consuming and expensive litigation. Moreover, the Company believed that litigation would not have resulted in a favorable outcome inasmuch as the Company had not, in fact, met its reporting requirements. Accordingly, the Board of Directors determined that litigation would have constituted a waste of the Company’s scarce resources and capital.

On August 29, 2014, the Company made an Offer of Settlement in which it admitted that it had failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder because it had not filed any periodic reports with the SEC since the quarterly period ended June 30, 2011. The Company consented to the entry of an Order, pursuant to Section 12(j) of the Exchange Act, revoking the registration of the Company’s securities registered pursuant to Section 12 of the Exchange Act. On September 4, 2014, the SEC entered an Order Making Findings and Revoking Registration of Securities Pursuant to Section 12(j) of the Securities Exchange Act of 1934 as to Diamondhead Casino Corporation, pursuant to the Company’s Offer of Settlement. Thus, effective September 4, 2014, the registration of each class of the Company’s

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securities registered pursuant to Section 12 of the Exchange Act was revoked and, since that date, the Company’s Common Stock has not traded on any exchange or other public market.

To re-register its stock, the Company is required, in addition to other steps, to file a Form 10 with two years of audited financial statements with the Securities and Exchange Commission. Thus, the Company was no longer required to file the Form 10-K’s and Form 10-Q’s it contemplated filing under the terms of the original Private Placement. Therefore, the Company decided to offer to amend the terms for conversion of the First Tranche Debentures and for issuance and conversion of the Second and Third Tranche Debentures. On December 31, 2014, Investors representing $950,000 of First Tranche Debentures, convertible into 3,166,666 common shares, agreed that the First Tranche Debentures would be converted when and if:

1. The Company has filed a Registration Statement on Form 10 (or a Form 8-A that incorporates by reference a Form S-1) with the Securities and Exchange Commission;

2. The Company’s common stock is trading on a national securities exchange or any over-the-counter market interdealer quotation system or similar market or system;

3. The Company has held an Annual Meeting of Stockholders in accordance with applicable state and/or federal law, to seek stockholder approval to increase the number of authorized shares of Common Stock from fifty million to one hundred million shares or the Company has obtained such approval by written consent of its stockholders pursuant to Section 228 of the Delaware General Corporation Law;

4. The Company is otherwise able to issue and deliver fully paid and non-assessable shares of Common Stock to the Holder upon conversion of this Debenture; and

5. The average closing price of the Common Stock on the principal trading market for the Company’s Common Stock is 150% or more of the Conversion Price for the thirty consecutive business days immediately prior to the Conversion Date.

The remaining $50,000 investment from the First Tranche remains as a collateralized Debenture payable in six years without the conversion rights.

Tranche 2 : The Company originally offered $1,000,000 of Second Tranche Collateralized Convertible Senior Debentures in the aggregate principal amount of $1,000,000 subject to certain conditions. The Second Tranche Debentures are convertible, at a Conversion Price of $.45 per share, into an aggregate of 2,222,222 shares of Common Stock, on certain terms and conditions. The minimum principal amount of Second Tranche Debentures that could be purchased was $50,000.

On December 31, 2014, Investors representing $850,000 of Second Tranche Debentures convertible into 1,888,889 common shares agreed to amend the Closing Obligations for issuance of the Second Tranche Debentures by eliminating the prior Closing Obligations and substituting a single requirement instead, namely, that “[t]he Company has filed an application for gaming

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site approval with the Mississippi Gaming Commission pursuant to Rule 1.4 of the Mississippi Gaming Regulations (2013 edition).”

The Company had filed this application in May 2014 and had obtained Gaming Site Approval on August 21, 2014. Therefore, a second closing occurred on December 31, 2014, when the amended terms were agreed to, at which time the Escrow Agent released $850,000 to the Company and the Company issued the Second Tranche Debentures. The remaining $150,000 of the original $1,000,000 of subscriptions escrowed for the Second Tranche Debentures was returned to three investors who did not agree to the amended terms for issuance and conversion of the Second Tranche Debentures.

On December 31, 2014, Investors representing $850,000 of Second Tranche Debentures convertible into 1,888,889 common shares also agreed to amend the conversion terms of the Second Tranche Debentures. The Debentures would be converted when and if:

1. The Company has filed a Form 10 (or a Form 8-A that incorporates by reference a Form S-1) with the Securities and Exchange Commission;

2. The Company’s common stock is trading on a national securities exchange or any over-the-counter market interdealer quotation system or similar market or system;

4. The Company is otherwise able to issue and deliver fully paid and non-assessable shares of Common Stock to the Holder upon conversion of this Debenture; and

Tranche 3 : The Company originally offered $1,000,000 of Third Tranche Collateralized Convertible Senior Debentures in the aggregate principal amount of $1,000,000 subject to certain conditions. The Third Tranche Debentures were originally convertible, at a Conversion Price of $0.55 per share, into an aggregate of 1,818,182 shares of Common Stock, or convertible, at a Conversion Price of $0.75 per share, into an aggregate of 1,333,333 shares of Common Stock, subject to certain terms and conditions. The Conversion Price will depend upon a combined appraised value of an independent third party appraisal firm of (1) the Company’s casino project (including the value of that land upon which it is expected to be located) and (2) the undeveloped remaining Property (collectively, the “Valuation”). If the Valuation is $175 million or more, then the Conversion Price for the Third Tranche Debentures would be $0.75 per share. If the Valuation is less than $175 million, then the Conversion Price for the Third Tranche Debentures

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would be $0.55 per share. The minimum principal amount of Third Tranche Debentures that could be purchased was $50,000.

On December 31, 2014, Investors representing $850,000 of Third Tranche Debentures convertible into 1,545,545 common shares at $.55 per share or 1,133,333 common shares at $.75 per share, depending on the “Valuation,” agreed to amended Third Closing Obligations, to be completed by June 30, 2015, as follows:

1. The Company has filed a Registration Statement on Form 10 (or a Form 8-A that incorporates by reference a Form S-1) with the Securities and Exchange Commission;

2. The Company’s common stock is trading on a national securities exchange or any over-the-counter market, interdealer quotation system or similar market or system;

4. The Company is otherwise able to issue and deliver fully paid and non-assessable shares of Common Stock to the Holder upon conversion of the Debenture; and

5 The required appraisals have been completed and the “Valuation” calculated to determine the Conversion Price of the Tranche 3 Debentures.

At the Third Closing, assuming it occurs, the gross proceeds from the sale of the Third Tranche Debentures in the principal amount of $850,000, will be released from Escrow to the Company. The Third Tranche Debentures will bear interest at 4% per annum after 180 days and will be secured by a lien on the Company’s Mississippi property.

As amended, the Third Tranche Debentures will be converted into shares of Common Stock when and if the average closing price of the Common Stock on the principal trading market for the Company’s Common Stock is 150% or more of the applicable Third Tranche Debenture Conversion Price, based upon the Valuation, for the thirty consecutive business days immediately prior to such conversion date. The Third Tranche Debentures will be converted into Common Stock without any required action on the part of the Debenture Holders and the lien securing the Third Tranche Debentures will be released upon conversion.

The gross proceeds received for the Third Tranche Debentures are being held in Escrow and will not be released unless and until the Third Closing Obligations have been met by June 30, 2015 and a certification to that effect has been forwarded to the Escrow Agent and each of the Investors (the “Third Closing”). If the Third Closing Obligations are not met, there will be no Third Closing and the remaining $850,000 in Escrow relating to the Third Tranche Debentures will be returned to the Investors without deduction or interest. There can be no assurance that the Company will satisfy the Third Closing Obligations. The Company believes that its failure to meet the Third Closing Obligations would have a material adverse impact on the Company.

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Maximum Offering

In the event all of the terms and conditions for issuance of all of the Debentures, as amended, have been met and in the event that all of the Debentures are eventually converted to Common Stock at the Conversion Prices in the Debentures, the Company will have issued a minimum of 6,188,888 shares of Common Stock upon conversion of all of the Debentures or a maximum of 6,601,100 shares of Common Stock upon conversion of all of the Debentures, depending on the Valuation required for the Third Tranche Debentures. Assuming a third closing, the aggregate proceeds to the Company from the sale of all of the Debentures would be $2,700,000 before deduction of commissions and expenses.

The following elements of the Debenture agreement remain unchanged:

Escrow Agent

The proceeds from the offering were placed in an escrow account at Continental Stock Transfer & Trust Company, which is serving as the Escrow Agent.

Maturity Date and Interest Rate of Debentures

The maturity date of the Debentures shall be six years from the issue date of each of the Debentures. The Debentures may not be prepaid without the written consent of the Holder, which consent may be withheld for any reason or no reason whatsoever. The maturity date may be extended upon the written consent of the Holder, which consent may be withheld for any reason or no reason whatsoever.

Any interest due on the Debentures shall be computed based on a 365 day year and, at the option of the Company, be payable in cash or in Common Stock on March 1 of each year. If paid in Common Stock, the number of shares of Common Stock payable shall be computed by dividing the interest due by the average closing price of the Common Stock for the thirty consecutive business days immediately prior to the payment date.

Collateral for Debentures

The payment obligations under the Debentures will be secured by a lien on the Company’s Mississippi property (the “Investors Lien”). The Investors Lien will be pari passu with a lien that has been placed on the Property in favor of Ms. Vitale, the President of the Company, Gregory Harrison, the Vice President of the Company, and certain directors of the Company, for past due wages, compensation, and expenses owed to them in the maximum aggregate amount of $2,000,000 (the “Executives Lien”). Ms. Vitale will serve as Lien Agent for the Executives Lien.

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Anti-Dilution Provision

The conversion rights on each Debenture carry an Anti-Dilution Provision. If the Company issues any shares of Common Stock or other securities after March 31, 2014 at a price per security that is less than the conversion price of a Debenture, then the Debenture shall have a new conversion price equal to the price per security that is less than the Conversion Price of the Debenture. The foregoing provision shall not apply to the following:

1) The issuance of any of the other Debentures in the Offering or the issuance of shares of Common Stock upon conversion of any of the Debentures in the Offering;

2) The issuance of any shares of Common Stock if such issuance relates to an agreement, arrangement or grant to issue shares of Common Stock entered into by the Company prior to the issue date of the First Tranche Debentures in the Offering, including but not limited to, for example, previously issued convertible promissory notes, previously issued warrants, previously issued options to purchase Common Stock, or common stock vested or to be issued pursuant to a pre-existing Employee Stock Ownership Plan.

The Anti-Dilution Provisions with respect to a Debenture terminate the earlier of (a) the date (if ever) the Company receives an “Approval to Proceed” from the Mississippi Gaming Commission to develop a casino/hotel on the Property, (b) the date on which the Debenture is converted in full, (c) the date on which the Debenture is paid in full, or (d) the Final Maturity Date of the Debenture (as defined in the Debenture).

Piggyback Registration Rights

The Investors received “piggyback” registration rights with respect to the common stock underlying the Debentures, on all registrations of equity securities of the Company under the Securities Act of 1933 for sale to the public.

Commissions and Expenses of the Offering

No commission or other remuneration was paid to any officer or director of the Company in connection with any sale of the Debentures. The Company agreed to pay Henley & Company, LLC (“Henley”), a commission of 6% of the gross proceeds to the Company from the sale of the Debentures, to reimburse Henley for related expenses up to a total of $75,000, and to issue warrants to purchase up to 75,000 shares of the Company’s Common Stock as described below.

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year warrant to purchase 25,000 shares of common stock at $ 0.45 per share. The Company recorded additional deferred financing costs in the amount of $8,890 in the fourth quarter of 2014 based on the valuation of this warrant using the Black-Scholes option pricing model. Henley is also entitled to receive, upon the Third Closing, assuming it occurs, a commission of 6% of the proceeds received by the Company at such Closing, a three year warrant to purchase 25,000 shares of Common Stock at $0.55 or $0.75 per share (depending on the Valuation) and reimbursement of its related expenses up to a maximum of $10,000. For periods after September 3, 2014 (the last trading date of the Company’s stock before deregistration), the Company obtained a valuation of its stock price from an independent valuation expert.

In determining the fair value of each warrant granted, the Black-Scholes option-pricing model, consistent with the provisions of ASC Topic 718, was used. The valuations were determined using the weighted-average assumptions of 0% dividend yield, expected volatility of 139.49% at March 31, 2014 and 130.39% at December 31, 2014, and risk-free interest rates of 0.9% at March 31, 2014 and 1.1% at December 31, 2014.

The Investors in the offering of the Debentures were “accredited investors” as defined in Rule 501 of Regulation D promulgated under Securities Act of 1933, as amended (the “Securities Act”). The offering was made in reliance on the exemption from registration afforded under Section 4(2) of the Securities Act and/or Rule 506 of Regulation D under the Securities Act.

As of December 31, 2014, the Company had $843,083 of operating cash on hand and current accounts payable and accrued expenses totaling $3,304,479. In addition, a Line of Credit in the amount of $1,000,000 obtained in October 2008 was payable in November 2012. Also, Convertible Notes issued via two Private Placements offered in 2010 totaling $962,500 in aggregate at December 31, 2014, had become payable beginning in March 2012 and extending at various dates through June 2013. As of the date of the filing of this report, none of the aforementioned debt obligations have been satisfied and the Company is in default of the repayment terms of the notes.

As of December 31, 2014, the Company had received $1,850,000 of proceeds from the closing of the First and Second Tranche Convertible Debentures and had expended approximately $1,006,900 of those proceeds for the payment of placement fees, costs associated with gaming site approval, and working capital, as summarized in the chart below.

Description of Expenditures	Amount

Private Placement related fees, commissions and expenses	$	185,785
Payment to Deborah Vitale per the Private Placement applied to past due office rents	100,000
Accounting and audit fees	75,000
Payroll paid to Edson Arneault and Deborah Vitale for the period April 1, 2014 through December 31, 2014 and related taxes	319,409
Office rents for April 1, 2014 through December 31, 2014 paid to Deborah Vitale	40,806
Mississippi Property taxes and property related fees and expenses	58,258
State Franchise taxes, fines and penalties and registered agent fees	22,435
Mississippi property development consulting fees, engineering and survey costs and other fees and expenses	55,114
Feasibility Study	15,000
Appraisal Fee	12,500
Repayment of advance from Director Gregory Harrison	10,000
Repayment of Advance from a Shareholder	25,000
Stock Transfer and Trust Company fees	14,125
Director and Officer liability insurance premiums	13,339
Other operating expenses	60,100

Total	$	1,006,871

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In order to complete the requirements for a third closing and obtain the remaining $850,000 currently remaining in escrow, the Company is required to meet the Third Closing Obligations enumerated above. The Company does not have an estimate of the cost required to complete these items at this time.

Off-Balance Sheet Arrangements

Management Agreement

On June 19, 1993, two subsidiaries of the Company, Casino World Inc. and Mississippi Gaming Corporation, entered into a Management Agreement with Casinos Austria Maritime Corporation (CAMC). Subject to certain conditions, under the Management Agreement, CAMC would operate, on an exclusive basis, all of the Company’s proposed dockside gaming casinos in the State of Mississippi, including any operation fifty percent (50%) or more of which is owned by the Company or its affiliates. Unless terminated earlier pursuant to the provisions of the Agreement, the Agreement terminates five years from the first day of actual Mississippi gaming operations and provides for the payment of an annual operational term management fee of 1.2% of all gross gaming revenues between zero and $100,000,000; plus 0.75% of gross gaming revenue between $100,000,000 and $140,000,000; plus 0.5% of gross gaming revenue above $140,000,000; plus two percent of the net gaming revenue between zero and $25,000,000; plus three percent of the net gaming revenue above twenty-five million dollars $25,000,000. The Company believes this Agreement is no longer in effect. However, there can be no assurance that CAMC will not attempt to maintain otherwise which would lead to litigation.

There are no other off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues and expenses, results of operations, liquidity, capital expenditures or capital resources, that is material to our stockholders.

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Critical Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of Diamondhead Casino Corporation and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Concentrated Credit Risk

The Company maintains its cash and cash equivalents with one institution which exceeded federally insured limits throughout the year. At December 31, 2014, the Company had cash on deposit of approximately $593,000 in excess of the federal insured limit of $250,000.

Fair Value Measurements

The Company follows the provisions of Accounting Standards Codification (“ASC) Topic 820 “Fair Value Measurements,” for financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. The standard does not require any new fair value measurements, but discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The standard utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Input other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable input that reflects our own assumptions.

Sensitivity Analysis to Changes in Level 3 Assumptions

Significant inputs include the expected dates when required conditions are met under the conversion terms of the debentures, the underlying market cap due to borrowings and losses, and

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discount for lack of marketability while in the delisted mode, and reversed when the Company becomes publicly listed as projected by management. In addition, use of different ranges of bond discount rates and changes in historical volatility rates would also result in a higher or lower fair value.

Current assets and current liabilities are financial instruments and management believes that their carrying amounts are reasonable estimates of their fair values due to their short term nature.

The convertible debentures and derivative liability approximate fair value based on Level 3 inputs.

Impairment of Long-Lived Asset

The Company reviews long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of long-lived assets is measured by comparing the carrying amount of the assets to the estimated undiscounted future cash flows projected to be generated by the assets. If such assets are considered impaired, the impairment to be recognized is measured by the amount the carrying value exceeds the fair value of such assets determined by appraisal, discounted cash flow projections, or other means.

Stock Based Compensation Expense

In determining the fair value of options and warrants granted or modified, the Company uses the Black-Scholes option-pricing model, consistent with the provisions of ASC Topic 718. Valuations are determined using the weighted-average assumptions of dividend yield, expected volatility and risk-free interest rates.

Option valuation models require the input of highly subjective assumptions, including the expected stock price volatility. The Company uses projected volatility rates, which are based upon historical volatility rates, trended into future years. Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of the Company’s options.

ITEM 3. PROPERTIES

Diamondhead, Mississippi Property

The Company owns, through its wholly-owned subsidiary, Mississippi Gaming Corporation, an approximate 404 acre tract of unimproved land in Diamondhead, Mississippi. The property is located at 7051 Interstate 10, Diamondhead, Mississippi 39525 (hereafter “the Diamondhead Property” or “the Property”). The Property is located entirely within the City of Diamondhead and Hancock County. The Property is zoned “C-2 - Interstate Commercial/Gaming/Resort.”

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Purchase Price and Payment for the Property

On June 19, 1993, the Company, through its wholly-owned subsidiary, Mississippi Gaming Corporation (hereafter “MGC”), exercised an option to purchase the 404.5 acres of land in Diamondhead, Mississippi for $4,000,000. MGC obtained a $2,000,000 loan from Casinos Austria Maritime Corporation (“CAMC”) to complete the purchase of the property. The loan was secured by a first mortgage on the property. The first mortgage loan was payable, interest only, at 8% per annum for fifteen months. The full principal balance on the first mortgage loan was due and payable on June 30, 1995. Prior to its due date, the first mortgage was paid in full from the proceeds of a loan obtained by the Company in May of 1995 from First Union National Bank of Florida. The loan due to First Union National Bank of Florida was subsequently paid in full.

On June 19, 1993, MGC also entered into an Option Agreement to purchase approximately 80 acres of land included within the 404 acre site for a purchase price of ten dollars ($10.00). The option was originally purchased so as to avoid certain limitations that attached to the underlying parcels. It was in the interest of the Company and its Diamondhead project that certain litigation instituted by the seller of the property be completed before MGC exercised this option. The litigation was finalized in 2002. In December 2002, MGC exercised its option. The property was transferred to MGC by Warranty Deed on December 18, 2002. The exercise of this option gave MGC full title to the entire 404 acre tract.

Liens on Diamondhead Property

In 2014, liens were placed on the Property to secure certain obligations of the Company. These consist of an Executives Lien and an Investors’ Lien which are in pari passu .

There is an “Executives Lien” on the Property for a maximum of $2 million in favor of certain executives to whom monies are owed for accrued, but unpaid salaries, expenses and Directors fees. The President of the Company is the primary beneficiary of this lien.

In addition, there is an Investors Lien on the Property securing the investment of purchasers of securities in a Private Placement dated February 14, 2014, as amended. There is a lien in the aggregate amount of $1 million in favor of the Holders of the original and/or Amended and Restated First Tranche Collateralized Convertible Senior Debentures issued for an aggregate of $1 million and a lien in the aggregate amount of $850,000 in favor of the Holders of the Second Tranche Collateralized Convertible Senior Debentures issued for an aggregate of $850,000.

In addition, there will be a lien on the Property in favor of the Holders of the Third Tranche Collateralized Convertible Senior Debentures in the aggregate amount of $850,000, if and when the Third Tranche Collateralized Convertible Senior Debentures are issued. Thus, there could be a maximum lien in favor of the Holders of the foregoing Debentures in the maximum, aggregate amount of $2.7 million.

The Amended and Restated First Tranche Collateralized Convertible Senior Debentures, the Second Tranche Collateralized Convertible Senior Debentures and the Third Tranche

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Collateralized Convertible Senior Debentures are convertible, under certain circumstances, to common stock of the Company. If and when these Debentures have been converted to common stock of the Company, the liens securing these Debentures will be removed. There can be no assurance that the foregoing Debentures will be able to be converted to common stock of the Company and that these liens will be removed.

Thus, there are liens in the maximum aggregate amount of $3.85 million on the Property. If and when the Third Tranche Collateralized Convertible Senior Debentures are issued, there would be liens in the maximum aggregate amount of $4.7 million on the Property.

Residential Lot

In January 2010, the Company purchased a small, residential lot located on a canal southwest of the Property near the back entrance of the Property. The Company paid $65,000 for the lot. The purchase price was paid with 108,000 shares of common stock of the Company. The property, which comprises less than a quarter of an acre, was acquired to permit the Company to control the appearance and approach to the back entrance of its commercial Property. The residential lot is located at 3518 Diamondhead Drive South, Diamondhead, Mississippi 39525.

Office Location

The Company leases a furnished and equipped townhouse office from its President at 1013 Princess Street, in Alexandria, Virginia 22314, pursuant to a Landlord/Tenant Month to Month Lease. The terms of the lease, as adjusted for square footage and certain other applicable differences, were based on the terms of the last lease signed by the Company with an unrelated third party for unfurnished office space leased in Largo, Florida. The Company pays a base rent in the amount of $4,534 per month for approximately 2473 square feet of commercial space, in addition to any and all expenses relating to the property, including property taxes, property insurance, telephone, electric, water and cable. The Company’s executive office and all of its active files are located in this office.

ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of March 1, 2015, to the Company’s knowledge, based on filings with the Securities & Exchange Commission by certain beneficial owners and/or information received by the Company, the beneficial ownership of the outstanding Voting Stock held by (i) each person or entity beneficially owning more than 5% of the shares of any class of Voting Stock, (ii) each director, nominee, and certain executive officers, individually, and (iii) all directors and executive officers as a group. The Common Stock and the Voting Preferred Stock vote as a single class and each share thereof is entitled to one vote per share.

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BENEFICIAL OWNER	AMOUNT OF STOCK	CLASS OF STOCK	PERCENT OF CLASS		PERCENT OF VOTING (1)
Europa Cruises Corporation Employee Stock Ownership Plan Trust Deborah A. Vitale, Trustee (2) 1013 Princess Street Alexandria, Virginia 22314	2,386,370	Common	5.04	%	4.85	%
Edson Arneault (3) Chairman of the Board President of Casino World, Inc. 1 Riverside Drive New Cumberland, West Virginia 26047	—
Deborah A. Vitale (2)(4) Director, President, Secretary and Treasurer Chairman and Treasurer of Casino World, Inc. Chairman, President, Treasurer of Mississippi Gaming Corporation 1013 Princess Street Alexandria, Virginia 22314	6,399,128	Common	13.52	%	13.01	%
Gregory Harrison (5) Director and Vice President 16209 Kimberly Grove Gaithersburg, Maryland 20878	1,467,279	Common	3.10	%	2.98	%
Benjamin J. Harrell (6) Director 162 Hesper Avenue Metairie, Louisiana 70005	475,000	Common	1.00	%	.97	%
Martin Blount Director c/o 1013 Princess Street Alexandria, Virginia 22314	—

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Serco International	901,831	Common S-NR	1.90	%	5.55	%
Financial Advisory and	900,000	Preferred S-	100.00	%
Management Services Limited (7) P.O. Box 52 A-1072 Vienna, Austria	926,000	Preferred	100.00	%
Austroinvest International	901,831	Common S-NR	1.90	%	5.55	%
Limited (7)	900,000	Preferred S-	100.00	%
30, DeCastro Street, Road Town Tortola, British Virgin Islands	926,000	Preferred	100.00	%
Serco International Limited (7)	901,831	Common S-NR	1.90	%	5.55	%
4, George Street	900,000	Preferred S-	100.00	%
Mareva House P.O. Box N-3937 Nassau, Bahamas	926,000	Preferred	100.00	%
Ernst G. Walter (7)	901,831	Common S-NR	1.90	%	5.55	%
P.O. Box 15	900,000	Preferred S-	100.00	%
1072 Vienna, Austria	926,000	Preferred	100.00	%
College Health and Investment Ltd. (8) College Health and Investment LP (8) Samuel I. Burstyn, General Partner 701 Brickell Avenue, 24th Fl Miami, FL 33131	3,515,982	Common	7.43	%	7.15	%
All Directors & Executive Officers (5 Persons)	8,341,407	Common	17.62	%	16.96	%

(1) Common Stock, Series S-NR Preferred Stock and Series S Preferred Stock have been combined for the purpose of calculating voting percentages.

(2) The Europa Cruises Corporation Employee Stock Ownership Plan (“ESOP”) was established on August 18, 1994. The Trustee of the ESOP is Deborah A. Vitale. As of December 31, 2014, a total of 2,295,450 ESOP shares had been released for allocation to participants in the ESOP and an additional 318,180 shares had been forfeited by the Trust. The participants in the ESOP are entitled to direct the Trustee as to the manner in which the Company’s allocated shares are voted. The remaining 2,386,370 unallocated shares are voted by the Trustee. The Trustee is required to vote the unallocated ESOP shares in the best interests of the ESOP beneficiaries.

(3) Pursuant to a Private Placement dated February 14, 2014, on March 31, 2014, Mr. Arneault purchased a Collateralized Convertible Senior Debenture convertible into 166,667 shares of Common Stock. On December 31, 2014, pursuant to the same Private Placement, as amended, he purchased a second Collateralized Convertible Senior Debenture convertible

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into 111,111 shares of Common Stock. The conditions required for conversion of the Debentures into Common Stock of the Company have not yet been met. Assuming the conditions required for conversion are met in the future, Mr. Arneault’s Debentures would be converted into a total of 277,778 shares of Common Stock without any action on the part of Mr. Arneault.

(4) Includes 2,386,370 unallocated common shares of the ESOP Trust; 767,000 shares of Common Stock owned directly by Ms. Vitale; options to purchase 2,825,000 shares of Common Stock; and 420,758 shares of Common Stock, which represent shares of Common Stock held in Ms. Vitale’s fully vested ESOP participant account.

(5) Includes 1,217,279 shares of Common Stock owned directly by Mr. Harrison; options to purchase 150,000 shares of Common Stock; and a convertible Promissory Note and Warrant to purchase common stock, which are convertible or exercisable into a total of 100,000 shares of common stock. The Warrant referred to will expire March 31, 2015. Pursuant to a Private Placement dated February 14, 2014, on March 31, 2014, Mr. Harrison purchased a Collateralized Convertible Senior Debenture convertible into 166,667 shares of Common Stock. The conditions required for conversion of this Debenture into Common Stock of the Company have not yet been met. Assuming the conditions required for conversion are met in the future, Mr. Harrison’s Debenture would be converted into a total of 166,667 shares of Common Stock without any action on the part of Mr. Harrison, at which time his holdings, assuming no other changes occurred, would total 1,640,449.

(6) Includes 400,000 shares of Common Stock owned directly by Mr. Harrell and an option to purchase 75,000 shares of Common Stock.

(7) Serco International Financial Advisory and Management Services Ltd., Austroinvest International Limited, and Serco International Limited (f/k/a Serco International Financial Advisory and Management Services, Ltd.), are affiliated entities. The Company is informed that Dr. Ernst Walter is the sole Director and President of each company. The total beneficial ownership of securities of the Company held by the foregoing includes: 901,831 shares of Common Stock owned by Serco International Financial Advisory and Management Services, Ltd.; 926,000 shares of Series S Preferred Stock owned by Austroinvest International Limited; and 900,000 shares of Series S-NR Preferred Stock owned by Serco International Limited.

(8) Includes 1,659,868 shares of Common Stock owned by College Health & Investment LP, 506,164 shares of Common Stock owned by College Health & Investment Ltd, 200,000 shares of Common Stock owned by Alana Burstyn, 199,950 shares of Common Stock owned by Sean Burstyn, c/o Burstyn. College Health & Investment Ltd. holds a Promissory Note, issued March 25, 2010, convertible into 300,000 shares of Common Stock and Warrants to purchase 300,000 shares of Common Stock at $1.00 per share. The Warrant to purchase 300,000 shares of common stock will expire on March 25, 2015. College Health & Investment Ltd. holds Warrants to purchase 350,000 shares of Common Stock at $0.25 per share. The foregoing persons and entities appear to share a common address, 701 Brickell Avenue, Miami, FL 33131. Samuel I. Burstyn is the General Partner

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of College Health & Investment LP, which the General Partner maintains, is also known as College Health & Investment, Ltd. Does not include 200,000 shares of Common Stock held by Shari Jakobowitz, Custodian FBO Ava Burstyn, under the Florida Uniform Transfer Minor Act.

ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS

Below is information regarding the Company’s current officers and directors. Officers are appointed annually by the Board of Directors to hold such office until an officer’s successor has been duly appointed and qualified, unless an officer dies, resigns, is replaced, or is removed by the Board of Directors. Directors are elected to serve until the next annual meeting of shareholders and until their successors are elected and qualified. A majority of directors constitutes a quorum of the Board of Directors for the transaction of business. The directors must be present at a meeting, in person or telephonically, to constitute a quorum. Any action required or permitted to be taken by the Board of Directors individually or collectively, may be taken without a meeting if all members of the Board of Directors consent, in writing, to the action.

Officers and
Directors	Age	Position(s )
Edson R. “Ted” Arneault	67	Chairman of the Board of Diamondhead Casino Corporation, President, Chief Executive Officer Casino World, Inc.
Martin Blount	52	Director
Benjamin J. Harrell	61	Director
Gregory A. Harrison	70	Director, Vice-President
Deborah A. Vitale	64	Director, President, Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer

Background of Current Executive Officer and Directors

Edson R. “Ted” Arneault was elected a Director of the Company and Chairman of the Board of Directors of the Company on March 31, 2014. On the same date, the Board of Directors of Casino World, Inc., a wholly-owned subsidiary of the Company, which is expected to develop and operate the Diamondhead casino, named Mr. Arneault to the Board of Directors of Casino World, Inc. and elected Mr. Arneault to the position of President and CEO of Casino World, Inc. From 1992 through 2008, Mr. Arneault served as Chairman, President and Chief Executive Officer of MTR Gaming Group (NASDAQ: MNTG), a publicly-traded company. Mr. Arneault has significant experience in the gaming industry and, though not currently licensed, has previously held gaming licenses in Pennsylvania, West Virginia, Ohio, and Nevada. Since 2009, Mr. Arneault has served as President of New ERA Consulting, which provides marketing, government relations, capital formation, financing, and human resources consulting services to various companies. Since 2009, Mr. Arneault has also served as a principle and co-CEO of Braneault Enterprises, LLC, which advises political, commercial and entrepreneurial enterprises in all facets of marketing management. Since 2001, Mr. Arneault has served as a co-host of

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“Black and Gold Sunday,” a sports program on KDKA radio. Since 1981, Mr. Arneault has served as President of Century Energy Management Co., Inc. and its predecessors, an oil and gas operating company founded in 1980, which has drilled and operated numerous gas wells. Mr. Arneault is also a member of the American Institute of Certified Public Accountants and was previously licensed as a CPA in Michigan, Ohio, and Louisiana. Mr. Arneault has worked as a tax partner with Seidman and Seidman (BDO Seidman) and as a tax consultant for Arthur Andersen & Company. Mr. Arneault was a Distinguished Military Graduate and served as a Captain in the United States Air Force from 1969 to 1972 and on active duty in the Middle East, Africa and Asia.

Martin C. Blount was elected a Director of the Company on June 9, 2010. Since approximately 1986, Mr. Blount has been a stock broker and registered investment banker. Since approximately April of 2013, Mr. Blount has also served as a licensed structured settlement agent for Galaher Settlements & Insurance Services, Inc. Mr. Blount also represents professional athletes and is a certified Major League Baseball agent. Mr. Blount is a graduate of West Virginia Wesleyan College and holds a B.A. degree in Sociology.

Benjamin J. Harrell was elected a Director of the Company on July 18, 2002. Mr. Harrell was the founder and served as President and CEO of Pete Fountain Productions, Inc. from 1979 until it was acquired in 1999 by Production Group International, Inc. (“PGI”), a global event communications company, which was subsequently acquired by TBA Global Events, LLC in 2005. Mr. Harrell managed the acquiring company’s business in the New Orleans area. He currently serves as Head of U.S. Operations of Kuoni Destination Management, Inc., a global event and travel company which specializes in event solutions, corporate meetings, incentive programs and sporting events. He also served as Vice President of Pete Fountain Entertainment, LLC, which until March 2003 operated one of the largest jazz clubs in New Orleans. Since 1975, Mr. Harrell has served as personal manager for the internationally noted jazz artist, Pete Fountain. Mr. Harrell handled all aspects of Mr. Fountain’s career, including promotion, concerts, personal appearances and commercial endorsements. From 1985 through 2003, Mr. Harrell served as President of Cresent Sound & Light, Inc, a professional sound, lighting, video and staging company for the convention and entertainment industry. Mr. Harrell served as a Director of the New Orleans Metropolitan Convention and Visitors Bureau from 1997 through 1999. On January 15, 2004, Mr. Harrell was elected to the Board of Directors of Mississippi Gaming Corporation, a wholly owned subsidiary of the Company.

Gregory A. Harrison, Ph.D., P.E . was elected a Director of the Company on February 20, 1998. Dr. Harrison was appointed Vice-President of the Company on July 18, 2002 and was appointed Secretary of the Company on July 25, 2002. Dr. Harrison is a consulting forensic engineer with forty-nine years of diversified fire protection/safety/project engineering experience with NASA, DOD, NBS, NRC, ARAMCO, and Tenera, L.P. Dr. Harrison is licensed in six states and, effective August 27, 2004, became a Professional Engineer licensed to practice in the state of Mississippi. Dr. Harrison has qualified as an expert witness in various courts in ten states. Dr. Harrison is a partner of Master Jin Kim of Champion Martial Arts, Inc., in the development of an internet martial arts school. Dr. Harrison received a B.S. degree in Fire Protection Engineering from the University of Maryland, an M.S. degree in Civil Engineering from the University of Maryland, an M.S. degree in Engineering Administration from George

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Washington University and a Ph.D. in Safety Engineering from Kennedy-Western University. Dr. Harrison has held a top secret security clearance with the U.S. Department of Energy, the U.S. Nuclear Regulatory Commission, and the Department of Defense. Dr. Harrison has served on the Board of Directors of Data Measurement Corporation and was an Advisory Board member of United Bank and First Patriot National Bank.

Deborah A. Vitale has served as President, Chief Executive Officer and Treasurer of the Company since February 1998, as Chief Financial Officer of the Company since September 2011, and as Chairman of the Board of the Company from March 1995 through March 31, 2014. Ms. Vitale served as Secretary of the Company from November 1994 until July 2002, and as Interim Secretary from January 11, 2012 until appointed Secretary again on January 29, 2015. As President and CEO, Ms. Vitale was responsible for all phases of the day-to-day operations of four casino ships sailing out of three Florida ports into international waters and for the management and supervision of hundreds of ship-based and land-based employees. She has been a Director of the Company since December 1992. On February 14, 1997, Ms. Vitale was appointed Chairman of the Board of Directors of Casino World, Inc. and Chairman of the Board of Directors of Mississippi Gaming Corporation, each a subsidiary of the Company. On September 2, 1997, Ms. Vitale was appointed President of Casino World, Inc. and Mississippi Gaming Corporation. On March 31, 2014, Ms. Vitale stepped down as Chairman of the Board of the Company and as President and CEO of Casino World, Inc. Ms. Vitale is a trial attorney by background with over thirty years of experience handling complex civil litigation. Ms. Vitale is licensed to practice law in Washington, D.C., Maryland, and Virginia.

ITEM 6. EXECTIVE COMPENSATION

Compensation Discussion and Analysis

The Company compensated two executives in 2014, the Chairman of the Board of Directors, who also serves as President and Chief Executive Officer of Casino World, Inc., a wholly-owned subsidiary of the Registrant, and the President and CEO, who also serves as a Director, and Chief Financial Officer, Treasurer and Secretary of the Registrant and holds various positions in the Registrant’s subsidiaries. The Board of Directors monitors and approves compensation paid to executives of the Company.

Executive Compensation

Mr. Arneault was appointed Chairman of the Board on March 31, 2014. Based on his past industry-specific experience and, due to the Company’s limited finances, the Board of Directors determined his annual salary to be $300,000.

The Board of Directors determined Ms. Vitale’s base salary to be $300,000 per annum. Ms. Vitale’s base salary reflects her contribution to the Company in a myriad of corporate roles and responsibilities and more fairly compensates her based upon industry peer review. The Board recognized that Ms. Vitale manages the Company’s business without the benefit of any administrative staff normally associated with the management of a publicly-traded company at significant savings to the Company. Since mid-November of 2009, due to the Company’s cash

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position, Ms. Vitale, has, from time to time, deferred actual payment of her salary. At December 31, 2014, Ms. Vitale was entitled to cash compensation of $1,091,996 for services rendered from 2010 through 2014, which has accrued and is unpaid at December 31, 2014. In addition, on October 12, 2012, the Board of Directors approved a motion to pay interest on this deferred compensation retroactive to the outstanding amounts due beginning in 2010 through the date of actual payment. Accrued interest through December 31, 2014 amounted to $227,687.

No other additional cash compensation was paid to Mr. Arneault or Ms. Vitale during the two year period ended December 31, 2014.

The following table provides information concerning the compensation of the Chairman of the Board of Directors and the President and Chief Executive Officer. No compensation was paid to any other person during 2014 and 2013.

SUMMARY COMPENSATION TABLE

Non-Equity

Nonqualified

(3)

(2)

Incentive

Deferred

All

Name and

(1)

Stock

Option

Plan

Compensation

Other

Occupation

Year

Salary

Bonus

Awards

Compensation

Earnings

Compensation

Total

Edson Arneault

2014

225,000

None

11,250

236,250

Chairman

2013

N/A

Deborah A. Vitale

2014

300,000

None

106,739

406,739

President

2013

300,000

None

343,348

None

85,428

728,776

(1) Mr. Arneault became employed by the Company effective March 31, 2014. In 2014, Mr. Arneault was paid $150,000 of his salary with the remainder deferred to a later date. In 2014, Ms. Vitale was paid $150,000 of her salary for 2014 with the remainder deferred to a later date. In 2013, Ms. Vitale received no cash compensation and payment of all of her 2013 compensation was deferred to a later date.

(2) In the first quarter of 2013, the Board of Directors awarded an option to purchase 2,000,000 shares of common stock at a price of $0.19 per share to Deborah A. Vitale, President, Chief Executive Officer, Chief Financial Officer, Treasurer , Interim Secretary and then-Chairman of the Board of Directors. In conjunction with the award, Ms. Vitale agreed to forfeit a previously-awarded option to purchase 450,000 shares of common stock at $1.25 per share, which would have expired on October 27, 2015. At the same time, the Board of Directors voted to extend the expiration date of a previously-awarded option to Ms. Vitale to purchase 750,000 shares of common stock at $ 0.30 per share from March 11, 2013 to October 27, 2015 and voted to extend the expiration date of a previously awarded option to Ms. Vitale to purchase 75,000 shares of common stock at $ 0.75 per share from July 23, 2013 to October 27, 2015.

Reference is hereby made to Note 3, “Summary of Significant Accounting Policies — Stock Based Compensation” in the attached consolidated financial statements, for a determination of the variables used in computing the value of option awards.

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(3) In 2014, Mr. Arneault earned a pro-rated portion of the annual Director fee of $15,000. None of the earned Director fee was paid to Mr. Arneault in 2014.

In 2014, Ms. Vitale earned an annual Director fee of $15,000. In addition, Ms. Vitale earned interest on the portion of her unpaid compensation for the years 2010 through 2014. In 2014, interest in the amount of $91,739 was earned. In 2013, Ms. Vitale earned an annual Director fee of $15,000. In addition, Ms. Vitale earned interest on the portion of her unpaid compensation for the years 2010 through 2014 in the amount of $70,428. None of the above amounts were paid to Ms. Vitale in 2014 or 2013.

The following tables provide a summary of the outstanding equity awards of the Chairman of the Board and President at December 31, 2014.

SUMMARY OF OUTSANDING EQUITY AWARDS AT FISCAL YEAR END

Option Awards

Equity

Incentive

Plan

Awards

Number of

Securities

Underlying

Unexercised

Unexpired

Option

Options

Unexercised

Exercise

Expiration

Name

Exercisable

Unexercisable

Options

Price

Date

Edson Arneault

None

Deborah A. Vitale

2, 000,000

None

0.19

3/13/18

750,000

None

0.30

10/27/15

75,000

None

0.75

10/27/15

Stock Awards

			Equity	Incentive
			Incentive	Plan Awards
			Plan Awards	Market or
			Number of	Payout Value
	Number of	Market Value of	Unearned	of Unearned
	Shares or Units	Shares or Units	Shares, Units or	Shares, Units or
	Of Stock That	Of Stock That	Other Rights That	Other Rights That
	Have Not	Have Not	Have Not	Have Not
Name	Vested	Vested	Vested	Vested
Edson Arneault	None	None	None	None
Deborah A. Vitale	None	None	None	None

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OPTION EXERCISES AND STOCK VESTED IN 2014

	Option Awards		Stock Awards
	Number of		Number of
	Shares	Value	Shares	Value
	Acquired	Realized	Acquired	Realized
	On	On	On	On
Name	Exercise	Exercise	Vesting	Vesting

Edson Arneault	None	None	None	None
Deborah A. Vitale	None	None	None	None

The Company sponsors an employee stock ownership plan which is a tax deferred defined contribution pension plan formed in 1994. Ms. Vitale has been a plan participant since 1998. No contributions were made to Ms. Vitale’s participant account for the years ending December 31, 2014 or 2013.

At December 31, 2014, Ms. Vitale was 100% vested in 420,758 share of common stock which had been contributed to the plan on her behalf in past years .

Directors’ Compensation

Effective January 1, 2013, the directors of the Company will be compensated at a rate of $15,000 per annum. Each Director will be eligible for an annual payment in the amount of $15,000 as long as they remain a Director through December 31 of the applicable year, absent death or incapacitation. The annual payment to new directors will be prorated based upon months served in their initial year as a Director. Directors are reimbursed for certain approved expenses incurred in connection with Company business and for certain approved expenses incurred in connection with attendance at non-telephonic Board, committee, or other meetings. Directors are from time to time, awarded non-qualified options to purchase common stock of the Company.

The table below summarizes Director Compensation for the year ended December 31, 2014.

DIRECTOR COMPENSATION

Earned or

Non- Equity

Deferred

Paid in

Stock

Option

Incentive Plan

Compensation

All Other

Name

Cash

Awards

Compensation

Earnings

Compensation

Total

Gregory A. Harrison

15,000

None

15,000

Benjamin Harrell

15,000

None

15,000

Martin Blount

15,000

None

15,000

Other Compensation Arrangements

The Company has an agreement with Director Blount pursuant to which he will be paid a bonus in the event of any recovery received from litigation against BP relating to the oil spill. This Director will receive ten percent of any amounts received by the Company, after deduction of attorney fees and expenses relating to the litigation.

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ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Transactions with Related Persons

On August 18, 1994, the Company (f/k/a Europa Cruises Corporation), established the Europa Cruises Corporation Employee Stock Ownership Plan (the “ESOP”). The ESOP, which is a qualified retirement plan under the provisions of Section 401(a) of the Internal Revenue Code and an employee stock ownership plan within the meaning of Section 4975(e)(7) of the Internal Revenue Code, was established primarily to invest in stock of the Company. All employees as of December 31, 1994, and subsequent new employees having completed 1,000 hours of service, are eligible to participate in the ESOP. The Company also established a trust called the Europa Cruises Corporation Employee Stock Ownership Plan Trust Agreement, to serve as the funding vehicle for the ESOP. Deborah A. Vitale is the sole Trustee of the Trust.

As of December 31, 2014, a total of 2,295,450 shares of Common Stock had been released for allocation to participants in the ESOP. An additional 318,180 shares had been forfeited by the Trust. The Company made no contributions to the ESOP Plan for the years ended December 31, 2011, 2012, 2013 and 2014 . The participants in the ESOP are entitled to direct the Trustee as to the manner in which the Company’s allocated shares are voted. The remaining 2,386,370 unallocated shares are voted by the Trustee. The Trustee is required to vote the unallocated ESOP shares in the best interests of the ESOP beneficiaries.

On August 21, 1994, the Company loaned $4,275,000 to the ESOP in exchange for a ten-year promissory note bearing interest at eight percent per annum. On August 24, 1994, the ESOP purchased 2,880,000 shares of the Company’s Common Stock with the proceeds of the loan. On August 25, 1994, the Company loaned an additional $3,180,000 to the ESOP in exchange for a ten year promissory note bearing interest at eight percent per annum. On August 26, 1994, the ESOP purchased an additional 2,120,000 shares of the Company’s Common Stock with the proceeds of the loan. The shares of Common Stock were pledged to the Company as security for the loans. The promissory notes will be repaid with the proceeds of annual contributions made by the Company to the ESOP. In April of 1995, the Company agreed to extend the maturity of the loans to twenty years. Effective for the Plan year beginning January 1, 2001, the Company amended the plan and related loans for the purpose of limiting excise tax liability for plan contributions in excess of IRS Code Section 415 limitations. To accomplish this, the Company agreed to extend the maturity of the loans to fifty years.

The Company leases a furnished and equipped townhouse office from its President at 1013 Princess Street, in Alexandria, Virginia 22314, pursuant to a Landlord/Tenant Month to Month Lease. The terms of the lease, as adjusted for square footage and certain other applicable differences, were based on the terms of the last lease signed by the Company with an unrelated third party for unfurnished office space leased in Largo, Florida. The Company pays a base rent in the amount of $4,534 per month for approximately 2,473 square feet of commercial space, in addition to any and all expenses relating to the property, including property taxes, property insurance, telephone, electric, water and cable. The Company’s office and all of its active files are located in this office.

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Rent expense associated with this lease amounted to $70,348 and $70,272 for the years ended December 31, 2014 and 2013, respectively. Ms. Vitale received direct cash payments totaling $140,806 for current and past year rents in 2014 and no direct cash payments in 2013.

On March 31, 2014, the Company accepted a subscription in the amount of $150,000 from Mr. Edson Arneault in the Private Placement dated February 14, 2014, in which the Company offered to sell $3,000,000 in Collateralized Convertible Senior Debentures. Effective March 31, 2014, as part of the Private Placement, Mr. Arneault was appointed a Director and Chairman of the Board of Directors of the Company. On the same date, the Company accepted a subscription in the amount of $150,000 from Gregory A. Harrison, a Director and Vice President of the Company. On or about December 31, 2014, Mr. Harrison elected to reject the Company’s Offer to Amend the terms for issuance and conversion of the Second and Third Tranche Collateralized Convertible Senior Debentures and was refunded $100,000 from funds held in Escrow pursuant to the terms of the Private Placement Memorandum dated February 14, 2014.

The Company has an agreement with a current Director which would give rise to payment of a fee under certain conditions. See Item 6. Executive Compensation — Other Compensation Arrangements.

The Company’s policies and procedures require Board of Director approval of any related party transaction that involves an Officer or Director of the Company or any of its subsidiaries.

Director Independence

Our common stock is not listed on any national securities exchange or quoted on any inter-dealer quotation service that imposes independent standards on our Board of Directors. However, in evaluating the independence of its members, the Company’s management determined that Mr. Blount and Mr. Harrell are independent directors by virtue of the fact that they are not officers or employees of the Company. The Company has no written independence standards it follows in making the above determination. See Item 6. Executive Compensation-Other Compensation Arrangements.

ITEM 8. LEGAL PROCEEDINGS

College Health & Investment, L.P. v. Diamondhead Casino Corporation (In the Superior Court of the State of Delaware In and For New Castle County) (Case No. N15C-01-119 WCC)

On January 15, 2015, the plaintiff, a beneficial owner of in excess of 5% of the common stock of the Company, filed suit for breach of a Promissory Note issued March 25, 2010, in the principle amount of $150,000, with interest payable at 12% per annum, with a maturity date of March 25, 2012. Plaintiff seeks payment of principle of $150,000, interest due through December 31, 2014 in the amount of $45,000, and interest due of 12% per annum from December 31, 2014 until entry of judgment. On January 22, 2015, the defendant forwarded a Notice of Conversion to plaintiff, exercising the Borrower’s right to convert the principal and any interest due on the Note into common stock. On February 11, 2015, the Company moved to dismiss the complaint as

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moot. The plaintiff filed an opposition to the motion to dismiss alleging that the Note was convertible only prior to its maturity date. The matter is pending.

College Health & Investment, L.P. v. Diamondhead Casino Corporation (In the Court of Chancery of the State of Delaware) (Case No. 10663-CB)

On February 13, 2015, the plaintiff, a beneficial owner in excess of 5% of the common stock of the Company, filed a Verified Complaint Pursuant to 8 Del.C.§211(c), with a Verification signed by the plaintiff’s General Partner, Samuel I. Burstyn, seeking an order compelling the Company to hold an annual meeting. The Company agreed to entry of an Order setting a new date for an annual meeting of June 8, 2015, a Record Date of April 24, 2015, and to clarify that there is no advance notice requirement for the submission of stockholder proposals at the Company’s annual stockholders’ meetings. This case was consolidated with the below-captioned case.

College Health & Investment, L.P. v. Edson R. Arneault, Deborah A. Vitale, Gregory A. Harrison, Martin Blount and Benjamin Harrell (In the Court of Chancery of the State of Delaware) (Case No. 10793-CB)

On March 14, 2015, the plaintiff, a beneficial owner in excess of 5% of the common stock of the Company, filed a Verified Complaint, with a Verification signed by the plaintiff’s General Partner, Samuel I. Burstyn. In Count I, the plaintiff alleges that the defendants breached their fiduciary duty of disclosure. In Count II, the plaintiff alleges that defendants breached their fiduciary duties of loyalty and care. The defendants believe that plaintiff’s claims are without merit and intend to vigorously defend this lawsuit. The plaintiff sought injunctive relief, but no monetary damages other than attorneys’ fees.

ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

The Company’s securities are not being traded on any United States market or any foreign market. There is no established public trading market for the common stock of the Company or for the preferred stock of the Company or for any other securities issued by the Company or underlying any securities. See Item 2. Financial Information-Liquidity-Private Placement Dated February 14, 2014 (which includes a description of the SEC’s issuance of an Order of Suspension of Trading with respect to the Company’s securities and an Order, effective September 4, 2014, revoking the registration of the Company’s securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended).

The Company intends to file for inclusion of our common stock on the Over-the-Counter Bulletin Board, however, there can be no assurance that FINRA will approve the inclusion of our common stock.

At December 31, 2014, there were (i) 3,440,000 shares of Common Stock subject to existing options to purchase common equity of the Company, (ii) 3,036,500 shares of Common Stock subject to existing warrants to purchase common equity of the Company, (iii)1,925,000 shares of

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Common Stock issuable upon the conversion of outstanding promissory notes of the Company, (iv) 260,000 shares of Common Stock issuable upon conversion of the Company’s Series S-PIK Junior, Non-Voting, Convertible, Non-Redeemable Preferred Stock, and (v) up to 5,055,555 shares of Common Stock issuable upon conversion of outstanding debentures issued by the Company pursuant to its Private Placement dated February 14, 2014, as amended (see “Item 2. Financial Information - Private Placement Dated February 14, 2014, as amended).

Of the issued and outstanding shares of the Company’s Common Stock, the Company believes that 8,350,976 shares could be sold under Rule 144 promulgated under the Securities Act of 1933, as amended. In addition, derivatives composed of non-plan stock options, warrants to purchase common stock, convertible notes, convertible debentures and convertible preferred stock, if converted into shares of the Company, may increase the total number of common shares of the Company which may be sold under Rule 144 to an aggregate total of 22,068,031 common shares.

The Company has no agreement in place to register any of its shares with the Securities and Exchange Commission other than with respect to certain piggy-back registration rights in connection with the Company’s private placement of convertible debentures dated February 14, 2014 and the shares of Common Stock underlying such debentures. See “Item 2. Financial Information - Private Placement Dated February 14, 2014 - Piggyback Registration Rights.”

Market Price

The market price of the Company’s common stock was highly volatile when it traded in the past. A lack of liquidity in the stock, announcements by the Company, its competitors, the industry, or other casino-related, gaming-related, economy-related, or various other announcements, can lead to wide swings in the market price of the Common Stock if and when it does trade.

From November 22, 2002 until September 3, 2014, shares of the Company’s Common Stock, $.001 par value (the “Common Stock”), traded on the over-the-counter market under the symbol “DHCC.” The following table sets forth the high and low closing price quotations of the Common Stock in each full quarter during the periods set forth. Such over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

	2013				2014
	High		Low		High			Low

First Quarter	$	0.25	$	0.15	$	0.86		$	0.61
Second Quarter	0.20		0.12		0.74			0.42
Third Quarter	0.35		0.08		0.75			0.36
Fourth Quarter	0.75		0.22		0.46		*	0.46		*

*The Registrant’s common stock last traded on September 3, 2014. The stock had a closing price of $ 0.46 per share on that date. The Registrant’s common stock did not trade in the fourth quarter of 2014.

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On March 1, 2015, there were 878 registered holders of record of the Common Stock of the Company.

Dividends on Common Stock

We have never paid any cash dividends on our Common Stock and do not anticipate paying any cash dividends on our Common Stock in the foreseeable future. We intend to retain future earnings, if any, to fund operations and promote our business strategy. Any future determination to pay cash dividends on our Common Stock will be at the discretion of our Board of Directors and will be dependent upon our financial condition, results of operations, if any, capital requirements, and such other factors as the Board of Directors deems relevant.

Equity Compensation Plans

On December 19, 1988, the Company adopted a stock option plan (the “Plan”) for its officers and management personnel under which options could be granted to purchase up to 1,000,000 shares of the Company’s common stock. Accordingly, the Company reserved 1,000,000 shares for issuance under the Plan. The option price may not be less than 100% of the market value of the shares on the date of the grant. The options expire within ten years from the date of grant. At December 31, 2014, no options from this plan were issued or exercised.

See “Item 6. Executive Compensation” which is included elsewhere in this registration statement and includes a summary of the attributes of non-plan options issued to Executive Officers and Directors of the Company.

ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES

The Company has no operations and no revenue stream. The Company has had to raise funds to sustain itself and pay its costs and expenses through the sale of securities. Since 2012, the Company has offered and sold securities pursuant to the following two private placements.

Private Placement Dated February 14, 2014, as Amended

Pursuant to a Private Placement Memorandum dated February 14, 2014, the Company offered up to an aggregate of $3,000,000 of its securities to accredited or institutional investors in three tranches. The offering was made in reliance on the exemption from registration afforded under Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”) and/or Rule 506 of Regulation D under the Securities Act. See “Item 2. Financial Information-Private Placement Dated February 14, 2014” which is included elsewhere in this registration statement and includes a description of the attributes of the convertible debentures issued and issuable with respect to the Company’s February 14, 2014 private placement, as amended, including, without limitation, related commissions and expenses.

The Company raised aggregate gross proceeds of $1 million from the sale of the First Tranche Debentures and aggregate gross proceeds of $850,000 from the sale of the Second Tranche Debentures. A total of $850,000 is being held in Escrow for the purchase of the Third Tranche

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Debentures. The Escrow Agent will release the $850,000 to the Company and the Company will issue the Third Tranche Debentures to the Investors, assuming the conditions for issuance of the Third Tranche Debentures have been met by the Company on or before June 30, 2015.

As of December 31, 2014, the Company had used proceeds totaling approximately $1,006,900 from the sale of the First and Second Tranche Debentures. A detailed description of the use of proceeds is contained in a table included in Item 2 —Liquidity.

Private Placement Dated July 1, 2012

Pursuant to a Private Placement dated July 1, 2012, the Company offered to sell a minimum of 20 Units, for a minimum offering of $105,000, and a maximum of 50 Units, for a maximum offering of $262,500. Each Unit cost $5,250 and consisted of 35,000 shares of Common Stock, par value $ .001 per share, and a five year Warrant to purchase 35,000 shares of Common Stock at a purchase price of $ .25 per share.

The Investors in the offering were “accredited investors” as defined in Rule 501 of Regulation D promulgated under Securities Act of 1933, as amended (the “Securities Act”). The offering was made in reliance on the exemption from registration afforded under Section 4(2) of the Securities Act and/or Rule 506 of Regulation D under the Securities Act. No commissions, fees or bonuses were paid to any placement agent, director, or officer in connection with the offering.

The Company raised an aggregate of $151,725 from the sale of the Units and sold an aggregate of 1,011,500 shares of Common Stock. The proceeds of the offering were used to pay taxes on the Diamondhead Property, to pay property insurance premiums, to pay directors and officers liability insurance premiums, to pay certain then-current liabilities of the Company, for general corporate purposes and working capital, and to sustain the Company while it sought additional financing.

The Warrants may be redeemed, at the option of the Company, at any time prior to the Expiration Date, at the price of $ .001 per Warrant Share (“Redemption Price”), provided that the last sales price of the Common Stock has been at least $ .50 per share, on each of ten consecutive trading days ending on the third business day prior to the date on which notice of redemption is given. In the event the Company elects to redeem the Warrant, the Company shall fix a date for the redemption. Notice of redemption shall be given to the Holder of the Warrant not less than 30 calendar days prior to the date fixed for redemption (“the Redemption Date”). The Warrant may be exercised by the Holder in whole only, at any time after notice of redemption shall have been given by the Company and prior to the time and date fixed for redemption. On and after the Redemption Date, the Holder shall have no further rights except to receive, upon surrender of the Warrant, the Redemption Price.

ITEM 11. DESCRIPTION OF REGISTRANT’S SECURITIES TO BE REGISTERED

Our authorized capital stock consists of 50,000,000 shares of Common Stock par value $ .001, and 5,000,000 shares of preferred stock, par value $.01 per share. The following description of our Common Stock is intended as a summary only and is qualified in its entirety by reference to our Certificate of Incorporation, as amended, and By-laws, as amended, to date.

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Each share of common stock shall entitle the holder thereof to one vote. At each meeting of the stockholders, each stockholder entitled to vote thereat may vote in person or by proxy duly appointed by an instrument in writing subscribed by such stockholder.

Under our Bylaws, the holders of a majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at the Annual Meetings of stockholders. Directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. The vote of the holders of a majority of the shares entitled to vote and represented at a meeting at which a quorum is present shall be the act of the stockholders’ meeting, unless the vote of a greater number is required by law or the certificate of incorporation. Approval of a proposed amendment to our Certificate of Incorporation, as amended, requires the affirmative vote of the holders of a majority of the outstanding stock of each class entitled to vote thereon as a class.

According to our charter documents, holders of our Common Stock do not have preemptive rights and are not entitled to cumulative voting rights. There are no conversion or redemption rights or sinking funds provided for our common stockholders. Shares of our Common Stock share ratably in dividends, if any, as may be declared from time to time by the Board of Directors, in its discretion, from funds legally available for distribution as dividends. In the event of a liquidation, dissolution, or winding up of the Company, the holders of our Common Stock are entitled to share pro rata all assets remaining after payment in full of all liabilities and distributions to holders of preferred stock with preferential liquidation rights to distributions. All of the outstanding shares of our Common Stock are fully paid and non-assessable.

ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Our Certificate of Incorporation limits the liability of our directors and provides for indemnification of our directors to the fullest extent permitted by Delaware General Corporation Law, as amended. Our Certificate of Incorporation provides that a director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law (liability of directors for unlawful payment of dividends or unlawful stock purchases or redemptions), or (iv) for any transaction from which the director derived an improper personal benefit. Our Certificate of Incorporation further provides that if the Delaware General Corporation Law is amended after approval of the Certificate of Incorporation to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended.

In addition, our Bylaws require that the corporation hold harmless and indemnify its officers and directors from and against all judgments, fines, liabilities, amounts paid in settlement and expenses, including attorneys’ fees, incurred directly or indirectly, as a result of or in connection with any threatened, pending or completed action, suit or proceeding, provided that such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best

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interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Such provisions substantially limit a shareholders’ ability to hold officers and directors liable for breaches of fiduciary duty and may require us to indemnify our officers and directors for any liability incurred as well as for legal fees and expenses incurred in defending any claims or actions. The general effect of the foregoing is that a current or former officer or director of the Company may be insured or indemnified by the Company for any liability incurred, or legal fees and expenses incurred, arising from their actions or inactions while serving as an officer or director.

Under Delaware law, we may indemnify our directors or other persons who were, are, or are threatened to be made a party to an action, suit or proceeding because the person is or was our director, officer, employee or agent, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by them in connection with the action, suit or proceeding, if the person (i) acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Company, and (ii) with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful.

ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements for the years ended December 31, 2014 and 2013 are attached as Exhibit 99.1 to this report.

ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS

Exhibits

(a)	3.1	Certificate of Incorporation of the Company, as filed with the Secretary of State of Delaware on November 15, 1988.

(b)	3.1.1	Amendment to Certificate of Incorporation of the Company, as filed with the Secretary of State of Delaware on September 4, 1992.

(b)	3.1.2	Amendment to Certificate of Incorporation of the Company, as filed with the Secretary of State of Delaware on November 22, 2002.

(a)	3.2	By-laws of the Company.

(b)	3.2.1	Amendment of By-laws of the Company, dated February 16, 2015.

(b)	4.1	Certificate of Designation of Preferences, Rights, and Limitations of Series S Voting, Non-Convertible, Redeemable Preferred Stock Par value $0.01

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		per Share as filed with the Secretary of State of Delaware on August 5, 1993.

(b)	4.2	Certificate of Designation of Preferences, Rights, and Limitations of Series S-NR Voting, Non-Convertible, Non-Redeemable Preferred Stock Par value $0.01 per Share, as filed with the Secretary of State of Delaware on September 13, 1993.

(b)	4.3	Certificate of Designation of Preferences, Rights, and Limitations of Series S-PIK Junior, Non-Voting, Convertible, Non-Redeemable Preferred Stock Par value $0.01 per Share, as filed with the Secretary of State of Delaware on March 23, 1994.

(c)	10.1	Consulting Agreement between Europa Cruises Corporation and Casinos Austria Maritime Corporation dated September 16, 1994.

(d)	10(mm)	Management Agreement between the Company and Casinos Austria Maritime Corporation dated June 19, 1993.

(a)	10(d)	The Company’s 1988 Stock Option Plan.

(e)	10.6	Term Sheet (Redacted) for $1 Million Line of Credit dated October 22, 2008.

(f)	10.7	Private Placement Memorandum dated March 1, 2010.

(f)	10.7.1	Appendix (C) to Private Placement Memorandum dated March 1, 2010 (Form of Promissory Note).

(f)	10.7.2	Appendix (D) to Private Placement Memorandum dated March 1, 2010 (Form of Warrant).

(f)	10.8	Private Placement Memorandum dated October 25, 2010.

(f)	10.8.1	Appendix (C) to Private Placement Memorandum dated October 25, 2010 (Form of Promissory Note).

(f)	10.8.2	Appendix (D) to Private Placement Memorandum dated October 25, 2010 (Form of Warrant).

(g)	10.9	Private Placement Memorandum dated February 14, 2014.

(b)	10.9.1	Offers to Amend dated December 4, 2014.

(b)	21.1	List of Subsidiaries of the Company.

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(b)

99.1

Consolidated Financial Statements of the Company for the years ended December 31, 2014 and 2013.

Index to Exhibits

(a) Previously filed as an exhibit to the Company’s Registration Statement on Form S-18 No. 33-26256-A filed December 20, 1988 and incorporated by reference.

(b) Attached as an Exhibit to this Form 10.

(c) Previously filed as an exhibit to the Company’s S-2 Registration Statement No. 33-89014 filed January 31, 1995 and incorporated by reference.

(d) Previously filed as an exhibit to the Company’s Annual Report on Form 10-KSB for the years ended December 31, 1993 and 1994.

(e) Previously filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 and incorporated by reference.

(f) Previously filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 and incorporated by reference.

(g) Previously filed as an exhibit to the Company’s Current Report on Form 8-K filed April 4, 2014 and incorporated by reference.

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

		Diamondhead Casino Corporation
		(Registrant)

Date:	March 31, 2015	/s/ Deborah A. Vitale
		By:	Deborah A. Vitale
			President

STATE OF OELAUARE SECRETARY OF STATE DIVISION OF CORPORATIONS EXRTRTT "* -, FILED 03:30 Pfl 09/04/1992 ^^HIBIT 3.1.1 922S2S398 - 2178324 ARTICLES OF AMENDMENT TO ARTICLES OF INCORPORATION OF EUROPA CRUISES CORPORATION EUROPA CRUISES CORPORATION, a corporation organized and existing under the laws of the State of Delaware (the "Corporation"), in order to amend its Articles of Incorporation, does hereby submit these Articles of Amendment of its Articles of Incorporation and in connection therewith does hereby state as follows: 1. The name of the Corporation is Europa CruUes Corporation. The original Articles of Incorporation of the Corporation were filed with the Department of State of the State of Delaware on November 15, 1988. / 2. The Amendment to the Corporation's Articles of Incorporation as adopted by the shareholders of the Corporation and as effected hereby is as follows: Article IV of the Articles of Incorporation of me Company shall be deleted in its entirety, and in hs place and stead shall be substituted the following: ARTICLE IV (1). {Shares Authorized. The aggregate number of shares of stock which this corporation shall have authority to issue shall be fifty-five million (55,000,000) shares of which fifty million (50,000,000) shall be of Common Stock (each with a par value of one cent ($.001), and five million (5,000,000) shares of Preferred Stock (each with a par value of one cent ($.01)). A. Preferred Stock. Shares of Preferred Stock may be issued from time to time by one or more series, each such series to have such distinctive designation or title as may be fixed by the Board of Directors prior to the issuance of any shares thereof. Except as Hmtod elsewhere in this Article IV, the rights, preferences and privileges of the shares thereof shall be determined by the Board of Directors who shall have me power to decide on the following terms: (a) whether the shares of preferred stock shall be participating; (b) the dividend rate or rates, if any, on me shares of preferred stock and the relation which dividends of preferred stock shall bear to the dividends payable on any other class or classes or of any other series of any class or classes of capital stock of the corporation; (c) the terms and conditions upon which and the periods in respect to which any such dividends shall be payable; (d) whether and upon what conditions and any dividends of preferred stock shall be cumulative and, if cumulative, the date or dates from which dividends shall accumulate; A-l

* (e) whether the shares shall be limited in dividends, if any, or whether they shall participate in dividends over and above the dividend rate, if any, provided for the shares; (f) whether any such dividends shall be payable in cash, in shares of such series, in shares of any other class or classes or of any other series of any class or classes of capital stock of the corporation, or hi other property, or in more than one of tbe foregoing; (g) whether the shares of preferred stock shall be redeemable or callable, the limitations and restrictions whh respect to such redemption or call, die time or time of redemption, and the price or prices (which may be greater than par value) at which and the manner in which shares shall be redeemable or callable, including the manner of selecting shares for redemption if less than all shares are to be redeemed or called; (h) whether the shares of preferred stock shall be subject to the operation of a purchase, retirement or sinking fund, and, if so, whether and upon what conditions the purchase, retirement or sinking fund shall be cumulative or non-cumulative and the extent to which and the manner in which the fund shall be applied to the purchase or redemption of the shares for retirement or to other corporate purposes and the terms and provisions relative to the operation thereof; (i) the terms ca which preferred stock shall be convertible into or exchangeable for shares of any other class or classes or of any other series of any class or classes of capital stock of the corporation, and the price or prices or the rate or rates of conversion or exchange and the method, if any, of adjusting the same, and any other terms and conditions of such conversion or exchange; (j) the extent to which holders of preferred stock shall be entitled to vote generally whh respect to matters relating to the corporation and the matters on which the holders of preferred stock shall be entitled to vote as a class; (k) the preferences in respect to the assets of the corporation upon liquidation or winding upon the corporation including the amount (which may be greater than par value) payable to holders of preferred stock before any amount is payable to holders of common stock; and (1) any other preferences, privileges and powers, and relative, participating, optional or other special rights and qualifications of or limitations or restrictions which the Board of Directors may deem advisable, provided they are not inconsistent with the provisions of these Articles of Incorporation. Notwithstanding anything herein to the contrary, each share of preferred stock shall stand on a parity with each other share of preferred stock upon tbe voluntary or involuntary liquidation, dissolution or distribution of assets, or winding up of the corporation. No dividend shall be paid, declared or set apart for payment on any preferred stock in respect of any period unless accumulated dividends shall be or shall have been paid, or declared and set apart for payment, pro rata, on all shares of outstanding preferred stock. A-2

B. Common Stock. (a) Whenever cash dividends upon the preferred stock at the time outstanding, to the extent of the preference to which such stock is entitled, shall have been paid in full for all past dividend periods or declared and set apart for payment, such dividends, payable in cash, stock or otherwise, as may be determined by the Board of Directors, may be declared by the Board of Directors, and paid from time to time to the holders of common stock out of the remaining net profit or surplus of the corporation. (b) In the event of any liquidation, dissolution or winding up of tbe affairs of the corporation, whether voluntary or involuntary, all assets and fluids of the corporation remaining after the payment to the holders of the preferred stock of the full amounts to which they shall be entitled, as provided by the Board of Directors hi the resolution or resolutions by which it authorizes die issuance of such stock, shall be divided and distributed among1 the holders of the common stock according to their respective shares. (c) Except as may be otherwise required by law or by these Articles of Incorporation, each holder of Common Stock shall have one vote of each share of such stock held by him on all matters voted upon by the shareholders. C. Preemptive Rights. No holder of shares of this corporation of any class, DOW or hereafter authorized, shall have any preferential or preemptive right to subscribe for, purchase or receive (i) any shares of stock of mis corporation of any class, now or hereafter authorized; (ii) any options or warrants for such shares; (iii) any rights to subscribe to or purchase such shares; or GV) any securities which may at any time or from time to time be issued, sold or offered for sale by this corporation. A new Article X shall be added as follows: ARTICLE X No person or entity may become the beneficial owner of 5% or more of the Company's shares of capital stock of every series and class unless such person or entity agrees to provide personal background and financial information to gaming authorities, consent to a background investigation, and respond to questions from gaming authorities. The Company may repurchase or redeem shares, at fair market value, held by any person or entity whose status as a shareholder, in the opinion of the Company's Board of Directors, jeopardizes the approval, continued existence, or renewal by any gaming regulatory authority, of a contract to manage gaming operations, or any other tribal, federal or state license or franchise held by the Company or any of its subsidiaries. These restrictions will be contained in a legend on each certificate evidencing shares of capital stock. The current Article X shall be renumbered Article XI. 2. The above Amendments were approved by the Board of Directors and recommended to the Corporation's shareholders on August 21, 1992, A-3

3. The Amendments were approved by the holders of a majority of the Corporation's outstanding shares of common stock, which is the only group of the Corporation's shareholders entitled to vote on the Amendments, at the Corporation's Annual Meeting of Shareholders held August 21,1992. The number of votes in favor of the Amendments were sufficient for approval. IN WITNESS WHEREOF, the foregoing instrument has been duly executed and delivered by the Corporation by its undersigned officers this«*?£day of August, 1992. ATTEST: EUROPA CRUISES CORPORATION By: _ Charles S. Liberis,President ACKNOWLEDGEMENT STATE OF FLORIDA COUNTY OF ESCAMBIA BEFORE ME, the undersigned authority, on this */ day of August, 1992, personally appeared £. fetty and LWl&S S. kberjs _ . to me known to be the persons who executed the foregoing Articles of Amendment of Articles of Incorporation, who acknowledged to me that the same were executed freely and voluntarily, with full knowledge and understanding of and for the uses and purposes therein expressed. WITNESS my hand and official seal Jhe date fij^t above written. My commission expires: JUDTY.WAOB wr eoNMKM«cc nm mm Jun* 7,1*4

SECRETARY OF StATE DIVISION OC CORPORATIONS FILED 11:09 AM 'fl/22/2002 020723322 - 217B324 EXHIBIT 3.1.2 ] EUROPA CRUISES CORPORATION CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION First: That the Board of Directors of Europa Cruises Corporation, via unanimous written consent dated September 11, 2002, duly adopted a resolution setting forth a proposed amendment of the Certificate of Jncoiporation of said corporation, declaring said amendment to be advisable and calling a meeting of the stockholders of said coiporation for the consideration thereof. The resolution setting forth the proposed amendment is as follows: FURTHER RESOLVED, That the Articles of Incorporation shall be amended so as to change the name of the Company from "Europa Cruises Corporation" to "Diamondhead Casino Corporation" subject to approval of the shareholders in accordance with the Company's Bylaws. Second: That, thereafter, pursuant fo resolution of the Board of Directors, the Annual Meeting of shareholders was duly called and held on November 4, 2002, upon notice in accordance with, section 222 of the General Corporation Law of the State of Delaware, at which meeting the necessary number ot'sharcs as required by statute wax voted in favor of the amendment. Third: That said amendment was adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. Fourth: That the capital of said corporal ion shall not be reduced under or by reason of aid amendment. Deborah A. Vitale, President Authorized Officer

EXHIBIT 3.2.1 BYLAWS OF EUROPA CRUISES CORPORATION (A DELAWARE CORPORATION)

INDEX t ARTICLE ONE - OFFICES 1. Registered Office 2. Other Offices ARTICLE TWO - MEETINGS OF STOCKHOLDERS 1. Place 2. Time of Annual Meeting 3. Call of Special Meeting 4. Notice 5. Business of Special Meetings 6. Quorum 7. Required Vote 8. Voting of Shares 9. Proxies 10. Stockholder List 11. Action Without Meeting 12. Closing of Transfer Books and Fixing Record Date ARTICLE THREE - DIRECTORS 1. Number, Election and Term 2. Vacancies 3. Powers 4. Place of Meeting , 5. Annual Meeting , 6. Regular Meetings , 7. Special Meetings and Notice 8. Quorum and Required Vote , 9. Action Without Meeting , 10. Telephone Meetings , 11. Committees , 12. Compensation of Directors , 13. Chairman of the Board 14. Vice Chairman of the Board , ARTICLE FOUR - OFFICERS 1. Positions 2. Election of Specified Officers by Board 3. Election or Appointment of Other Officers 4. Salaries 5. Term 6. President 7. Vice Presidents 8. Secretary 9. Treasurer Page Number 111 111 11 222 2333 44455 55 5 5 6 667 77 88 8 8 8 88999 (i)

t INDEX (cont'd.) t ARTICLE FIVE - CERTIFICATE FOR SHARES 1. Issue of Certificates 2. Legends for Preferences and Restrictions on Transfer 3. Facsimile Signatures 4. Lost Certificates 5. Transfer of Shares 6. Registered Stockholders ARTICLE SIX - GENERAL PROVISIONS 1. Dividends 2. Reserves 3. Checks 4. Fiscal Year , 5. Seal ARTICLE SEVEN - INDEMNIFICATION , 1. Indemnification 2. Continuation of Indemnity 3. Advancement and Repayment of Expenses 4. Authorization 5. Notification and Defense of Claim 6. Nonexclusivity 7. Indemnification of Other Expenses 8. Length of Effectiveness ARTICLE EIGHT - AMENDMENT OF BYLAWS Page Number 99 10 10 11 11 11 11 11 11 12 12 12 12 12 13 13 13 14 15 15 15 15 (ii)

t EUROPA CRDISES CORPORATION BYLAWS ARTICLE ONE OFFICES Section 1. Registered Office. The registered office shall be located in the City of Wilmington, County of New Castle/ State of Delaware. Section 2. Other Offices. The corporation may also have offices at such other places, either within or without the State of Delaware, as the board of directors may from time to time determine or as the business of the corporation may require. ARTICLE TWO MEETINGS OF STOCKHOLDERS Section 1. Place. All annual meetings of stockholders shall be held at the offices of the corporation in the City of Pensacola, State of Florida, or at such other place, within or without the State of Delaware, as may be designated by the board of directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof. Special meetings of stockholders may be held at such place, within or without the State of Florida, and at such time as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof. Section 2. Time of Annual Meeting. Annual meetings of stockholders shall be held on the date and at the time fixed, from time to time, by the Board of Directors, provided, that there shall be an annual meeting held every calendar year at which the stockholders shall elect a board of directors and transact such other business as may properly be brought before the meeting. Section 3. Call of Special Meeting. Special meetings of the stockholders may be called by the president, the board of directors or the holders of not less than a majority of all shares entitled to vote at the meeting. Section 4. Notice. Written or printed notice stating the place, day and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten (10) nor more than sixty (60) days before the day of the meeting, either personally or by mail, by or at the direction of the president, the secretary, or the officer or person calling the meeting, to each stockholder of

record entitled to vote at such meeting. If mailed, such notice • shall be deemed to be delivered when deposited in the United States mail addressed to the stockholders at his address as it appears on the stock transfer books of the corporation, with postage thereon prepaid. If a meeting is adjourned to another time and/or place, and if an announcement of the adjourned time and/or place is made at the meeting, it shall not be necessary to give notice of the adjourned meeting unless the directors, after adjournment, fix a new record date for the adjourned meeting. Notice need not be given to any stockholder who submits a written waiver of notice by him before or after the time stated therein. Attendance of a person at a meeting of stockholders shall constitute a waiver of notice of such meeting, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice. Section 5. Business of Special Meetings. Business transacted at any special meeting shall be confined to the purposes stated in the notice thereof. Section 6. Quorum. The holders of a majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at meetings of stockholders except as otherwise provided in the certificate of incorporation. If, however, a quorum shall not be present or represented at any meeting of the stockholders, the stockholders present in person or represented by proxy shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified and called. The stockholders present at a duly organized meeting may continue to transact business notwithstanding the withdrawal of some stockholders prior to adjournment, but in no event shall a quorum consist of the holders of less than one-third (1/3) of the shares entitled to vote and thus represented at such meeting. Section 7. Required Vote. The vote of the holders of a majority of the shares entitled to vote and represented at a meeting at which a quorum is present shall be the act of the stockholders' meeting, unless the vote of a greater number is required by law or the certificate of incorporation. Section 8. Voting of Shares. Each outstanding share, regardless of class, shall be entitled to vote on each matter submitted to a vote at a meeting of stockholders, except to the extent that the voting rights of the shares of any class are

t limited or denied by the corporation's certificate of incorporation or the Delaware General Corporation Act. Section 9. Proxies. A stockholder may vote in person or by proxy executed in writing by the stockholder or by his duly authorized attorney-in-fact. No proxy shall be valid after three (3) years from the date of its execution unless otherwise provided in the proxy. Each proxy shall be revocable unless expressly provided therein to be irrevocable, and unless otherwise made irrevocable by law. Section 10. Stockholder List. The officer or agent having charge of the corporation's stock transfer book shall make, at least ten (10) days before each meeting of stockholders, a complete list of the stockholders entitled to vote at such meeting or any adjournment thereof, arranged in alphabetical order, with the address of, and the number and class and series, if any, of shares held by each. Such list, for a period of ten (10) days prior to such meeting, shall be subject to inspection by any stockholder at any time during the usual business hours at the place where the meeting is to be held. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any stockholder during the whole time of the meeting. The original stock transfer books shall be prima facie evidence as to who are the stockholders entitled to examine such • list or transfer book or to vote at any such meeting of stockholders. Section 11. Action Without Meeting. Any action required by the statutes to be taken at a meeting of stockholders, or any action which may be taken at a meeting of the stockholders, may be taken without a meeting or notice if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted with respect to the subject matter thereof, and such consent shall have the same force and effect as a vote of stockholders, taken at such a meeting. Section 12. Closing of Transfer Books and Fixing Record Books. For the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend, or in order to make a determination of stockholders for any other proper purposes, the board of directors may provide that the stock transfer books shall be closed for a stated period not to exceed, in any case, sixty (60) days. If the stock transfer books shall be closed for the purpose of determining stockholders entitled to notice of or to vote at a meeting of stockholders, such books shall be closed for at least ten (10) days immediately preceding such meeting. In lieu of closing the stock transfer

• books, the board of directors may fix in advance a date as the record date for any such determination of stockholders, such date in any case to be not more than sixty (60) days, and, in case of a meeting of stockholders, not less than ten (10) days, prior to the date on which the particular action requiring such determination of stockholders is to be taken. If the stock transfer books are not closed and no record date is fixed for the determination of stockholders entitled to notice of or to vote at a meeting of stockholders, or stockholders entitled to receive payment or a dividend, the date of which the notice of the meeting is mailed or the date on which the resolutions of the board of directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of stockholders. When a determination of stockholders entitled to vote at any meeting of stockholders has been made as provided in this section, such determination shall apply to any adjournment thereof, except where the board of directors fixes a new record date or the determination has been made through the closing of stock transfer books and the stated period of closing has expired. t ARTICLE THREE DIRECTORS Section 1. Number, Election and Term. The number of directors of the corporation shall not be less than three (3) nor more than ten (10), and within that minimum and maximum shall be such number as shall be from time to time specified by resolution of the board of directors; provided, however, no director's term shall be shortened by reason of a resolution reducing the number of directors. The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2 of this Article, and each director elected shall hold office for the term for which he is elected and until his successor is elected and qualified. Directors need not be residents of the State of Delaware or stockholders of the corporation. Any director may be removed at any time, with or without cause, at a special meeting of the stockholders called for that purpose. Section 2. Vacancies. A director may resign at any time by giving written notice to the board of directors or the chairman of the board. Such resignation shall take effect at the date of receipt of such notice or at any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Any vacancy occurring in the board of directors may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the board of directors, or may be filled by an election at an annual or special meeting of the stockholders ^ called for that purpose. A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in

t t office, or until the next election of one or more directors by stockholders if the vacancy is caused by an increase in the number of directors. Section 3. Powers. The business and affairs of the corporation shall be managed by its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the certificate of incorporation or by these bylaws directed or required to be exercised and done by the stockholders. Section 4. Place of Meetings. Meetings of the board of directors, regular or special, may be held either within or without the State of Delaware. Section 5. Annual Meeting. The first meeting of each newly elected board of directors shall be held, without call or notice, immediately following each annual meeting of stockholders. Section 6. Regular Meetings. Regular meetings of the board of directors may also be held without notice at such time and at such place as shall from time to time be determined by the board of directors. Section 7. Special Meetings and Notice. Special meetings of the board of directors may be called by the president and shall be called by the secretary on the written request of two (2) directors. Written notice of special meetings of the board of directors shall be given to each director at least twenty-four (24) hours before the meeting. Except as required by statute/ neither the business to be transacted at, nor the purpose of, any regular or special meeting of the board of directors need be specified in the notice or waiver of such meeting. Notices to directors shall be in writing and delivered personally or mailed to the directors or stockholders at their addresses appearing on the books of the corporation. Notice by mail shall be deemed to be given at the time when same shall be received. Notice to directors may also be given by telegram, and shall be deemed delivered when same shall be deposited at a telegraph office for transmission and all appropriate fees therefor have been paid. Whenever any notice is required to be given to any director, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be equivalent to the giving of such notice. Attendance of a director at a meeting shall constitute a waiver of notice of such meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. Section 8. Quorum and Required Vote. A majority of directors shall constitute a quorum for the transaction of business and the act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board

t of directors, unless a greater number is required by the certificate of incorporation. If a quorum shall not be present at any meeting of the board of directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. At such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally notified and called. Section 9. Action Without Meeting. Any action required or permitted to be taken at a meeting of the board of directors or committee thereof may be taken without a meeting if a consent in writing, setting forth the action taken, is signed by all of the members of the board of directors or the committee, as the case may be, and such consent shall have the same force and effect as a unanimous vote at a meeting. Section 10. Telephone Meetings. Directors and committee members may participate in and hold a meeting by means of conference telephone or similar communication equipment by means of which all persons participating in the meeting can hear each other. Participation in such a meeting shall constitute presence in person at the meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground the meeting is not lawfully called or convened. Section 11. Committees. The board of directors may, by resolution passed by a majority of the whole board, designate one or more other committees, each committee to consist of one or more of the directors of the corporation. The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the certificate of incorporation, (except that a committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the board of directors as provided in Section 151(a) fix any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the corporation or the conversion into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the corporation) adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all

t or substantially all of the corporation's property and assets, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, or amending the bylaws of the corporation; and, unless the resolution or the certificate of incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock or to adopt a certificate of ownership and merger. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors. Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required. Section 12. Compensation of Directors. The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings. Section 13. Chairman of the Board. The board of directors may, in its discretion, choose a chairman of the board who shall preside at meetings of the stockholders and of the directors and shall be an ex officio member of all standing committees. The chairman of the board shall have such other powers and shall perform such other duties as shall be designated by the board of directors. The chairman of the board shall be a member of the board of directors but no other officers of the corporation need be a director. The chairman of the board shall serve until his successor is chosen and qualified, but he may be removed at any time by the affirmative vote of a majority of the board of directors. Section 14. Vice Chairman of the Board. The board of directors may, at its discretion, choose a vice chairman of the board who shall preside at meetings of the stockholders and directors in the absence of the chairman of the board. The vice chairman of the board shall have such other powers and shall perform such other duties as shall be designated by the board of directors. The vice chairman of the board shall serve until his successor is chosen and qualified, but he may be removed at any time by the affirmative vote of a majority of the board of directors.

t ARTICLE POOR OFFICERS Section 1. Positions. The officers of the corporation shall be chosen by the board of directors and shall be a president, a vice-president, a secretary and a treasurer. The board of directors may also choose additional vice-presidents, and one or more assistant secretaries and assistant treasurers. Any number of offices may be held by the same person, unless the certificate of incorporation or these bylaws otherwise provide. Section 2. Election of Specified Officers by Board. The board of directors at its first meeting after each annual meeting of stockholders shall elect a President, one or more Vice Presidents, a Secretary and a Treasurer. Section 3. Election or Appointment _ of Other Officers. Such other officers and assistant officers and agents as may be deemed necessary may be elected or appointed by the board of directors, or, unless otherwise specified herein, appointed by the president of the corporation. The board of directors shall be advised of appointments by the president at or before the next scheduled Board meeting. • Section 4. Salaries. The salaries of all officers of the corporation to be elected by the board of directors pursuant to Article Four, Section 2 hereof shall be fixed from time to time by the board of directors or pursuant to its discretion. The salaries of all other elected or appointed officers of the corporation shall be fixed from time to time by the president of the corporation or pursuant to his direction. Section 5. Term. The officers of the corporation shall hold office until their successors are chosen and qualify. Any officer or agent elected or appointed by the board of directors or the president of the corporation may be removed, with or without cause, by the board of directors whenever in its judgment the best interests of the corporation will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Any officers or agents appointed by the president of the corporation pursuant to Section 3 of this Article Four may also be removed from such officer positions by the president, with or without cause. Any vacancy occurring in any office of the corporation by death, resignation, removal or otherwise shall be filled by the board of directors, or, in the case of an officer appointed by the president of the corporation, by the president or the board of directors. Section 6. President. The president shall be the chief executive officer of the corporation, shall have general and active management of the business of the corporation and shall see that 8

all orders and resolutions of the board of directors are carried into effect. In the absence of the chairman of the board or in the event the board of directors shall not have designated a chairman of the board, the president shall preside at meetings of the stockholders and the board of directors. Section 7. Vice Presidents. The vice presidents in the order of their seniority, unless otherwise determined by the board of directors, shall, in the absence or disability of the president, perform the duties and exercise the powers of the president. They shall perform such other duties and have such other powers as the board of directors shall prescribe or as the president may from time to time delegate. Section 8. Secretary. The secretary shall attend all meetings of the board of directors and all meetings of the stockholders and record all the proceedings of the meetings of the corporation of the board of directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. He or she shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or president, under whose supervision he or she shall be. He or she shall keep in safe custody the seal of the corporation and, when authorized by the board of directors, affix the same to any instrument requiring it. Section 9. Treasurer. The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all monies and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors. He or she shall disburse the funds of the corporation as may be ordered by the board of directors, taking proper vouchers for such disbursements, and shall render -to the president and the board of directors at its regular meetings or when the board of directors so requires an account of all his or her transactions as treasurer and of the financial condition of the corporation. ARTICLE FIVE CERTIFICATES OF SHARES Section 1. Issue of Certificates. The corporation shall deliver certificates representing all shares to which stockholders are entitled; and such certificates shall be signed by the president or a vice president, and the secretary or an assistant secretary of the corporation, and may be sealed with the seal of the corporation or a facsimile thereof. No certificate shall be issued for any share until the consideration therefor has been

t fully paid. Each certificate representing shares shall state upon the face thereof, the name of the corporation, that the corporation is organized under the laws of the State of Delaware, and narr.e of the person to whom issued, the number and class and the designation of the series, if any, which such certificate represents, and the par value of each share represented by such certificate. Section 2. Legends for Preferences and Restrictions on Transfer. Every certificate representing shares issued by the corporation shall set forth or fairly summarize upon the face or back of the certificate, or shall state that the corporation will furnish to any stockholder upon request and without charge a full statement of: (a) The designation, preferences/ limitation and relative rights of the shares of each class or series authorized to be issued. (b) The variations in the relative rights and preferences between the shares of each such series, if the corporation is authorized to issue any preferred or special class in series and so far as the same have been fixed and determined. (c) The authority of the board of directors to fix and determine the relative rights and preferences of subsequent series. Every certificate representing shares which are restricted as to the sale, disposition, or the transfer of such shares shall also state that such shares are restricted as to transfer and shall set forth or fairly summarize upon the certificate, or shall state the corporation will furnish to any stockholder upon request and without charge, a full statement of, such restrictions. If the corporation issues any shares which are not registered under the Securities Act of 1933, as amended, and registered or qualified under the applicable state securities laws, the transfer of any such shares shall be restricted substantially in accordance with the following legend: "THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER ANY APPLICABLE STATE LAW. THEY MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR PLEDGED WITHOUT (1) REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE LAW, OR (2) AN OPINION (SATISFACTORY TO THE CORPORATION) OF COUNSEL (SATISFACTORY TO THE CORPORATION) THAT REGISTRATION IS NOT REQUIRED." Section 3. Facsimile Signatures. The signatures of the president or vice president and the secretary or assistant secretary upon a certificate may be facsimiles, if the certificate is manually signed by a transfer agent, or registered by a registrar, 10

other than the corporation itself or an employee of the corporation. In case any officer who has signed or whose facsimile signature has been placed upon such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer at the date of the issuance. Section 4. Lost Certificates. The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost or destroyed. Section 5. Transfer of Shares. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Section 6. Registered Stockholders. The corporation shall be entitled to recognize the exclusive rights of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Delaware. ARTICLE SIX GENERAL PROVISIONS Section 1. Dividends. The board of directors may from time to time declare, and the corporation may pay, dividends on its outstanding shares in cash, property, or its own shares pursuant to law and subject to the provisions of the corporation's certificate of incorporation. Section 2. Reserves. The board of directors may by resolution create a reserve or reserves out of earned surplus for 11

any proper purpose or purposes, and may abolish any such reserve in the same manner. Section 3. Checks. All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate. Sect ion3 cf.ml: ?\l Year. The fiscal year of the corporation shall end onagr 31 of each year unless otherwise fixed by resolution of the board of directors. Section 5. Seal. The corporate seal shall have inscribed thereon the name and state of incorporation of the corporation. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced. ARTICLE SEVEN INDEMNIFICATION Section 1. Indemnification. The corporation hereby agrees to hold harmless and indemnify any of its officers, directors, employees or agents from and against and to reimburse such person for, any and all judgments, fines, liabilities, amounts paid in settlement and expenses, including attorneys' fees, incurred directly or indirectly as a result of or in connection with any threatened, pending or completed action, suit or proceeding whether or not such action, suit or proceeding is by or in the right of the corporation to procure a judgment in its favor, including an action, suit or proceeding by or in the right of any other corporation of any type or kind, domestic or foreign, or any partnership, joint venture, trust, employee benefit plan or other enterprise for which such person served in any capacity at the request of the corporation to which such person is, was or at any time becomes a party, or is threatened to be made a party, or as result of or in connection with any appeal therein, by reason of the fact that such person is, was or at any time becomes a director or officer of the corporation or is or was at any time serving or at any time serves such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise in any capacity, whether arising out of any breach of such person's fiduciary duty as a director or officer of such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise under any state or federal law or otherwise; provided, however, that (i) indemnification shall be paid pursuant to this Article Seven if and only if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; and (ii) no indemnification shall be payable pursuant to 12

this Article Seven if a court having jurisdiction in the matter shall determine that such indemnification is not lawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had reasonable cause to believe that this conduct was unlawful. No indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnify for such expenses which the Court of Chancery or such other court shall deem proper. Section 2. Continuation of Indemnity. All agreements and obligations of the corporation contained herein shall continue during the period such person shall serve as a director or officer of the corporation and shall continue thereafter so long as such person shall be subject to any possible claim or threatened, pending- or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person was a director or officer of the corporation or served at the request of the corporation in any capacity for any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. Section 3. Advancement and Repayment of Expenses. Expenses incurred by an officer or director in defending any threatened or pending action, suit or proceeding, whether civil, criminal, administrative or investigative, shall be paid by the corporation in advance of the final disposition thereof, other than those expenses for which such director or officer is not entitled to indemnification pursuant to the proviso to, or the last sentence of, Section 1 of this Article Seven. The corporation shall make such payments upon receipt of (i) a written request made by such person for payment of such expenses, (ii) an undertaking by or on behalf of such person to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the corporation as authorized herein and (iii) evidence satisfactory to the corporation as to the amount of such expenses. Section 4. Authorization. Any indemnification under this Article Seven (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in Section 1 of this 13

Article Seven. Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by a written opinion of independent legal counsel, or (iii) by the stockholders of the corporation. Section 5. Notification and Defense of Claim. Promptly after receipt by a person seeking indemnification pursuant to this Article Seven of notice of the commencement of any action, suit or proceeding, such person will, if a claim in respect thereof is to be made against the corporation under this Article Seven, notify the corporation of the commencement thereof; but the omission so to notify the corporation will not relieve it from any liability which it may have to such person otherwise than under this Article Seven. With respect to any such action, suit or proceeding as to which such person notifies the corporation of the commencement thereof. A. The corporation will be entitled to participate therein at its own expense; and, B. Except as otherwise provided below, to the extent that it may wish, the corporation jointly with any other indemnifying party similarly notified will be entitled to assume the defense thereof, with counsel satisfactory to the person to be indemnified. After notice from the corporation to the person to be indemnified of its election so to assume the defense thereof, the corporation will not be liable to such person under this Article Seven for any legal or other expenses subsequently incurred by such person in connection with the defense thereof other than reasonable costs of investigation or as otherwise provided below. The person to be indemnified shall have the right to employ his or her own counsel in such action, suit or proceeding but the fees and expenses of such counsel incurred after notice from the corporation of its assumption of the defense thereof shall be at the expense of such person unless (i) the employment of counsel by such person has been authorized by the corporation in connection with the defense of such action, (ii) such person shall have reasonably concluded that there may be a conflict of interest between the corporation and such person in the conduct of the defense of such action, or (iii) the corporation shall not in fact have employed counsel to assume the defense of such action, in each of which cases the fees and expenses of counsel for such person shall be borne by the corporation (it being understood, however, that the corporation shall not be liable for the expenses of more than one counsel for such person in connection with any action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances). The corporation shall not be entitled to assume the defense of any action, suit or proceeding brought by or on behalf of the corporation or as to 14

which such person shall have made the conclusion provided for in (ii) above. C. Anything in this Section to the contrary notwithstanding, the corporation shall not be liable to indemnify any person seeking indemnification under this Article Seven for any amounts paid in settlement of any action or claim effected without its written consent. The corporation shall not settle any action or claim in any manner which would impose any penalty or limitation on the person to be indemnified without such person's written consent. Neither the corporation nor any such person will unreasonably withhold their consent to any proposed settlement. Section 6. Nonexclusivity. The indemnification and advancement of expenses provided by, or granted pursuant to this Article Seven shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the General Corporation Law of the State of Delaware, the corporation's Certificate of Incorporation, Bylaws, as now in effect or as hereafter amended, any agreement, any vote of stockholders or directors, any applicable law, or otherwise. Section 7. Indemnification of Other Expenses. In the event any person seeking indemnification hereunder is required to bring any action to enforce rights or to collect monies due under this Article Seven and is successful in such action, the Company shall reimburse such person for all costs and expenses, including attorneys' fees, incurred by such person in connection with such action. Section 8. Length of Effectiveness. The indemnification and advancement of expenses provided by or granted pursuant to this Article Seven shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. ARTICLE EIGHT AMENDMENTS OF BYLAWS These bylaws may be altered, amended or repealed or new bylaws may be adopted at any meeting of the board of directors at which a quorum is present, by the affirmative vote of a majority of the directors present at such meeting (provided notice of the proposed alteration, amendment or repeal is contained in the notice of the meeting), subject to repeal or change at any meeting of the stockholders at which a quorum is present, by the affirmative vote of a majority of the stockholders present at such meeting (provided notice of the proposed alteration, amendment or repeal is contained in the notice of the meeting). 15

TRUST COMPANY (THU108.05' 93 10:16/ST. 10:15/NO. 3560228847 P 2 SECB£TARV OF STATE •91 VISION OF CORPORATIONS ILED 10:00 AM 08/05/1993 723217016 - 217G324 EXHIBIT 4.1 CERTIFICATE OF DESIGNATION" OF PREFERENCES, RIGHTS AND LIMITATION OF SERIES S VOTINS, NON-COJTVERTIBI.E/ REDEEHABLE PREFERRED STOCK FAR VALUE $.01 PER SHARE OF EOROPA CRDISES CORPORATION that: Charles H. Reddien and Sharon Petty hereby certify A. They are the President and Secretary, respectively, of Europa Cruises Corporation, a Delaware corporation (the "Corporation"). B. The Corporation's Articles of Incorporation authorize the issuance of up to 5,000,000 shares of Preferred Stock, par value $.01 per share. C. Pursuant to the authority conferred upon the Board of Directors by the Articles of Incorporation, arid pursuant to the provisions of the Delaware General Corporation Lav, said Board of Directors, by action on the 14th day of providing for the designation of a series of 926, June, 1993, 000 shares of Series S Preferred Stock, par value $.01 per sharp, which action was as follows: That pursuant to the authority expressly granted and vested in the Board of Directors of this Corporation in accordance with the provisions of its Articles ofjIncorporation, a series of preferred stock of the Corporation be], and it hereby is, designated "Series S Voting, Non-Convertible Redeemable Preferred Stock, par value $.01 per share" (the "Series S Preferred Stock"), said series to consist of 926,boo shares. The powers, designations, preferences and relative participating, optional or other special rights and the Qualifications, •limitations and restrictions of the Series s Preferred Stock shall be as follows: ' 1. Number and Designation, The number of shares to constitute the Series S Preferred Stock shall be 926,000 shares and the designation of such shares shall be "Series S Preferred Stock:, par value $.01 per share." 2. Liquidation. (a) Preference. In the event of any voluntary or involuntary dissolution, liquidation, or winding up of affairs of the Corporation, after payment or provision for payment of the debts and other liabilities of the Corporation, trie holders of the Series s Preferred Stock shall be entitled to [receive out of the assets of the corporation, whether such assets are capital,

'FROM CORPORATION TRUST COMPANY (THU) 08.05' 93 10:17/ST. 10:15/NO, 3560228847 P 3 surplus or earnings, an amount equal to the Liquidation Value of each share of Series S Preferred Stock before any payment shall be made or assets distributed on the common Stock. After payment to the holders Preferred Stock of the amount to which such holders are entitled as set forth above, the remaining assets of the of the Series S :orporation, if any, shall, subject to the rights of the holders of the Corporation's Preferred Stock, be distributed ratably among the holders of the Corporation's Common Stock. | (b) Partial,Payment. If upon any,dissolution, liquidation or winding up of the affairs of the Corporation, the assets of the Corporation distributable among th<£ holders of the Series S Preferred Stock and all other classes oijr series of Preferred stock ranking as to assets pari p_asu thereto shall be insufficient to permit the payment to them of the full preferential amounts to which they are entitled, ,then the entire assets of the Corporation to be so distributed shall be distributed ratably among the holders of the Series S Preferred Stock and such other classes or series of Preferred Stock ranking as to assets pari pasu thereto, in proportion to ithe sum of their respective per share liquidation values, until payment in full of such amount per share. (c) Licmidation Value. The Liquidation share of Series S Preferred Stock as of any parti|cul be $1.08. Value per cular date shall 3. Voting Ricrhts. The shareholders ofj the Series S 'preferred Stock shall have full voting rights on all matters upon which the shareholders of the Corporation are entitled to vote. Each share of Preferred Stock shall be entitled tp one vote per share. The holders of the Series S Preferred stock may vote either in person or by proxy. The shareholders or the Series S Preferred Stock, shall foe entitled to notice of all regular and special shareholder's meetings and copies of all proxy and other materials provided to the shareholders of the Corporation at the same time and in the same manner as the shareholders of the Corporation. . ' I The Corporation shall not, without the consent of the holders of at least 51% of the Series S Preferred Stock then outstanding, given in person or by prosty, either in writing or by vote at a meeting called for that purpose at which the Series S Preferred Stock shall vote as a Class, by amendment to the Articles of Incorporation of the corporation or by merger or consolidation or in any other manner alter or change the preference, special rights or powers given to the [holders of the Series S Preferred stock by the Articles of Incorporation.

* FROM CORPORATION TRUST COMPANY (THU) 08.05' 93 10:17/ST. 10:15/NO. 3560228847 P 4 4, cumulative Dividends. Dividends oh the Series s Preferred Stock shall be payable at the rate of three percent (3%) per annum, .payable quarterly to shareholders of record as of March 31, June 30, September 30, and December 31 of each year Payments of all from legally available funds and are cumulative, dividends on the Series S Preferred Stock shall be made before any dividends are declared and paid on the Common Stock of the Corporation ("Common Shares"); provided, however\t the Series S Preferred Stock shall not be entitled to the payment of any dividends or other distribution resulting from the spin-off to Europa shareholders of Casino World Inc. and Mississippi Gaming Corporation. 5. Conversion. The holders of shares Preferred Stock shall not be entitled to convert sliares of Common Stock of the corporation. of Series S such shares into 6. Redemption. The Preferred Shares are redeemable at the option of the company, at any time, in whdle or in part. If the Company elects to redeem the Preferred Shares, the Company will pay to the holder a redemption fee of 1% per quarter for each quarter the shares have been issued and outstanding prior to the Redemption Payment. IN WIS/NESS WHEREOF, the Corporation has caused this Certificate to be signed by Charles H-^Reddien, president, and Sharon Petty, its Secretary, this /Cs^&day of June, 1993. EUROPA CRUISES CORPORATION Charles H. Reddien Its President: Petty /Its Secretary

SENT BY'Potter Anderson & C, ; 9-13-93 i 12U4 ; HAILROOH DEPT. •« 302 739 3812t» 3 STATE OF DELAWARE . , SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 12:00 Prt 09/13/1993 543256001 - 2178324 Or DMXOMMIOJC 0? PWZJUEVCIf , JUOTTf U0> LXMITlJPtcarg 07 •XXIBI i-3Wt 70TXJW, PUTOUUD •TOOK vui VJUMJI 9.01 P» woai aw Charles H. Reddien and Sharon Petty hereby certify that: A. They are the President and Secretary, respectively, of Europa Cruises Corporation, a Delaware corporation {the "Corporation11). B. The Corporation'* Article! of Incorporation authorize the issuance of up to 5,000,000 shares of Preferred Stock, par value $.01 per share. C. Pursuant to the authority conferred upon the Board of Directors by the Article* of Incorporation, and pursuant to the provisions of the Delaware General Corporation Lav, aaid Board of Director*, by duly adopted resolution* on the 2nd day of September, 1993, providing for the designation of a series of 900,000 shares of Series S-NR Preferred stock, par value $.01 per share, which resolutions are as follows« RESOLVED, that pursuant to the authority expressly granted and vested in the Board of Directors of this Corporation in accordance with the provision* of its Articles of Incorporation, a series of preferred stock of the Corporation be, and it hereby is, designated "Series S-tfR Voting, Non-Convertible Non-Redeemable Preferred Stock, par value $.01 per chare" (the "Series S-NR Preferred Stock"), said series to consist of 900,000 shares. The powers, designations, preferences and relative participating, optional or other special rights and the qualifications, limitations and restriction* of the Series S-NR Preferred Stock shall be as follows! 1. Number and Designation. The nunber of shares to constitute the Series S-NR Preferred Stock shall be 900,000 shares and the designation of such shares shall be "Series S-NR Preferred Stock, par value $.01 per share.*1 a. Liquidation. (a) Preference. In the event of any voluntary or involuntary dissolution, liquidation, or winding up of affairs of the corporation, after payment or provision for payment of the debts and other liabilities of the Corporation, the holder* of the Series s-NR Preferred Stock shall be entitled to receive out of the assets of the corporation, whether such assets are EXHIBIT 4.2

SENT BYlPotter Anderson & C, ! 9-13-93 : 12U5 ! HAILROOM DEPT. -» 302 733 36121* 4 capital, aurplua or earnings, an amount equal to the Liquidation Value of each share of series fl-HR Preferred Stock before any payment shall be made or assets distributed on the Common Stock. After payment to the holders of the Series SNR Preferred Stock of the aaount to which such holders are entitled as set forth above, the remaining Msets of the corporation, if any, shall, subject to the rights of the holders of the Corporation's Preferred Stock, be distributed ratably among the holders of the Corporation's Comaon Stock. (b) Partial Payaant. If upon any dissolution, liquidation or winding up of tha affairs of the Corporation, the assets of the corporation distributable among the holders of the Series S-NR Preferred Stock and all other classes or series of Preferred Stock ranking as to assets EirJL KAfJU thereto shall be insufficient to permit the payment to them of the full preferential amount* to which they are entitled, then the entire assets of the Corporation to be so distributed shall be distributed ratably among the holders of the Series B-NR Preferred Stock and suoh other classes or series of Preferred Stock ranking as to aisets nari jam thereto, in proportion to tha sum of their respective per share liquidation values, until payment in full of such amount per share. (c) Raorganiiation. For the purposes of this Section 2, a liquidation, dissolution or winding up of the affairs of the Corporation shall not b« deemed to be oocasionsd by or to include the sale of all or substantially all of the assets of the Corporation or the acquisition of the Corporation by another entity by means of a merger, consolidation or other reorganization. (d) Liquidation Valua. The Liquidation Value per share of Series S-NR Preferred Stock as of any particular date shall be $1.11 per share plus accrued dividends, if any. * 3. Voting Rights. The shareholders of the Series 8-HR Preferred Stock ahall have full voting rights on all matters upon which the shareholders of the Corporation are entitled to vote. Each shars of Pr«f«rr«d stock shall ba entitled to one vote per share. The holders of the Series S-NR Pref«rr»d Stock may vote either in person or by proxy. The shareholders of the Series SNR Preferred Stock shall be entitled to notice of all regular and special shareholder's Beatings and copies of all proxy and other materials provided to the sharaholdars of the Corporation at the Barn* tim« and in tha san« manner as the shareholders of the Corporation. The Corporation shall not, without the consent of th« holders of «t least 51% of the 8«ri«s S-NR Praforrad Stock thsn outstanding, given in person or by proxy,

SENT BY:Potter Anderson & C. ; 9-13-93 ,' 12U6 I MAILROOM DEPT. •• 302 733 3812',* 5 •ithar in vritina or by vota at a meeting oallad for that purpoaa at which tha Seriea B-NR Prafarxad Stock shall vota at • Clan/ by aaandaent to tha Articlaa of Incorporation of tba Corporation or by margar or oonaolidation or in any othar Banner: (a) altar or change tha prafaranoa, apaaial right* or pcvars givan to tha holdar* of tha Sariaa S-NR Prafarrad stock by tha Arbiolaa of Inoorporatlonj or (b) incraaaa tha nuabar of author iced aharaa of tha Prafarrad Stock to aora than 5,000,000 aharaa. 4. flfln-fflmulativa Pividanda. Dividanda on tha Cariaa fl-NR Prafarrad Stoak ahall ba payabla at tha rata of thraa parcant (3%) par annun, payabla quartarly to aharaholdara of record aa of March 31, Juna 30, Saptenber 30, and Daoanbar 31 of aaoh yaar front lagally availabla fund* and ara non-cumulative. Payaanta of all dividanda on tha Sariaa S-NR Prafarrad Stock shall ba mada bafora any dividanda ara daolarad and paid on tha coaaon Stock of tha Corporation ("Coaaon Sbaraa1*}. Tha Sariaa 8- NR Prafarrad Stock ahall participate pro rata in any dividand doclarad on the Company '» Coamon Sharaa. 5. Convaraion. Tha holdara of aharaa of Bariaa B-NR Prafarrad Stock ahall not ba entitled to convert auoh aharaa into shares of Common Stock of tha Corporation. 6. Redemption. Tha Prafarrad Sharaa ara not radaaaabla by tha Company. IN WITNESS WBBR20F, tha Corporation haa oauaad this certificate to ba aignad by Charlai &. Raddian, Praaidant, and Sharon Patty, it* Secretary, thia 8th day of September, 1993. EUROPA CKUISES CORPORATION il*- Charlai H. Raddian Ita Praaldant /Sharon Patty ' Ita Saoratary

; :-.STATE OF DELfUlIAREOYAi. I.I.X. : n -J. SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 10:00 AN 03/23/199-4 944047334 - 2178324 EXHIBIT 4.3 or DESIGNATION or PREFERENCES, RIGHTS MID LXHXTATIOIIS O7 SERIES S-PIK OTOXOR, NOH-VQTXNG, CONVERTIBLB, PREFERRED STOCK PAR VALUE $.01 PER BEARS O? CRUISES CORPORATION Charles H. Reddien and Sharon Petty hereby certify that: A. They are the President and Secretary, respectively, of Europa Cruises Corporation, a Delaware corporation (the "Corporation"). B. The Corporation's Articles of Incorporation authorize the issuance of up to 5,000,ooo shares of Preferred Stock, par value $.01 per share. C. Pursuant to the authority conferred upon the Board of Directors by the Articles of incorporation, and pursuant to the provisions of the Delaware General Corporation Law, said Board of Directors, by duly adopted resolutions on the 7th day of March, 1984, providing for the designation of a series of 2,500,000 shares of Series S-PIK Preferred Stock, par value $.01 per share, which resolutions are as follows: RESOLVED, that pursuant to the authority expressly granted and vested in the Board of Directors of this Corporation in accordance with the provisions of its Articles of Incorporation, a series of preferred stock of the corporation be, and it hereby is, designated "Series S-PIK Junior, Non-Voting, Convertible Non-Redeemable Preferred Stock, par value $.ai per share" (the "Series S-PIK Preferred Stock"), said series to consist of 2/500,000 shares. The powers, designations, preferences and relative participating, optional or other special rights and the qualification*, limitations and restrictions of the Series S-PIK Preferred Stock shall be as followsi 1. Number and Designation. The nuaiber of shares to constitute the Series S-PIK Preferred Stock shall be 2,500,000 shares and tiie designation of such shares shall be "Series S-PIK Preferred Stock, par value $.01 per share." 2. Liquidation. (a) Junior Rank. The Series s-PIK Preferred Stock shall rank junior to the Series S Preferred Stock and the Series S-NR Preferred Stock as to the distribution of assets upon

i'X'.i- '<'M,\ LL.\ liquidation, dissolution, or winding up of the Corporation. No distribution of the assets of the Corporation upon liquidation, dissolution, or winding up of the Corporation, whether such aseats are capital, surplus, or earnings, shall b« made to the holders of the Series S-PIK Preferred Stock before full payment of the Liquidation value of the Series S and Series S-NR Preferred Stock is made to the holders of tiie Series S and Series S-NR Preferred Stock. (b) Preference. In the event of any voluntary or involuntary dissolution, liquidation, or winding up of affairs of the corporation, after payment or provision for payment of the debts and other Liabilities of the Corporation and payment or provision for payment of the Liquidation Value of the Series S and Series S-NR Preferred holders, the holders of the Series SPIK Preferred Stock shall be entitled to receive out of the assets of the corporation, whether such assets are capital, surplus or earnings, an amount equal to the Liquidation Value of each share of Series S-PIK Preferred Stock before any payment shall be made or assets distributed on the Conunon Stock. After payment to the holders of the Series SPik Preferred stock of the amount to which such holders are entitled as set forth above, the remaining assets of the Corporation, if any, shall, subject to the rights of the holders of the Corporation's Preferred Stock, be distributed ratably among the holders of the Corporation's Common Stock. (c) Partial Payment. If upon any dissolution, liquidation or winding up of the affairs of the Corporation, the assets of the Corporation distributable aaong the holders of the Series S-PIK Preferred Stock and all other classes or series of Preferred Stock ranking as to assets pari pasu thereto shall be insufficient to permit the payment to them of the full preferential amounts to which they are entitled, then the entire assets of the Corporation to b« so distributed shall be distributed ratably among the holders of the series S-PIK Preferred Stock and such other classes or series of Preferred Stock ranking as to assets pari paau thereto, in proportion to the sum of their respective per share liquidation values, until payment in full of such amount per share. (d) Reorganization. For the purposes of this Section 2, a liquidation, dissolution or winding up of the affairs of the Corporation ehall not be deemed to be occasioned by or to include the sale or spin-off of all or substantially all of the assets of the Corporation or the acquisition of the Corporation by another entity by means of a merger, consolidation or other reorganization.

'.\ •:.'-. i<OJi _A!, '.'. A_. «-__;.:.-XM . •:.<'! C--_ ! •-^ v,— i.:-. -iOvAi. l.i \ : M (c) Liquidation Value. The Liquidation Value per share of Series S~PIK Preferred Stock as of any particular date shall be $2,25 per share plus accrued dividends, if any. 3. Voting Rights. The shareholders of the Series SPIK Preferred Stock shall have no voting rights on any natters upon which the shareholders of th« Corporation are entitled to vote provided, however, the corporation shall not, vithout the consent of the holders of at least 51% of the Series S-PIK Preferred Stock then outstanding, given in person or by proxy, either in writing or by vote at a meeting called for that purpose at which the Series S-PIK Preferred Stock shall vote as a Class, by amendment to the Articles of Incorporation of the Corporation or by merger or consolidation or in any other manner: (a) alter or change the preference, special rights or powers given to the holders of the Series S-PIK Preferred Stock by the Articles of Incorporation; or (b) increase the number of authorized shares of the Preferred Stock to mor* than 5,000,000 shares. 4. Cumulative Dividends. Annual dividends on the Series S-PIK Pr«f«rr«d Stock shall be payable at the rate of $.18 per share, payable quarterly at the rate of $.045 per share to shareholders of record as of March 15, June 15, September 15 and December 15 of each year from legally available funds and are cumulative. For a period of three (3) years from the date the Series S-PIK Preferred Stock is first issued, the Corporation may at its option pay the amount of any dividend payable by issuing Common Stock of the Corporation to the holders of the Series SPIX Preferred Stock. When the Corporation elects to make any dividend payment to the record holders of the Series S-PIK Preferred Stock by issuing shares of its Common Stock to the holders of the Series S-PIK Preferred Stock, the number of shares of Common Stock issued to th* holders of the Series S-PIK Preferred Stock shall be determined by dividing the total dividend payable by the closing price of the Corporation's Common Stock as reported in the Wall Street Journal on the Dividend Record Date. If the Dividend Record Date falls on a Saturday, Sunday or holiday, the last closing price of the Corporation's Common Stock as reported in tha Wall Street Journal on the day immediately preceding the Dividend Record Date shall be utilized in determining the numb«r of shares of Common Stock to be issued to the holders of the Series S-PIK Preferred stock. Mo fractional shares of Common Stock will b« issued. Payments of all dividends on the Series S-PIK Preferred Stock shall be made before any dividends are declared and paid on the Common Stock of th* Corporation ("Common Shares"). The Series S-PIK Preferred Stock shall participate pro rata in any dividend, whether payable in cash or in stock, declared on th* Company's Common Shares.

RI.-C. I'AK : I>. kOY/,.'. i.i \. • i ••'- •'.-.:•• • \>'• •*• !!.' 5. Conversion. The holders of the Series S-PIK Preferred StocX shall be entitled to convert each share of Series S-PIK Preferred Stock into one share of the Corporation's Voting Common Stock (par value $.001 per chare) at any time after January 31, 1995, 6. Redemption. The Preferred Shares are not redeemable by the Company. IN WITNESS WHEREOF, the Corporation has caused this Certificate to be signed by Charles H. Raddien, President, and Sharon Petty, its Secretary, this 15th day of February, 1994, EUROPA CRUISES CORPORATION Charles B. Reddien Its President •'Sharon Petty Its Secretary

EXHIBIT 10.9.1

DIAMONDHEAD CASINO CORPORATION

OFFERS TO AMEND

Diamondhead Casino Corporation, a Delaware corporation (the “ Company ” or the “ Issuer ”), pursuant to a Private Placement Memorandum dated February 14, 2014 (the “ Memorandum ”), offered up to an aggregate of $3,000,000 of its securities to accredited or institutional investors, on the terms and conditions described in the Memorandum (the “ Original Offering ”). The Offering consisted of three tranches as follows:

(a) $1,000,000 of First Tranche Collateralized Convertible Senior Debentures convertible into an aggregate of 3,333,333 shares of Common Stock of the Company at a conversion price of $ .30 per share (the “ First Tranche Debentures ”);

(b) $1,000,000 of Second Tranche Collateralized Convertible Senior Debentures, convertible into an aggregate of 2,222,222 shares of Common Stock of the Company at a conversion price of $ .45 per share (the “ Second Tranche Debentures ”); and

(c) $1,000,000 of Third Tranche Collateralized Convertible Senior Debentures, convertible into either 1,818,182 shares of Common Stock or 1,333,333 shares of Common Stock of the Company, at a conversion price of $ .55 or $ .75 per share depending upon certain conditions described in the Memorandum (the “ Third Tranche Debentures ”).

The Company is offering to amend, upon the terms and conditions set forth herein, the conversion terms of the First Tranche Debentures, which were issued on March 31, 2014 (“ Amendment I ”). The Company is separately offering to amend, upon the terms and conditions set forth herein, the terms for issuance and conversion of the Second and Third Tranche Debentures, as well as the period of time within which to perform the Third Tranche Closing Obligations, as amended (“ Amendment II ”).

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THE TRANSACTION CONTEMPLATED HEREIN; PASSED UPON THE MERITS OR FAIRNESS OF THE TRANSACTIONS; OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

OUR BOARD OF DIRECTORS MAKES NO RECOMMENDATION AS TO WHETHER OR NOT YOU SHOULD PARTICIPATE IN EITHER OR BOTH OF THE OFFERS TO AMEND. YOU MUST MAKE YOUR OWN DECISION WITH RESPECT TO THE OFFERS TO AMEND. FOR QUESTIONS REGARDING TAX IMPLICATIONS OR OTHER INVESTMENT-RELATED QUESTIONS, YOU SHOULD TALK TO YOUR OWN ATTORNEY, ACCOUNTANT AND/OR FINANCIAL PLANNER.

NEITHER WE NOT THE PLACEMENT AGENT HAVE AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR BEHALF AS TO WHETHER OR NOT YOU SHOULD AGREE TO EITHER OR BOTH OF THE OFFERS TO AMEND. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY REFERENCE IN THIS DOCUMENT IN MAKING YOUR DECISION.

THESE OFFERS TO AMEND ARE DIRECTED SOLELY TO THE INSTITUTIONAL AND ACCREDITED INVESTORS OF THE ORIGINAL OFFERING. DISTRIBUTION OF THESE OFFERS TO AMEND TO ANY OTHER PERSON IS UNAUTHORIZED AND ANY REPRODUCTION OF THESE OFFERS OR RELATED DOCUMENTS, IN WHOLE OR IN PART, IS PROHIBITED.

THE SECURITIES BEING OFFERED PURSUANT TO THESE OFFERS TO AMEND ARE BEING OFFERED PURSUANT TO EXEMPTIONS PROVIDED BY SECTION 4(A)(2) OF THE SECURITIES ACT OF 1933, AS AMENDED, REGULATION D THEREUNDER, CERTAIN STATE SECURITIES LAWS AND CERTAIN RULES AND REGULATIONS PROMULGATED THEREUNDER.

DECEMBER 4, 2014

BACKGROUND LEADING TO OFFERS TO AMEND

Securities and Exchange Commission Proceedings

In its Private Placement Memorandum dated February 14, 2014, the Company informed Investors that the Company was not in compliance with its reporting requirements under Section 13(a) of the Securities Exchange Act of 1934 (the “ Exchange Act ”). (See first risk factor entitled “The Company is not in compliance with its reporting requirements under Section 13(a) of the Securities Exchange Act of 1934.”)(Memorandum, at page 11.)

As the Company also stated in the Memorandum, the Company had not filed any financial statements, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q or other periodic reports with the Securities and Exchange Commission, which it was required to file, since it filed its Form 10-Q for the period ended June 30, 2011. The Company did not have the funds to retain accountants, outside auditors, and/or outside attorneys to prepare, review and file the documents and/or financial statements which the Company was required to file with the Securities and Exchange Commission (the “ SEC ”). As the Company stated, by letter dated August 19, 2013, the SEC notified the Company that it was not in compliance with the reporting requirements under Section 13(a) of the Securities Exchange Act of 1934 and that it should file all required reports within fifteen days from the date of the letter. The SEC informed the Company that if it did not file all required reports within fifteen days, that it may be subject, without further notice, to an administrative proceeding to revoke its registration under the Exchange Act and, in addition, that if the Company’s stock was trading, it also may be subject to a trading suspension by the Commission pursuant to Section 12(k) of the Exchange Act. The Company further stated:

We presently need to file our annual reports for the years ended December 31, 2011 and December 31, 2012 and seven quarterly reports in order to become current in our Exchange Act reporting requirements. If we fail to become current on our reporting requirements, we will not be able to list on an exchange or trading platform and, as a result, the market liquidity for our securities would be limited or non-existent. The proceeds of this offering will be used, in part, to pay the Company’s former CFO, who has already been retained, to prepare the financial statements and delinquent reports required to be filed under the Exchange Act, and to retain and pay the Company’s outside auditor, Friedman LLP, to review and/or audit the delinquent reports required to be filed under the Exchange Act. (Memorandum, at pages 11-12.)

The First Closing and Preparation for the Second Closing

The First Closing occurred on March 31, 2014, at which time the First Tranche Debentures were issued and the Company received aggregate gross proceeds of $1,000,000 from the Escrow Account. On April 2, 2014, the Company retained Friedman LLP to audit and/or review the Company’s financial statements required to be included in the Forms 10-K and Forms 10-Q necessary for the Company to file as part of the Second Closing Obligations. The Company had already retained its former Chief Financial Officer to begin the preparation of the financial

statements pending the First Closing. On May 5-6, 2014, the Company’s auditors conducted their on-site audit of the Company’s books and records.

SEC Action Subsequent to the First Closing

On June 18, 2014, the SEC issued an Order of Suspension of Trading in which it stated that “[i]t appears to the [SEC] that there is a lack of current and accurate information concerning the securities of Diamondhead Casino Corporation because it has not filed any periodic reports since the period ended June 30, 2011.” The Order further stated that “[t]he Commission was of the opinion that the public interest and the protection of investors require[d] a suspension of trading” and the Commission ordered, pursuant to Section 12(k) of the Securities Exchange Act of 1934, that trading in the Company’s securities be suspended from June 18, 2014 through July 1, 2014. On June 18, 2014, the SEC also issued an Order Instituting Administrative Proceedings (“ OIP ”) and Notice of Hearing Pursuant to Section 12(j) of the Securities Exchange Act of 1934, alleging that the Company was delinquent in its periodic filings with the SEC, having not filed any periodic reports since it filed its Form 10-Q for the period ended June 30, 2011 and, therefore, that the Company had failed to comply with Securities Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder.

On June 27, 2014, the Company filed an Answer to the OIP in which it admitted that it had not filed any periodic reports since it filed its Form 10-Q for the period ended June 30, 2011. On July 29, 2014, the Company attended a prehearing conference at which it requested an in-person hearing. On August 11, 2014, the SEC issued an Initial Decision on Default and Order for Motion for Summary Disposition as to Diamondhead Casino Corporation. The SEC found that there were no issues of material fact that required an in-person hearing, granted the Division leave to file a motion for summary disposition, and set a briefing schedule for the parties to file their briefs.

The Board of Directors of the Company determined that defending itself against the OIP would likely have resulted in extensive, time-consuming and expensive litigation. Moreover, the Company believed that litigation would not have resulted in a favorable outcome inasmuch as the Company had not, in fact, met its reporting requirements. Accordingly, the Board of Directors determined that litigation would have constituted a waste of the Company’s scarce resources and capital.

On August 29, 2014, the Company made an Offer of Settlement in which it admitted that it had failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder because it had not filed any periodic reports with the SEC since the quarterly period ended June 30, 2011. The Company consented to the entry of an Order, pursuant to Section 12(j) of the Exchange Act, revoking the registration of the Company’s securities registered pursuant to Section 12 of the Exchange Act. On September 4, 2014, the SEC entered an Order Making Findings and Revoking Registration of Securities Pursuant to Section 12(j) of the Securities Exchange Act of 1934 as to Diamondhead Casino Corporation, pursuant to the Offer of Settlement. Thus, effective September 4, 2014, the registration of each class of the Company’s securities registered pursuant to Section 12 of the Exchange Act was revoked and the Company’s Common Stock no longer trades (the “ Revocation ”).

Re-Registration of the Company’s Common Stock

After the Issuer’s registration was revoked, the Board of Directors voted to re-register the Company’s Common Stock under the Exchange Act and to proceed with the Offers to Amend.

To re-register its Common Stock and be deemed current with the SEC, the Company is no longer required to file those Annual Reports (Form 10-K’s) and those Quarterly Reports (Form 10-Q’s) required to be filed under the original Second Closing Obligations. Instead, to re-register its stock with the SEC, the Company is required to file a Registration Statement on Form 10 with the SEC together with two years of audited financial statements Alternatively, the Company may file a Registration Statement on Form 8-A that incorporates by reference a Registration Statement on Form S-1.

Application for Gaming Site Approval

Shortly after the First Closing occurred, certain events transpired involving potential competitors in Diamondhead which convinced management that it would be in the best interest of the Company to file an application for gaming site approval with the Mississippi Gaming Commission pursuant to Rule 1.4 of the Mississippi Gaming Regulations (2013 edition) as soon as practicable. This filing was required to meet the Company’s Third Closing Obligations and was originally expected to be filed after the Second Closing Obligations had been met, when the Company would have had additional time and funds from the Second Closing to do so. Instead, however, on or about May 29, 2014, the Company filed its initial application for gaming site approval with the Mississippi Gaming Commission. The Company spent approximately three months working with its engineers and the Mississippi Gaming Commission and their legal and non-legal staff to secure site approval. On August 21, 2014, the Mississippi Gaming Commission voted to grant gaming site approval to Mississippi Gaming Corporation, the wholly-owned subsidiary of the Company that holds title to the Diamondhead property, for a 50-acre gaming site on the Property. Therefore, this Third Closing Obligation has now been satisfied.

To address the foregoing developments, the Company seeks to amend the Original Offering.

DESCRIPTION OF THE OFFERS TO AMEND

AMENDMENT I

OFFER TO AMEND CERTAIN TERMS AND CONDITIONS FOR THE CONVERSION OF THE FIRST TRANCHE COLLATERALIZED CONVERTIBLE SENIOR DEBENTURES ISSUED BY DIAMONDHEAD CASINO CORPORATION ON MARCH 31, 2014

The Company is offering to amend certain terms and conditions relating to the conversion of the First Tranche Debentures into common stock of the Company. These Debentures have already been issued. Therefore, the Company does not seek to amend the terms relating to the issuance of these debentures.

This Amendment to the conversion terms is required to ensure that the Investors can receive the benefit of the conversion features of the First Tranche Debentures and that the Company can convert the First Tranche Debentures into common stock of the Company. An Investor who does not agree to amend the conversion terms of the First Tranche Debenture will, in effect, end up with a Debenture that cannot be converted into common stock of the Company, regardless of the price of the common stock. While this outcome was always a possibility, the Company did not intend for it to be the sole outcome for Investors purchasing the First Tranche Debentures.

Section 3.1 of each of the Debentures deals with the conversion of the Debentures into common stock of the Company. This Amendment is required because Section 3.1 of the First Tranche Debentures requires that “… the Second Closing Obligations described in the Memorandum have been met.” However, this requirement can no longer be met since the Forms 10-K and Forms 10-Q required to be filed under the Second Closing Obligations will no longer be filed with the Securities and Exchange Commission as a result of the Revocation. In lieu thereof, in order to re-register its stock and bring its financial statements up to date, the Company intends to file a Registration Statement on Form 10 with the Securities and Exchange Commission, together with other required documents. Alternatively, the Company may file a Registration Statement on Form 8-A that incorporates by reference a Registration Statement on Form S-1, which has the same effect as a Form 10 with respect to registering a company’s Common Stock with the SEC under the Exchange Act.

Under the terms of the Original Offering, the Investors of the First Tranche Debentures were entitled to have their Debentures converted once the Company had met the original Second Closing Obligations and the average closing price of the stock was 150% or more of the conversion price of $.30 for 30 consecutive business days immediately prior to the Conversion Date. However, as a result of the Revocation, the Investors are left with a First Tranche Debenture that could never be converted, regardless of the price of the Company’s common stock. Neither the Company nor (in the belief of the Company) the Investor, intended such a result. Therefore, to remedy this unintended effect, the Company is offering to amend the First Tranche Debentures by modifying the conversion terms and making other ministerial changes.

The first paragraph of Section 3.1 of the First Tranche Debenture, which deals with the terms for conversion of the Debenture, now reads as follows:

SECTION 3.1. Conversion . Subject to Section 3.5(c) below, which provides for circumstances under which the Conversion Price of this Debenture will be adjusted, this Debenture will be converted at the Conversion Price of $.30 per share into 3,333,333 shares of Common Stock when and if: 1) the Second Closing Obligations described in the Memorandum have been met ; and 2) the average closing price of the Common Stock on the principal trading market for the Company’s Common Stock is 150% or more of the Conversion Price for the thirty consecutive business days immediately prior to the Conversion Date. [Emphasis added.]

As previously explained, the Second Closing Obligations will not be met. Therefore, in Amendment I, the Company proposes to delete the above paragraph and substitute the following in lieu thereof:

SECTION 3.1. Conversion . Subject to Section 3.5(c) below, which provides for circumstances under which the Conversion Price of this Debenture will be adjusted, the First Tranche Debentures will be converted at the Conversion Price of $.30 per share into 3,333,333 shares of Common Stock when and if:

1. The Company has filed a Registration Statement on Form 10 (or a Form 8-A that incorporates by reference a Form S-1) with the Securities and Exchange Commission;

2. The Company’s common stock is trading on a national securities exchange or any over-the-counter market, interdealer quotation system or similar market or system;

4. The Company is otherwise able to issue and deliver fully paid and non-assessable shares of Common Stock to the Holder upon conversion of this Debenture; and

The form of the Amended and Restated First Tranche Debenture, which the Company is asking the Investors of the First Tranche Debentures to agree to, and which is marked up to show

the above-referenced changes and other ministerial changes, as compared to the original First Tranche Debenture, is attached hereto as Exhibit A.

An Investor who agrees to Amendment I, should complete, sign and return the Amendment I-Election to Amend Form, a copy of which is attached hereto as Attachment I. The Company will cancel and mark as “void” in its Register of Notes and Debentures, the First Tranche Debentures issued to those Investors in the Original Offering who agree to Amendment I and substitute the Amended and Restated First Tranche Debenture for same. An Investor who does not agree to Amendment I is not required to do anything. Any such Investor’s original First Tranche Debenture will remain in effect in accordance with its stated terms.

An Investor of the First Tranche Debentures can agree to Amendment I without agreeing to Amendment II.

AMENDMENT II

OFFER TO AMEND CERTAIN TERMS AND CONDITIONS FOR THE ISSUANCE AND CONVERSION OF SECOND TRANCHE COLLATERALIZED CONVERTIBLE SENIOR DEBENTURES AND THIRD TRANCHE COLLATERALIZED CONVERTIBLE SENIOR DEBENTURES AND TO EXTEND THE PERIOD OF TIME WITHIN WHICH THE COMPANY IS REQUIRED TO COMPLETE THE THIRD CLOSING OBLIGATIONS, AS AMENDED

The Company is offering to amend certain terms relating to both the issuance of the Second and Third Tranche Debentures and the terms relating to the conversion of the Second and Third Tranche Debentures, if issued, into common stock of the Company. These Debentures have not been issued yet inasmuch as the Company has not been able to satisfy the Second Closing Obligations. Since the First Closing, as explained earlier, certain events have occurred which require that certain terms relating to the issuance of the Second and Third Tranche Debentures and certain terms relating to the conversion of the Second and Third Tranche Debentures, if issued, be amended. The Company is offering to amend the terms relating to the issuance of the Second and Third Tranche Debentures and the terms relating to the conversion of the Second and Third Tranche Debentures, if issued, into common stock of the Company. These Debentures have not been issued yet.

Under the terms of the Original Offering, the Second Tranche Debentures would only be issued and the funds from the purchase thereof released to the Company from the Escrow Account only if all of the Second Closing Obligations were satisfied on or prior to December 31, 2014. Similarly, the Third Tranche Debentures would only be issued and the funds from the purchase thereof released to the Company from the Escrow Account only if all of the Second Closing Obligations and Third Closing Obligations were satisfied on or prior to December 31, 2014. As previously explained, the Second Closing Obligations will not be met because the Company will not be filing the Forms 10-K and Forms 10-Q required to have been filed to satisfy the Second Closing Obligations.

Therefore, in its Amendment II, the Company seeks, among other things, to eliminate all references in the Second Closing Obligations to the Forms 10-K and Forms 10-Q, since the

Company intends to file a Form 10 or, alternatively, a Form 8-A that incorporates by reference a Form S-1, with the SEC in lieu thereof. Moreover, since a number of the Second Closing Obligations have already been satisfied since the First Closing occurred, the Company seeks to remove all references to those Second Closing Obligations that have been satisfied or rendered moot. This will simplify and reduce the list of items remaining to be performed and eliminate any confusion over what obligations now remain to be performed. In addition, the Company seeks to amend both the Second and Third Closing Obligations by, in part, transposing the Second Closing Obligations with the Third Closing Obligations. Finally, the Company seeks to amend the period of time within which the Company is required to complete the Third Closing Obligations, as amended. A comparison between the original Second Closing Obligations and the Second Closing Obligations, as amended, pursuant to Amendment II herein, follows.

ISSUANCE OF SECOND TRANCHE DEBENTURES

Comparison of Original Second Closing Obligations to Amended Second Closing Obligation

The original Second Closing Obligations and conditions for issuance of the Second Tranche Debentures appear on page 7 of the Memorandum, which states as follows:

The Company will issue the Second Tranche Debentures at the Second Closing and the Escrow Agent will release $1,000,000 from the sale of the Second Tranche Debentures at the Second Closing, provided the Second Closing Obligations have been met. The Second Closing Obligations are as follows:

1. The Company has filed its Annual Reports on Form 10-K for the periods ended December 31, 2011 and 2012, and any other Annual Report on Form 10-K that would have been required to have been filed as of the date of the Second Closing;

3. The Company and its subsidiaries have filed their federal and state tax returns for the years ended 2011 and 2012;

5. The Company is otherwise able to issue and deliver fully paid and non-assessable shares of Common Stock to the investors of this Offering in accordance with the terms of this Memorandum;

6. The Company has obtained an updated property survey and preliminary engineering estimates for the construction of a casino/hotel on the Property;

7. The Company has obtained a site location engineering study identifying viable locations(s) for the placement of the proposed casino/hotel on the Property; and

8. The Company has obtained preliminary architectural estimates for the construction of the casino/hotel on the Property.

Status of the Original Second Closing Obligations

Items 1 and 2 of the above Obligations are no longer required inasmuch as the Company intends to file a Form 10 or, alternatively, a Form 8-A that incorporates by reference a Form S-1, with the SEC in lieu thereof. Item 3 was completed. Items 4 and 5 have not been completed. Item 6 was completed. Any updates to Item 7 were rendered moot as a result of early discussions with the Mississippi Gaming Commission and its staff, which resulted in a determination for the location of the gaming site that was acceptable to the Mississippi Gaming Commission. Item 8 was completed.

Amendment to Second Closing Obligations

The Company is seeking to amend the Second Closing Obligations by replacing all eight of the original Second Closing Obligations with the following single obligation:

The Company has filed an application for gaming site approval with the Mississippi Gaming Commission pursuant to Rule 1.4 of the Mississippi Gaming Regulations (2013 edition).

As previously noted, this obligation has already been completed. Therefore, this Amendment will allow the Company to immediately proceed to a Second Closing. The Escrow Agent is currently holding $1 million in Escrow for the purchase of the Second Tranche Debentures, assuming there is a Second Closing. If all of the Investors agree to Amendment II, then the Escrow Agent will release the entire $1 million held in Escrow for the purchase of the Second Tranche Debentures to the Company at the Second Closing. If less than all of the Investors agree to Amendment II, the Escrow Agent will release only that portion of the $1 million held in Escrow for the purchase of the Second Tranche Debentures that is attributable to Investors who agree to Amendment II, assuming there is a Second Closing. The remainder of the funds held in Escrow to purchase the Second Tranche Debentures will be returned to Investors who did not agree to Amendment II on or about December 31, 2014.

Additional Risk Factor

The original Offering contemplated a possible Second Closing at which the entire $1 million would be released to the Company and a possible Third Closing at which the final $1 million would be released to the Company. However, not all Investors may agree to accept Amendment II. Therefore, there may be insufficient funds released to the Company for the original purposes intended. The funds released to the Company may be materially reduced, depending on how many Investors agree to Amendment II. Thus, there is a new and material risk factor associated with this Offer to Amend, namely, that the funds released to the Company at a

Second Closing, assuming a Second Closing occurs, and/or at a Third Closing, assuming a Third Closing occurs, may be insufficient for the original purposes intended.

ISSUANCE OF THIRD TRANCHE DEBENTURES

Comparison of Original Third Closing Obligations to Amended Third Closing Obligations

The original Third Closing Obligations and conditions for issuance of the Third Tranche Debentures appear on pages 7-8 of the Memorandum, which states as follows:

The Company will issue the Third Tranche Debentures at the Third Closing and the Escrow Agent will release $1,000,000 from the sale of the Third Tranche Debentures at the Third Closing, provided the Third Closing Obligations have been met. The Third Closing Obligations are as follows:

1. The Second Closing Obligations have been met;

2. The Company issued the Second Tranche Debentures; and

3. The Company has filed an application for gaming site approval with the Mississippi Gaming Commission pursuant to Rule 1.4 of the Mississippi Gaming Regulations (2013 edition) (the “Application”).

The Third Closing Obligations require that the Second Closing Obligations have been met. As previously stated, the Second Closing Obligations will not be met. Therefore, the Company is seeking to amend the Third Closing Obligations by replacing the original Third Closing Obligations with the following Third Closing Obligations:

1. The Company has filed a Registration Statement on Form 10 (or a Form 8-A that incorporates by reference a Form S-1) with the Securities and Exchange Commission;

2. The Company’s common stock is trading on a national securities exchange or any over-the-counter market, interdealer quotation system or similar market or system;

4. The Company is otherwise able to issue and deliver fully paid and non-assessable shares of Common Stock to the Investors upon conversion of the Debentures; and

5. The required appraisals have been completed and the “Valuation” calculated to determine the Conversion Price of the Tranche 3 Debentures.

In addition, the Company requires additional time to complete the Third Closing Obligations as amended. Accordingly, the Company is also seeking to extend the period of time required to complete the Third Closing Obligations, as amended, to June 30, 2015. Investors who agree to Amendment II agree to this extension of time and to the extension of the Escrow Account Termination Date to June 30, 2015.

The Escrow Agent is currently holding $1 million in Escrow for the purchase of the Third Tranche Debentures, assuming there is a Third Closing. If all of the Investors agree to Amendment II, then the Escrow Agent will release the entire $1 million held in Escrow for the purchase of the Third Tranche Debentures to the Company at the Third Closing, assuming there is a Third Closing. If less than all of the Investors agree to Amendment II, the Escrow Agent will release only that portion of the $1 million held in Escrow for the purchase of the Third Tranche Debentures that is attributable to Investors who agree to Amendment II. The remainder of the funds held in Escrow to purchase the Third Tranche Debentures will be returned to Investors who did not agree to Amendment II on or about December 31, 2014.

An investor who does not agree to Amendment II is entitled to the return of his, her, or its remaining investment which is being held in Escrow. Thus, an investor who invested the required minimum of $150,000 to participate in the Original Offering, for example, would be entitled to the return of $100,000. The funds would be returned on or about December 31, 2014.

CONVERSION OF SECOND TRANCHE DEBENTURES

In addition to amending the terms for the issuance of the Second and Third Tranche Debentures, the Company is seeking to amend the terms for conversion of the Second and Third Tranche Debentures, once issued, into common stock of the Company. The conversion terms appear in Section 3.1 of each Debenture.

Under the terms of the Original Offering, the Second Tranche Debentures would be converted, among other things, when and if “the Third Closing Obligations described in the Memorandum have been met.” (Section 3.1 of Second Tranche Debenture) The Third Closing Obligations included the Second Closing Obligations which, as explained previously, will not be met. Therefore, the Second Tranche Debentures, as originally drafted, cannot be converted to common stock of the Company. Therefore, the terms for conversion of the Second Tranche Debentures must also be amended. The Company proposes to amend current Section 3.1 of the Second Tranche Debentures by deleting the first paragraph and substituting a new paragraph in lieu thereof. The second paragraph remains the same. The first paragraph of Section 3.1, as amended, would read as follows:

SECTION 3.1. Conversion . Subject to Section 3.5(c) below, which provides for circumstances under which the Conversion Price of this Debenture will be adjusted, the Second Tranche Debentures will be converted at the Conversion Price of $.45 per share into up to 2,222,222 shares of Common Stock when and if:

1. The Company has filed a Form 10 (or a Form 8-A that incorporates by reference a Form S-1) with the Securities and Exchange Commission;

2. The Company’s common stock is trading on a national securities exchange or any over-the-counter market, interdealer quotation system or similar market or system;

4. The Company is otherwise able to issue and deliver fully paid and non-assessable shares of Common Stock to the Holder upon conversion of this Debenture; and

The form of Second Tranche Debenture, which the Company is asking the Investors to agree to, and which is marked up to show the above-referenced changes, as compared to the original Second Tranche Debenture, is attached hereto as Exhibit B.

CONVERSION OF THIRD TRANCHE DEBENTURES

In addition to amending the terms for issuance of the Third Tranche Debentures, the Company is seeking to amend the terms for conversion of the Third Tranche Debentures to common stock of the Company. The conversion terms need to be reworded in the event not all Investors agree to Amendment II. The first paragraph of Section 3.1 of the Third Tranche Debenture now reads as follows:

SECTION 3.1. Conversion . Subject to Section 3.5(c) below, which provides for circumstances under which the Conversion Price of this Debenture will be adjusted, this Debenture will be converted at a Conversion Price of either $0.55 per share into 1,818,182 shares of Common Stock or $0.75 per share into 1,333,333 shares of Common Stock (depending on the Valuation as provided in the Memorandum), when and if the average closing price of the Common Stock on the principal trading market for the Company’s Common Stock is 150% or more of the Conversion Price for the thirty consecutive business days immediately prior to the Conversion Date. [Emphasis added.]

The Company seeks to amend Section 3.1 of the Third Tranche Debentures by deleting the first paragraph and substituting a new paragraph in lieu thereof. The second paragraph remains the same. The first paragraph of Section 3.1, as amended, would read as follows:

SECTION 3.1. Conversion . Subject to Section 3.5(c) below, which provides for circumstances under which the Conversion Price of this Debenture will be

adjusted, the Third Tranche Debentures will be converted at a Conversion Price of either $0.55 per share into up to 1,818,182 shares of Common Stock or $0.75 per share into up to 1,333,333 shares of Common Stock (depending on the Valuation as provided in the Memorandum), when and if the average closing price of the Common Stock on the principal trading market for the Company’s Common Stock is 150% or more of the Conversion Price for the thirty consecutive business days immediately prior to the Conversion Date. [Emphasis added.]

The form of Third Tranche Debenture, which the Company is asking the Investors to agree to, and which is marked up to show the above-referenced changes and other ministerial changes, as compared to the original Third Tranche Debenture, is attached hereto as Exhibit C.

Investors who agree to Amendment II should be aware that in the event the Company is unable to satisfy the Third Closing Obligations, as amended, such Investors will have First Tranche Debentures and Second Tranche Debentures that will likely be unable to be converted into Common Stock and such Debentures will likely remain obligations of the Company in accordance with their stated terms through the maturity dates thereof.

The Offers to Amend are personal to each Investor, and consequently, it is possible that some Investors may agree to the Offers to Amend, while other Investors may decline to do so. Thus, there is an increased risk to the Investors who agree to Amendment II, since not all of the funds now held in Escrow with respect to the Second Tranche and the Third Tranche would be released to the Company if less than all of the original Investors agreed to Amendment II. Therefore, our inability to access all funds remaining in Escrow and to apply the net proceeds thereof, may jeopardize our ability to fully or partially execute our business plan.

An investor who agrees to Amendment II as provided herein and in Exhibit B and C should complete, sign and return the Amendment II-Election to Amend Form which is attached hereto as Attachment II. An investor who does not agree to Amendment II is not required to do anything. An investor who does not agree to Amendment II is entitled to the return of his, her, or its remaining investment which is being held in Escrow. The funds would be returned on or about December 31, 2014.

OTHER INFORMATION

Accredited Investors

These Offers to Amend are limited to “accredited investors,” as that term is defined in Rule 501 of the Securities Act of 1933, as amended, and to those institutional and accredited investors who subscribed to the Private Placement Dated February 14, 2014. The Investors who subscribed to the Offering represented that they were “accredited” investors at the time of their investment and by agreeing to either or both of Amendment I and Amendment II, represent and warrant that he, she, or it remains an “accredited investor”.

The Offers to Amend are not being made in any jurisdiction in which the Offers to Amend would not be in compliance with the laws of such jurisdiction.

Expiration Date

The period during which an investor may elect Amendment I and/or Amendment II, pursuant to the terms described herein, will commence on the date of this Offer to Amend and end on December 31, 2014, at 8:00 p.m. eastern standard time.

Procedure for Accepting Offer(s) to Amend

An investor’s right to elect an Offer to Amend expires if he, she, or it, does not properly execute and deliver the applicable Election to Amend form on or before the Expiration Date. There is an Election to Amend form for Amendment I and a separate Election to Amend form for Amendment II. The Investor must complete, execute and return an Election to Amend form for each Offer to Amend that an investor agrees to accept. The form(s) must be received at the Company’s corporate address, or received via email or facsimile by the Company, on or before 8:00 p.m. (eastern standard time) on December 31, 2014. The Election to Amend forms contain the Company’s corporate address, email address and facsimile number for this purpose.

Interest of Directors and Executive Officers in this Offer to Amend

Mr. Harrison, the Vice President of the Company, who is also a Director of the Company, invested in the Original Offering for the minimum purchase price of $150,000. Mr. Harrison was an Officer and Director of the Company at the time of his investment. Mr. Arneault, the current Chairman of the Board of Directors of the Company, who is also President and CEO of Casino World, Inc., a wholly owned subsidiary of the Company, also invested in the Original Offering for the minimum purchase price of $150,000. Mr. Arneault was not an Officer or Director of the Company at the time of the Original Offering, but became an Officer and Director upon the First Closing on March 31, 2014. Therefore, the Offers to Amend are being extended to two of the Company’s current Officers and/or Directors and/or control persons.

AMENDMENTS TO ESCROW AGREEMENT

In order to effect the changes contemplated by Amendment I and Amendment II, the Company must also amend certain terms of the Escrow Agreement with the Escrow Agent to reflect such changes. A copy of the proposed Amendment No. 1 to Amended and Restated Escrow Agreement is attached hereto as Exhibit D.

ADDITIONAL INFORMATION

We will make available to any Investor, or the Investor’s representative, the opportunity to ask questions and receive answers concerning the terms and conditions of the Offers to Amend and to obtain information which we possess or can acquire without unreasonable effort or expense that is necessary to verify the accuracy or adequacy of the information contained herein. Any requests or questions to the Company should be directed to its Chairman of the Board, Edson “Ted” Arneault, at (412) 972-0123, or its President and Chief Executive Officer, Deborah A. Vitale, at (703) 683-6800.

EXHIBITS

Exhibit A: Form of Amended and Restated First Tranche Collateralized Convertible Senior Debenture, marked against the original form of First Tranche Collateralized Convertible Senior Debenture

Exhibit B: Form of replacement Second Tranche Collateralized Convertible Senior Debenture, marked against the original form of Second Tranche Collateralized Convertible Senior Debenture

Exhibit C: Form of replacement Third Tranche Collateralized Convertible Senior Debenture, marked against the original form of Third Tranche Collateralized Convertible Senior Debenture

Exhibit D : Form of Proposed Amendment No. 1 to Amended and Restated Escrow Agreement

ATTACHMENTS

Attachment I: Amendment I-Election to Amend

Attachment II: Amendment II-Election to Amend

EXHIBIT 21.1

Subsidiaries of the Registrant

Mississippi Gaming Corporation (Delaware)

Casino World, Inc. (Delaware)

Europasky Corporation (Delaware) ]

Exhibit 99.1

DIAMONDHEAD CASINO CORPORATION

AND SUBSIDIARIES

CONTENTS

	Page

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	F-2

CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2014 AND 2013	F-3

CONSOLIDATED STATEMENTS OF LOSS FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013	F-4

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY) FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013	F-5

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013	F-6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	F-7

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of:

Diamondhead Casino Corporation and Subsidiaries

We have audited the accompanying consolidated balance sheets of Diamondhead Casino Corporation and Subsidiaries as of December 31, 2014 and 2013, and the related consolidated statements of loss, changes in stockholders’ equity (deficiency), and cash flows for each of the years in the two-year period ended December 31, 2014. The Company’s management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Diamondhead Casino Corporation and Subsidiaries as of December 31, 2014 and 2013, and the results of their operations and their cash flows for each of the years in the two-year period ended December 31, 2014 in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 2 to the consolidated financial statements, the Company has incurred significant recurring net losses over the past few years. In addition, the Company has no operations, except for its efforts to develop the Diamondhead, Mississippi property. Such efforts may not contribute to the Company’s cash flows in the foreseeable future. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s continued existence is dependent upon its ability to raise the necessary capital with which to satisfy liabilities, fund future costs and expenses and develop the Diamondhead, Mississippi property. Management’s plans in regard to these matters are also described in Note 2 to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Friedman LLP

New York, New York

March 31, 2015

F-2

DIAMONDHEAD CASINO CORPORATION

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2014 AND 2013

	2014			2013

ASSETS

Current assets
Cash	$	843,083		$	7,106
Other current assets	36,655			12,687
Total current assets	879,738			19,793

Land held for development (Note 3)	5,476,097			5,476,097

Deferred financing costs (net of amortization of $18,518 in 2014 and $64,094 in 2013)	182,582			—
Other assets	80			80

	$	6,538,497		$	5,495,970

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)

Current liabilities
Notes payable	$	1,962,500		$	1,962,500
Short term financing agreement	14,905			10,325
Accounts payable and accrued expenses	3,304,479			2,690,744
Total current liabilities	5,281,884			4,663,569

Debenture payable (net of unamortized discount of $48,887)	1,113			—

Convertible debentures payable (net of unamortized discount of $928,859)	21,141			—

Derivative liability	3,754,233			—

Total liabilities	9,058,371			4,663,569

Commitments and contingencies (Notes 3 and 11)

Stockholders’ equity (deficiency) (Note 8)
Preferred stock, $.01 par value; shares authorized 5,000,000, outstanding 2,086,000 in 2014 and 2013 (aggregate liquidation preference of $2,519,080 in 2014 and 2013).	20,860			20,860
Common stock, $.001 par value; shares authorized 50,000,000, Issued: 39,052,472 in 2014 and 2013, outstanding: 36,297,576 in 2014 and 2013.	39,052			39,052
Additional paid-in capital	35,568,649			35,624,525
Unearned ESOP shares	(3,558,078		)	(3,676,679		)
Accumulated Deficit	(34,461,551		)	(31,084,176		)
Treasury stock, at cost, 368,526 shares at December 31, 2014 and 288,981 shares at December 31, 2013	(128,806		)	(91,181		)

Total stockholders’ equity (deficiency)	(2,519,874		)	832,401

	$	6,538,497		$	5,495,970

See the accompanying notes to these consolidated financial statements.

F-3

DIAMONDHEAD CASINO CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF LOSS

YEARS ENDED DECEMBER 31, 2014 AND 2013

	2014			2013
COSTS AND EXPENSES
Administrative and General	$	974,844		$	625,148
Stock-based Compensation	—			352,892
Amortization	18,518			856
Other	55,958			62,174

	1,049,320			1,041,070

OTHER INCOME (EXPENSE)
Amortization of Debt Discount	(22,254		)	—
Interest Expense	(306,182		)	(272,606		)
Change in Fair Value of Derivative Liability	(1,904,233		)	—
Other Miscellaneous Income	6,214			750

	(2,226,455		)	(271,856		)

NET LOSS	(3,275,775		)	(1,312,926		)

PREFERRED STOCK DIVIDENDS	(101,600		)	(101,600		)

NET LOSS APPLICABLE TO COMMON STOCKHOLDERS	$	(3,377,375	)	$	(1,414,526	)

Net loss per common share, basic and diluted	$	(.093	)	$	(.040	)

Weighted average number of common shares outstanding	36,297,575			35,472,805

See the accompanying notes to these consolidated financial statements.

F-4

DIAMONDHEAD CASINO CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY)

YEARS ENDED DECEMBER 31, 2014 AND 2013

	2014			2013
*Preferred Stock*
Balance January 1	$	20,860		$	20,860
Balance December 31	$	20,860		$	20,860

*Common Stock*
Balance January 1	$	39,052		$	37,275
Issued in Private Placement	—			1,011
Issued for Interest	—			766
Balance December 31	$	39,052		$	39,052

*Additional Paid-In Capital*
Balance January 1	$	35,624,525		$	35,036,631
Issuance of Shares in Private Placement	—			150,714
Stock-based Awards	25,100			352,892
Issued for Interest	—			148,799
ESOP Defaulted Shares	(80,976		)	(64,511		)
Balance December 31	$	35,568,649		$	35,624,525

*Common Stock Subscriptions*
Balance January 1	$	—		$	151,725
Issuance of Stock for Sale	—			(151,725		)
Balance December 31	$	—		$	—

*Unearned ESOP Shares*
Balance January 1	$	(3,676,679	)	$	(3,795,281	)
Shares Acquired from ESOP	118,601			118,602
Balance December 31	$	(3,558,078	)	$	(3,676,679	)

*Accumulated (Deficit)*
Balance January 1	$	(31,084,176	)	$	(29,669,650	)
Preferred Stock Dividends	(101,600		)	(101,600		)
Net Loss for Year	(3,275,775		)	(1,312,926		)
Balance December 31	$	(34,461,551	)	$	(31,084,176	)

*Treasury Stock*
Balance January 1	$	(91,181	)	$	(37,091	)
Shares Acquired from ESOP	(37,625		)	(54,090		)
Balance December 31	$	(128,806	)	$	(91,181	)

*Total Stockholders’ Equity (Deficiency)*	$	(2,519,874	)	$	832,401

See the accompanying notes to these consolidated financial statements

F-5

DIAMONDHEAD CASINO CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2014 AND 2013

	2014			2013
OPERATING ACTIVITIES
Net loss	$	(3,275,775	)	$	(1,312,926	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization	18,518			856
Change in fair value of derivative liability	1,904,233			—
Amortization of debt discount	22,254			—
Stock-based Compensation	—			352,892
Decrease (Increase) in:
Other assets	(23,968		)	85
Increase in:
Accounts payable and accrued expenses	512,135			851,335
Net cash used in operating activities	(842,603		)	(107,758		)

FINANCING ACTIVITIES
Proceeds from Private Placements, net of financing costs	1,674,000			20,500
Proceeds from Short Term Note	16,355			11,444
Payment of Short Term Note	(11,775		)	(11,921		)
Net cash provided by financing activities	1,678,580			20,023

Net increase (decrease) in cash	835,977			(87,735		)
Cash beginning of year	7,106			94,841
Cash end of year	$	843,083		$	7,106

Cash paid for interest	$	404		$	261

Non-Cash Financing activities:

Stock issued to satisfy payment of interest	$	—		$	149,565

Warrants included in deferred financing costs	$	25,100		$	—

Unpaid preferred stock dividends included in accounts payable and accrued expenses	$	355,600		$	254,000

See the accompanying notes to these consolidated financial statements.

F-6

DIAMONDHEAD CASINO CORPORATION

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Business

Diamondhead Casino Corporation and Subsidiaries (the “Company”) owns a total of approximately 404.5 acres of unimproved land in Diamondhead, Mississippi on which it plans, in conjunction with one or more partners, to construct a casino resort and hotel and associated amenities. The Company was originally formed to principally own, operate and promote gaming vessels offering day and evening cruises in international waters.

The Company was previously registered with the Securities and Exchange Commission and its stock traded on the over-the counter bulletin board under the symbol “DHCC”.

Note 2. Liquidity and Going Concern

These consolidated financial statements have been prepared on the basis that the Company is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred losses over the past several years, has no operations, generates no operating revenues, and as reflected in the accompanying consolidated financial statements, incurred a loss applicable to common stockholders of $3,377,375 and $1,414,526 for the years ended December 31, 2014 and 2013 respectively.

In the recent past, in order to raise capital to continue to pay on-going costs and expenses, the Company has borrowed funds and offered, through Private Placements, convertible instruments more fully described in Note 4 to these consolidated financial statements.

Tranche 1: The Company offered $1,000,000 of First Tranche Collateralized Convertible Senior Debentures in the aggregate principal amount of $1,000,000 (the “First Tranche Debentures”), subject to certain conditions. The First Tranche Debentures were originally convertible at a Conversion Price of $.30 per share into an aggregate of 3,333,333 shares of Common Stock of the Company. The minimum principal amount of First Tranche Debentures that could be purchased was $50,000.

On March 31, 2014, subscriptions in the amount of $3,000,000 were received in Escrow and accepted by the Company. Thus, the First Closing occurred on that date. The Escrow Agent released $1,000,000 to the Company and the Company issued First Tranche Debentures in the aggregate principle amount of $1,000,000. The First Tranche Debentures bear interest at 4% per annum after 180 days and are be secured by a lien on the Company’s Mississippi property.

The First Tranche Debentures were originally convertible into 3,333,333 shares of Common Stock when and if:

F-7

1. the Second Closing Obligations (as defined below) had been met on or before December 31, 2014; and

2. the average closing price of the Common Stock on the principal trading market for the Company’s Common Stock is 150% or more of the Conversion Price for the thirty consecutive business days immediately prior to the Conversion Date.

The “Second Closing Obligations” were originally as follows:

3. The Company and its subsidiaries have filed their federal and state tax returns for the years ended 2011 and 2012;

6. The Company has obtained an updated property survey and preliminary engineering estimates for the construction of a casino/hotel on the Property;

7. The Company has obtained a site location engineering study identifying viable locations(s) for the placement of the proposed casino/hotel on the Property; and

8. The Company has obtained preliminary architectural estimates for the construction of the casino/hotel on the Property.

F-8

On August 29, 2014, the Company made an Offer of Settlement in which it admitted that it had failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder because it had not filed any periodic reports with the SEC since the quarterly period ended June 30, 2011. The Company consented to the entry of an Order, pursuant to Section 12(j) of the Exchange Act, revoking the registration of the Company’s securities registered pursuant to Section 12 of the Exchange Act. On September 4, 2014, the SEC entered an Order Making Findings and Revoking Registration of Securities Pursuant to Section 12(j) of the Securities Exchange Act of 1934 as to Diamondhead Casino Corporation, pursuant to the Offer of Settlement. Thus, effective September 4, 2014, the registration of each class of the Company’s securities registered pursuant to Section 12 of the Exchange Act was revoked and the Company’s Common Stock no longer trades on any exchange or other public market.

1. The Company has filed a Registration Statement on Form 10 (or a Form 8-A that incorporates by reference a Form S-1) with the Securities and Exchange Commission;

2. The Company’s common stock is trading on a national securities exchange or any over-the-counter market interdealer quotation system or similar market or system;

4. The Company is otherwise able to issue and deliver fully paid and non-assessable shares of Common Stock to the Holder upon conversion of this Debenture; and

F-9

The remaining $50,000 investment from the First Tranche remains as a collateralized Debenture payable in six years without the conversion rights.

On December 31, 2014, Investors representing $850,000 of Second Tranche Debentures convertible into 1,888,889 common shares agreed to amend the Closing Obligations for issuance of the Second Tranche Debentures by eliminating the prior obligations and substituting a single requirement instead, namely, that “[t]he Company has filed an application for gaming site approval with the Mississippi Gaming Commission pursuant to Rule 1.4 of the Mississippi Gaming Regulations (2013 edition).”

The Company had filed this application in May 2014 and had obtained Gaming Site Approval on August 21, 2014. Therefore, a second closing occurred on December 31, 2014, when the amended terms were agreed to, at which time the Escrow Agent released $850,000 to the Company. The remaining $150,000 of the original $1,000,000 of subscriptions escrowed for the Second Tranche Debentures was returned to three investors who did not agree to the amended terms for issuance and conversion of the Second Tranche Debentures.

1. The Company has filed a Form 10 (or a Form 8-A that incorporates by reference a Form S-1) with the Securities and Exchange Commission;

2. The Company’s common stock is trading on a national securities exchange or any over-the-counter market interdealer quotation system or similar market or system;

4. The Company is otherwise able to issue and deliver fully paid and non-assessable shares of Common Stock to the Holder upon conversion of this Debenture; and

F-10

million, then the Conversion Price for the Third Tranche Debentures would be $0.55 per share. The minimum principal amount of Third Tranche Debentures that could be purchased was $50,000.

On December 31, 2014, Investors representing $850,000 of Third Tranche Debentures convertible into 1,545,545 common shares at $.55 per share or 1,133,333 common shares at $.75 per share, depending on the “Valuation”, agreed to amend Third Closing Obligations to be completed by June 30, 2015, as follows:

1. The Company has filed a Registration Statement on Form 10 (or a Form 8-A that incorporates by reference a Form S-1) with the Securities and Exchange Commission;

2. The Company’s common stock is trading on a national securities exchange or any over-the- counter market, interdealer quotation system or similar market or system;

4. The Company is otherwise able to issue and deliver fully paid and non-assessable shares of Common Stock to the Holder upon conversion of the Debenture; and

5 The required appraisals have been completed and the “Valuation” calculated to determine the Conversion Price of the Tranche 3 Debentures.

At the Third Closing, assuming it occurs, the gross proceeds from the sale of the Third Tranche Debentures in the principal amount of $850,000 will be released from Escrow to the Company. The Third Tranche Debentures will bear interest at 4% per annum after 180 days and will be secured by a lien on the Company’s Mississippi property.

Maximum Offering

In the event all of the terms and conditions for issuance of all of the Debentures have been met and in the event that all of the Debentures are eventually converted to Common Stock at the Conversion Prices in the Debentures (as amended), the Company will have issued a minimum of 6,188,888 shares of Common Stock upon conversion of all of the Debentures or a maximum of 6,601,100 shares of Common Stock upon conversion of all of the Debentures, depending on the Valuation required for the Third Tranche Debentures. Assuming a third closing, Tte proceeds to the Company from the sale of the Debentures will be $2,700,000 before deduction of commissions and expenses.

F-11

The following elements of the Debenture agreement remain unchanged and are as follows:

Escrow Agent

The proceeds from this offering were placed in an escrow account at Continental Stock Transfer & Trust Company, which is serving as the Escrow Agent.

Maturity Date and Interest Rate of Debentures

Collateral for Debentures

The payment obligations under the Debentures will be secured by a lien on the Company’s Mississippi property (the “Investors Lien”). The Investors Lien will be pari passu with a lien that has been placed on the Property in favor of the President of the Company, the Vice President , and certain directors of the Company, for past due wages, compensation, and expenses owed to them in the maximum aggregate amount of $2,000,000 (the “Executives Lien”). The President of the Company will serve as Lien Agent for the Executives Lien.

Anti-Dilution Provision

1. The issuance of any of the other Debentures in the Offering or the issuance of shares of Common Stock upon conversion of any of the Debentures in the Offering;

2. The issuance of any shares of Common Stock if such issuance relates to an agreement, arrangement or grant to issue shares of Common Stock entered into by the Company prior to the Issue Date of the First Tranche Debentures in the Offering, including but not limited to, for example, previously issued convertible promissory notes, previously issued warrants, previously issued options to purchase Common Stock, or common stock vested or to be issued pursuant to a pre-existing Employee Stock Ownership Plan.

Piggyback Registration Rights

F-12

Commissions and Expenses of the Offering

The Company’s agreement with Henley provides that commissions due will be paid when, as, and if proceeds of the Offering are released to the Company. Following the First Closing, Henley received commissions of $60,000 and reimbursement for legal fees and expenses of $55,000. Henley was also issued a three year warrant to purchase 25,000 shares of common stock at $0.30 per share. The Company recorded deferred financing costs in the amount of $16,210 in the first quarter of 2014 based on the valuation of this warrant using the Black-Scholes option pricing model. In addition, following the Second Closing, Henley received commissions of $51,000 and reimbursement for legal fees and expenses of $10,000. Henley was issued an additional three year warrant to purchase 25,000 shares of common stock at $ 0.45 per share. The Company recorded additional deferred financing costs in the amount of $8,890 in the fourth quarter of 2014 based on the valuation of this warrant using the Black- Scholes option pricing model. Henley is also entitled to receive, upon the Third Closing, assuming it occurs, a commission of 6% of the proceeds received by the Company at such Closing, a three year warrant to purchase 25,000 shares of Common Stock at $0.55 or $0.75 per share (depending on the Valuation) and reimbursement of its related expenses up to a maximum of $10,000. For periods after September 3, 2014 (the last trading date of the Company’s stock before deregistration), the Company obtained a valuation of its stock price from an independent valuation expert.

In determining the fair value of each warrant granted, the Black-Scholes option-pricing model, consistent with the provisions of Financial Accounting Standards Board Accounting Standard Codification (“ASC”) Topic 718, was used. The valuations were determined using the weighted-average assumptions of 0% dividend yield, expected volatility of 139.49% at March 31, 2014 and 130.39% at December 31, 2014, and risk-free interest rates of 0.9% at March 31, 2014 and 1.1% at December 31, 2014.

As of December 31, 2014, the Company had received $1,850,000 of proceeds from the closing of the First and Second Tranche Convertible Debentures and had expended approximately $1,006,900 of those proceeds for the payments of placement fees, costs associated with gaming site approval and working capital as summarized in the chart below.

F-13

Description of Expenditures	Amount

Private Placement related fees, commissions and expenses	$	185,785
Payment to the President per the Private Placement applied to past due office rents	100,000
Accounting and audit fees	75,000
Payroll paid to the Chairman and President for the period April 1, 2014 through December 31, 2014, and related taxes	319,409
Office rents for April 1, 2014 through December 31, 2014 paid to the President	40,806
Mississippi Property taxes and property related fees and expenses	58,258
State Franchise taxes, fines and penalties and registered agent fees	22,435
Mississippi property development consulting fees, engineering and survey costs and other fees and expenses	55,114
Feasibility Study	15,000
Appraisal Fee	12,500
Repayment of advance from a Director	10,000
Repayment of Advance from a Shareholder	25,000
Stock Transfer and Trust Company fees	14,125
Director and Officer liability insurance premiums	13,339
Other operating expenses	60,100

Total	$	1,006,871

Note 3. Summary of Significant Accounting Policies

Principles of Consolidation

Estimates

Cash and Cash Equivalents

The Company considers all short term highly liquid investments with a maturity of three months or less to be cash equivalents.

Concentrated Credit Risk

Land Held for Development

Land held for development is carried at cost. Costs directly related to site development, such as licensing, permitting, engineering, and other costs, are capitalized.

Land development costs, which have been capitalized, consist of the following:

F-14

Land under development	$	4,934,323
Licenses	77,000
Engineering and costs associated with permitting	464,774

	$	5,476,097

Fair Value Measurements

The Company follows the provisions of ASC Topic 820 “Fair Value Measurements” for financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. The standard discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The standard utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 3: Unobservable input that reflects management’s own assumptions.

The table listed below provides a reconciliation of the beginning and ending net balances for the derivative liability measured at fair value using significant unobservable inputs (Level 3) for the years ended December 31, 2014 and 2013:

	2014		2013
Beginning balance	$	—	$	—

Total change in unrealized appreciation (depreciation) included in net assets	1,904,233		—

Purchases, other settlements and issuances, net	1,850,000		—

Ending balance	$	3,754,233	$	—

Sensitivity Analysis to Changes in Level 3 Assumptions

Significant inputs include the expected dates when required conditions are met under the conversion terms of the debentures, the underlying market cap due to borrowings and losses and discount for lack of marketability while in the delisted mode and reversed when the Company becomes publicly listed as projected by management. In addition, use of different range of bond discount rates and changes in historical volatility rates would also result in a higher or lower fair value.

Current assets and current liabilities are financial instruments and management believes that their carrying amounts are reasonable estimates of their fair values due to their short term nature.

The convertible debentures and derivative liability approximate fair value based on Level 3 inputs, as further discussed in Note 6.

F-15

Long-Lived Assets

Employee Stock Ownership Plan

The Company has an Employee Stock Ownership Plan (ESOP) covering substantially all employees with one or more years of service, financed by employer loans. The Company also established a trust called the Europa Cruises Corporation Employee Stock Ownership Plan Trust Agreement, to serve as the funding vehicle for the ESOP. Deborah A. Vitale is the sole Trustee of the Trust. Compensation expense was measured at the current market price of shares committed for release and such shares constitute outstanding shares for earnings per share computations.

As the loans are repaid, shares are released from the ESOP and allocated to qualified employees based upon the proportion of payments made during the year to the remaining amount of payments due on the loans through maturity. Dividends, if any, are treated as follows:

(1) stock dividends on shares allocated to participant accounts shall be credited to the participant account when paid; and (2) cash dividends on shares allocated to participant accounts shall, at the discretion of the Administrator, be credited to the participants’ Other Investment Account or be used to reduce the indebtedness to the Company, in which case, shares bearing an equal value to the cash dividend would be allocated to participant accounts. The Company has not paid any dividends on its common stock.

In 2011, the Company elected to temporarily suspend contributions to the Plan, in accordance with the loan pledge agreement between the Company and the ESOP Trust. In each successive year, the Plan returned the 79,545 shares, which would have been allocated to employees annually, to treasury.

Income Taxes

Under the asset and liability method of ASC Topic 740, “Accounting for Income Taxes,” deferred tax liabilities and assets are recognized for future tax consequences attributable to differences between the financial statement carrying amounts and the tax basis of assets and liabilities. A valuation allowance is recorded to reflect the uncertainty of realization of deferred tax assets.

The Company follows the provisions of ASC Topic 740, “Accounting for Uncertainty in Income Taxes.” The standard addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under this standard, an entity may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The standard also provides guidance on derecognition, classification, interest and penalties on income taxes, and accounting in interim periods and requires increased disclosures. The Company does not have a liability for unrecognized tax benefits.

The Company is subject to U.S. federal or state income tax examinations by tax authorities for years after 2010. During the periods open to examination, the Company has net operating loss (“NOL”) carryforwards for U.S. federal and state tax purposes that have attributes from closed periods. Since these NOL carryforwards may be utilized in future periods, they remain subject to examination until they expire.

F-16

The Company’s policy is to record interest and penalties on uncertain tax provisions as income tax expense. As of December 31, 2014 and 2013, the Company has no accrued interest or penalties related to uncertain tax positions.

Net Loss per Common Share

Basic earnings/(loss) per share is computed by dividing net income/(loss) available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings/ (loss) per share is calculated by using the weighted average number of common shares outstanding, plus other potentially dilutive securities. Common shares outstanding consist of issued shares, including allocated and committed shares held by the ESOP trust, less shares held in treasury. The dilutive securities below do not include 5,055,555 potentially Convertible Debentures since the requirements for possible conversion have not yet, and may never be, met.

The table below summarizes the components of potential dilutive securities at December 31, 2014 and 2013.

	December 31,	December 31,
Description	2014	2013

Convertible Preferred Stock	260,000	260,000
Options to Purchase Common Shares	3,440,000	3,440,000
Private Placement Warrants	3,036,500	2,986,500
Convertible Promissory Notes	1,925,000	1,925,000

Total	8,661,500	8,611,500

Segment Information

Operating segments are components of a company about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

The Company currently operates solely in one segment, development of land, which relates to planned future operations.

Stock Based Compensation

The Company follows the provisions of ASC Topic 718 “Compensation — Stock Compensation” which requires the measurement and recognition of compensation expense for all share-based payment awards either modified or granted to employees and directors based upon estimated fair values. In the first quarter of 2013, the Board of Directors awarded an option to purchase 2,000,000 shares of common stock at a price of $0.19 per share to the President, and then-Chairman of the Board of Directors (“the President”). In conjunction with the award, the President agreed to forfeit a previously-awarded option to purchase 450,000 shares of common stock at $1.25 per share, which would have expired on October 27, 2015. At the same time, the Board of Directors voted to extend the expiration date of a previously-awarded option to the President to purchase 750,000 shares of common stock at $0 .30 per share from March 11, 2013 to October 27, 2015 and voted to extend the expiration date of a previously-awarded option to the President to purchase 75,000 shares of common stock at $0.75 per share from July 23, 2013 to October 27, 2015. In addition, in the first quarter of 2013, the Board of Directors voted to extend the expiration date of a previously-awarded option granted to a Director to purchase 75,000 shares of common stock at $0.75 per share, from July 23, 2013 to October 27, 2015 and to extend the expiration date of certain previously-awarded options to purchase common stock granted to former employees of the Company and an Honorary Director of the Company, to purchase a combined total of 90,000 shares of common stock at $0.75 per share, from August 12, 2013 to October 27, 2015.

F-17

In determining the fair value of each option granted or modified, the Black-Scholes option-pricing model, consistent with the provisions of ASC Topic 718, was used. The valuations were determined using the weighted-average assumptions of 0% dividend yield, expected volatility ranging from 244.38% to 127.09% and a risk-free interest rates ranging from .9% to .2%.

Recent Accounting Pronouncements

In June 2014, the Financial Accounting Standard Board (“FASB”) issued ASU 2014-12, “Compensation — Stock Compensation (Topic 718)”. The amendments in this ASU require a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The performance target should not be reflected in estimating the grant-date fair value of the award, and compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The amendments in the ASU are effective for annual periods beginning after December 15, 2015. The adoption of this guidance should not have a material effect on the Company’s financial condition or results of operations.

In August 2014, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). ASU 2014-15 requires that, in connection with preparing financial statements for each annual and interim reporting period, the Company should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date the financial statements are issued or within one year after the date that the financial statements are available to be issued. If the Company identifies conditions or events that raise substantial doubt about its ability to continue as a going concern, the Company should disclose how it plans are intended to mitigate or alleviate those relevant conditions or events raising substantial doubt about its ability to continue as a going concern. ASU 2014-15 is effective for all entities with annual periods ending after December 15, 2016 and interim periods thereafter. Early adoption is permitted. The standard will not have a material impact on the consolidated financial statements.

In November 2014, the FASB issued ASU 2014-17, “Business Combinations (Topic 805): Pushdown Accounting”. The amendments in this ASU apply to the separate financial statements of an acquired entity and its subsidiaries that are a business (either public or nonpublic) when an acquirer obtains control of an acquired entity. An acquired entity may elect the option to apply pushdown accounting in the reporting period in which the change in control event occurs. If pushdown accounting is applied to an individual change in control event, the election is irrevocable. The amendments in the ASU are effective on November 18, 2014. The adoption of this guidance did not have a material effect on the Company’s financial condition or results of operations.

In January 2015, the FASB issued ASU 2015-01, “Income Statement — Extraordinary and Unusual Items (Subtopic 225-20)”. This ASU eliminates extraordinary items from US GAAP and will align more closely with International Accounting Standards 1, “Presentation of Financial Statements”. The amendments in the ASU are effective beginning after December 15, 2015. The adoption of this guidance should not have a material effect on the Company’s financial condition or results of operations.

In February 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810)”. This ASU focuses on the consolidation evaluation for reporting organizations that are required to evaluate consolidation of certain legal entities by reducing the number of consolidation models from four to two and is intended to improve current

F-18

GAAP. The amendments in the ASU are effective beginning after December 15, 2016. The adoption of this guidance should not have a material effect on the Company’s financial condition or results of operations.

Note 4 . Accounts Payable and Accrued Expenses

The table below outlines the elements included in accounts payable and accrued expenses at December 31, 2014 and 2013:

	December 31,	December 31,
Description	2014	2013

Accrued payroll due officers	1,288,136	1,063,136
Accrued interest due officers	270,166	167,234
Accrued interest	756,405	555,119
Accrued dividends	355,600	254,000
Other accounts payable and accrued expenses	634,172	651,255

Total accounts payable and accrued expenses	3,304,479	2,690,744

Included in other accounts payable and accrued expenses are accrued director fees at December 31, 2014 and 2013 of $131,250 and $60,000, respectively, and rents payable due the President of the Company in the amounts of $62,602 and $143,119 for the years ending December 31, 2014 and 2013, respectively.

Note 5. Notes Payable

Line of Credit

On October 23, 2008, the Company entered into an agreement with an unrelated third party for an unsecured Line of Credit up to a maximum of $1,000,000. The Line of Credit provided for funds to be drawn as needed and carries an interest rate on amounts borrowed of 9% per annum originally payable quarterly based on the pro rata number of days outstanding. All funds originally advanced under the facility were due and payable by November 1, 2012. As an inducement to provide the facility, the lender was awarded an immediate option to purchase 50,000 shares of common stock of the Company at $1.75 per share. In addition, the lender received an option to purchase a maximum of 250,000 additional shares of common stock of the Company at $1.75 per share. The options expire following repayment in full by the Company of the amount borrowed.

As of December 31, 2009, the Company had borrowed all of the $1,000,000 available to it under the Line of Credit. In addition, the Company and the lender had verbally agreed that payment of all interest accrued subsequent to June 30, 2009 would be deferred until the date payment in full is due. The lender is now deceased and it is unclear if his estate will honor that verbal agreement. If it is not honored, the Company could be considered to be in default for non-payment of interest due on the note which totaled $493,669 at December 31, 2014. Interest on this debt incurred prior to June 30, 2009 has been paid in full. The Company was unable to satisfy the principal obligation of $1,000,000 by the due date of November 1, 2012 or any interest which accrued on the obligation after June 30, 2009 and is in default under the repayment terms of the note.

Convertible Notes and Warrants

Pursuant to a Private Placement Memorandum dated March 1, 2010, the Company offered Units consisting of a two year unsecured, convertible promissory note in the principal amount of $25,000 with interest at 12% per annum, together with a five year Warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $1.00 per share. The Promissory Note is convertible into 50,000 shares of common stock of the Company immediately upon issuance at the option of the investor. Interest on the notes is payable either in cash or common stock at the option of the Company. The Company ultimately accepted subscriptions totaling $450,000 from unrelated subscribers and an additional $25,000 for one Unit purchased by a Director of the Company. The offering of these Units expired on June 29, 2010 pursuant to the terms of the Private Placement Memorandum.

F-19

Pursuant to an additional Private Placement Memorandum dated October 25, 2010, the Company offered Units consisting of a two year unsecured, convertible promissory note in the principal amount of $25,000 together with a five year Warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $1.00 per share. The Promissory Notes bear interest at 9% per annum and are convertible into 50,000 shares of common stock of the Company. Interest on the notes is payable in either cash or common stock at the option of the Company. The Company accepted subscriptions totaling $212,500 from unrelated accredited investors in 2010 and accepted an additional $300,000 of subscriptions from unrelated accredited investors in 2011. The Company paid a finders commission of $25,000 to an unrelated third party during the nine months ended September 30, 2011 before the offering terminated June 29, 2011. On July 2, 2011, the Company redeemed a note in the principal amount of $25,000 by issuing 50,000 shares of common stock.

The Convertible Notes issued via the Private Placements discussed above total $962,500 in aggregate and became due and payable beginning in March 2012 and extending at various dates through June 2013. As of the date of the filing of this report, all of the aforementioned debt obligations remain unpaid and in default under the repayment terms of the notes.

The table below summarizes the Company’s notes payable at December 31, 2014 and 2013:

	Gross Amount
Loan Facility	Owed

Line of Credit	$	1,000,000

Private Placements:
March 1, 2010	475,000
October 25, 2010	487,500

Total Private Placements	962,500

Total Note Payable	$	1,962,500

Note 6. Convertible Debentures and Derivative Liability

Pursuant to a Private Placement Agreement dated February 14, 2014, the terms of which are more fully described in Note 2 to these consolidated financial statements, the Company had various Convertible Debentures with maturity dates of six years from issuance and a coupon rate of 4% per annum issued and outstanding at December 31, 2014. The Debentures are convertible from the date of issuance, subject to certain Company milestones being met, into fully paid non-assessable common shares of the Company. The notes have an anti-dilution provision providing for a full ratchet reset of the conversion price.

For purposes of determining the proper accounting treatment and valuation of the instruments, the Company applied the provisions set forth in ASC Topic 820, Fair Value in Financial Instruments and ASC Topic 815, Accounting for Derivative Instruments and Hedging Activities. Since the Notes issued have derivative features, the embedded derivatives should be bundled and valued as a single, compound embedded derivative, bifurcated from the debt host and treated as a liability. In addition, the valuation is required to be conducted for each reporting period the instrument was in existence (i.e. for Tranche 1 March 31, 2014, June 30, 2014, September 30, 2014 and December 31, 2014 and for Tranche 2 December 31, 2014).

As previously noted, the Company’s stock registration was revoked effective September 4, 2014. Therefore the Company engaged an independent valuation expert to determine the fair value of its shares of common stock at September 30, 2014 and December 31, 2014. For periods after September 3, 2014, the fair valuewas estimated by adjusting the most recent market price by changes in the underlying market cap due to borrowings and continuing losses and applying a discount for a lack of marketability while in the delisted mode and reversed when the Company becomes publicly listed as projected by management. Monte Carlo models were developed to value the derivative liability within the Notes using historical volatility rates ranging from 172% - 197%, discount bond rates based on the expected remaining term of each instrument ranging from 5.78% - 9.85% and

F-20

expected conversion requirements being met by December 31, 2014 for the first and second quarter of 2014 and June 30, 2015 for the third and fourth quarter of 2014.

The estimated fair value for the derivative liability relating to each Debenture at issuance and quarter ends were as follows:

	March 31, 2014		June 30, 2014		September 30, 2014		December 31, 2014

Tranche 1	$	3,053,176	$	2,294,190	$	1,849,148	$	2,014,733
Tranche 2	—		—		—		1,739,500

Derivative Liability	$	3,053,176	$	2,294,190	$	1,849,148	$	3,754,233

At the initial valuation date of each Tranche, a portion of the derivative liability was allocated to the Convertible Debentures as debt discount, with the remainder being recorded as other income/expense. At March 31, 2014, the initial valuation of Tranche 1 Debentures, $1,000,000 was allocated to debt discount and at December 31, 2014, the initial valuation of Tranche 2 Debentures, $850,000 was allocated to debt discount. The debt discount is subsequently amortized to expense using a seeding method dependent on changing circumstances and assumptions. Amortization of debt discount amounted to $21,141 for Convertible Debentures and $1,113 for the non-convertible Debenture for the year ended December 31, 2014. The Company recorded $1,904,233 of expense associated with the change in fair value of the derivatives.

In the event the Company fails to meet the conditions for conversion of the Debentures, the First Tranche Convertible Debentures which total $950,000 would be due on March 31, 2020, the Second Tranche Debentures which total $850,000 would be due December 31, 2020. The sole remaining non-convertible Debenture in the amount of $50,000 is due March 31, 2020.

Note 7. Related Party Transactions

The President of the Company is owed deferred salary in the amount of $1,091,996 and the Vice President and current Director of the Company is owed deferred salary in the amount of $121,140 as of December 31, 2014. On October 12, 2012 the Board of Directors approved a motion to pay these individuals interest on their deferred compensation retroactive to the outstanding amounts due beginning in 2010 through the date of actual payment. Accrued interest through December 31, 2014 and 2013 amounted to $270,166 and $167,234, respectively.

Effective September 1, 2011, the Company entered into a month-to-month lease with the President and then-Chairman of the Board of Directors of the Company, for office space in a furnished and fully equipped townhouse office building owned by the President in Alexandria, Virginia. The lease calls for monthly base rent in the amount of $4,534 and payment of associated costs of insurance, real estate taxes, expenses and utilities. Rent expense associated with this lease amounted to $70,348 and $70,272 for the years ended December 31, 2014 and 2013, respectively. The President received direct cash payments totaling $140,806 for current and past year rents in 2014 and no direct cash payments in 2013.

The Company has been unable to pay directors’ fees to date. As of December 31, 2014 and 2013 a total of $131,250 and $60,000 respectively, was due and owing to the Company’s directors. Directors have previously been compensated and may, in the future, be compensated for their services with Common Stock or options to purchase Common Stock of the Company. Directors are reimbursed for expenses incurred in attending meetings. Directors may be paid a consulting fee for services performed outside the scope of their directorship.

F-21

In the first quarter of 2013, the Board of Directors awarded an option to purchase 2,000,000 shares of common stock at a price of $0.19 per share to the President and then-Chairman of the Board of Directors. In conjunction with the award, the President agreed to forfeit a previously-awarded option to purchase 450,000 shares of common stock at $1.25 per share, which would have expired on October 27, 2015. At the same time, the Board of Directors voted to extend the expiration date of a previously-awarded option to the President to purchase 750,000 shares of common stock at $0.30 per share from March 11, 2013 to October 27, 2015 and voted to extend the expiration date of a previously-awarded option to Ms. Vitale to purchase 75,000 shares of common stock at $0.75 per share from July 23, 2013 to October 27, 2015.

In the first quarter of 2013, the Board of Directors voted to extend the expiration date of a previously-awarded option granted to a Director of the Company to purchase 75,000 shares of common stock at $0.75 per share, from July 23, 2013 to October 27, 2015.

In the first quarter of 2013, the Board of Directors voted to extend the expiration date of certain previously-awarded options to purchase common stock granted to former employees of the Company and an Honorary Director of the Company, to purchase a combined total of 90,000 shares of common stock at $0.75 per share, from August 12, 2013 to October 27, 2015.

On May 21, 2013, a Director of the Company received an interest payment in the amount of $4,496 paid in 22,853 shares of common stock. The payment was for accumulated interest on a $25,000 convertible note for the period January 1, 2011 through June 30, 2012.

On January 10, 2014, a Director of the Company advanced $10,000 to the Company for capital needed by the Company prior to the first closing of the Private Placement dated February 14, 2014. On April 2, 2014, the Company repaid the Director in full for the advance.

On March 31, 2014, in conjunction with the Company’s offer of $3,000,000 in Collateralized Convertible Debentures, the Company accepted a subscription in the amount of $150,000 from a Director and Chairman of the Board of Directors of the Company effective March 31, 2014. On the same date, the Company accepted a subscription in the amount of $150,000 from another Director and Vice President of the Company. On December 31, 2014, that Director rejected the amended terms offered by the Company for the Second and Third Tranches of the Collateralized Convertible Debentures and was refunded $100,000 from funds held in Escrow under that agreement.

In the second quarter of 2014, the President of the Company received $100,000 from the proceeds of the First Tranche Collateralized Convertible Senior Debentures in partial payment of accrued rent on the office premises located in Alexandria, Virginia which she leased to the Company pursuant to a lease effective September 1, 2011. Additionally, the President received $40,806 for current rents on that facility for the period April 1 through December 31, 2014.

In the second quarter of 2014, the Company retained the brother of the current Chairman of the Board of Directors to perform certain consulting services relating to the Mississippi Gaming Commission site approval for a parcel on the Company’s Diamondhead property. The brother was paid $10,000 per month for his services for the months of April 2014 and May 2014.

Company Directors

Effective March 31, 2014, the President, Chief Executive Officer, Treasurer, Chief Financial Officer, Interim Secretary and Chairman of the Board of Directors of the Company, resigned as Chairman of the Board of Directors.

F-22

Effective March 31, 2014, the Company appointed a new Director of the Company who was then appointed Chairman of the Board of Directors of the Company and President and Chief Executive Officer of Casino World, Inc., a subsidiary of the Company.

Note 8. Stockholders’ Equity

At December 31, 2014 and 2013, the Company had a stock option plan and non-plan options, which are described below.

Non-Plan Stock Options

On January 9, 2013, the Board of Directors voted to extend the expiration date of previously-awarded options granted as follows:

Options to purchase 750,000 shares of common stock at $0.30 per share issued to the President, originally scheduled to expire on March 11, 2013 were extended to October 27, 2015.

Options to purchase 75,000 shares of common stock at $0.75 per share issued to the President, originally scheduled to expire on July 23, 2013 were extended to October 27, 2015.

Options to purchase 75,000 shares of common stock at $0.75 per share issued to a Director originally scheduled to expire on July 23, 2013 were extended to October 27, 2015.

Options to purchase a combined total of 90,000 shares of common stock at $0.75 per share issued to former employees and a Honorary Director of the Company originally scheduled to expire on August 12, 2013 were extended to October 27, 2015.

On March 13, 2013 the Board of Directors awarded the President of the Company options to purchase 2,000,000 shares of common stock at $0.19 per share for a period of five years. The Board, however, required the President to forfeit options to purchase 450,000 shares of common stock at $1.25 per share which would not have otherwise expired until October 27, 2015.

Stock Option Plan

On December 19, 1988, the Company adopted a stock option plan (the “Plan”) for its officers and management personnel under which options could be granted to purchase up to 1,000,000 shares of the Company’s common stock. Accordingly, the Company reserved 1,000,000 shares for issuance under the Plan. The exercise price may not be less than 100% of the market value of the shares on the date of the grant. The options expire within ten years from the date of grant. At December 31, 2014, no options from this plan were issued or exercised.

Summary of Stock Options

A summary of the status of the Company’s fixed Plan and non-plan options as of December 31, 2014 and 2013, and changes during the years ended December 31, 2014 and 2013 is presented below.

F-23

	December 31, 2014			December 31, 2013
		Weighted				Weighted
		Average				Average
		Exercise				Exercise
	Shares	Price		Shares		Price

Outstanding at beginning of year	3,440,000	$	.44	1,890,000		$	.98
Granted				2,000,000		.19
Exercised		—				—
Expired	—	—		(450,000	)	1.25
Outstanding at end of year	3,440,000	$	.44	3,440,000		$	.44
Options exercisable at year-end	3,440,000			3,440,000
Weighted-average fair value of options granted during the year						$	.19

The following tables summarize information about stock options outstanding and exercisable at December 31, 2014 and 2013:

December 31, 2014

		Options Outstanding				Options Exercisable
			Weighted-
		Number	Average	Weighted		Number	Weighted-
Range of		Outstanding	Remaining	Average		Exercisable	Average
Exercise		At	Contractual	Exercise		At	Exercise
Prices		12/31/14	Life (Yrs.)	Price		12/31/14	Price

$	.19	2,000,000	3.20	$	.19	2,000,000	$	.19
$	.30	750,000	.82	.30		750,000	.30
$	.75	240,000	.82	.75		240,000	.75
$	1.25	150,000	.82	1.25		150,000	1.25
$	1.75	300,000	(a)	1.75		300,000	1.75
		3,440,000				3,440,000

December 31, 2013

		Options Outstanding				Options Exercisable
			Weighted-
		Number	Average	Weighted		Number	Weighted-
Range of		Outstanding	Remaining	Average		Exercisable	Average
Exercise		At	Contractual	Exercise		At	Exercise
Prices		12/31/13	Life (Yrs.)	Price		12/31/13	Price

$	.19	2,000,000	4.16	$	.19	2,000,000	$	.19
$	.30	750,000	1.82	.30		750,000	.30
$	.75	240,000	1.82	.75		240,000	.75
$	1.25	150,000	1.82	1.25		150,000	1.25
$	1.75	300,000	(a)	1.75		300,000	1.75
		3,440,000				3,440,000

(a) Options expire upon payment in full of an outstanding note payable with an original due date of November 1, 2012 but remains outstanding at December 31, 2014 and 2013.

Warrants

The Company has previously issued warrants to purchase shares of the Company’s common stock in conjunction with convertible debentures issued in private placements dated March 25, 2010 and October 25, 2010. The Company also issued warrants in conjunction with a private placement of shares of the Company’s common stock dated July 1, 2012.

F-24

On March 31, 2014, the Company issued a warrant to purchase 25,000 shares of common stock exercisable at $0.30 per share for a period of three years as part of the broker commission for the First Tranche Convertible Debentures discussed in Note 2.

On December 31, 2014, the Company issued a second warrant to purchase 25,000 shares of common stock exercisable at $0.45 per share for a period of three years as part of the broker commission for the Second Tranche Convertible Debentures discussed in Note 2.

A summary of the status of the Company’s outstanding warrants as of December 31, 2014 and 2013, and changes during the years ended on December 31, 2014 and 2013 is presented below.

	December 31, 2014			December 31, 2013
		Weighted			Weighted
		Average			Average
		Exercise			Exercise
	Shares	Price		Shares	Price

Outstanding at beginning of year	2,986,500	$	.750	2,986,500	$	.750
Granted	50,000	.375		—
Exercised	—			—
Expired	—			—
Outstanding at end of year	3,036,500	$	.740	2,986,500	$	.750
Warrants exercisable at year-end	3,036,500			2,986,500
Weighted-average fair value of warrants granted during the year		$	.375		None

The following tables summarize information about warrants outstanding and exercisable at December 31, 2014 and 2013:

December 31, 2014

		Warrants Outstanding			Warrants Exercisable
			Weighted-
		Number	Average	Weighted	Number	Weighted-
Range of		Outstanding	Remaining	Average	Exercisable	Average
Exercise		At	Contractual	Exercise	At	Exercise
Prices		12/31/14	Life (Yrs.)	Price	12/31/14	Price

$	.25	1,011,500	2.82	.25	1,011,500	.25
$	.30	25,000	2.25	.30	25,000	.30
$	.45	25,000	3.00	.45	25,000	.45
$	1.00	1,975,000	.65	1.00	1,975,000	1.00
		3,036,500			3,036,500

December 31, 2013

Warrants Outstanding

Warrants Exercisable

Weighted-

Number

Average

Weighted

Number

Weighted-

Range of

Outstanding

Remaining

Average

Exercisable

Average

Exercise

Contractual

Exercise

Prices

12/31/13

Life (Yrs.)

Price

12/31/13

Price

.25

1,011,500

3 .89

.25

1,011,500

.25

1.00

1,975,000

1.85

1.00

1,975,000

1.00

2,986,500

F-25

Preferred Stock

Series S Preferred Stock

On June 14, 1993, the Company issued 926,000 shares of $.01 par value Series S Voting, Non-Convertible Preferred Stock to Austroinvest International, Inc. in exchange for proceeds of $1,000,080. The Company is required to pay quarterly cumulative dividends of three percent per annum on these shares.

These shares may be redeemed at the option of the Company at $1.08 per share plus $.0108 per share for each quarter that such shares are outstanding. The shares also have a $1.08 per share preference in involuntary liquidation of the Company. At December 31, 2014 and 2013, outstanding Series S preferred stock totaled 926,000 shares. Cumulative dividends in arrears at December 31, 2014 and 2013 amounted to $105,000 and $75,000 respectively.

Series S-NR Preferred Stock

On September 13, 1993, the Company issued 900,000 shares of its $.01 par value Series S-NR Voting, Non-Convertible, Non-Redeemable, Preferred Stock to Serco International Limited (a wholly-owned subsidiary of Austroinvest International, Inc.), in exchange for proceeds of $999,000. The Company is required to pay quarterly, non-cumulative dividends of three percent per annum on these shares. Upon involuntary liquidation of the Company, the liquidation preference of each share is $1.11. At December 31, 2014 and 2013, outstanding Series S-NR preferred stock totaled 900,000 shares.

Series S-PIK Preferred Stock

In March 1994, the Company offered, pursuant to Regulation S, one million units at $5.50 per unit, each unit consisting of one share of the Company’s $.001 par value common stock and two shares of the Company’s Series S-PIK Junior, cumulative, convertible, non-redeemable, non-voting $.01 par value preferred stock. Each share of Series S-PIK preferred stock is convertible into one share of the Company’s common voting stock at any time after February 15, 1995. No shares were converted during 2014 and 2013 . The Series S-PIK preferred stock ranks junior to the Series S and Series S-NR preferred shares as to the distribution of assets upon liquidation, dissolution, or winding up of the Company. Upon liquidation of the Company, the S-PIK preferred stock will have a liquidation preference of $2.00 per share. A cumulative quarterly dividend of $0.04 per share is payable on Series S-PIK preferred stock. At December 31, 2014 and 2013, outstanding Series S-PIK preferred stock totaled 260,000 shares. Cumulative dividends in arrears at December 31, 2014 and 2013 amounted to $145,600 and $104,000 respectively.

Payment of Preferred Dividends

The Company did not pay any dividends due on its preferred stock in 2014 or 2013.

Note 9. Employee Stock Ownership Plan

The Company’s employee stock ownership plan (ESOP) is intended to be a qualified retirement plan and an employee stock ownership plan. All employees having one year of service are eligible to participate in the ESOP. The ESOP is funded by two 8% promissory notes issued by the Company. The shares of common stock are pledged to the Company as security for the loans. The promissory notes are payable from the proceeds of annual contributions made by the Company to the ESOP. In the event that the Company elects not to make a Plan contribution in any given year, the corresponding shares applicable to that year are released from the Trust to the Company in consideration of that years’ note payment. In January 2001, the Plan and accompanying promissory notes were amended to conform to the Company’s current employment structure, by extending the note repayment terms through 2044.

F-26

Assuming a Plan contribution is made, shares are allocated to the participants’ accounts in relation to repayments of the loans from the Company. At December 31, 2014, 2,386,370 shares with a fair market value of $1,128,753 are unearned. At December 31, 2013, 2,465,915 shares with a fair market value of $1,676,822 were unearned.

In 2011, the Company decided to temporarily suspend contributions to the Plan. Therefore the Trust was unable to make its annual loan payment to the company and a loan default occurred. In accordance with the Pledge Agreement between the Company and the Trust, the shares attached to the loan payments subsequent to the 2010 contribution reverted back to the Company as treasury shares. In 2014, 79,545 shares, with a market value of $37,625, reverted back to the Company treasury. In 2013, 79,545 shares with a market value of $54,091 reverted back to the Company treasury.

Note 10. Income Taxes

At December 31, 2014, the Company had net operating loss carryforwards for income taxes of approximately $12.5 million, which expire during various periods through 2034. Realization of deferred income taxes as of December 31, 2014 and 2013 is not considered likely. Therefore, by applying a Federal statutory rate of 35% to the carryforward amounts, a valuation allowance of approximately $4.4 million and $4.1 million has been established for the entire amount of deferred tax assets relative to the net operating loss at December 31, 2014 and 2013, respectively, resulting in an effective tax rate of 0% and no deferred tax asset recognition. The valuation allowance increased by approximately $300,000 in 2014 and $400,000 in 2013.

Note 11. Commitments and Contingencies

Leases

Effective September 1, 2011, the Company entered into a month-to-month lease with Deborah A. Vitale, President and CEO of the Company for office space in a building owned by Ms. Vitale in Alexandria, Virginia. The lease calls for monthly base rent in the amount of $4,534 and payment of associated costs of insurance real estate taxes, expenses and utilities.

The Company also leases storage facilities in Alexandria, Virginia on a month-to month basis.

Rental expenses for all facilities totaled $70,348 in 2014 and $71,072 in 2013.

The Company is not liable for future minimum lease payments.

Management Agreement

On June 19, 1993, two subsidiaries of Diamondhead Casino Corporation, Casino World Inc. and Mississippi Gaming Corporation, entered into a Management Agreement with Casinos Austria Maritime Corporation (CAMC). Subject to certain conditions, under the Management Agreement, CAMC would operate, on an exclusive basis, all of the Company’s proposed dockside gaming casinos in the State of Mississippi, including any operation fifty percent (50%) or more of which is owned by the Company or its affiliates. Unless terminated earlier pursuant to the provisions of the Agreement, the Agreement terminates five years from the first day of actual Mississippi gaming operations and provides for the payment of an annual operational term management fee of 1.2% of all gross gaming revenues between zero and $100,000,000; plus 0.75% of gross gaming revenue between $100,000,000 and $140,000,000; plus 0.5% of gross gaming revenue above $140,000,000; plus two percent of the net gaming revenue between zero and $25,000,000; plus three percent of the net gaming revenue above twenty-five million dollars $25,000,000. Management of the Company believes this Agreement is no longer in effect. However, there can be no assurance that CAMC will not attempt to maintain otherwise which would lead to litigation.

F-27

Related Parties

The Company has an agreement with a Director pursuant to which he will be paid a bonus in the event of any recovery received from litigation against BP relating to the oil spill. This Director will receive ten percent of any amounts received by the Company, after deduction of attorney fees and expenses relating to the litigation.

Other

The Company’s obligations under the Collateralized Convertible Senior Debentures will be secured by a lien on the Company’s Mississippi property (the “Investors Lien”). On March 31, 2014, the Company issued $1 million of First Tranche Collateralized Convertible Senior Debentures and on December 31, 2014 the Company issued $850,000 of Second Tranche Collateralized Convertible Senior Debentures. Thus, liens were placed on the Property in favor of the Investors for $1,850,000. The Investors Lien is in pari passu with a lien placed on the Property in favor of the President of the Company, the Vice President of the Company, and certain directors of the Company, for past due wages, compensation, and expenses owed to them in the maximum aggregate amount of $2,000,000 (the “Executives Lien”). Ms. Vitale will serve as Lien Agent for the Executives Lien.

The Company is currently delinquent in filing those documents and forms required to be filed in connection with its Employee Stock Ownership Plan (“ESOP”) for the years ended December 31, 2010, 2011, 2012 and 2013. The Company did not have the funds to pay professionals to prepare and file these documents and forms when due. Although these required filings normally do not result in any tax due to an agency of the government, the Company could be subject to significant penalties for failure to file these forms when due. Penalties are assessed by both the Department of Labor and the Internal Revenue Service on a per diem basis from the original due dates for the required informational filings until the filings are actually made. The Company has accrued $57,305 and $47,505 in penalties for the years ending December 31, 2014 and 2013 respectively based on the current delinquent filings. In addition, the Company expects that cumulative penalties for all delinquent ESOP filings could total approximately $142,600 through December 31, 2014. The Company intends to bring its ESOP-required filings current and when current, will attempt to enroll in a voluntary compliance program with the Department of Labor and the Internal Revenue Service with respect to any penalties or fines incurred. However, there can be no assurance the Company will be able to enroll in any such program or obtain a reduction of the fines and penalties that may be due.

The Company has agreements with various unrelated persons and entities that could be entitled to substantial commissions if the Company enters into an agreement relating to the development of its Diamondhead property as a result of their efforts.

Note. 12 Pending and Threatened Litigation

College Health & Investment, L.P. v. Diamondhead Casino Corporation

F-28

College Health & Investment, L.P. v. Diamondhead Casino Corporation

College Health & Investment, L.P. v. Edson R. Arneault, Deborah A. Vitale, Gregory A. Harrison, Martin Blount and Benjamin Harrell

F-29