NEVADA GOLD & CASINOS INC (Form: 10-Q, Received: 12/23/2013 16:03:09)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

	(Mark One)

x	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

	For the quarterly period ended October 31, 2013

¨	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

	For the transition period from_______________________ to ___________________________

Commission File Number 1-15517

Nevada Gold & Casinos, Inc.

(Exact name of registrant as specified in its charter)

	Nevada		88-0142032

	(State or other jurisdiction of Incorporation or organization)		(I.R.S. Employer Identification No.)

	133 E. Warm Springs Road
	Suite 102
	Las Vegas, Nevada		89119
	(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number including area code:

(702) 685-1000

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for any shorter period that the registrant was required to file the reports), and (2) has been subject to those filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding twelve months (or for such shorter period that the registrant was required to submit and post such files).

x Yes ¨ No

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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨

Accelerated filer ¨

Non-accelerated filer ¨

Smaller Reporting Company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.).

¨ Yes x No

The number of common shares, $0.12 par value per share, issued and outstanding, was 16,134,110 as of December 9, 2013.

TABLE OF CONTENTS

		Page

	PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements
	Consolidated Balance Sheets – October 31, 2013 (unaudited) and April 30, 2013	2
	Consolidated Statements of Operations – Three and six months ended October 31, 2013 (unaudited) and October 31, 2012 (unaudited)	3
	Consolidated Statements of Cash Flows –Six months ended October 31, 2013 (unaudited) and October 31, 2012 (unaudited)	4
	Notes to Consolidated Financial Statements (unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	23
Item 4.	Controls and Procedures	24

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Mine Safety Disclosures	24
Item 5.	Other Information	24
Item 6.	Exhibits	24

FORWARD-LOOKING STATEMENTS

Factors that May Affect Future Results

(Cautionary Statements Under the Private Securities Litigation Reform Act of 1995)

Certain information included in this Form 10-Q and other materials filed or to be filed by us with the Securities and Exchange Commission (as well as information included in oral statements or other written statements made or to be made by us or our representatives) contains or may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Statements that include the words “may,” “could,” “should,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” or other words or expressions of similar meaning, may identify forward-looking statements. We have based these forward-looking statements on our current expectations about future events. Forward-looking statements include statements that reflect management’s beliefs, plans, objectives, goals, expectations, anticipations, intentions with respect to the financial condition, results of operations, future performance and the business of us, including statements relating to our business strategy and our current and future development plans. These statements may also involve other factors which are detailed in the “Risk Factors” and other sections of our Annual Report on Form 10-K for the year ended April 30, 2013 and other filings with the Securities and Exchange Commission.

Although we believe that the assumptions underlying these forward-looking statements are reasonable, any or all of the forward-looking statements in this report and in any other public statements that are made may prove to be incorrect. This may occur as a result of inaccurate assumptions or as a consequence of known or unknown risks and uncertainties. Many factors discussed in this report will be important in determining our future performance. Consequently, actual results may differ materially from those that might be anticipated from forward-looking statements. In light of these and other uncertainties, you should not regard the inclusion of a forward-looking statement in this report or other public communications that we might make as a representation by us that our plans and objectives will be achieved, and you should not place undue reliance on such forward-looking statements.

We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Any further disclosures made on related subjects in our subsequent reports filed with the Securities and Exchange Commission should be consulted.

	1

Part I. Financial Information

Item 1. Financial Statements

Nevada Gold & Casinos, Inc.

Consolidated Balance Sheets

	October 31,		April 30,
	2013		2013
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	6,844,436	$	6,723,919
Restricted cash		1,252,046		1,306,487
Accounts receivable, net		411,565		445,481
Prepaid expenses		1,208,146		854,092
Notes receivable, current portion		283,613		216,596
Other current assets		327,098		373,923
Total current assets		10,326,904		9,920,498

Investments in development projects		-		56,959
Real estate held for sale		1,100,000		1,100,000
Notes receivable, net of current portion		1,914,321		2,082,853
Goodwill		16,103,583		16,103,583
Identifiable intangible assets, net of accumulated amortization of $5,016,223 and $4,413,439 at October 31, 2013 and April 30, 2013, respectively		6,356,952		6,959,737
Property and equipment, net of accumulated depreciation of $3,123,297 and $2,599,940 at October 31, 2013 and April 30, 2013, respectively		4,728,995		5,028,122
Deferred tax asset, net		4,782,211		4,738,373
Other assets		390,319		533,861
Total assets	$	45,703,285	$	46,523,986
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	1,464,368	$	2,024,465
Accrued interest payable		30,555		34,393
Other accrued liabilities		2,072,596		2,127,140
Long-term debt, current portion		2,370,000		1,280,000
Total current liabilities		5,937,519		5,465,998
Other long-term liabilities		428,421		421,253
Long-term debt, net of current portion		11,550,000		12,930,000
Total liabilities		17,915,940		18,817,251

Stockholders' equity:
Common stock, $0.12 par value per share; 50,000,000 shares authorized; 16,916,947 and 16,864,122 shares issued and 16,134,110 and 16,081,285 shares outstanding at October 31, 2013, and April 30, 2013, respectively		2,030,044		2,023,705
Additional paid-in capital		24,489,199		24,419,858
Retained earnings		8,205,676		8,200,746
Treasury stock, 782,837 shares at October 31, 2013 and April 30, 2013, respectively, at cost		(6,932,035)		(6,932,035)
Accumulated other comprehensive loss		(5,539)		(5,539)
Total stockholders' equity		27,787,345		27,706,735
Total liabilities and stockholders' equity	$	45,703,285	$	46,523,986

The accompanying notes are an integral part of these consolidated financial statements.

	2

Nevada Gold & Casinos, Inc.

Consolidated Statements of Operations

(unaudited)

	Three Months Ended				Six Months Ended
	October 31,		October 31,		October 31,		October 31,
	2013		2012		2013		2012
Revenues:
Casino	$	14,479,974	$	14,492,470	$	28,428,453	$	29,451,147
Food and beverage		2,511,766		2,508,167		4,870,074		5,065,767
Other		431,354		456,837		863,400		928,119
Gross revenues		17,423,094		17,457,474		34,161,927		35,445,033
Less promotional allowances		(1,073,977)		(1,073,786)		(2,122,020)		(2,250,642)
Net revenues		16,349,117		16,383,688		32,039,907		33,194,391

Expenses:
Casino		8,482,388		8,542,487		16,907,336		16,973,323
Food and beverage		1,281,597		1,178,027		2,498,307		2,363,249
Other		70,576		81,039		125,056		155,661
Marketing and administrative		4,076,583		4,031,426		8,386,524		8,435,687
Facility		491,720		570,178		970,481		1,113,799
Corporate		585,090		1,493,311		1,202,251		2,405,947
Depreciation and amortization		565,288		538,534		1,127,225		1,077,515
Write-off of project development cost		56,959		257,733		56,959		257,733
Total operating expenses		15,610,201		16,692,735		31,274,139		32,782,914
Operating income (loss)		738,916		(309,047)		765,768		411,477
Non-operating income (expenses):
Loss on sale of assets		(4,546)		(1,718)		(8,517)		(2,963)
Interest income		34,090		-		68,485		900
Interest expense		(345,142)		(393,064)		(699,063)		(778,565)
Amortization of loan issue costs		(88,037)		(85,082)		(165,580)		(162,625)
Income (loss) before income tax benefit (expense)		335,281		(788,911)		(38,907)		(531,776)
Income tax benefit (expense)		(114,524)		108,375		43,837		19,686
Net income (loss) from continuing operations	$	220,757	$	(680,536)	$	4,930	$	(512,090)
Net loss from discontinued operations, net of taxes		-		(138,472)		-		(138,793)
Net income (loss)	$	220,757	$	(819,008)	$	4,930	$	(650,883)
Per share information:
Net income (loss) per common share - basic and diluted for continuing operations	$	0.01	$	(0.04)	$	0.00	$	(0.03)

Net income (loss) per common share - basic and diluted for discontinued operations	$	-	$	(0.01)	$	-	$	(0.01)

Basic weighted average number of shares outstanding		16,105,775		15,964,051		16,104,725		15,949,269

Diluted weighted average number of shares
outstanding		16,208,227		15,964,051		16,171,182		15,949,269

The accompanying notes are an integral part of these consolidated financial statements.

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Nevada Gold & Casinos, Inc.

Consolidated Statements of Cash Flows

(unaudited)

	Six Months Ended
	October 31,		October 31,
	2013		2012
Cash flows from operating activities:
Net income (loss)	$	4,930	$	(650,883)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		1,127,225		1,077,515
Impairment of capitalized development projects		56,959		257,733
Stock-based compensation		27,240		69,759
Amortization of deferred loan issuance costs		165,580		162,625
Deferred rent		14,438		38,067
Loss on sale of assets		8,517		2,963
Changes to restricted cash		54,441		(262,151)
Deferred income tax benefit		(43,838)		(19,686)
Changes in operating assets and liabilities:
Receivables and other assets		(270,352)		(9,191)
Accounts payable and accrued liabilities		(625,748)		483,574
Net cash provided by operating activities		519,392		1,150,325
Cash flows from investing activities:
Capitalized development costs		-		(43,128)
Collections on notes receivable		101,515		65,600
Purchase of property and equipment		(245,961)		(389,567)
Proceeds from the sale of assets		12,131		800,000
Net cash (used in) provided by investing activities		(132,315)		432,905
Cash flows from financing activities:
Employee stock plan purchases		37,790		83,257
Proceeds from credit facilities		1,500,000		1,700,000
Prepayment of deferred loan costs		(25,000)		(25,000)
Repayment of credit facilities		(1,790,000)		(2,680,000)
Cash proceeds from exercise of stock options		10,650		7,100
Net cash used in financing activities		(266,560)		(914,643)

Net increase in cash and cash equivalents		120,517		668,587
Cash and cash equivalents at beginning of period		6,723,919		5,200,161
Cash and cash equivalents at end of period	$	6,844,436	$	5,868,748
Supplemental cash flow information:
Cash paid for interest	$	706,507	$	799,099

Non-cash investing and financing activities:

Issuance of note receivable to purchasers of wholly-owned subsidiary	$	-	$	2,325,000

The accompanying notes are an integral part of these consolidated financial statements.

	4

Nevada Gold & Casinos, Inc.

Notes to Consolidated Financial Statements

Note 1. Basis of Presentation

The interim financial information included herein is unaudited. However, the accompanying consolidated financial statements include all adjustments of a normal recurring nature which, in the opinion of management, are necessary to present fairly our Consolidated Balance Sheets at October 31, 2013 and April 30, 2013, Consolidated Statements of Operations for the three and six months ended October 31, 2013 and October 31, 2012, and Consolidated Statements of Cash Flows for the six months ended October 31, 2013 and October 31, 2012. Although we believe the disclosures in these financial statements are adequate to make the interim information presented not misleading, certain information relating to our organization and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted in this Form 10-Q pursuant to Securities and Exchange Commission (“SEC”) rules and regulations. These financial statements should be read in conjunction with the audited consolidated financial statements for the year ended April 30, 2013 and the notes thereto included in our Annual Report on Form 10-K. The results of operations for the three and six months ended October 31, 2013 are not necessarily indicative of the results expected for the full year.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period and disclosure of contingent liabilities. On an ongoing basis, we evaluate our estimates, including those related to bad debts, investments, intangible assets and goodwill, property, plant and equipment, income taxes, employment benefits and contingent liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

Certain reclassifications have been made to conform prior year financial information to the current period presentation. Those reclassifications did not impact working capital, total assets, total liabilities, net income, net loss or stockholders’ equity. We have revised certain statement of cash flow amounts for the six months ended October 31, 2012 from the amounts previously reported in our Form 10-Q quarterly report for the quarterly period ended October 31, 2012. We corrected the classification of proceeds from credit facilities that we had previously reported as supplemental cash flow information for non-cash financing activities rather than as a direct cash flow provided by financing activities. The correction increased previously reported net cash provided by financing activities by $ 1.7 million in the six months ended October 31, 2012, and it reduced previously reported net cash provided by operating activities by an equal amount since the credit facility proceeds were used to prepay our annual slot machine registration fees in South Dakota. We also corrected the classification of additions to restricted cash that we had previously reported as cash flow from investing activities rather than as cash flow from operating activities. Refer to Note 3 for the nature of restricted cash. This correction increased previously reported net cash provided by investing activities by $ 262,151 in the six months ended October 31, 2012, and it reduced previously reported net cash provided by operating activities by an equal amount. We assessed the materiality of the corrections and concluded that the corrections were not material to any of our previously issued financial statements. The correction did not affect net revenues, operating income, income before income tax, or working capital for any period.

Note 2. Critical Accounting Policies

Revenue Recognition

We record revenues on the accrual basis as earned. The retail value of food and beverage and other services furnished to guests without charge is included in gross revenue and deducted as promotional allowances. Net revenues do not include the retail amount of food, beverage and other items provided gratuitously to customers. We record the redemption of coupons and points for cash as a reduction of revenue as they are earned. These amounts are included in promotional allowances in the accompanying consolidated statements of operations. The estimated cost of providing such complimentary services included in casino expense in the accompanying consolidated statements of operations was as follows:

	5

	Three Months Ended				Six Months Ended
	October 31, 2013		October 31, 2012		October 31, 2013		October 31, 2012
Food and beverage	$	783,633	$	827,353	$	1,552,391	$	1,730,764
Other		30,876		40,514		65,598		84,800
Total cost of complimentary services	$	814,509	$	867,867	$	1,617,989	$	1,815,564

Fair Value and Concentrations of Credit Risk

The U. S. generally accepted accounting principles defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date and establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy categorizes assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. The three levels are as follows:

Level 1 – Observable inputs such as quoted prices in active markets at the measurement date for identical, unrestricted assets or liabilities.

Level 2 – Other inputs that are observable directly or indirectly such as quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 – Unobservable inputs for which there is little or no market data and which we make our own assumptions about how market participants would price the assets and liabilities.

The following describes the valuation methodologies used by us to measure fair value:

Real estate held for sale is recorded at fair value and tested for impairment annually, or more frequently, using third party valuations.

Goodwill and indefinite lived intangible assets are recorded at carrying value and tested for impairment annually, or more frequently, using projections of undiscounted future cash flows.

The recorded value of cash, accounts receivable and payable approximate fair value based on their short term nature. The recorded value of long term debt approximates fair value as interest rates approximate market rates.

Financial instruments that potentially subject us to concentrations of credit risk are primarily notes receivable, cash and cash equivalents, accounts receivable and payable, and long term debt. As of October 31, 2013 we had three notes receivable, as well as the BVD/BVO receivable, outstanding. Two of these notes were issued in connection with a potential gaming project and one is for the sale of the Colorado Grande Casino. Management performs periodic evaluations of the collectability of these notes. Our cash deposits are held with large, well-known financial institutions, and, at times, such deposits may be in excess of the federally insured limit. The recorded value of cash, accounts receivable and payable, approximate fair value based on their short term nature; the recorded value of long term debt approximates fair value as interest rates approximate current market rates.

New Accounting Pronouncements and Legislation Issued

Since the filing of our Form 10-K for the fiscal year ended April 30, 2013, there are no new accounting standards effective which are material to our financial statements or that are required to be adopted by the Company.

Note 3. Restricted Cash

As of October 31, 2013 and April 30, 2013, we maintained approximately $ 1.3 million and $ 1.3 million, respectively, in restricted cash, which consists of player-supported jackpot funds. Player-supported jackpot is a progressive game of chance directly related to the play or outcome of an authorized non-house-banked card game separately funded by our patrons. Any jackpots hit in these card games are paid from such reserved funds .

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Note 4. Notes Receivable and BVD/BVO Receivable

Notes Receivable

G Investments, LLC

Upon completion of the sale of the Colorado Grande Casino on May 25, 2012, we recorded a $ 2.3 million note receivable. This note bears interest at 6 % per annum through the maturity date of June 1, 2017 and is secured with all of the assets of the Colorado Grande Casino, pledge of membership interest in G Investments, LLC (“GI”), and a personal guaranty by GI’s principal.

Principal and interest payments are scheduled to be made as follows:

· No monthly installments of principal and accrued interest shall be due and payable for three months following the sale date of May 25, 2012;

· One monthly installment of principal and accrued interest of $ 5,000 on September 1, 2012 ;

· Beginning October 1, 2012, eight monthly installments of principal and accrued interest of $ 20,000 ;

· Beginning June 1, 2013, twelve monthly installments of principal and accrued interest of $ 30,000 ;

· Beginning June 1, 2014, thirty six monthly installments of principal and accrued interest of $ 40,000 ; and

· A final installment of $ 907,061 which is due on the maturity date of June 1, 2017.

Since the inception of this note we have collected $ 315,000 which consists of $ 127,066 of principal plus $ 187,934 of interest.

Big City Capital, LLC

At October 31, 2013 and April 30, 2013, our balance sheet reflects net notes receivable of $ 0 , net of a $ 3.2 million valuation allowance, related to the development of gaming/entertainment projects from Big City Capital, LLC (“Big City Capital”). These notes receivable have a maturity date of December 31, 2014 . On a quarterly basis, we review each of our notes receivable to evaluate whether collection is still probable. During prior fiscal years we determined that our ability to collect these notes receivable and related accrued interest had been impaired. As a result, given the prevailing very challenging capital market conditions and continued uncertainties as to the economy, and based upon our “Level 3” analysis, we recorded $ 3.2 million of valuation allowances and wrote off the accrued interest.

BVD/BVO Receivable

At October 31, 2013 and April 30, 2013, our balance sheet reflects a net receivable of $ 0 , net of a $ 4.6 million valuation allowance, related to the development of gaming/entertainment projects from B. V. Oro, LLC (“BVO”). On a quarterly basis, we review each of our receivables to evaluate whether collection is still probable. During a prior fiscal year we determined that our ability to collect this receivable and related accrued interest had been impaired. As a result, given the prevailing very challenging capital market conditions and continued uncertainties as to the economy, and based upon our “Level 3” analysis, we recorded a $ 4.6 million valuation allowance for the total principal and interest due.

Note 5. Long-Term Debt

Our long-term financing obligations are as follows:

	7

	October 31,		April 30,
	2013		2013
$11.0 million note payable, LIBOR, with 0.25% floor, plus 9.50% interest, payments of $250,000 due each quarter and remainder due at maturity of October 7, 2014	$	9,000,000	$	9,500,000
$4.0 million promissory note, 11.5% interest until maturity at June 30, 2015		2,885,000		3,055,000
$250,000 note payable, 6% interest, to be paid in two annual installments of $100,000 plus accrued interest and the final payment of $50,000 plus accured interest at the maturity date of December 15, 2013		50,000		50,000
$100,000 note payable, 6% imputed interest, to be paid in thirty equal monthly installments, beginning August 5, 2011, maturing January 13, 2014		10,000		30,000
$1.4 million promissory note, 6% interest, payable in fifty nine monthly installments of $10,000 plus all accrued interest beginning February 27, 2012, and the remaining principle at the maturity date of January 27, 2017		1,215,000		1,275,000
$400,000 note payable, 6% imputed interest, to be paid in sixty equal monthly installments beginning February 27, 2012, maturing January 27, 2017		260,000		300,000
$1.5 million note payable, base rate interest, which equals the greater of 2.5%, the Federal Reserve rate plus 1/2%, LIBOR plus 1%, or the prime rate charged by Wells Fargo Bank, plus the margin rate of 3.5%, maturing March 31, 2014		500,000		-
Total		13,920,000		14,210,000
Less: current portion		(2,370,000)		(1,280,000)
Total long-term financing obligations	$	11,550,000	$	12,930,000

In December 2013, the Company used $1,170,000 of cash to pay down long-term debt that existed as of October 31, 2013. Effective December 18, 2013, the Company refinanced the remaining $12,750,000 of its long-term debt that existed at October 31, 2013. Current portion of long-term debt includes the $1,170,000 cash payment discussed above and scheduled payments due by October 31, 2014 for the new financing. See Note 17 for additional information.

On June 26, 2013, we obtained a $ 1.5 million revolving loan from Wells Fargo Gaming Capital, LLC to pay a slot machine registration fee due to the South Dakota Commission on Gaming by June 30 of each year. The loan matures on March 31, 2014 and bears an annual interest rate of the base rate, which equals the greater of (a) 2.5 %, (b) the Federal Reserve rate plus 1/2%, (c) the LIBOR plus 1 % or (d) the prime rate charged by Well Fargo Bank, N.A., plus the margin rate of 3.5 %. The terms of the loan requires South Dakota Gold to make amortization payments in order to reduce a large portion of the principal balance through October 31, 2013. The repayment of the loan is secured by the assets of South Dakota Gold and NG South Dakota, LLC, while we and NG South Dakota, LLC serve as the guarantors. With this loan, we incurred $ 25,000 of deferred loan issue costs which are amortizable over the life of the loan.

On May 31, 2012, following the closing of the sale of the Colorado Grande Casino we repaid $800,000 of the $4 million debt due on June 30, 2015 from the cash proceeds of the sale price paid to us at closing. Pursuant to the terms of the $4 million loan, we are required to remit all principal and interest payments received pursuant to the $2.3 million note receivable issued to us by the buyer of the Colorado Grande Casino towards further reduction of the principal of the $4 million debt.

Note 6. Stock-Based Compensation

Information about our share-based plans

We have obligations under two employee stock plans: (1) the 2009 Equity Incentive Plan (the “2009 Plan”), and (2) the 2010 Employee Stock Purchase Plan, as amended (the “2010 Plan”).

The 2009 Plan

On April 14, 2009, our shareholders approved the 2009 Plan providing for the granting of awards to our directors, officers, employees and independent contractors. The number of common stock shares reserved for issuance under the 2009 Plan is 1,750,000 shares. The plan is administered by the Compensation Committee (the “Committee”) of the Board of Directors. The Committee has complete discretion under the plan regarding the vesting and service requirements, exercise price and other conditions. Under the 2009 Plan, the Committee is authorized to grant the following types of awards:

· Stock Options including Incentive Stock Options (“ISO”),

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· Options not intended to qualify as ISOs,

· Stock Appreciation Rights, and

· Restricted Stock Grants.

To date, the Committee has only awarded stock options for stock-based compensation. Our practice has been to issue new or treasury shares upon the exercise of stock options. Stock option rights granted under the 2009 Plan generally have 5 or 10 year terms and vest in two or three equal annual installments, with some options grants providing for immediate vesting for a portion of the grant.

A summary of activity under our share-based payment plans for the six months ended October 31, 2013 is presented below:

					Weighted
			Weighted		Average
			Average		Remaining
			Exercise		Contractual
	Shares		Price		Term
Outstanding at April 30, 2013		865,000	$	1.08
Granted		-		-
Exercised		(15,000)		0.71
Forfeited or expired		-		-

Outstanding at October 31, 2013		850,000	$	1.09		7.6

Exercisable at October 31, 2013		716,667	$	1.14		7.3

As of October 31, 2013, there was a total of $ 67,837 of unamortized compensation related to stock options, which cost is expected to be recognized over a weighted-average of approximately 1.25 years.

Compensation cost for stock options granted will be based on the fair value of each award, measured by applying the Black-Scholes model on the date of grant and using the weighted-average assumptions of (i) expected volatility, (ii) expected term, (iii) expected dividend yield, (iv) risk-free interest rate and (v) forfeiture rate. Expected volatility is based on historical volatility of our stock. The expected term considers the contractual term of the option as well as historical exercise and forfeiture behavior. The risk-free interest rate is based on the rates in effect on the grant date for U.S. Treasury instruments with maturities matching the relevant expected term of the award.

The 2010 Plan

On October 11, 2010, our shareholders approved the 2010 Plan which permits all our eligible employees, including employees of certain of our subsidiaries, to purchase shares of our common stock through payroll deductions at a purchase price not to be less than 90 % of the fair market value of the shares on each purchase date. The number of shares available for issuance under the 2010 Plan is a total of 500,000 shares. On November 30, 2010, our Board of Directors amended the 2010 Plan, effective December 1, 2010, to allow its participants to contribute up to a maximum of twenty ( 20 %) percent of their paid compensation. The 2010 Plan became available for employee participation on January 1, 2011, employee payroll deductions began in January of 2011, and shares are to be purchased at the end of each calendar quarter. As of October 31, 2013, 330,965 shares were issued to 140 participants under the 2010 Plan.

Note 7. Computation of Earnings Per Share

The following is presented as a reconciliation of the numerators and denominators of basic and diluted earnings per share computations:

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	Three Months Ended				Six Months Ended
	October 31,		October 31,		October 31,		October 31,
	2013		2012		2013		2012
Numerator:
Basic and Diluted:
Net income (loss) from continuing operations available to common shareholders	$	220,757	$	(680,536)	$	4,930	$	(512,090)

Denominator:
Basic weighted average number of common shares outstanding		16,105,775		15,964,051		16,104,725		15,949,269
Dilutive effect of common stock options and warrants		102,452		—		66,457		—

Diluted weighted average number of common shares outstanding		16,208,227		15,964,051		16,171,182		15,949,269

Loss per share from continuing operations:

Net income (loss) per common share - basic and diluted for continuing operations	$	0.01	$	(0.04)	$	0.00	$	(0.03)

Net loss per common share - basic and diluted for discontinued operations	$	-	$	(0.01)	$	-	$	(0.01)

For the three months ended October 31, 2013 and October 31, 2012, potential dilutive common shares issuable under options of 748,000 and 1,295,000 , respectively, were not included in the calculation of diluted earnings per share as they were anti-dilutive. For the six months ended October 31, 2013 and October 31, 2012, potential dilutive common shares issuable under options of 784,000 and 1,295,000 , respectively, were not included in the calculation of diluted earnings per share as they were anti-dilutive.

Note 8. Segment Reporting

We have three business segments (i) Washington Gold, (ii) South Dakota Gold, (iii) Corporate and for reporting purposes we include assets of operations held for sale. For the three and six month periods ended October 31, 2013 and October 31, 2012, the Washington Gold segment consists of the Washington mini-casinos, the South Dakota Gold segment consists of our slot route operation in South Dakota, the Corporate column includes the vacant land in Colorado and its taxes and maintenance expenses, while the “assets of operations held for sale” consists of the Colorado Grande Casino.

Summarized financial information for our reportable segments is shown in the following table. The “Corporate” column includes corporate-related items, results of insignificant operations, and segment profit (loss) and income and expenses not allocated to other reportable segments.

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	As of and for the Three Months Ended October 31, 2013
	Washington Gold		South Dakota Gold		Corporate		Total Continuing Operations		Discontinued Operations		Totals
Net revenue	$	13,430,310	$	2,916,784	$	2,023	$	16,349,117	$	-	$	16,349,117
Casino and food and beverage expense		7,328,217		2,435,768		-		9,763,985		-		9,763,985
Marketing and administrative expense		4,015,755		60,828		-		4,076,583		-		4,076,583
Facility and other expenses		527,823		30,379		646,143		1,204,345		-		1,204,345
Depreciation and amortization		393,604		170,598		1,086		565,288		-		565,288
Segment operating income (loss)		1,164,911		219,211		(645,206)		738,916		-		738,916
Segment assets		20,997,169		4,349,794		7,477,629		32,824,592		-		32,824,592
Additions to property and equipment		71,109		16,875		-		87,984				87,984

	As of and for the Three Months Ended October 31, 2012
	Washington Gold		South Dakota Gold		Corporate		Total Continuing Operations		Discontinued Operations		Totals
Net revenue	$	13,044,127	$	3,339,561	$	-	$	16,383,688	$	-	$	16,383,688
Casino and food and beverage expense		6,983,137		2,737,377		-		9,720,514		-		9,720,514
Marketing and administrative expense		3,973,122		58,304		-		4,031,426		-		4,031,426
Facility and other expenses		622,414		26,403		1,753,444		2,402,261		-		2,402,261
Depreciation and amortization		380,391		154,142		4,001		538,534		-		538,534
Segment operating income (loss)		1,085,063		363,335		(1,757,445)		(309,047)		(138,472)		(447,519)
Segment assets		20,090,148		4,972,091		9,991,161		35,053,400		-		35,053,400
Additions to property and equipment		121,590		47,240		-		168,830		-		168,830

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	As of and for the Six Months Ended October 31, 2013
	Washington Gold		South Dakota Gold		Corporate		Total Continuing Operations		Discontinued Operations		Totals
Net revenue	$	26,267,613	$	5,767,303	$	4,991	$	32,039,907	$	-	$	32,039,907
Casino and food and beverage expense		14,568,697		4,836,946		-		19,405,643		-		19,405,643
Marketing and administrative expense		8,247,714		138,810		-		8,386,524		-		8,386,524
Facility and other expenses		1,025,657		58,823		1,270,267		2,354,747		-		2,354,747
Depreciation and amortization		784,746		340,171		2,308		1,127,225		-		1,127,225
Segment operating income (loss)		1,640,799		392,553		(1,267,584)		765,768		-		765,768
Segment assets		20,997,169		4,349,794		7,477,629		32,824,592		-		32,824,592
Additions to property and equipment		119,138		78,183		-		197,321				197,321

	As of and for the Six Months Ended October 31, 2012
	Washington Gold		South Dakota Gold		Corporate		Total Continuing Operations		Discontinued Operations		Totals
Net revenue	$	26,915,923	$	6,278,468	$	-	$	33,194,391	$	-	$	33,194,391
Casino and food and beverage expense		14,180,348		5,156,224		-		19,336,572		-		19,336,572
Marketing and administrative expense		8,306,136		129,551		-		8,435,687		-		8,435,687
Facility and other expenses		1,209,838		51,928		2,671,374		3,933,140		138,793		4,071,933
Depreciation and amortization		762,336		307,014		8,165		1,077,515		-		1,077,515
Segment operating income (loss)		2,457,265		633,751		(2,679,539)		411,477		(138,793)		272,684
Segment assets		20,090,148		4,972,091		9,991,161		35,053,400		-		35,053,400
Additions to property and equipment		193,900		59,713		-		253,613		-		253,613

Reconciliation of reportable segment assets to our consolidated totals is as follows:

	October 31, 2013
Total assets for reportable segments	$	32,824,592
Cash and restricted cash not allocated to segments		8,096,482
Deferred tax asset		4,782,211
Total assets	$	45,703,285

Note 9. Other Assets

Other assets consist of the following:

	October 31, 2013		April 30, 2013
Other assets	$	77,423	$	93,553
Deferred loan issue cost, net		312,896		440,307
Other assets	$	390,319	$	533,861

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Note 10. Commitments and Contingencies

We currently lease 3,131 square feet of office space for our corporate headquarters in Las Vegas, Nevada. The lease expires on January 15, 2015 . The total annual rent, including mandatory common area maintenance (“CAM”) for this space is currently $ 48,844 . The CAM contractually increases five percent effective each January 1.

As a result of acquiring facilities in Washington, we own the buildings for the Crazy Moose Casino in Pasco and Coyote Bob Casino’s in Kennewick. In addition we have real property leases as follows:

	·	Crazy Moose Casino in Mountlake Terrace has a building lease which expires on May 31, 2014 with an option to renew for two additional terms of two years and five years, respectively. The annual rent for this lease is $ 157,000 .
	·	Crazy Moose Casino in Pasco has a parking lot lease which expires on December 31, 2013. The annual rent for this lease is $ 6,600 .
	·	Silver Dollar Casino in SeaTac has a building lease which expires in May of 2022 with an option to renew for an additional term of 10 years. The annual rent is $ 238,000 , with escalation of 4 % annually.
	·	Silver Dollar Casino in Renton has a building lease which expires in April of 2019 with an option to renew for up to two additional terms of 10 years each. The annual rent is $ 517,000 , with escalation of 8 % every three years.
	·	Silver Dollar Casino in Bothell has a building lease which expires in April of 2017 with an option to renew for an additional term of 5 years. The annual rent is $ 286,000 .
	·	Club Hollywood Casino in Shoreline has casino building and parking lot leases which expire in March of 2017 with options to renew for up to four additional five-year terms. The annual rentals are $ 700,000 , with escalation of 3 % annually.
	·	Golden Nugget Casino in Tukwila has a building lease which expires in November of 2014 with an option to renew for an additional term of 10 years. The annual rent is $ 166,000 , with escalation of 3 % annually.
	·	Royal Casino in Everett has a building lease which expires in January of 2016 with an option to renew for up to four additional five-year terms. The annual rent is $ 360,600 , with escalation of 3 % annually.
	·	Administrative offices lease in Renton expires in December of 2013. The annual rent is $ 53,000 .
	·	Red Dragon Casino in Mountlake Terrace has a building lease which expires in October of 2016 with an option to renew for up to two additional five-year terms. The annual rent is $ 384,000 , with escalation of 2 % annually.

South Dakota Gold. As a result of acquiring the South Dakota Gold slot route operation, we have the following real property lease:

An administrative center lease which expires in January of 2017 with an option to renew for an additional five-year term. The annual rent is $ 55,200 .

The expected remaining future rolling twelve months minimum lease payments as of October 31, 2013 are as follows:

Period	Corporate Office Lease Payment		South Dakota Gold Payment		Washington Gold Lease Payment		Total Lease Payment

Nov 2013 - Oct 2014	$	49,313	$	55,200	$	2,924,626	$	3,029,139
Nov 2014 - Oct 2015		12,399		55,200		2,736,489		2,804,088
Nov 2015 - Oct 2016		—		55,200		2,655,325		2,710,525
Nov 2016 - Oct 2017		—		13,800		1,346,827		1,360,627
Nov 2017 - Oct 2018		—		—		882,191		882,191
Thereafter		—		—		1,533,408		1,533,408
Total	$	61,712	$	179,400	$	12,078,866	$	12,319,978

On November 23, 2011, we signed an agreement to sell substantially all of the assets of the Colorado Grande Casino, located in Cripple Creek, Colorado, including any rights in the Colorado Grande name and gaming-related liabilities, to G Investments, LLC (“GI”). Prior to the sale to GI, we leased this property at an annual rent of the greater of $ 144,000 or 5 % of Colorado Grande Casino’s adjusted gross gaming revenues with an annual cap of $ 400,000 . Starting from April 30, 2012, the annual rent was changed to $ 252,548 with an option by the landlord to revert to the original rent structure upon obtaining necessary approvals from the Colorado Gaming Commission. Although this lease was assigned to GI as a result of the sale of the Colorado Grande Casino, which occurred on May 25, 2012, we retained contingent liability of the tenant’s obligations under this lease through May 24, 2017. We have evaluated financial information provided by GI as of October 31, 2013, and have not recorded an accrual for contingent liability since it appears unlikely that GI will default on their lease obligation.

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We continue to pursue additional development opportunities that may require, individually and in the aggregate, significant commitments of capital, extensions of credit, up-front payments to third parties and guarantees by us for third-party debt.

We indemnify our officers and directors for certain events or occurrences while the director or officer is or was serving at our request in such capacity. The maximum potential amount of future payments we could be required to make under these indemnification obligations is unlimited; however, we have a directors and officers liability insurance policy that limits our exposure and enables us to recover a portion of any future amounts paid, provided that such insurance policy provides coverage.

Note 11. Legal Proceedings

We are not currently involved in any material legal proceedings.

Note 12. Acquisitions

South Dakota Gold

On January 27, 2012, through our wholly owned subsidiary, NG South Dakota, LLC, we completed the acquisition of 100 % of the shares of South Dakota Gold for $ 5.1 million. The transaction was financed by $ 3.2 million in cash, $ 25,000 in our common stock, and $ 1.9 million in three promissory notes payable to the sellers, Michael J. Trucano and Patricia Burns. The first promissory note, in the principal amount of $ 1,425,000 , matures on January 27, 2017 and bears an annual interest rate of 6 % per annum. Starting February 27, 2012 , this note is to be repaid in fifty-nine monthly principal installments of $ 10,000 , plus all accrued and unpaid interest. The remaining balance is due on the maturity date. The second promissory note, in the principal amount of $ 400,000 , bears an imputed annual interest of 6 % per annum, matures on January 27, 2017 , and is payable in sixty equal monthly installments of $ 6,667 on the twenty-seventh day of each month, with the first installment being paid in February of 2012. The third promissory note, in the principal amount of $ 60,324 , bears an imputed annual interest of 6 % per annum and matured, and was repaid, on January 27, 2013 . We acquired this slot route in furtherance of our strategy of being an owner and operator of gaming facilities. The purchase was accounted for as a purchase business combination in accordance with ASC 805, Business Combinations (“ASC 805”). Goodwill is defined in ASC 805 as the future economic benefits of other assets acquired in a business combination that are not individually identified and separately recognized. Goodwill is attributable to the synergies from the existing customer base, as well as other intangible assets that do not qualify for separate recognition. During fiscal year 2012, closing costs and pre-opening expenses of $ 1,000 related to the acquisition were included in the consolidated statement of operations in marketing and administrative, legal and other expenses of $ 108,000 related to the acquisition were reflected separately in the consolidated statement of operations. The summary of the purchase price allocation is as follows:

	(000’s)
Current assets and liabilities, net	$	65
Property and equipment		1,775
Non-compete		251
Customer relationships		1,100
Goodwill		1,936

Purchase price	$	5,127

We reviewed the South Dakota Gold operating results and concluded that pro-forma financial statements were not required due to immateriality.

Note 13. Goodwill and Intangible Assets

In connection with our acquisitions of the Washington mini-casinos on May 12, 2009, July 23, 2010, and July 18, 2011 as well as South Dakota Gold on January 27, 2012 (see Note 12), and expenditures made to obtain our Nevada gaming license, as of October 31, 2013, we have goodwill and intangible assets of $ 22.4 million, net of amortization.

The change in the carrying amount of goodwill and intangibles assets for the six months ended October 31, 2013 are as follows (in thousands):

	Total		Goodwill		Other Intangibles, net
Balance as of April 30, 2013	$	23,063	$	16,104	$	6,959
Current year amortization		(603)		-		(603)
Balance as of October 31, 2013	$	22,460	$	16,104	$	6,356

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Goodwill and net other intangibles by segment as of October 31, 2013 are as follows:

	Total		Goodwill		Other Intangibles, net
Washington Gold	$	19,197	$	14,167	$	5,030
South Dakota Gold		2,875		1,937		938
Corporate		388		-		388
Balance as of October 31, 2013	$	22,460	$	16,104	$	6,356

Intangible assets are generally amortized on a straight line basis over the useful lives of the assets. Amortization of intangible assets by category, as of October 31, 2013, is as follows (in thousands):

	Gross Carrying Amount		Accumulated Amortization		Net
Customer relationships	$	7,853	$	(3,854)	$	3,999
Gaming license		388		-		388
Non-compete agreements		1,269		(1,162)		107
Trade names		1,862		-		1,862
Total	$	11,372	$	(5,016)	$	6,356

The estimated future annual amortization of intangible assets, which excludes Trade Names and Gaming License, is as follows (in thousands):

Period	Amount
Nov 1, 2013-Oct 31, 2014	$	1,206
Nov 1, 2014-Oct 31, 2015		1,150
Nov 1, 2015-Oct 31, 2016		911
Nov 1, 2016-Oct 31, 2017		580
Nov 1, 2017-Oct 31, 2018		207
Thereafter		52
Total	$	4,106

The expected average useful lives of acquired intangibles related to customer relationships and non-compete agreements are 7.0 years and 3.0 years, respectively. The weighted average useful life of intangible assets in total is 5.5 years.

Note 14. State Gaming Laws

Washington

The gaming legislation in Washington State is codified in chapter 9.46 of the Revised Code of Washington (“RCW”) which stipulates the Washington State Gambling Commission (the “WA Gambling Commission”) to be the regulator of gambling activities in this state. The WA Gambling Commission enforces its authority through an extensive set of rules and regulations promulgated in Title 230 of the Washington Administrative Code. The state of Washington allows certain gambling activities, such as amusement games, bingo, raffles, punch boards, pull-tabs, card-rooms, and public card games. In order to be considered legal, these activities must be operated by either non-profit organizations or by commercial food and drink establishments. Some activities may be operated solely by non-profit organizations, such as raffles. Some traditional casino games, such as craps, roulette and keno, are prohibited. House-banked card-rooms have been authorized in Washington State since 1997 and, under current law, each establishment is allowed to have up to 15 tables offering games, such as Blackjack, Ultimate Texas Hold’em, Three Card Poker, Four Card Poker, Spanish Poker, Texas Shootout, Spanish 21, Pai Gow Poker, and others. The law allows both player-sponsored and house-banked card-rooms. As of January 1, 2009, the WA Gambling Commission increased the maximum bet for house-banked card-rooms’ table game wager limit to $300 and allowed card-rooms to offer Mini-Baccarat. In addition, these establishments are allowed to be open 24 hours per day, provided they close for at least four continuous hours two times per week.

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To operate our ten “mini-casinos” in Washington State, each of them is required to maintain a Public Card-room and Punch Board/Pull-Tab Commercial Stimulant license. These licenses are renewable annually, subject to continued compliance with applicable gaming regulations. In addition, the WA Gambling Commission requires, prior to the licenses being issued, each substantial interest holder in the licensees (including our officers, directors and owners of 5 % percent or more of any class of our stock) to submit to the WA Gambling Commission certain disclosure forms and be subject to background investigations. The failure or inability of our “mini-casinos” to maintain their respective licenses would have a material adverse effect on our operations.

Revised Code of Washington (“RCW”) 9.46.110 allows local governments (including cities, counties and towns) to prohibit any or all gambling activities for which licenses are required as well as tax such activities. The maximum tax limitations imposed by law include 20% of gross receipts for public card-room games and either 5% of gross receipts or 10% of net receipt (as chosen by a local authority) for pull-tabs activities. The current gaming tax rate for public card-room games in the cities of Pasco, Mountlake Terrace, Kennewick, SeaTac, Renton, Tukwila and Shoreline, as well as in Snohomish County, is 10% of table games gross receipts. The current gaming tax rate for pull-tabs in the city of Kennewick is 10% of pull-tabs net receipts, while in the cities of Pasco, Mountlake Terrace, SeaTac, Renton, Tukwila and Shoreline, as well as in Snohomish County, the tax rate is 5% of pull-tabs gross receipts. In addition, Washington State charges a business and occupational tax in the amount of 1.63% of all gaming activities’ net receipts in order to promote responsible gaming.

South Dakota

Gaming in South Dakota began in November 1989 and is presently authorized within the City of Deadwood. The gaming legislation is codified in Chapter 42-7B of the South Dakota Codified Laws as well as Article 20:18 of the South Dakota Legislature Administrative Rules (collectively, the “SD Regulations”) and is regulated by the South Dakota Commission on Gaming (the “SD Gaming Commission”). The SD Regulations allow gambling activities to be conducted at bars and taverns, including slot machines and limited card games, such as Blackjack and Poker. The SD Regulations limit each licensed location to have a maximum of 30 slot machines. The current tax rate is 9 % of the adjusted gross gaming revenues in addition to an annual fee of $ 2,000 for each licensed gaming device located in a licensed location. In order to operate our slot route business in this state, we are required to hold Operator and Route Operator licenses issued by the SD Gaming Commission.

The SD Regulations require that every officer and director, as well as any stockholder holding 5% or greater ownership in a company involved with the conduct of gaming in the state to be a person of good moral character and must submit to a full background investigation conducted by the SD Gaming Commission. Our gaming licenses may be suspended or revoked for any cause which may have prevented their issuance, or for violation by us, or any of our officers, directors, agents, members or employees, of the SD Regulations or for conviction of a crime of moral turpitude or a felony. In addition to the revocation or suspension or in lieu of revocation or suspension, the SD Gaming Commission may impose a reprimand or a monetary penalty.

Colorado

Upon the sale of the Colorado Grande Casino to G Investments, LLC on May 25, 2012, we surrendered our license to operate the Colorado Grande Casino and are no longer subject to the provisions of the Act and the regulations promulgated thereunder.

Nevada

Upon the recommendation of the Nevada Gaming Control Board (the “NV Gaming Board”), on January 26, 2012, the Nevada Gaming Commission (the “NV Gaming Commission” and, collectively with the NV Gaming Board, the “NV Gaming Authorities”) approved our application for registration as a publicly-traded corporation submitted in connection with an acquisition of a 1 % interest in The Nugget, a non-restricted gaming licensee located in Reno, NV, by our wholly-owned subsidiary, Nevada Gold Speedway, LLC (“NG Speedway”). Our acquisition of equity in the Nugget required us to file the application. In connection therewith, we, NG Speedway, and certain of our key employees and directors were found suitable by the NV Gaming Authorities. We took this action to accelerate future Nevada acquisitions or management contracts. In May 2013, as permitted by the agreement, the Heaney Trust exercised its right to repurchase our 1 % ownership of The Nugget for $ 1,000 . As a result we were licensed in Nevada and remain registered with the Nevada Gaming Control Board as a publicly traded corporation that has been found suitable.

The ownership and operation of gaming establishments in the State of Nevada are subject to the Nevada Gaming Control Act and the regulations promulgated thereunder (collectively, the “NGCA”). A finding of suitability is comparable to licensing and it requires submission of detailed personal and financial information followed by a thorough investigation. A finding of unsuitability with respect to any officer, director, employee, associate, lender or beneficial owner of a licensee or applicant may jeopardize an already issued license or applicant’s license application. Licenses may be conditioned upon termination of any relationship with unsuitable persons.

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Although any beneficial holder of our voting securities, regardless of the number of shares owned, may be required to file an application for a finding of suitability, the general rule provides that beneficial owners of more than 10% of any class of our voting securities must apply to the NV Gaming Authorities for a finding of suitability. Under certain circumstances, an “institutional investor” (as defined in the NGCA) who acquires more than 10% but not more than 25% of any class of our voting securities, may apply to the NV Gaming Authorities for a waiver of such finding of suitability if such institutional investor holds the voting securities for investment purposes only. An institutional investor that has obtained a waiver may, in certain circumstances, own up to 29% of the voting securities of a registered company for a limited period of time and maintain the waiver. Any person who fails or refuses to apply for a finding of suitability or a license within 30 days after being ordered to do so by the NV Gaming Authorities, or who refuses or fails to pay the investigative costs in connection with investigation of its application, may be found unsuitable. The same restrictions apply to a record owner if the record owner, after request, fails to identify the beneficial owner. Any shareholder found unsuitable and who holds, directly or indirectly, any beneficial ownership of our common stock beyond such period of time as may be prescribed by the NV Gaming Authorities may be guilty of a criminal offense. We and NG Speedway would be subject to disciplinary action if, after receipt of notice that a person is unsuitable, we:

• pay such a person any dividend or interest upon any of our voting securities;

• allow such a person to exercise, directly or indirectly, any voting right conferred through securities held by that person;

• pay remuneration in any form to such a person for services rendered or otherwise; or

• fail to pursue all lawful efforts to require such unsuitable person to relinquish his or her voting securities including, if necessary, the immediate purchase of the voting securities for cash at fair market value.

Corporations registered with the NV Gaming Commission may not make a public offering of any securities without the prior approval of the NV Gaming Authorities if the securities or the proceeds therefrom are intended to be used to construct, acquire, or finance gaming facilities in the State of Nevada, or to retire or extend obligations incurred for those purposes or for similar purposes. An approval, if given, does not constitute a finding, recommendation, or approval by the NV Gaming Authorities as to the accuracy or adequacy of the prospectus or the investment merits of the securities, and any representation to the contrary is unlawful.

Because we are involved in gaming activities outside the State of Nevada, we are required to deposit with the NV Gaming Board, and thereafter maintain, a revolving fund in the amount of $ 10,000 to pay for the expenses of investigation by the NV Gaming Board of our participation in gaming in other jurisdictions. The revolving fund is subject to increase or decrease at the discretion of the NV Gaming Commission. Upon our registration and finding of suitability, we are also required to comply with certain other requirements imposed by the NGCA, including reporting requirements.

We currently do not operate any gaming establishment in the State of Nevada.

Note 15. Impairment of Assets

Long-lived assets, including property, plant and equipment and amortizable intangible assets, comprise a significant portion of our total assets. We evaluate the carrying value of long-lived assets when impairment indicators exist or when circumstances indicate that impairment may exist under authoritative guidance. When management believes impairment indicators may exist, projections of the undiscounted future cash flows associated with the use of and eventual disposition of long-lived assets held for use are prepared. If the projections indicate that the carrying values of the long-lived assets are not recoverable, we reduce the carrying values to fair value. For long-lived assets held for sale, we compare the carrying values to an estimate of fair value less selling costs to determine potential impairment. We test for impairment of long-lived assets at the lowest level for which cash flows are measurable. These impairment tests are heavily influenced by assumptions and estimates that are subject to change as additional information becomes available. Our evaluation of the carrying value of our long-lived assets for sale indicates that we have no further impairment. This fair value measurement uses level 3 inputs under the fair value hierarchy.

On a quarterly basis, we review each of our notes receivable to evaluate whether the collection of our notes receivable and receivables are still probable. In our analysis, we review the economic feasibility and the current financial, legislative and development status of the project. If our analysis indicates that the project is no longer economically feasible, the note receivable will be written down to its estimated fair value. This fair value measurement uses level 3 inputs under the fair value hierarchy.

At October 31, 2013 and April 30, 2013, our balance sheet reflects notes receivable related to Big City Capital of $ 0 , net of a $ 3.2 million allowance related to the development of gaming/entertainment projects from Big City Capital. During fiscal year ended April 30, 2008, we determined that our ability to collect $ 859,000 of accrued interest and $ 1.5 million of the original $ 3.2 million notes receivable from Big City Capital, LLC (“Big City Capital”) had been impaired. As a result we wrote down the notes receivable to $ 1.7 million, by establishing a $ 1.5 million allowance, and we wrote off the accrued interest. At April 30, 2012, we determined our ability to collect the remaining $ 1.7 million is doubtful and therefore increased the valuation allowance to $ 3.2 million. These notes receivable have a maturity date of December 31, 2014 .

At October 31, 2013 and April 30, 2013, our balance sheet reflects a receivable related to BVO of $ 0 , net of a $ 4.6 million allowance. In the period ending April 30, 2012, we determined our ability to collect the $ 4.6 million BVO Receivable and its accrued interest was doubtful. Therefore we established a $ 4.6 million valuation allowance against its principal and interest due.

	17

Note 16. Stock Offering

On November 7, 2011, we closed on the sale of 2,625,652 shares of our common stock at a price of $ 1.65 per share to certain investors through a registered direct offering for the total proceeds of approximately $ 4.3 million, net of offering costs of approximately $ 444,000 . In addition, for each share of our common stock purchased by an investor, we issued to such investor a warrant to purchase 0.75 shares of our common stock. The warrants have an exercise price of $ 2.18 per share and are exercisable for five years from the initial exercise date, which date is six months from the date of their issuance. The warrants expire on May 7, 2017. The proceeds of the offering were used to assist us in the $ 5.1 million acquisition of South Dakota Gold.

Note 17. Subsequent Event

On December 18, 2013, the Company and certain of its subsidiaries entered into a new $ 12,750,000 Reducing Revolving Credit Agreement with Mutual of Omaha Bank (the “Credit Facility”). The Credit Facility and $ 1,170,000 of the Company’s cash were utilized to pay down all of the Company’s outstanding long term debt obligations that existed at October 31, 2013 (see Note 5) . The maturity date of the Credit Facility is December 10, 2018 , and is secured by liens on substantially all of the real and personal property of the Company and its subsidiaries. The interest rate on the borrowing is based on LIBOR plus an Applicable Margin, which will be determined quarterly, based on the total leverage ratio for the trailing twelve month period. The initial Applicable Margin is 5.00 % until July 1, 2014, when the first quarterly pricing change will take effect. In addition, the Company is required to fix the interest rate on at least 50% of the borrowing through a swap agreement.

Scheduled principle payments on the Credit Facility for each of the next five years and thereafter as of October 31, 2013 are as follows:

November 1, 2013 – October 31, 2014	$	1,200,000
November 1, 2014 – October 31, 2015	$	1,675,000
November 1, 2015 – October 31, 2016	$	1,775,000
November 1, 2016 – October 31, 2017	$	1,875,000
November 1, 2017 – October 31, 2018	$	1,975,000
Thereafter	$	4,250,000

The Company evaluated the refinancing transaction in accordance with the accounting standards for debt modifications and extinguishments and evaluated the refinancing transaction on a lender by lender basis. As a result of this evaluation, the Company concluded the refinancing was an extinguishment of debt and will recognize a loss on debt extinguishment of $ 313,000 representing the write-off of unamortized debt issuance costs in the third quarter ending January 31, 2014. In connection with the refinancing transaction, the Company paid $ 451,000 in fees and other costs which will be capitalized and included in other assets on the consolidated balance sheet.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis (“MD&A”) should be read in conjunction with our Consolidated Financial Statements and Notes thereto included in Item 1 of this Quarterly Report and with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report for the year ended April 30, 2013, filed on Form 10-K with the SEC on July 29, 2013.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements. We prepare these financial statements in conformity with GAAP. As such, we are required to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments. On an on-going basis, we evaluate our estimates; however, actual results may differ from these estimates under different assumptions or conditions. There have been no material changes or developments in our evaluation of the accounting estimates and the underlying assumptions or methodologies that we believe to be Critical Accounting Policies and Estimates as disclosed in our Annual Report for the year ended April 30, 2013, filed on Form 10-K with the SEC on July 29, 2013.

Executive Overview

We were formed in 1977 and, since 1994, have primarily been a gaming company involved in financing, developing, owning and operating gaming properties. Our gaming facility operations are located in the United States of America (“U.S.”), specifically in the states of Washington and South Dakota. Our business strategy will continue to focus on owning and operating gaming establishments. If we are successful, our future revenues, costs and profitability can be expected to increase. However, there is no guarantee that we will be successful in implementing our business strategy in the future and, as such, no guarantee that our future revenues, costs and profitability will increase. Our net revenues were $16.3 million and $16.4 million for the three months ended October 31, 2013 and October 31, 2012, respectively.

When compared to the three months ended October 31, 2012, the three month period ended October 31, 2013 was impacted by the following items:

- Reduced operating expenses due to the severance accruals and write-off of project development costs during the quarter ended October 31, 2012; and

- Decreased net interest expense.

COMPARISON OF THE THREE MONTHS ENDED OCTOBER 31, 2013 AND OCTOBER 31, 2012

Net revenues . Net revenues year over year were flat for all revenue reporting categories at $16.3 million versus $16.4 million, for the three month period ended October 31, 2013, compared to the same period ended October 31, 2012.

Total operating expenses . Total operating expenses decreased 6.4%, to $15.6 million from $16.7 million, for the three month period ended October 31, 2013, compared to the same period ended October 31, 2012. Casino, marketing and administrative, depreciation and amortization and, other expenses remained consistent. Food and beverage expenses increased $0.1 million, or 8.8%, primarily due to increased payroll benefit costs. Facility expenses decreased $0.1 million, or 13.8%, as a result of reduced operating supplies, payroll and related benefit costs. Corporate expenses decreased $0.9 million, or 61%, as a result of last year recording $0.7 million of severance accruals for the former CEO and other Houston employees and a $0.3 million write-off of project development costs versus a $0.1 million write-off of project development costs in the current year.

	18

Interest income (expense) Interest expense decreased 12.2 %, or $48,000, for the three month period ended October 31, 2013, compared to the three month period ended October 31, 2012. The decrease is due to the reduction of outstanding debt since October 31, 2012. Interest income increased $34,000 for the three month period ended October 31, 2013, compared to the three month period ended October 31, 2012, which was related to the the G Investments, LLC note receivable (See Note 4 of our Consolidated Financial Statements). Amortization of loan issue cost was $88,037 and $85,082 for the three month periods ended October 31, 2013 and October 31, 2012, respectively.

Income Taxes . The effective tax benefit rate for the three month period ended October 31, 2013 and October 31, 2012, were 34.16% and 13.74%, respectively, compared to the federal statutory rate of 34%. The prior year rate was primarily due to the write-off of deferred tax assets that corresponded to stock options that expired or were forfeited.

Net income (loss) . Net income from continuing operations was $0.2 million compared to a net loss of $0.7 million for the three month periods ended October 31, 2013 and October 31, 2012, respectively. The improvement is primarily a result of the $0.7 million severance accruals and the $0.3 million write-off of project development costs recorded in the period ending October 31, 2012.

COMPARISON OF THE SIX MONTHS ENDED OCTOBER 31, 2013 AND OCTOBER 31, 2012

Net revenues . Net revenues decreased 3.5%, to $32.0 million from $33.2 million, for the six month period ended October 31, 2013 compared to the six month period ended October 31, 2012. Casino revenues decreased 3.5%, or $1.0 million, due to decreased drop at our Washington properties due to abnormally dry weather conditions in the Seattle market during the first quarter of fiscal year 2014 compared to abnormally wet weather conditions during the first quarter of fiscal year 2013. Food and beverage and other revenues also decreased $0.2 million and $0.1million, respectively, due to the Seattle weather conditions. In an effort to maintain revenues and market share promotional allowances only decreased $0.1 million.

Total operating expenses. Total operating expenses decreased 4.6% to $31.2 million from $32.8 million, for the six month period ended October 31, 2013, compared to the six month period ended October 31, 2012. Casino, marketing and administrative, depreciation and amortization and other expenses remained consistent. Food and beverage increased $0.1 million, or 5.7%, primarily due to increased payroll benefit costs. Facility expenses decreased $0.1 million or 12.9% primarily due to reduced operating supplies, payroll and related benefit costs. Corporate expenses decreased $1.2 million, or 50.0%, primarily as a result of the recording of $0.7 million severance accrual for the former CEO and other Houston office employees and, the $0.3 million write-off of development costs during the six months ended October 31, 2012. The remaining decreases were primarily due to the cost reduction program put into place beginning the third quarter of fiscal 2013.

Interest expense. Interest expense decreased 10.2 %, or $80,000, for the six month period ended October 31, 2013 compared to the six month period ended October 31, 2012. The decrease is primarily due to a decrease in outstanding debt. Amortization of loan issue costs was $166,000 and $163,000 for the six month periods ended October 31, 2013 and October 31, 2012, respectively.

Income Taxes . The effective tax benefit rate for the six months period ended October 31, 2013 and October 31, 2012 were 112.70% and 3.7%, respectively. The rate for this period was lower than the federal statutory rate of 34% primarily due to the amortization of stock options while the prior year rate was primarily due to the write-off of deferred tax assets that correspond to stock options that expired or were forfeited.

Net income (loss). Net income (loss) from continuing operations was $0.0 million and $(0.7) million for the six month periods ended October 31, 2013 and October 31, 2012, respectively. The increase of $0.7 million is primarily due to the decline in net revenues offset by the reduced facility expenses described above and the $0.7 million after tax impact of the severance accruals and write-off of project development costs recorded in the six month period ended October 31, 2012.

Non-GAAP Financial Measures

The term “adjusted EBITDA” is used by us in presentations, quarterly earnings calls, and other instances as appropriate. Adjusted EBITDA is defined as net income before interest, income taxes, depreciation and amortization, non-cash goodwill and other long-lived asset impairment charges, write-offs of project development costs, litigation charges, non-cash stock option grants, exclusion of net income or loss from operations held for sale, and net losses/gains from asset dispositions. Adjusted EBITDA excludes the impact of slot and table games hold percentages compared to the prior year. Adjusted EBITDA is presented because it is a required component of financial ratios reported by us to our lenders, and it is also frequently used by securities analysts, investors, and other interested parties, in addition to and not in lieu of GAAP results to compare to the performance of other companies who also publicize this information.

Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to net income as an indicator of our operating performance or any other measure of performance derived in accordance with GAAP.

	19

The following table shows adjusted EBITDA by segment for the three months ended October 31, 2013 and October 31, 2012:

	For the three months ended October 31, 2013
	Washington Gold		South Dakota Gold		Corporate - Other		Total Continuing Operations
Revenues:
Gross revenues	$	14,495,897	$	2,925,174	$	2,023	$	17,423,094
Less promotional allowances		(1,065,587)		(8,390)		-		(1,073,977)
Net revenues		13,430,310		2,916,784		2,023		16,349,117

Expenses:		11,861,917		2,526,975		573,616		14,962,508
Adjusted EBITDA	$	1,568,393	$	389,809	$	(571,593)	$	1,386,609

	For the three months ended October 31, 2012
	Washington Gold		South Dakota Gold		Corporate - Other		Total Continuing Operations
Revenues:
Gross revenues	$	14,107,533	$	3,349,941	$	-	$	17,457,474
Less promotional allowances		(1,068,596)		(5,190)		-		(1,073,786)
Net revenues		13,038,937		3,344,751		-		16,383,688

Expenses:		11,556,859		2,827,264		701,752		15,085,875
Adjusted EBITDA	$	1,482,078	$	517,487	$	(701,752)	$	1,297,813

	20

The following table shows adjusted EBITDA by segment for the six months ended October 31, 2013 and October 31, 2012:

	For the six months ended October 31, 2013:
	Washignton Gold		South Dakota Gold		Corporate - Other		Total Continuing Operations
Revenues:
Gross revenues	$	28,359,112	$	5,797,823	$	4,992		34,161,927
Less promotional allowances		(2,091,500)		(30,520)		-	$	(2,122,020)
Net revenues		26,267,612		5,767,303		4,992		32,039,907

Expenses:		23,827,629		5,034,579		1,182,291		30,044,499
Adjusted EBITDA	$	2,439,983	$	732,724	$	(1,177,299)	$	1,995,408

	For the six months ended October 31, 2012
	Washignton Gold		South Dakota Gold		Corporate - Other		Total Continuing Operations
Revenues:
Gross revenues	$	29,135,955	$	6,309,078	$	-		35,445,033
Less promotional allowances		(2,235,337)		(15,305)		-	$	(2,250,642)
Net revenues		26,900,618		6,293,773		-		33,194,391

Expenses:		23,650,464		5,353,008		1,610,491		30,613,963
Adjusted EBITDA	$	3,250,154	$	940,765	$	(1,610,491)	$	2,580,428

The following table reconciles adjusted EBITDA to net income (loss) for the three months ended October 31, 2013 and October 31, 2012:

Adjusted EBITDA reconciliation to net loss:

	For the three months ended
	October 31, 2013		October 31, 2012
Net income (loss)	$	220,757	$	(819,008)
Add:
Income tax expense (benefit)		114,524		(108,375)
Net interest expense (income)		399,089		478,146
Impairments/Write offs		56,959		257,733
Loss on sale of assets		4,546		1,718
Depreciation and amortization		565,288		538,534
Deferred rent		9,878		19,034
Stock option and ESPP grants		15,568		65,682
Severance expense		-		725,877
Loss on operations held for sale		-		138,472
Adjusted EBITDA	$	1,386,609	$	1,297,813

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The following table reconciles adjusted EBITDA to net income (loss) for the six months ended October 31, 2013 and October 31, 2012:

Adjusted EBITDA reconciliation to net loss:

	For the six months ended
	October 31, 2013		October 31, 2012

Net income (loss)	$	4,930	$	(650,883)
Add:
Income tax benefit		(43,837)		(19,686)
Net interest expense (income)		796,158		940,290
Impairments/Write offs		56,959		257,733
Loss on sale of assets		8,517		2,963
Depreciation and amortization		1,127,225		1,077,515
Deferred rent		14,438		38,067
Stock option and ESPP grants		31,018		69,759
Severance expense		-		725,877
Loss on operations held for sale		-		138,793
Adjusted EBITDA	$	1,995,408	$	2,580,428

Liquidity and Capital Resources

Historical Cash Flows

The following table sets forth our consolidated net cash provided by (used in) operating, investing and financing activities for the six month periods ended October 31, 2013 and October 31, 2012:

	Six Months Ended
	October 31,		October 31,
	2013		2012
Net cash provided by (used in):
Operating activities	$	519,392	$	1,150,325
Investing activities		(132,315)		432,905
Financing activities		(266,560)		(914,643)

Operating activities . Net cash provided by operating activities during the six month period ended October 31, 2013 decreased by $0.6 million over the comparable period in the prior fiscal year. This decrease mainly resulted from a net $1.4 million use of cash to purchase operating assets and pay down operating liabilities, a net $0.2 million reduction of project development cost write-offs, offset by $0.7 million improved net income, a $0.3 million net change in restricted cash.

Investing activities . Net cash used in investing activities during the six month period ended October 31, 2013 increased to $0.1 million compared to net cash provided by of $0.4 million for the comparable period in the prior fiscal year. The decrease of funds provided is primarily due to the $0.8 million proceeds from the Colorado Grande Casino sale which occurred in the prior fiscal year.

Financing activities . Net cash used in financing activities during the six month period ended October 31, 2013 decreased $0.6 million from the comparable period in the prior fiscal year. The decrease is primarily attributable to $0.9 million less repayment of debt offset by $0.2 million less borrowed funds.

Future Sources and Uses of Cash

We expect that our future liquidity and capital requirements will be affected by:

- capital requirements related to future acquisitions;

- cash flow from operations;

- new management contracts;

- working capital requirements;

- obtaining debt financing; and

- debt service requirements.

	22

At October 31, 2013, outstanding indebtedness was $13.9 million, of which $2.4 million is due by October 31, 2014. On October 7, 2011, we closed on an $11.0 million loan with Wells Fargo Gaming Capital, LLC. The proceeds were used to refinance debt and pay fees associated with the loan.

On December 18, 2013, the Company and certain of its subsidiaries entered into a new $12,750,000 Reducing Revolving Credit Agreement with Mutual of Omaha Bank (the “Credit Facility”). The Credit Facility and $1,170,000 of the Company’s cash were utilized to pay down all of the Company’s outstanding long term debt obligations that existed at October 31, 2013 (see Note 5). The maturity date of the Credit Facility is December 10, 2018, and is secured by liens on substantially all of the real and personal property of the Company and its subsidiaries. The interest rate on the borrowing is based on LIBOR plus an Applicable Margin, which will be determined quarterly, based on the total leverage ratio for the trailing twelve month period. The initial Applicable Margin is 5.00% until July 1, 2014, when the first quarterly pricing change will take effect. In addition, the Company is required to fix the interest rate on at least 50% of the borrowing through a swap agreement.

Scheduled principle payments on the Credit Facility for each of the next five years and thereafter as of October 31, 2013 are as follows:

November 1, 2013 – October 31, 2014	$	1,200,000
November 1, 2014 – October 31, 2015	$	1,675,000
November 1, 2015 – October 31, 2016	$	1,775,000
November 1, 2016 – October 31, 2017	$	1,875,000
November 1, 2017 – October 31, 2018	$	1,975,000
Thereafter	$	4,250,000

The Credit Facility contains customary covenants for a facility of this nature, including, but not limited to, covenants requiring the preservation and maintenance of the Company’s assets and covenants restricting our ability to merge, transfer ownership, incur additional indebtedness, encumber assets and make certain investments. The Credit Facility also contains covenants requiring the Company to maintain certain financial ratios, such as a minimum total leverage ratio ranging from 3.00 to 1.00 through July 31, 2015, 2.50 to 1.00 from August 1, 2015 through July 31, 2017, and 2.00 to 1.00 from August 1, 2017 until maturity; and lease adjusted fixed charge coverage ratio no less than 1.15 to 1.00.

The Company evaluated the refinancing transaction in accordance with the accounting standards for debt modifications and extinguishments and evaluated the refinancing transaction on a lender by lender basis. As a result of this evaluation, the Company concluded the refinancing was an extinguishment of debt and will recognize a loss on debt extinguishment of $313,000 representing the write-off of unamortized debt issuance costs in the third quarter ending January 31, 2014. In connection with the refinancing transaction, the Company paid $451,000 in fees and other costs which will be capitalized and included in other assets on the consolidated balance sheet.

The 268 acres of vacant land in Black Hawk, Colorado is currently held for sale. If the acreage is sold, we will use the proceeds to reduce debt. On October 31, 2011, we took an impairment charge of $2.3 million on this land thereby writing it down to the estimated value of $1.1 million.

On October 31, 2013, excluding restricted cash of $1.3 million, we had cash and cash equivalents of $6.8 million. The restricted cash consists of approximately $1.3 million of player supported jackpots.

Our Consolidated Financial Statements have been prepared assuming that we will have adequate availability of cash resources to satisfy our liabilities in the normal course of business. We have made, and are in the process of making, arrangements to ensure that we have sufficient working capital to fund our obligations as they come due. These potential funding transactions include divesting of non-core assets and obtaining long-term financing. We believe that some or all of these sources of funds will be funded in a timely manner and will provide sufficient working capital for us to meet our obligations as they come due; however, there can be no assurance that we will be successful in divesting of the non-core assets or achieving the desired level of working capital at terms that are favorable to us. Should cash resources not be sufficient to meet our current obligations as they come due, repay or refinance our long-term debt, and acquire operations that generate positive cash flow, we would be required to curtail our activities and grow at a pace that cash resources could support which may require a restructuring of our debt or selling core assets.

Liquidity

The current ratio is an indication of a company’s market liquidity and ability to meet creditor’s demands. Acceptable current ratios vary from industry to industry and are generally between 1.25 and 3.0 for healthy businesses. If a company’s current ratio is in this range, then it generally indicates good short-term financial strength. If current liabilities exceed current assets (the current ratio is below 1), then the company may have problems meeting its short-term obligations. If the current ratio is too high, then the company may not be efficiently using its current assets or its short-term financing facilities. This may also indicate problems in working capital management. The table below shows that, as of October 31, 2013, we have a 1.7 working capital ratio.

		Current Ratio as of October 31, 2013
Current Ratio	Current Assets	$	10,326,904	1.7
	Current Liabilities	$	5,937,519

Off-Balance Sheet Arrangements

None.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not required for smaller reporting companies.

	23

Item 4. Controls and Procedures

Disclosure controls and procedures . We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit to the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that information is accumulated and communicated to our management, including our President and Chief Financial Officer (“CFO”), as appropriate to allow timely decisions regarding required disclosure.

In accordance with Rules 13a-15 and 15d-15 of the Exchange Act, we carried out an evaluation, under the supervision and with the participation of management, including our President and CFO, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. As a result of our evaluation, they concluded that our disclosure controls and procedures were effective as of October 31, 2013.

Changes in internal controls over financial reporting . There have not been any changes in our control over financial reporting during the three months ended October 31, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II. Other Information

Item 1. Legal Proceedings

We are not currently involved in any material legal proceedings.

Item 1A. Risk Factors

There have been no material changes in our risk factors as previously disclosed in our Annual Report on Form 10-K for the fiscal year ended April 30, 2013, filed with the SEC on July 29, 2013.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

See the Index to Exhibits following the signature page hereto for a list of the exhibits filed pursuant to Item 601 of Regulation S-K

INDEX TO EXHIBITS

EXHIBIT NUMBER		DESCRIPTION
10.1		First Amendment to Asset Purchase Agreement between Colorado Grande Enterprises, Inc., as seller, and G Investments, LLC, as purchaser (filed previously as Exhibits 10.1 to the Company’s Form 8-K filed May 29, 2012).

10.2		Third Amended and Restated Promissory Note dated May 25, 2012 issued by Nevada Gold & Casinos, Inc. to Louise H. Rogers, as her separate property (filed previously as Exhibits 10.1 to the Company’s Form 8-K filed June 1, 2012).

10.3		May 2012 Amended and Restated Security Agreement dated May 25, 2012 between Nevada Gold & Casinos, Inc. and Louise H. Rogers, as her separate property (filed previously as Exhibits 10.2 to the Company’s Form 8-K filed June 1, 2012).

	24

10.4		Credit Agreement dated June 27, 2012 by and among Wells Fargo Gaming Capital, LLC, as administrative agent, the Lenders that are parties thereto, Nevada Gold & Casinos, Inc., as parent, and A.G. Trucano, Son & Grandsons, Inc., as borrower (filed previously as Exhibits 10.1 to the Company’s Form 8-K filed July 3, 2012).

10.5		Guaranty and Security Agreement dated June 27, 2012 among Nevada Gold & Casinos, Inc., certain Grantors listed on the signature page and Wells Fargo Gaming Capital, LLC, in capacity as administrative agent (filed previously as Exhibits 10.2 to the Company’s Form 8-K filed July 3, 2012).

10.6		Intercompany Subordination Agreement dated June 27, 2012 by and among certain Obligors listed on the signature page in favor of Wells Fargo Gaming Capital, LLC, in capacity as administrative agent (filed previously as Exhibits 10.3 to the Company’s Form 8-K filed July 3, 2012).

10.7		Amendment Number Two to Credit Agreement dated October 7, 2011 by and among Wells Fargo Gaming Capital, LLC, in capacity as administrative agent and lender, Nevada Gold & Casinos, Inc., as parent, and NG Washington, LLC, NG Washington II, LLC and NG Washington III, LLC, as borrowers (filed previously as Exhibits 10.4 to the Company’s Form 8-K filed July 3, 2012).

10.8		Intercreditor Agreement and Subordination dated June 27, 2012 by and between Wells Fargo Gaming Capital, LLC, as administrative agent, and Michael J. Trucano, as sellers’ representative (filed previously as Exhibits 10.5 to the Company’s Form 8-K filed July 3, 2012).

10.9		Credit Agreement dated December 10, 2013 by and among Mutual of Omaha Bank, the Lender, Nevada Gold & Casinos, as parent, and Restricted Subsidiaries, as borrower.

31.1(*)		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2(*)		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1(*)		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2(*)		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Schema

101.CAL		XBRL Taxonomy Calculation Linkbase

101.DEF		XBRL Taxonomy Definition Linkbase

101.LAB		XBRL Taxonomy Label Linkbase

101.PRE		XBRL Taxonomy Presentation Linkbase

* Filed or furnished herewith.

In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed.

	25

SIGNATURES

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

Date: December 20, 2013

	Nevada Gold & Casinos, Inc.

	By:	/s/ James J. Kohn
	James J. Kohn
	Chief Financial Officer
	(Principal Financial Officer)

	26

RECITALS		1

ARTICLE I - DEFINITIONS		3

Section 1.01.	Definitions	3
Section 1.02.	Interpretation and Construction	43
Section 1.03.	Use of Defined Terms	44
Section 1.04.	Cross-References	45
Section 1.05.	Exhibits and Schedules	45

ARTICLE II - AMOUNT AND TERMS OF THE CREDIT FACILITY		45

Section 2.01.	The Revolving Credit Facility	45
Section 2.02.	Use of Proceeds of the Credit Facility	46
Section 2.03.	Notice of Borrowings	47
Section 2.04.	Conditions of Borrowings	47
Section 2.05.	The Revolving Credit Note and Interest Rate	47
Section 2.06.	Place and Manner of Payment	48
Section 2.07.	Net Payments	49
Section 2.08.	Fees	49
Section 2.09.	Interest on Overdue Amounts and Default Rate	51
Section 2.10.	Security for the Credit Facility	51

ARTICLE III - CONDITIONS PRECEDENT TO THE CLOSING DATE		52

A. Closing Conditions		52

Section 3.01.	Credit Agreement	52
Section 3.02.	The Note	52
Section 3.03.	Security Documentation	52
Section 3.04.	Other Loan Documents	53
Section 3.05.	Organizational Documents, Resolutions, Certificates of Good Standing, Authorized Representative Certificates and Closing Certificate	53
Section 3.06.	Title Policies	54
Section 3.07.	Insurance	54
Section 3.08.	Payment of Upfront Fee and Existing Refi Debt	54
Section 3.09.	Reimbursement for Expenses and Fees	55
Section 3.10.	Phase I Environmental Site Assessments and Environmental Indemnity	55
Section 3.11.	Schedule of Slot Route Locations	55
Section 3.12.	Washington Casino Leases and Deadwood Slot Route Leases	55
Section 3.13.	Gaming Permits	55

Section 3.14.	Survey	56
Section 3.15.	Schedule of all Significant Litigation	56
Section 3.16.	Opinion of Counsel	56
Section 3.17.	Pro Forma Financial Compliance	56
Section 3.18.	Regulatory Approvals, Permits, Consents, Etc.	57
Section 3.19.	No Injunction or Other Litigation	57
Section 3.20.	Additional Documents and Statements	57

B. Conditions Precedent to all Borrowings under the Credit Facility		57

Section 3.21.	Notice of Borrowing	57
Section 3.22.	Certain Statements	58
Section 3.23.	Gaming Permits	58

ARTICLE IV - REPRESENTATIONS AND WARRANTIES		58

Section 4.01.	Organization; Power and Authorization	58
Section 4.02.	No Conflict With, Violation of or Default Under Laws or Other Agreements	59
Section 4.03.	Litigation	59
Section 4.04.	Agreements Legal, Binding, Valid and Enforceable	60
Section 4.05.	Information and Financial Data Accurate; Financial Statements; No Adverse Event; Deposit Accounts	60
Section 4.06.	Governmental Approvals	61
Section 4.07.	Payment of Taxes	61
Section 4.08.	Title to Properties	61
Section 4.09.	No Untrue Statements	61
Section 4.10.	Brokerage Commissions	62
Section 4.11.	No Defaults	62
Section 4.12.	Employee Retirement Income Security Act of 1974	62
Section 4.13.	Availability of Utility Services	62
Section 4.14.	Policies of Insurance	62
Section 4.15.	Gaming Permits and Approvals	63
Section 4.16.	Environmental Certificate	63
Section 4.17.	Labor Relations	63
Section 4.18.	Trademarks, Patents, Licenses, Franchises, Formulas and Copyrights	63
Section 4.19.	Contingent Liabilities	63
Section 4.20.	Subsidiaries	63
Section 4.21.	Washington Casino Leases	64
Section 4.22.	Deadwood Slot Route Leases	64

ARTICLE V - GENERAL COVENANTS OF BORROWERS		64

Section 5.01.	FF&E	64
Section 5.02.	Permits; Licenses and Legal Requirements	64

Section 5.03.	Protection Against Lien Claims	65
Section 5.04.	Notice to Gaming Authorities	65
Section 5.05.	No Change in Character of Business or Location of Chief Executive Office	65
Section 5.06.	Preservation and Maintenance of Properties and Assets; Acquisition of Additional Property	66
Section 5.07.	Repair of Properties and Assets	66
Section 5.08.	Financial Statements; Reports; Certificates and Books and Records	67
Section 5.09.	Insurance	70
Section 5.10.	Taxes	71
Section 5.11.	Permitted Encumbrances Only	71
Section 5.12.	Advances	71
Section 5.13.	Further Assurances	72
Section 5.14.	Indemnification	72
Section 5.15.	Inspection of the Collateral and Appraisal	73
Section 5.16.	Compliance With Other Loan Documents	73
Section 5.17.	Suits, Actions or Material Changes Affecting Borrowers	73
Section 5.18.	Consents of and Notice to Gaming Authorities	73
Section 5.19.	Tradenames, Trademarks and Servicemarks	74
Section 5.20.	Notice of Hazardous Materials	74
Section 5.21.	Compliance with Access Laws	74
Section 5.22.	Compliance with Washington Casino Leases and Deadwood Slot Route Leases	75
Section 5.23.	Restriction on Payment of Seller Subordinated Debt	75
Section 5.24.	Prohibition on Prepayment or Defeasance of Permitted Indenture Subordinated Debt	76
Section 5.25.	Interest Rate Protection	76
Section 5.26.	Delivery of Schedule of Depository Accounts and Control Agreements	76
Section 5.27.	Compliance With Other Loan Documents, Execution of Subsidiary Guaranties and Pledge of Restricted Subsidiary Stock	77
Section 5.28.	Restriction on Development or Use of Gold Mountain Real Property	77

ARTICLE VI - FINANCIAL COVENANTS		77

Section 6.01.	Total Leverage Ratio	77
Section 6.02.	Lease Adjusted Fixed Charge Coverage Ratio	78
Section 6.03.	Maintenance Capital Expenditure Requirements	78
Section 6.04.	Limitation on Indebtedness	78
Section 6.05.	Restriction on Distributions	79

Section 6.06.	Contingent Liability(ies)	79
Section 6.07.	Investment Restrictions	79
Section 6.08.	Total Liens	80
Section 6.09.	No Change of Control	81
Section 6.10.	Sale of Assets, Consolidation, Merger, or Liquidation	81
Section 6.11.	No Transfer of Ownership; Equity Offerings	82
Section 6.12.	ERISA	82
Section 6.13.	Margin Regulations	83
Section 6.14.	Transactions with Affiliates	83
Section 6.15.	Limitation on Additional Subsidiaries	83
Section 6.16.	Limitation on Consolidated Tax Liability	83
Section 6.17.	Change in Accounting Principles	84

ARTICLE VII - EVENTS OF DEFAULT		84

Section 7.01.	Events of Default	84
Section 7.02.	Default Remedies	88
Section 7.03.	Application of Proceeds	88
Section 7.04.	Notices	89
Section 7.05.	Agreement to Pay Attorney's Fees and Expenses	89
Section 7.06.	No Additional Waiver Implied by One Waiver	89
Section 7.07.	Licensing of Lender	89
Section 7.08.	Exercise of Rights Subject to Applicable Law	90
Section 7.09.	Discontinuance of Proceedings	90

ARTICLE VIII - DAMAGE, DESTRUCTION AND CONDEMNATION		90

Section 8.01.	No Abatement of Payments	90
Section 8.02.	Distribution of Capital Proceeds Upon Occurrence of Fire, Other Perils or Condemnation	90

ARTICLE IX - GENERAL TERMS AND CONDITIONS		91

Section 9.01.	Severability of Provisions.	91
Section 9.02.	Failure to Exercise Rights	91
Section 9.03.	Notices and Delivery	91
Section 9.04.	Modification in Writing	92
Section 9.05.	Other Agreements	92
Section 9.06.	Counterparts	92
Section 9.07.	Rights, Powers and Remedies are Cumulative	92
Section 9.08.	Continuing Representations	92
Section 9.09.	Successors and Assigns	93
Section 9.10.	Time of Essence	93
Section 9.11.	Choice of Law and Forum	93
Section 9.12.	Arbitration	93

Section 9.13.	Waiver of Jury Trial	94
Section 9.14.	Scope of Approval and Review	94
Section 9.15.	Cumulative Nature of Covenants	94
Section 9.16.	Costs to Prevailing Party	94
Section 9.17.	Expenses	95
Section 9.18.	Setoff	95
Section 9.19.	Borrowers’ Waivers and Consents	96
Section 9.20.	Confidentiality	100
Section 9.21.	Schedules Attached	100

Schedule 2.01(c)	-	Aggregate Commitment Reduction Schedule
Schedule 3.08(b)	-	Schedule of WFGC Washington Security Documentation
Schedule 3.11	-	Schedule of Slot Route Locations - Form
Schedule 3.15	-	Schedule of Significant Litigation
Schedule 4.01(c)	-	Schedule of Significant Shareholders
Schedule 4.19	-	Schedule of Contingent Liabilities
Schedule 4.20	-	Schedule of Restricted and Unrestricted Subsidiaries
Schedule 5.08(d)(i)	-	Lease Summary Schedule
Schedule 5.26	-	Schedule of Depository Accounts (Post Closing)

Exhibit A	-	Revolving Credit Note
Exhibit B	-	Notice of Borrowing - Form
Exhibit C	-	Authorized Representative Certificate - Form
Exhibit D	-	Closing Certificate - Form
Exhibit E	-	Compliance Certificate - Form
Exhibit F	-	Subsidiary Guaranty - Form
Exhibit G	-	Payment Subordination Agreement - Form
Exhibit H	-	Legal Opinion - Form
Exhibit I	-	Crazy Moose Pasco Real Property Description
Exhibit J	-	Gold Mountain Real Property Description

Total Leverage Ratio	Applicable Margin
Greater than or equal to 2.50 to 1.00		5.00	%
Greater than or equal to 2.00 to 1.00 but less than 2.50 to 1.00		4.50	%
Greater than or equal to 1.50 to 1.00 but less than 2.00 to 1.00		4.00	%
Less than 1.50 to 1.00		3.50	%

Fiscal Quarter End		Maximum Total Leverage Ratio
As of the end of the Fiscal Quarter ending on April 30, 2014 through the Fiscal Quarter ending on July 31, 2015		3.00 to 1.00
As of the Fiscal Quarter ending on October 31, 2015 through the Fiscal Quarter ending on January 31, 2017		2.50 to 1.00
As of the Fiscal Quarter ending April 30, 2017 and as of each Fiscal Quarter end thereafter occurring until Credit Facility Termination		2.00 to 1.00

	BORROWERS :

	NEVADA GOLD & CASINOS, INC.,
	a Nevada corporation

	By	/s/ Michael P. Shaunnessy
		Michael P. Shaunnessy,
		President

	NG WASHINGTON, LLC,
	a Washington limited liability company

	By	/s/ Michael P. Shaunnessy
		Michael P. Shaunnessy,
		Manager

	NG WASHINGTON II HOLDINGS, LLC,
	a Delaware limited liability company

	By	/s/ Michael P. Shaunnessy
		Michael P. Shaunnessy,
		Manager

	NG WASHINGTON II, LLC,
	a Washington limited liability company

	By	/s/ Michael P. Shaunnessy
		Michael P. Shaunnessy,
		Manager

	NG WASHINGTON III, LLC,
	a Washington limited liability company

	By	/s/ Michael P. Shaunnessy
		Michael P. Shaunnessy,
		Manager

	NG SOUTH DAKOTA, LLC,
	a South Dakota limited liability company

	By	/s/ Michael P. Shaunnessy
		Michael P. Shaunnessy,
		Manager

	A.G. TRUCANO, SON & GRANDSONS, INC.,
	a South Dakota corporation

	By	/s/ Michael P. Shaunnessy
		Michael P. Shaunnessy,
		President

	CGC HOLDINGS, L.L.C.,
	a Nevada limited liability company

	By	/s/ Michael P. Shaunnessy
		Michael P. Shaunnessy,
		Manager

	CGE ASSETS, INC.
	(formerly Colorado Grand Enterprises, Inc.),
	a Colorado corporation

	By	/s/ Michael P. Shaunnessy
		Michael P. Shaunnessy,
		President

	GOLD MOUNTAIN DEVELOPMENT,
	A LIMITED LIABILITY COMPANY,
	a Colorado limited liability company,
	also known as GOLD MOUNTAIN DEVELOPMENT, LLC

	By	/s/ Michael P. Shaunnessy
		Michael P. Shaunnessy,
		Manager

	NEVADA GOLD BVR, L.L.C.,
	a Nevada limited liability company

	By	/s/ Michael P. Shaunnessy
		Michael P. Shaunnessy,
		Manager

	Address for Borrower Consolidation:

	133 East Warm Springs Road, Suite 102
	Las Vegas, NV 89119

	Telephone: (702) 685-1000
	Facsimile: (702) 685-1265

	LENDER:

	MUTUAL OF OMAHA BANK

	By	/s/ Ashan S. Perera
		Ashan S. Perera,
		Vice President

	Address:

	8945 W. Russell Rd., Ste. 300
	Las Vegas, NV 89148.

	Telephone: (702) 492-5801
	Facsimile: (602) 636-8618

REDUCTION DATE	SCHEDULED REDUCTION
Closing Date	$	-0-
March 31, 2014		400,000.00
June 30, 2014		400,000.00
September 30, 2014		400,000.00
December 31, 2014		400,000.00
March 31, 2015		425,000.00
June 30, 2015		425,000.00
September 30, 2015		425,000.00
December 31, 2015		425,000.00
March 31, 2016		450,000.00
June 30, 2016		450,000.00
September 30, 2016		450,000.00
December 31, 2016		450,000.00
March 31, 2017		475,000.00
June 30, 2017		475,000.00
September 30, 2017		475,000.00
December 31, 2017		475,000.00
March 31, 2018		500,000.00
June 30, 2018		500,000.00
September 30, 2018		500,000.00
December 10, 2018 (Maturity Date)		Entire unpaid balance

Schedule of Slot Route Locations

Name of Slot Route	Address	Lessor	Lessee	No. of Gaming Devices	Commitment Date of Lease or Occupancy Agreement	Termination Date of Lease or Occupancy Agreement	Renewal Options	Description of Payment Arrangement
Best Western	137 Charles Street, Deadwood, SD	BRI, Inc. dba Best Western Hickok House	A.G. Trucano, Son & Grandsons, Inc.	27	03/21/2012	03/20/2017	Auto-Renewal No Expiration	Divide net proceeds per lease agreement
Bodega	658, 660, 662 Main St. Deadwood, SD	Michael Trucano, dba Bodega 1 and Bodega 2 & Kevin Johnson dba Bodega 3	A.G. Trucano, Son & Grandsons, Inc.	66	05/17/2007	05/16/2017	Auto-Renewal No Expiration	Divide net proceeds per lease agreement
Bullock Hotel #1	633 Main Street, Deadwood, SD	Bullock Hospitality, LLC	A.G. Trucano, Son & Grandsons, Inc.	30	08/01/2011	07/31/2016	Auto-Renewal No Expiration	Divide net proceeds per lease agreement
Bullock Hotel #2	633 Main Street, Deadwood, SD	Bullock Hospitality, LLC	A.G. Trucano, Son & Grandsons, Inc.	30	08/01/2011	07/31/2016	Auto-Renewal No Expiration	Divide net proceeds per lease agreement
Comfort Inn (Gulches of Fun #1)	225 Cliff St., Deadwood, SD	Kevin Johnson dba Gulches of Fun #1	A.G. Trucano, Son & Grandsons, Inc.	26	08/01/2011	07/31/2016	Auto-Renewal No Expiration	Divide net proceeds per lease agreement
Comfort Inn (Gulches of Fun #2)	225 Cliff St., Deadwood, SD	Kevin Johnson dba Gulches of Fun #2	A.G. Trucano, Son & Grandsons, Inc.	23	08/01/2011	07/31/2016	Auto-Renewal No Expiration	Divide net proceeds per lease agreement
Deadwood Dicks	51, 53, 55 Sherman St., Deadwood, SD	Mary Dunne dba Deadwood Dick Saloon	Black Hills Novelty Co, Inc.	3	05/01/1994	04/30/2015	Auto-Renewal No Expiration	Divide net proceeds per lease agreement
BB Cody's (#1, #2, #3) (formerly Deadwood Frontier #1, #2, #3)	681 Main Street, Deadwood, SD	GG&E, LLC	A.G. Trucano, Son & Grandsons, Inc.	44	11/12/2009	11/11/2014	Auto-Renewal No Expiration	Divide net proceeds per lease agreement

Fairmont Hotel/Oyster bar	628-630 Main St. Deadwood, SD	Fairmont Hotel Corporation	A.G. Trucano, Son & Grandsons, Inc.	29	03/03/2010	03/02/2015	Auto-Renewal No Expiration	Divide net proceeds per lease agreement
Hickok's Hotel & Casino (#1, #2, #3, #4)	685 Main St. Deadwood, SD	NMD Venture, LLC	A.G. Trucano, Son & Grandsons, Inc.	74	12/01/2011	11/30/2014	None	Divide net proceeds per lease agreement
Iron Horse Inn	27 Deadwood St. Deadwood, SD	Donna Kellar, dba Iron Horse Inn	A.G. Trucano, Son & Grandsons, Inc.	23	12/01/2009	11/30/2014	Auto-Renewal No Expiration	Divide net proceeds per lease agreement
McKenna's Gold	470 Main St. Deadwood, SD	James Sternhagen dba McKenna's Gold & dba The Chase	A.G. Trucano, Son & Grandsons, Inc.	41	11/17/2008	11/16/2023	Auto-Renewal No Expiration	Divide net proceeds per lease agreement
Midnight Star	677 Main St. Deadwood, SD	Midnight Star Enterprises, LTD	A.G. Trucano, Son & Grandsons, Inc.	53	11/01/2012	10/31/2017	Auto-Renewal No Expiration	Divide net proceeds per lease agreement
Peacock dba Mustang Sally's	630-634 Main St. Deadwood, SD	Toby Keehn dba Peacock Club	Black Hills Novelty Co, Inc.	43	04/01/1997	03/31/2018	None	Divide net proceeds per lease agreement
Old Style Saloon #10	657 Main St. Deadwood, SD	Old Style Saloon #10	Black Hills Novelty Co, Inc.	53	04/09/1990	04/08/2014	Auto-Renewal No Expiration	Divide net proceeds per lease agreement
Lucky 8 Motel (Jack Gunvordahl dba Vendee)	196 Cliff St. Deadwood, SD	Jack Gunvordahl	A.G. Trucano, Son & Grandsons, Inc.	73	01/01/2012	12/31/2016	None	Divide net proceeds per lease agreement
VFW Club	10 Pine St. Deadwood, SD	VFW Club	Black Hills Novelty Co, Inc.	18	07/01/1989	06/30/2016	Auto-Renewal No Expiration	Divide net proceeds per lease agreement
Martin Mason Hotel #1	48 Sherman St. Deadwood, SD	Blake Haverberg dba Martin-Mason Hotel #1	A.G. Trucano, Son & Grandsons, Inc.	19	01/26/2009	01/25/2024	Auto-Renewal No Expiration	Divide net proceeds per lease agreement

Martin Mason Hotel #2	44 Sherman St. Deadwood, SD	Blake Haverberg dba Martin-Mason Hotel #2	A.G. Trucano, Son & Grandsons, Inc.	21	01/26/2009	01/25/2024	Auto-Renewal No Expiration	Divide net proceeds per lease agreement
Wooden Nickel	9 Lee St. Deadwood, SD	Blake Haverberg dba Wooden Nickel	A.G. Trucano, Son & Grandsons, Inc.	22	01/26/2009	01/25/2024	Auto-Renewal No Expiration	Divide net proceeds per lease agreement
Deadwood Station	84 Main St. Deadwood, SD	Willy's Wild West	A.G. Trucano, Son & Grandsons, Inc.	30	10/25/2013	10/24/2018	Auto-Renewal No Expiration	Divide net proceeds per lease agreement
Gold Country Inn	801 Main St. Deadwood, SD	Willy's Wild West	A.G. Trucano, Son & Grandsons, Inc.	24	10/25/2013	10/24/2018	Auto-Renewal No Expiration	Divide net proceeds per lease agreement
Totals				772

Name of Shareholder		Address		Number of Shares Owned				Percentage of Total Issued and Outstanding Shares
Louise H. Rogers		2512 Alta Mira Tyler, TX 75701			941,288				5.8	%

NV Gold Lease Schedule:
Casino	Address	Type	LTM Lease Expense		Current Portion Lease Liability		Lease Start Date	Lease Expire Date	Options Exp. Date	Lease Escalation Amount		Lease Escalation Date	CAM		Annual Property Taxes		Lease Remaining (Years)		Lease Option (Years)
Coyote Bobs	3014 W Kennewick Ave Kennewick, WA	Fee Property	$	-	$	-	N/A	N/A	N/A				$	-	$	-		-		-
Crazy Moose Casino	420 S 20th St Pasco, WA	Fee Property	$	-	$	-	N/A	N/A	N/A				$	-	$	-		-		-
Crazy Moose Casino	420 S 20th St Pasco, WA	Parking Lot	$	6,600	$	6,600	02/01/2011	12/31/2013					$	-	$	-		0.05		-
Crazy Moose Casino	22003 66th Ave Mountlake Terrace, WA	Building Lease	$	157,022	$	157,022	06/01/2012	05/31/2014	05/31/2021				$	-	$	-		0.47		7.47
Silver Dollar Casino	17917 Bothell-Everett Hwy Bothell, WA	Building Lease	$	293,946	$	293,946	05/01/2012	04/30/2017	04/30/2022				$	-	$	-		3.38		8.39
Silver Dollar Casino	19222 International Blvd SeaTac, WA	Building Lease	$	267,869	$	267,869	05/01/2012	05/31/2022	05/01/2032		4%	5/31/2014	$	-	$	-		8.47		18.40
Silver Dollar Casino	3100 E Valley Hwy Renton, WA	Building Lease	$	516,900	$	516,900	05/01/2012	04/30/2019	01/01/2039		8% every 3 yrs		$	-	$	-		5.38		25.07
Royal Casino	13010 Hwy 99 S Everett, WA	Building Lease	$	394,037	$	394,037	05/01/2012	01/31/2016	01/31/2036		3%	1/31/2014	$	-	$	-		2.14		22.15
Club Hollywood Casino	16716 Aurora Ave N Shoreline, WA	Building Lease & Parking Lot	$	721,307	$	721,307	04/01/2012	03/31/2017	03/31/2037		3%	3/31/2014	$	-	$	-		3.30		23.32
Red Dragon Casino	21917 Hwy 99 Mountlake Terrace, WA	Building Lease	$	399,514	$	399,514	05/01/2012	10/31/2016	10/31/2026		2%		$	-	$	-		2.89		12.89
Golden Nugget Casino	14025 Interurban Ave Stukwila, WA	Building Lease	$	192,130	$	192,130	05/01/2012	11/30/2014	11/30/2024		3%	11/30/2013	$	-	$	-		0.97		10.98
Administrative Offices	South Dakota	Building Lease	$	55,200	$	55,200	01/27/2012	01/27/2017	01/27/2022				$	-	$	-		3.13		8.13
Corporate Headquarters	133 E Warm Springs Rd Las Vegas, NV	Building Lease	$	37,572	$	37,572	01/07/2013	01/31/2015	01/15/2017				$	1,272	$	-		1.14		3.10
Administrative Offices	711 Powell Ave SW Renton, WA	Building Lease	$	53,000	$	53,000	05/01/2012	12/31/2013	10/31/2026		2%	10/31/2013	$	-	$	-		0.05		12.89
			$	3,095,096	$	3,095,096					Casino Average Lease Remaining							3.01		14.30

A.	The Aggregate Commitment is	$____________________

B.	The Funded Outstandings are	$____________________

C.	The Maximum Availability
	(A minus B) is	$____________________

	BORROWERS:

	NEVADA GOLD & CASINOS, INC.,
	a Nevada corporation;
	A.G. TRUCANO, SON & GRANDSONS, INC.,
	a South Dakota corporation; and
	CGE ASSETS, INC.,
	a Colorado corporation

	By
		Michael P. Shaunnessy,
		President

	NG WASHINGTON, LLC,
	a Washington limited liability company;
	NG WASHINGTON II HOLDINGS, LLC,
	a Delaware limited liability company;
	NG WASHINGTON II, LLC,
	a Washington limited liability company;
	NG WASHINGTON III, LLC,
	a Washington limited liability company;
	NG SOUTH DAKOTA, LLC,
	a South Dakota limited liability company;
	CGC HOLDINGS, L.L.C.,
	a Nevada limited liability company;
	GOLD MOUNTAIN DEVELOPMENT,
	A LIMITED LIABILITY COMPANY,
	a Colorado limited liability company; and
	NEVADA GOLD BVR, L.L.C.,
	a Nevada limited liability company

	By
		Michael P. Shaunnessy,
		Manager

NAME	POSITION IN EACH MEMBER OF THE BORROWER CONSOLIDATION	SIGNATURE

Michael P. Shaunnessy	President/Manager	/s/ Michael P. Shaunnessy

James J. Kohn	Chief Financial Officer	/s/ James Jay Kohn

A. FF&E (Section 5.01): Please state whether or not all FF&E has been purchased and installed in the Business Operations free and clear of all liens, encumbrances or claims, other than Permitted Encumbrances.		yes/no

B. Permits; Licenses and Legal Requirements (Section 5.02):

a. State whether or not there have been any changes in the Gaming Permits or material licenses with respect to the Business Operations. If so, please attach a description of such changes.		yes/no

b. State whether or not there have been any changes in the FinCEN registrations or BSA/AML Program maintained with respect to the Business Operations. If so, please attach a description of such changes.		yes/no

C. Liens Filed (Section 5.03): Report any liens filed against the Business Operations or Collateral Properties and the amount claimed in such liens. Describe actions being taken with respect thereto.		__________________

D. Additional Real Property (Section 5.06(b)): Attach a legal description of any other real property or rights to the use of real property acquired subsequent to the Closing Date which is used in any material manner in connection with the Business Operations and describe such use. Attach evidence that such real property or rights to the use of such real property has been added as Collateral under the Credit Agreement.		__________________

E. Significant Shareholder Reporting (Section 5.08(h)): State whether or not there are any Significant Shareholder’s that have not been previously reported or any change to the previously reported Significant Shareholders. If so, please attach a revised Schedule of Significant Shareholders, Schedule 4.01(c), with respect to such new Significant Shareholders.		yes/no

F. Permitted Encumbrances (Section 5.11): Describe any mortgage, deed of trust, pledge, lien, security interest, encumbrance, attachment, levy, distraint or other judicial process or burden affecting the Collateral other than the Permitted Encumbrances. Describe any matters being contested in the manner described in Sections 5.03 and 5.10 of the Credit Agreement.		__________________

G. Suits, Actions or Material Changes (Section 5.17): Describe on a separate sheet any matters requiring notice and advice to Lender under Section 5.17(a) through (e).		__________________

H. Tradenames, Trademarks and Servicemarks (Section 5.19): Describe on a separate sheet any matters requiring advice to Lender under Section 5.19.		__________________

I. Notice of Hazardous Materials (Section 5.20): State whether or not to your knowledge there are any matters requiring notice to Lender under Section 5.20. If so, attach a detailed summary of such matter(s).		__________________

J. Compliance with Washington Casino Leases and Deadwood Slot Route Leases (Section 5.22):

a. Describe all defaults, if any, which occurred during the period under review under any of the Washington Casino Leases or any of the Deadwood Slot Route Leases. Describe any modifications or amendments to any of the Washington Casino Leases or any of the Deadwood Slot Route Leases. State whether or not such modifications or amendments have been consented to by Lender as required under Section 5.22 of the Credit Agreement.		__________________

b. State whether or not there were any changes to the information set forth on the Lease Summary Schedule (Schedule 5.08(d)(i)) during the Fiscal Quarter under review. If so, please attach an updated Lease Summary Schedule setting forth such changes.		__________________

c. State whether or not there were any changes to the information set forth on the Schedule of Slot Route Locations (Schedule 3.11) during the Fiscal Quarter under review. If so, please attach an updated Schedule of Slot Route Locations setting forth such changes.		__________________

K. Restriction on Payment of Seller Subordinated Debt (Section 5.23): Report the amount of any payments made on the Seller Subordinated Debt:

Interest		$_________________

Principal		$_________________

L. Compliance with Restrictions on Payment of Permitted Indenture Subordinated Debt (Section 5.24): Report the amount of any Cash payments made on the Permitted Indenture Subordinated Debt:

Interest		$_________________

Principal [None permitted]		$_________________

M. Restricted and Unrestricted Subsidiaries (Section 5.27): List on a separate sheet the name and state of incorporation or origination of each Restricted and Unrestricted Subsidiary, other than Restricted and Unrestricted Subsidiaries which existed as of the Closing Date or which have been disclosed in prior Compliance Certificates.		__________________

Has each Restricted Subsidiary executed a Subsidiary Guaranty?		yes/no

A. Total Leverage Ratio (Section 6.01): To be calculated with reference to the Borrower Consolidation as of each Fiscal Quarter, commencing with the Fiscal Quarter ending April 30, 2014:

TOTAL FUNDED DEBT:

a. The total of the Funded Outstandings on the Credit Facility as of the last day of the Fiscal Quarter under review.		$_________________

b. Plus the total, as of the last day of the Fiscal Quarter under review, of both the long-term and current portions (without duplication) of all other interest bearing Indebtedness (including Contingent Liabilities and Seller Subordinated Debt, but excluding Permitted Indenture Subordinated Debt).		+ $_______________

c. Plus the total, as of the last day of the Fiscal Quarter under review of both the long-term and current portions (without duplication) of all Capitalized Lease Liabilities.		+ $_______________

d. Less the aggregate amount of all Unrestricted Cash on deposit with Lender as of the last day of the Fiscal Quarter under review.		- $_______________

e. TOTAL FUNDED DEBT (a + b + c - d)		$________________

Divided ( ¸ ) by:		¸

EBITDA To be calculated on a cumulative basis with respect to the Fiscal Quarter under review and the most recently ended three (3) preceding Fiscal Quarters on a rolling four (4) Fiscal Quarter basis:

f. Net Income.		$_________________

g. Less any one-time non-Cash gain to the extent reflected in such Net Income		- $________________

h. Plus any losses on sales of assets and other extraordinary losses and one-time non-Cash charges to the extent reflected in such Net Income		+ $________________

i. Plus Interest Expense (expensed and capitalized) to the extent deducted in the determination of Net Income		+ $________________

j. Plus the aggregate amount of the provision for federal and state taxes on or measured by income or profit for the period under review (whether or not payable during such period) to the extent deducted in the determination of Net Income		+ $________________

k. Plus depreciation, amortization and all other non-cash expenses for the period under review to the extent deducted in the determination of Net Income		+ $________________

l. Plus non-recurring fees incurred as a result of the Credit Facility to the extent deducted in the determination of Net Income		+ $________________

m. Total EBITDA (f - g + h + i + j + k + l)

n. Total Leverage Ratio (e ¸ m)		:1.0

Maximum Permitted:
Fiscal Quarter End		Maximum Total Leverage Ratio
As of the Fiscal Quarter ending April 30, 2014 and as of each Fiscal Quarter end through the Fiscal Quarter ending July 31, 2015		3.00 to 1.00

As of the Fiscal Quarter ending October 31, 2015 and as of each Fiscal Quarter end through the Fiscal Quarter ending January 31, 2017		2.50 to 1.00

As of the Fiscal Quarter ending April 30, 2017 and as of each Fiscal Quarter end through Credit Facility Termination		2.00 to 1.00

B. Lease Adjusted Fixed Charge Coverage Ratio (Section 6.02): To be calculated with respect to the Borrower Consolidation for each Fiscal Quarter commencing with the Fiscal Quarter ending April 30, 2014, in each instance with reference to the Fiscal Quarter under review and the most recently ended three (3) preceding Fiscal Quarters on a four (4) Fiscal Quarter basis (other than as otherwise provided in the definition of AFCC Make Well Contribution):

Lease Adjusted Cash Flow

a. Total EBITDA (Enter II A (m) above)		$__________________

b. Less the aggregate amount of actually paid and/or accrued taxes net of tax benefits		- $_________________

c. Plus non-recurring expenses (less non-recurring income) permitted by Lender		+ $_________________

d. Less the aggregate amount of Distributions		- $_________________

e. Less the aggregate amount of Non-Financed Capital Expenditures		- $_________________

f. Plus Net Proceeds of any Equity Offering permitted by Lender		+ $_________________

g. Plus Facilities Lease Expense		+ $_________________

h. Lease Adjusted Cash Flow (a - b + c - d - e + f + g)		$__________________

Divided ( ¸ ) by:

Adjusted Coverage Denominator - the sum of :

i. The aggregate amount of Interest Expense (expensed and capitalized)		$__________________

j. Plus the aggregate of Scheduled Reduction Payments, if any		+ $_________________

k. Plus all payments of principal and interest actually paid on Seller Subordinated Debt		+ $_________________

l. Plus all payments of interest actually paid on Permitted Indenture Subordinated Debt		+ $_________________

m. Plus the aggregate amount of mandatory payments required to be made on all other interest bearing indebtedness.		+ $_________________

n. Plus the aggregate amount of mandatory payments required to be made on all Capitalized Lease Liabilities.		+ $_________________

o. Plus the aggregate of Facilities Lease Expense		+ $_________________

p. Total Adjusted Coverage Denominator. (i + j + k + l + m + n + o)		$__________________

Provided, however, for the Fiscal Quarters ending April 30, 2014, July 31, 2004 and October 31, 2004, the aggregate of the Adjusted Coverage Denominator shall be determined on an annualized basis using the following calculations:

(i) For the Fiscal Quarter ending April 30, 2014, the actual aggregate amount of the Adjusted Coverage Denominator for that Fiscal Quarter shall be multiplied by four (4);

(ii) For the Fiscal Quarter ending July 31, 2014, the actual aggregate amount of the Adjusted Coverage Denominator for the Fiscal Quarters ending April 30, 2014 and July 31, 2014 shall be multiplied by two (2); and

(iii) For the Fiscal Quarter ending October 31, 2014, the actual aggregate amount of the Adjusted Coverage Denominator for the Fiscal Quarters ending April 30, 2014, July 31, 2014 and October 31, 2014 shall be multiplied by four-thirds (4/3).

Adjusted Fixed Charge Coverage Ratio (h ¸ p)		:1

Minimum required: 1.15 to 1.00.

C. Maintenance Capital Expenditure Requirement (Section 6.03): To be calculated with respect to the Borrower Consolidation for each Fiscal Year commencing with the Fiscal Year ending April 30, 2015:

Maintenance Capital Expenditures

a. Set forth amount of Maintenance Capital Expenditures made during the Fiscal Year under review.		$__________________

b. Set forth the gross annual revenues realized by the Borrower Consolidation during the immediately preceding Fiscal Year.		$__________________

c. Set forth 0.50% of such gross annual revenues		$__________________

Line (a) must exceed (c)		$__________________

D. Limitation on Indebtedness (Section 6.04):

a. Set forth the aggregate amount of Interest Rate Hedges in effect as of the end of the Fiscal Quarter under review.		$__________________

b. Set forth the amount of the Aggregate Commitment as of the end of the Fiscal Quarter under review.		$__________________

Requirement: (a) must not exceed (b).

c. Set forth the aggregate amount of Seller Subordinated Debt owing by the Borrower Consolidation		$__________________

Requirement: May not exceed $1,000,000.00

d. Set forth aggregate outstanding amount of Permitted Indenture Subordinated Debt.		$__________________

Requirement: Must satisfy each requirement for Permitted Indenture Subordinated Debt.

e. Set forth the aggregate amount of Unsecured Indebtedness, secured purchase money Indebtedness and Capital Lease Liabilities.		$__________________

Maximum Aggregate Permitted up to $500,000.00

f. Set forth the aggregate amount of all other unsecured Indebtedness (other than trade payables and contingent liabilities).		$__________________

Requirement: May not exceed $500,000.00.

g. Set forth the amount and a brief description of any Indebtedness of the Borrower Consolidation not permitted under Section 6.04.		$__________________

E. Limitation on Distributions (Section 6.05):

a. Set forth aggregate amount of Distributions (including all principal and interest payments on Seller Subordinated Debt and interest payments on Permitted Indenture Subordinated Debt).		$__________________

b. Set forth the date, amount and a brief description of each Distribution made by the Borrower Consolidation not permitted under Section 6.05.		___________________

F. Contingent Liabilities (Section 6.06):

a. Set forth the cumulative aggregate amount of Contingent Liabilities incurred by the Borrower Consolidation.		$__________________

Requirement: None permitted without consent of Lender.

G. Investment Restrictions (Section 6.07):

a. Set forth the aggregate amount of New Venture Investments made during the period commencing on the Closing Date through the end of the Fiscal Quarter under review.		$__________________

Requirements:

(i) Must not exceed $2,500,000.00 in the aggregate (may include up to $1,000,000.00 in Seller Subordinated Debt)

(ii) Each Acquisition acquired by such New Venture Investment must be added as Collateral.

H. Total Liens (Section 6.08): On a separate sheet describe in detail any and all Liens on any assets of the Borrower Consolidation not permitted under Section 6.08.		___________________

I. Change of Control (Section 6.09): State whether or not a Change of Control has occurred.		___________________

J. Sale of Assets, Consolidation, Merger or Liquidation (Section 6.10):

a. On a separate sheet describe any and all mergers, consolidations, liquidations and/or dissolutions not permitted under Section 6.10.		__________________

b. With respect to the determination of Excess Capital Proceeds, please set forth:

(i) The amount of Net Proceeds received by the Borrower Consolidation during the current Fiscal Year from the Disposition of FF&E and other items of personal property Collateral which have not been identified as Designated Replacement Assets.		$_________________

(ii) Plus the amount of Net Proceeds from the Disposition of FF&E and other items of personal property Collateral that have been identified as Designated Replacement Assets but which have not been replaced by the end of the consecutive 12 month period following such Disposition, which 12 month period has ended during the current Fiscal Year.		+ $________________

(iii) Plus the amount of Cash payments received during the current Fiscal Year for principal owing under any promissory notes or deferred payment arrangements payable to the order of any member of the Borrower Consolidation from the Disposition of Collateral during the current or any prior Fiscal Year.		+ $________________

Amount of Excess Capital Proceeds during the current Fiscal Year [(i) + (ii) + (iii)]		$_________________