As filed with the Securities and Exchange Commission on April 7, 2014
Registration No. 333-193225
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Amendment No. 2
to
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
 
FULL HOUSE RESORTS, INC.
(Exact name of registrant as specified in its charter)
 
Delaware
7011
13-3391527
(State or other jurisdiction of
incorporation or organization)
(Primary Standard Industrial
Classification Code Number)
(IRS Employer
Identification Number)
4670 S. Fort Apache Road, Suite 190
Las Vegas, Nevada 89147
(702) 221-7800
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
 
Elaine L. Guidroz, Esq.
Secretary & General Counsel Full House Resorts, Inc.
4670 S. Fort Apache Road, Suite 190
Las Vegas, Nevada 89147
(702) 221-7800
(Name, address, including zip code, and telephone number, including area code, of agent for service)
 
Copies to:
 
John N. Brewer, Esq.
Michael S. Shalmy, Esq.
Greenberg Traurig, LLP
3773 Howard Hughes Parkway, Suite 400N.
Las Vegas, Nevada 89169
(702) 792-3773
Steven B. Stokdyk, Esq.
Latham & Watkins LLP
355 South Grand Avenue
Los Angeles, CA 90071
(213) 458-1234
 
Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
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
(Do not check if a smaller reporting company)
Smaller reporting company
 
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to such Section 8(a), may determine.
 
 

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED APRIL 7, 2014
PRELIMINARY PROSPECTUS
[MISSING IMAGE: lg_fullhouse-lores.jpg]
Full House Resorts, Inc.
__________ Shares
Common Stock
We are offering __________ shares of our common stock. Our common stock is listed on the NASDAQ Capital Market under the symbol “FLL”. The last sale price of our common stock on          __, 2014 was $_____.
 
Price to Public
Underwriting Discounts and Commissions
Proceeds, Before Expenses, to Full House Resorts, Inc.
Per Share
$
     
$
     
$
     
Total
$
     
$
     
$
     
We have granted the underwriters for this offering an option to purchase up to an additional __________ shares of common stock at the public offering price, less the underwriting discount. The underwriters may exercise this option at any time and from time to time within 30 days after the date of this prospectus.
We expect that the shares of common stock will be ready for delivery to investors on or about __________, 2014.
Investing in our securities involves risks. You should consider the risks that we have described in Risk Factors beginning on page 10 of this prospectus before buying our securities.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
Neither the Nevada Gaming Commission, the Nevada State Gaming Control Board, nor any other gaming authority has passed upon the accuracy or adequacy of this prospectus or the investment merits of the securities offered hereby. Any representation to the contrary is unlawful.
 
Macquarie Capital
 
The date of this prospectus is __________, 2014

TABLE OF CONTENTS
 
 
You should rely only on the information contained in this prospectus. Neither the underwriters nor we have authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. Neither the underwriters nor we are making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate as of the date on the front cover of this prospectus only. Our business, financial condition, results of operations and prospects may have changed since that date.


Prospectus Summary
This summary highlights material information about our business and this offering. This is a summary of material information contained elsewhere in this prospectus and does not contain all of the information you should consider before investing in our common stock. You should read this entire prospectus carefully before making an investment decision. When we use the words “Company,” “we,” “us” or “our company” in this prospectus, we are referring to Full House Resorts, Inc., a Delaware corporation, and our subsidiaries, unless it is clear from the context or expressly stated that these references are only to Full House Resorts, Inc. Unless otherwise indicated, all information contained in this prospectus assumes that the underwriters will not exercise their over-allotment option. This prospectus contains forward-looking statements, which involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under “Risk Factors” and elsewhere in this prospectus.
Our Company
We are a leading multi-jurisdictional developer, owner and operator of gaming-related enterprises in regional markets. We have successfully transitioned from a gaming management company to a company with operations that consist primarily of owned casino properties. The repositioning of our business plan is highlighted by the acquisition of Rising Star Casino Resort and the lease of Grand Lodge Casino in 2011 and the acquisition of Silver Slipper Casino and the sale of the management agreement for the FireKeepers Casino in 2012. We actively explore, individually and with partners, new gaming-related opportunities with a focus on acquiring and developing casino properties.
We currently own three casino properties, lease one casino property and we have one management contract to manage a group of related casino properties. These properties are located in four distinct regions of the United States — the Gulf Coast, the Midwest, Northern Nevada and the Southwest.
Gulf Coast Casino Operations
Silver Slipper Casino
On October 1, 2012, we acquired Silver Slipper Casino located in Bay St. Louis, Mississippi. Silver Slipper Casino is approximately one hour (56 miles) from New Orleans, Louisiana. The property has approximately 37,000 square feet of gaming space containing approximately 950 slot and video poker machines, 25 table games and the only live keno game on the Gulf Coast. The property includes a fine dining restaurant, buffet, quick service restaurant and two casino bars. The property draws patrons primarily from the New Orleans metropolitan area and other communities in southern Louisiana and southwestern Mississippi. In addition, we have commenced construction of a 142-room hotel adjacent to our casino. Construction of the hotel is expected to be completed in late 2014 or early 2015.
Midwest Casino Operations
Rising Star Casino Resort
On April 1, 2011, we acquired all of the operating assets of Grand Victoria Casino & Resort, L.P., located in Rising Sun, Indiana. We renamed the property Rising Star Casino Resort in August 2011. The property has approximately 40,000 square feet of casino space and includes approximately 1,200 slot and video poker machines, 33 table games, a 190-room hotel, five dining outlets and an 18-hole Scottish links golf course. In addition, a third party has constructed a 104-room hotel on property adjacent to Rising Star Casino Resort which opened on November 15, 2013, bringing total room capacity to 294 rooms. On August 16, 2013, we entered into a 10-year lease which commenced on November 15, 2013 and provides us with full management control and option to own the hotel at the end of the lease term.
Northern Nevada Casino Operations
Grand Lodge Casino
On September 1, 2011, we purchased the operating assets of Grand Lodge Casino and entered into a lease with Hyatt Equities, L.L.C. for the casino space in the Hyatt Regency Lake Tahoe Resort, Spa and


Casino in Incline Village, Nevada on the north shore of Lake Tahoe. The term of the lease runs to August 31, 2018. The lease has an option, subject to mutual agreement, to renew the lease for an additional five-year term. Grand Lodge Casino has 18,900 square feet of casino space integrated with the Hyatt Regency Lake Tahoe Resort, Spa and Casino, featuring approximately 260 slot machines, 16 table games and a poker room.
Stockman’s Casino
On January 31, 2007, we acquired Stockman’s Casino in Fallon, Nevada. Stockman’s Casino has approximately 8,400 square feet of gaming space with approximately 265 slot machines, four table games and keno. The facility has a bar, a fine dining restaurant and a coffee shop.
Southwest Casino Management Operations
Buffalo Thunder Casino and Resort
In May 2011, we entered into an agreement with the Pueblo of Pojoaque in New Mexico to manage the Pueblo’s gaming operations including Buffalo Thunder Casino and Resort in Santa Fe, New Mexico, the Cities of Gold Casino and other gaming facilities. The agreement was approved by the National Indian Gaming Commission as a management contract. For our management services, we receive a base consulting fee of $100,000 per month plus quarterly success fees based on achieving certain financial targets. The Pueblo of Pojoaque agreement covers approximately 1,200 slot machines, 18 table games (including poker) and a simulcast area. The Pueblo of Pojoaque agreement expires on September 23, 2014.
Expansion Opportunities
We actively pursue expansion opportunities, including those discussed below.
Fitz Tunica Casino & Hotel
On March 21, 2014, we entered into an Interest Purchase Agreement to acquire the membership interests of Majestic Mississippi, LLC, the owner of Fitz Tunica Casino & Hotel in Tunica, Mississippi for $62.0 million, exclusive of working capital and other adjustments, fees and expenses as of the closing date, which is expected to occur in the third quarter of 2014. We expect to invest an additional $7.0 million after closing for certain required renovations to the property. The acquisition is subject to financing, regulatory approvals and other customary closing conditions. No assurance can be given that the conditions to closing will be satisfied. Fitz Tunica Casino & Hotel is located approximately 30 miles from downtown Memphis, Tennessee and has 38,000 square feet of gaming space with approximately 1,100 slot and video poker machines and 20 table games on a 53-acre site. The property includes a 506-room hotel with 68 suites, a fine dining restaurant, buffet, quick service restaurant, two casino bars and an 8,100 square foot multi-purpose event center.
We are working with potential lenders to obtain a binding commitment for $125.0 million in debt financing, which along with the net proceeds of this equity offering will provide the funds for the purchase of the membership interests of Majestic Mississippi, LLC. We anticipate that the debt financing will contain customary covenants and representations including a provision that the financing will be secured by our assets. However, because we have not yet obtained a commitment for the debt financing, the terms of the anticipated debt financing are not yet known.
Kentucky Opportunities
On February 26, 2014, we entered into an exclusivity agreement with Keeneland Association, Inc. to own, manage, and operate instant racing and, if authorized, traditional casino gaming at race tracks in Kentucky, subject to completion of definitive documents for each opportunity. In addition, we and Keeneland Association, Inc. have a letter of intent that provides for an exclusive option to purchase the Thunder Ridge Raceway in Prestonsburg, Kentucky. The purchase will be subject to the completion of


definitive documentation and to the approval of the Kentucky Horse Racing Commission, including the approval to transfer the racing license to a to-be-constructed quarter horse racetrack near Corbin, Kentucky to be owned 75% by us and 25% by Keeneland Association, Inc.
Prior Projects
Until March 30, 2012, we owned 50% of Gaming Entertainment (Michigan), LLC, a joint venture with RAM Entertainment, LLC, that held the management rights and responsibilities under an agreement to manage the FireKeepers Casino, a tribal gaming casino, located near Battle Creek, Michigan. During the development and construction of the FireKeepers Casino, Gaming Entertainment (Michigan), LLC provided site acquisition, design, budgeting, financing, construction oversight and pre-opening planning and implementation services. Following opening, Gaming Entertainment (Michigan), LLC managed FireKeepers Casino’s operations and entered into a hotel consulting services agreement with respect to the FireKeepers Casino phase II development project. We and RAM sold Gaming Entertainment (Michigan), LLC and the related management agreement to FireKeepers Development Authority for approximately $97.5 million on March 30, 2012. Additionally, Gaming Entertainment (Michigan), LLC assigned the hotel consulting services agreement to us, and we completed all consulting services under the agreement on or before December 31, 2012.
Operating and Marketing Strategy
Our marketing strategy is to target primarily local patrons that are able to easily drive to our casinos from the surrounding communities. We believe that patrons are attracted to our casinos based on our ability to create favorable experiences through customer service, employee engagement and entertainment. Our primary operating strategy is focused on maintaining and increasing the volume of patrons that frequent our casino properties. Our management philosophy is based on a decentralized model in which property level management maintains significant autonomy in daily operations, but are provided with corporate oversight of business planning, accounting and finance, human resources, risk management, procurement of shared resources, marketing strategy and capital allocation.
Our Growth Strategy
Target the acquisition of high quality regional casino properties that provide an opportunity to create value for our shareholders
Our strategy is to identify high quality gaming opportunities with strong demographics, in attractive and accessible locations, at purchase valuations that provide opportunities for us to create shareholder value through improved management and/or capital investment. Our management team will focus on implementing best practices in accounting and finance, business planning, human resources, risk management, marketing, and procurement at our current properties and potential future acquisitions.
Pursue casino development opportunities in existing and new regional gaming jurisdictions
We believe there are significant opportunities to develop new casinos in existing and new regional casino markets throughout the United States. We recently entered into an Interest Purchase Agreement to acquire the membership interests of Majestic Mississippi, LLC, the owner of Fitz Tunica Casino & Hotel in Tunica, Mississippi, which we believe furthers our growth strategy of acquiring quality properties in familiar regulatory jurisdictions. We also recently entered into an exclusivity agreement with Keeneland Association, Inc. to own, manage, and operate instant racing and, if authorized, traditional casino gaming at race tracks in Kentucky, subject to completion of definitive documents for each opportunity.
We evaluate projects based on a number of factors, including forecasted profitability, development period, regulatory and political environment and our ability to secure the funding necessary to complete the development. We believe that our expertise as a multi-jurisdictional casino operator and our experience with the development of the FireKeepers Casino position us well to expand our operations with new project openings.


Invest in organic growth opportunities at our existing properties
We are focused on maximizing the performance of our properties through capital spending programs designed to maintain asset quality and add or improve amenities. We are currently constructing a 142-room hotel adjacent to Silver Slipper Casino, which we believe will favorably impact customer loyalty and financial performance by allowing guests to extend their visits at Silver Slipper Casino. A third party also recently opened a 104-room hotel adjacent to Rising Star Casino Resort which we have leased and began operating in November 2013.
Risks That We Face
You should carefully consider the risks described under “Risk Factors” beginning on page 10 and the other information included in this prospectus before deciding to invest in our common stock. These risks could materially and adversely impact our business, results of operations and financial condition, which could cause the trading price of our common stock to decline and result in a partial or total loss of your investment.
Our risks include:
  • Growth.   Since 2011 we have acquired three properties. On March 21, 2014, we entered into an agreement to acquire the membership interests of Majestic Mississippi, LLC, the owner of Fitz Tunica Casino & Hotel in Tunica, Mississippi. Additionally, we and Keeneland Association, Inc. have a letter of intent with Appalachian Racing, LLC that provides for an exclusive option to purchase the Thunder Ridge Raceway in Prestonsburg, Kentucky. This growth and any future growth could place a significant strain on our management, employees and operating systems.
  • Debt.   We have significant debt that may hinder our ability to borrow funds or dispose of assets and may limit our flexibility in planning for or reacting to our competitors or our ability to acquire a gaming business. As of December 31, 2013, we had debt under our credit agreements of approximately $57.5 million (inclusive of current maturities) and a capital lease obligation of $7.7 million related to the recently opened 104-room hotel adjacent to Rising Star Casino Resort. We are currently seeking new debt financing in the amount of $125.0 million which along with the net proceeds of this equity offering would be used to repay the indebtedness under our existing credit agreements, to provide the funds for the purchase of the membership interests of Majestic Mississippi, LLC, and to be available for future capital expenditures and development opportunities. No assurance can be given that we will successfully obtain the new debt financing.
  • Competition.   The gaming industry is highly competitive. Our gaming properties compete with other gaming properties for the gaming patron on the basis of forms of gaming, as well as other forms of entertainment available in the surrounding communities.
  • Renovation and capital improvement.   Our properties have an ongoing need for renovation and other capital improvements to remain competitive in our markets as well as to replace from time to time our furniture, fixtures and equipment. We are currently constructing a 142-room hotel at our Silver Slipper Casino property that is expected to cost approximately $17.7 million. Upon closing of the acquisition of the membership interests of Majestic Mississippi, LLC, we expect to invest $7.0 million in renovations at the Fitz Tunica Casino & Hotel.
  • Economic environment.   Discretionary consumer spending has been adversely impacted by the continuing economic weakness in the United States. As a result, consumers are spending less on discretionary items such as gaming.
  • Governmental regulation.   We operate in a highly regulated business environment and changes in regulation could impose significant costs on us or make our services less economical.
Additional Information
We were incorporated in Delaware on January 5, 1987. Our principal executive offices are located at 4670 S. Fort Apache Road, Suite 190, Las Vegas, Nevada 89147, and our telephone number is (702) 221-7800. Our website is www.fullhouseresorts.com. The information contained in our website is not a part of this prospectus.


The Offering
Issuer
Full House Resorts, Inc.
Common Stock offered
_________ shares
Common Stock outstanding prior to this offering
18,870,681 shares(1)
Common Stock to be outstanding after this offering
_________ shares(1)
Use of proceeds  
We intend to use the net proceeds of this offering along with borrowings from a contemplated new $125.0 million debt financing to repay debt outstanding under our existing First Lien Credit Agreement and Second Lien Credit Agreement, to provide funds for the purchase of the membership interests of Majestic Mississippi, LLC, the owner of Fitz Tunica Casino & Hotel, to be available for future capital expenditures and development opportunities, including construction of the hotel at Silver Slipper Casino, renovations at the Fitz Tunica Casino & Hotel, and any future development expenses in Kentucky including development of a racetrack and related gaming facilities in Corbin Kentucky, and for general corporate purposes. See “Use of Proceeds.”
Listing
Our common stock is listed on the NASDAQ Capital Market under the symbol “FLL.”
 
(1)
  • Excludes the following:
  • 1,356,595 shares of common stock held as treasury stock.
  • 17,000 shares of common stock available for future issuance under our Amended and Restated 2006 Incentive Compensation Plan.
All information in this prospectus assumes no exercise by the underwriters of their right to purchase up to an additional _____ shares of common stock to cover over-allotments.


Summary Financial Data
The following summary consolidated historical financial information as of December 31, 2013 and 2012 and for the years then ended was derived from our audited consolidated financial statements included in this prospectus. In the opinion of management, such audited financial data reflects all adjustments necessary for a fair presentation of the results for such periods. The following summary historical financial information of Majestic Mississippi, LLC as of the years ended December 31, 2013 and 2012 was derived from the audited financial statements included in this prospectus. The pro forma combined statement of operations data for the year ended December 31, 2013 presents the combined results, after adjustments, of us and Majestic Mississippi, LLC, as if the acquisition of the membership interests had occurred on January 1, 2013, and the pro forma combined balance sheet data as of December 31, 2013 presents the combined balance sheet data, after adjustments, of us and Majestic Mississippi, LLC on December 31, 2013.
The following information is only a summary and should be read together with the audited consolidated financial statements and the related notes appearing elsewhere in this prospectus, the financial information included in this prospectus in the sections entitled “Selected Consolidated Financial Data,” “Unaudited Pro Forma Financial Information” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the section entitled “Risk Factors.”
 
Full House Resorts, Inc.(1)
Majestic Mississippi, LLC(2)
Pro forma
Combined
Year Ended
December 31,
2013
Year Ended
December 31,
2012(3)
Year Ended
December 31,
2013
Year Ended
December 31,
2012
Year Ended
December 31, 2013
(Unaudited)
(in thousands except per share data)
Statement of Operations Data(4):
       
Revenues
$
144,727
$
128,760
$
63,235
$
67,755
$
207,962
Operating income (loss)(4)(5)(6)
2,960
49,638
(9,444
)
7,043
8,643
Net (loss) income
(3,962
)
27,834
(9,596
)
7,001
(2,331
)
Basic per share (loss) income(5)
$
(0.21
)
$
1.49
$
$
$
(0.07
)
 
Full House Resorts, Inc.(1)
Majestic Mississippi, LLC(2)
Pro forma
Combined
As of
December 31,
2013
As of
December 31,
2012(3)
As of
December 31,
2013
As of
December 31,
2012
As of
December 31, 2013
(Unaudited)
(in thousands)
Balance Sheet Data:
Cash and cash equivalents
$
14,936
$
20,603
$
7,619
$
7,735
$
26,622
Total assets
154,287
162,725
69,165
102,187
229,736
Long-term debt (including current maturities)
57,500
68,750
150
1,548
100,000
Capital lease obligation (including current maturities)
7,719
7,719
Current liabilities
11,877
15,332
7,212
9,288
18,128
Retained earnings
34,116
38,078
61,953
92,900
28,314
Total stockholders’ equity
77,814
81,133
61,953
92,900
104,512
Other Financial Data(7):
Adjusted EBITDA
$
17,007
$
15,922
$
9,981
$
10,547
$
26,988
Property EBITDA
21,710
21,159
9,981
10,547
31,691
 
(1)
  • Full House Resorts, Inc. consolidated.


(2)
  • Majestic Mississippi, LLC operations. On March 21, 2014, we entered into an Interest Purchase Agreement with The Majestic Star Casino, LLC for the purchase of all the outstanding membership interests of Majestic Mississippi, LLC, the owner of Fitz Tunica Casino & Hotel in Tunica, Mississippi.
(3)
  • Our results of operations for 2012 include a pre-tax gain of $41.2 million on the sale of the management rights and management agreement for the FireKeepers Casino to the FireKeepers Development Authority in March 2012.
(4)
  • Our results of operations for 2013 and 2012 may not be comparable. We sold the management rights and management agreement for the FireKeepers Casino in March 2012 and acquired Silver Slipper Casino in October 2012.
(5)
  • Excluding our $4.0 million goodwill impairment charge recognized in September 2013, net of tax effect, our net loss would have been $1.4 million and loss per share would have been $0.07 for the year ended December 31, 2013. For the years summarized for our results of operations, there were no common equivalent shares that would have been dilutive and, therefore, the calculations for basic and diluted per share (loss) income are equal.
(6)
  • Majestic Mississippi, LLC’s results of operations for 2013 and 2012 are not comparable, due to a $15.3 million goodwill impairment loss and $1.5 million trade name impairment loss incurred in 2013. The goodwill and trade name were written down to reflect the purchase price of $62.0 million for the purchase by us of the membership interests of Majestic Mississippi, LLC. The pro forma combined statements of operations data presents the combined results, after adjustments, as if the acquisition of the membership interests of Majestic Mississippi, LLC had occurred on January 1, 2013 at the purchase price of $62.0 million as per the Interest Purchase Agreement. Therefore, the goodwill impairment loss and the trade name impairment loss were adjusted to zero in the pro forma combined data.
(7)
  • For the period ended on the reference date. An explanation of Adjusted EBITDA and Property EBITDA and a reconciliation to net income (loss) is set forth below.
We define EBITDA as net income (loss) plus (i) interest expense, net, (ii) provision for taxes and (iii) depreciation and amortization. We define Adjusted EBITDA as EBITDA further adjusted to eliminate the impact of non-cash items and certain gains, losses and expenditures that we do not consider indicative of our ongoing operating performance due to their nature and amounts, which may fluctuate from period to period, that would distort an assessment of performance. These further adjustments are itemized below. Although Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with generally accepted accounting principles (“GAAP”), we believe this Non-GAAP financial measure provides meaningful supplemental information regarding our performance and liquidity. We utilize Adjusted EBITDA internally to focus management on year-over-year changes in our core operating performance, which we consider our ordinary, ongoing and customary operations, which we believe is useful information to investors. For example, revenues and expenses in Adjusted EBITDA are primary components of calculations made to confirm our compliance with certain covenants under our credit agreements. Accordingly, management excludes from core operating performance analysis items such as those relating to impairment loss or acquisition costs, stock-based compensation, loss on derivatives, gain on a sale of a joint venture and certain non-cash activities that management believes are not reflective of such ordinary, ongoing and customary operations.
In addition, because Adjusted EBITDA is not calculated in accordance with GAAP, it may not necessarily be comparable to similarly titled measures employed by other companies. A reconciliation of the Adjusted EBITDA figures is presented below. However, you should not consider these measures in isolation or as substitutes for operating income, cash flows from operating activities or any other measure for determining our operating performance or liquidity that is calculated in accordance with GAAP. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of


Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual, variable or infrequent items. We define Property EBITDA as Adjusted EBITDA reduced by the corporate operating loss (adjusted for corporate stock compensation, severance costs and depreciation).
 
Full House Resorts, Inc.
Majestic Mississippi, LLC
Pro forma
Combined
Year Ended
December 31,
2013
Year Ended
December 31,
2012
Year Ended
December 31,
2013
Year Ended
December 31,
2012
Year Ended
December 31, 2013
(Unaudited)
(in thousands)
Net (loss) income
$
(3,962
)
$
27,834
$
(9,596
)
$
7,001
$
(2,331
)
Add back:
Interest (income) expense
7,283
2,731
33
42
5,756
Depreciation and amortization
9,388
6,884
3,858
3,504
13,246
Income taxes
(361
)
15,175
937
EBITDA
12,348
52,624
(5,705
)
10,547
17,608
Add back:
Impairment loss
4,000
16,767
4,000
Stock compensation
623
1,242
623
Acquisition costs expensed(1)
36
1,619
1,676
Loss on derivatives and debt(2)
1,711
Property sale expenses
449
449
Loss on extinguishment of debt(3)
4,162
Severance costs
157
157
Deduct:
Flood insurance proceeds, net of expense(4)
(1,687
)
(1,687
)
Gain on sale of joint venture
(41,189
)
Other(5)
(85
)
Adjusted EBITDA
$
17,007
$
15,922
$
9,981
$
10,547
$
26,988
Add back:
Corporate operating loss
5,339
6,818
5,339
Deduct:
Corporate stock compensation
(623
)
(1,242
)
(623
)
Severance costs
(330
)
Corporate depreciation and amortization
(13
)
(9
)
(13
)
Property EBITDA
$
21,710
$
21,159
$
9,981
$
10,547
$
31,691
 
Set forth above is a quantitative reconciliation of EBITDA, Adjusted EBITDA and Property EBITDA to the most directly comparable financial performance measure under generally accepted accounting principles (“GAAP”), which is net income. Adjusted EBITDA and Property EBITDA also include the following adjustments:
(1)
  • Acquisition costs incurred by us for the year ended December 31, 2013 of $36,000 and $1.6 million for the year ended December 31, 2012 are related to Silver Slipper Casino and potential gaming opportunities in Kentucky. The pro forma acquisition costs of $1.6 million are related to Majestic Mississippi, LLC, consisting of a 2% commission to the investment bankers and attorney fees.


(2)
  • We recognized net losses on the interest rate derivative related to our Wells Fargo debt, in addition to a loss of $1.7 million resulting from the write-off of unamortized loan costs related to the extinguishment of the Wells Fargo debt in March 2012.
(3)
  • Pro forma loss on extinguishment of debt is related to the pro forma write-off of loan acquisition costs on our First Lien Credit Agreement and Second Lien Credit Agreement, of $3.4 million, as well as the pro forma prepayment penalty on the Second Lien Credit Agreement, of $0.8 million.
(4)
  • Business interruption insurance proceeds paid to Majestic Mississippi, LLC due to a flood in May 2011.
(5)
  • Other items consist primarily of the non-controlling interest adjustment and non-controlling interest depreciation adjustment for the year ended December 31, 2012.
We present EBITDA, Adjusted EBITDA and Property EBITDA because we believe it assists investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we use EBITDA, Adjusted EBITDA and/or Property EBITDA: (i) as factors in evaluating management’s performance when determining incentive compensation, (ii) to evaluate the effectiveness of our business strategies and (iii) because our credit agreements use measures similar to these items to measure our compliance with certain covenants. EBITDA, Adjusted EBITDA and Property EBITDA have limitations as analytical tools. Some of these limitations are:
  • they do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;
  • they do not reflect changes in, or cash requirements for, our working capital needs;
  • they do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;
  • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA, Adjusted EBITDA and Property EBITDA do not reflect any cash requirements for such replacements;
  • non-cash compensation is and will remain a key element of our overall long-term incentive compensation package, although we exclude it as an expense when evaluating our ongoing operating performance for a particular period;
  • they do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; and
  • other companies in our industry may calculate EBITDA, Adjusted EBITDA and Property EBITDA differently than we do, limiting their usefulness as comparative measures.
Because of these limitations, EBITDA, Adjusted EBITDA and Property EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA, Adjusted EBITDA and Property EBITDA only supplementally.

Risk Factors
Investing in our common stock involves a high degree of risk. You should carefully consider the following risk factors, as well as the other information in this prospectus, before deciding whether to invest in our common stock. If any of the events highlighted in the following risks actually occurs, our business, results of operations and financial condition would likely suffer. In such an event, the trading price of our common stock would likely decline, and you could lose part or all of your investment in our common stock.
Risks Related to Our Business
Our success depends on our ability to continue to attract patrons and manage our risk and volatility.
Our success depends on our ability to continue to attract patrons, including frequent players and players who make large wagers, drive volume through marketing, offer competitive and diversified wagering products, and manage risk and volatility. Without a sufficiently high volume of wagers, we will not earn sufficient revenues. If we are unable to manage risk and volatility and we experience more losses than anticipated, our results of operations will be harmed. As a result, our revenues and earnings could fluctuate or decline and would be lower than our expectations or those of analysts or investors.
To increase awareness of our casinos, services and brand and attract profitable gaming patrons, we may need to significantly increase marketing expenses.
To successfully execute our business strategy, we must build awareness and understanding of our casinos, including our services and brands. In order to build this awareness, our marketing efforts must succeed and we must provide high-quality products and services. These efforts require us to incur significant expenses for advertising, free play and other marketing initiatives. Some of these initiatives have the effect of reducing our revenues or increasing our expenses. We cannot assure you that our marketing efforts will be successful or that the allocation of funds to these marketing efforts will be the most effective use of those funds.
The gaming industry is highly competitive, which could reduce our revenues or increase our expenses.
Gaming activities include traditional land-based casinos, riverboat and dockside gaming, casino gaming on tribal land, internet gaming, state-sponsored lotteries, video poker in restaurants, bars and hotels, pari-mutuel betting on horse racing, dog racing and jai alai, sports bookmaking, card rooms, and casinos at racetracks. Silver Slipper Casino, Rising Star Casino Resort, Grand Lodge Casino, Stockman’s Casino and the tribal and other casinos that we may be developing and plan to manage or own compete with all these forms of gaming, and will compete with any new forms of gaming that may be legalized in additional jurisdictions, as well as with other types of entertainment. Some of our competitors have more personnel and greater financial or other resources. Competition may cause our revenues to decline or require us to incur additional expenses to attract patrons.
We are leveraged, which could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, expose us to interest rate risk and prevent us from meeting our obligations under our indebtedness.
As of December 31, 2013, we had debt under our credit agreements of approximately $57.5 million (inclusive of current maturities) and a capital lease obligation of $7.7 million related to the recently opened 104-room hotel adjacent to Rising Star Casino Resort. In March 2014, we borrowed an additional $2.0 million under our First Lien Credit Agreement to make the deposit of $1.75 million under the Interest Purchase Agreement dated March 21, 2014 to acquire the membership interests of Majestic Mississippi, LLC, with the remaining borrowing retained as working capital. Our debt has financial covenants, including a total leverage ratio and fixed charge coverage ratio, which are impacted by the performance of our operations. If a default were to occur and we were unable to meet our obligations, we would be forced to restructure or refinance our indebtedness or sell additional equity or assets, which we may not be able to do on favorable terms or at all.

In order to acquire the membership interests of Majestic Mississippi, LLC, we expect to replace our existing indebtedness as of March 31, 2014 of approximately $59.5 million (inclusive of current maturities) with new debt financing in the aggregate amount of $125.0 million. This new indebtedness is expected to have financial covenants that may limit our operations. No assurance can be given that we will be successful in obtaining new debt financing.
Our indebtedness could have important consequences for investors, including:
  • it may limit our ability to borrow money, dispose of assets or sell equity to meet our working capital needs, fund capital expenditures and dividend payments, service our debt, or pursue strategic initiatives;
  • it may limit our flexibility in planning for, or reacting to, changes in our operations or business;
  • we may be more highly leveraged than some of our competitors, which may place us at a competitive disadvantage;
  • it may make us more vulnerable to downturns in our business or the economy;
  • there would be a material adverse effect on our business, results of operations and financial condition if we were unable to service our indebtedness or obtain additional financing, as needed; and
  • our ability to complete the hotel at Silver Slipper Casino.
Our failure to properly manage our growth effectively could have a material adverse effect upon our business, results of operations and financial condition.
Since 2011, we have acquired two significant properties, Silver Slipper Casino in Mississippi and Rising Star Casino Resort in Indiana, and we entered into a long term lease to lease Grand Lodge Casino at the Hyatt Regency Lake Tahoe Resort, Spa and Casino in Incline Village, Nevada. We recently entered into an Interest Purchase Agreement to acquire the membership interests of Majestic Mississippi, LLC, the owner of Fitz Tunica Casino & Hotel in Tunica, Mississippi. We also recently entered into an exclusivity agreement with Keeneland Association, Inc. to jointly develop and operate instant racing and, if authorized, traditional casino gaming in Kentucky, subject to completion of definitive documents for each opportunity. This growth and any future growth could place significant strain on our existing management team and other personnel, management systems and resources. Significant growth will also require us to improve our financial, accounting and operational systems and controls. Expansion into new geographic areas would further strain our limited managerial, operational and marketing resources. We cannot assure you that we will properly manage our growth effectively, and failure to do so may have a material adverse effect upon our business, results of operations and financial condition.
Acquisitions and developments may not be successful.
As part of our strategy, we may seek to increase growth through acquisitions or developments and any such acquisition or development may be significant. Not only is the identification of good acquisition or development candidates difficult and competitive, but these transactions also involve numerous risks, including the ability to:
  • successfully integrate acquired companies, properties, systems or personnel into our existing business;
  • minimize any potential interruption to our ongoing business;
  • successfully enter markets in which we may have limited or no prior experience;
  • achieve expected synergies and obtain the desired financial or strategic benefits;
  • retain key relationships with employees, customers, partners and suppliers of acquired companies;
  • foresee uncertainty in key assumptions including projected future earnings growth of acquired operations, which could potentially result in impairment of goodwill; and

  • maintain uniform standards, controls, procedures and policies.
Companies, businesses or operations acquired or developed may not be profitable, may not achieve revenue levels and profitability that justify the investments made or carry other risks associated with such transactions. Future acquisitions or developments could result in the incurrence of indebtedness, the assumption of contingent liabilities, material expense related to certain intangible assets and increased operating expense, which could adversely affect our results of operations and financial condition. We may also pursue such transactions through joint ventures, which could limit our control over operations.
We recently entered into an Interest Purchase Agreement to acquire the membership interests of Majestic Mississippi, LLC, the owner of Fitz Tunica Casino & Hotel in Tunica, Mississippi, for $62.0 million, exclusive of working capital and other adjustments, fees and expenses as of the closing date, which is expected to occur in the third quarter of 2014. We expect to invest an additional $7.0 million after closing for renovations to the property. The acquisition is subject to financing, regulatory approvals and other customary closing conditions. No assurance can be given that the conditions to closing will be satisfied. In connection with this acquisition, we will be required to replace our existing indebtedness as of March 31, 2014 of approximately $59.5 million (inclusive of current maturities) with new debt financing in the aggregate amount of $125.0 million. The terms of the new debt financing may adversely affect our results of operations and financial conditions and limit our ability to further acquire additional gaming properties. Additionally, no assurance can be given that we will be successful in obtaining the contemplated new $125.0 million debt financing.
We, together with Keeneland Association, Inc., are currently pursuing potential gaming opportunities in Kentucky, including the installation of instant racing machines at racetrack properties. However, any such opportunity is dependent on the results of a challenge to the legality of instant racing machines in Kentucky. On February 20, 2014, the Kentucky Supreme Court held, among other matters, that the Kentucky Horse Racing Commission acted in its regulatory authority when it licensed the operation of pari-mutuel wagering on instant racing, also known as historical horse racing, but remanded the matter to the Circuit Court to determine if instant racing constitutes a pari-mutuel form of wagering authorized by Kentucky law. There is no assurance that the outcome of this legal challenge will result in instant racing being found to constitute a pari-mutuel form of wagering.
In addition, to the extent that the economic benefits associated with any of our acquisitions diminish in the future, we may be required to record additional write downs of goodwill, intangible assets or other assets associated with such acquisitions, which could adversely affect our operating results.
Any potential future acquisitions or developments may divert the attention of management and may divert resources from matters that are core or critical to the business.
Our ability to retain our key employees and the ability of certain key employees to devote adequate time to us are critical to the success of our business, and failure to do so may adversely affect our revenues and as a result could have a material adverse effect on our business, results of operations and financial condition.
Our future success depends to a significant degree on the skills, experience and efforts of our senior executives, Andre Hilliou, our Chairman and Chief Executive Officer, Mark J. Miller, our Chief Operating Officer and Deborah Pierce, our Chief Financial Officer. We have entered into employment agreements with each of Mr. Hilliou, Mr. Miller, and Ms. Pierce, which automatically renew for successive terms of two years for Mr. Hilliou and automatically renew for successive terms of one year for Mr. Miller and Ms. Pierce, unless terminated by us or the relevant executive.
The loss of any of our senior executives could adversely affect our operations. In addition, we compete with potential employers for employees, and we may not succeed in hiring and retaining the executives and other employees that we need. An inability to hire quality employees could have a material adverse effect on our business, financial condition and results of operations.
We may require additional capital to meet our financial obligations and support business growth, and this capital might not be available on acceptable terms or at all.
We intend to continue to make significant investments to support our business growth and may require additional funds to respond to business challenges, including the need to make significant capital

improvements at our properties, improve our operating infrastructure or acquire or develop complementary businesses, personnel and technologies. Accordingly, we may need to engage in equity or debt financings to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock. Any debt financing we secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired, and our business may be harmed.
The casino, hotel and resort industry is capital intensive and we may not be able to finance expansion and renovation projects, which could put us at a competitive disadvantage.
Our casino and casino/hotel properties have an ongoing need for renovations and other capital improvements to remain competitive, including replacement, from time to time, of furniture, fixtures and equipment. We are currently constructing a 142-room hotel at our Silver Slipper Casino property that is expected to cost approximately $17.7 million to construct. We may also need to make capital expenditures at our casino properties to comply with applicable laws and regulations.
Renovations and other capital improvements of the casino properties require significant capital expenditures. In addition, renovations and capital improvements of the casino properties usually generate little or no cash flow until the projects are completed. We may not be able to fund such projects solely from cash provided from operating activities. Consequently, we may have to rely upon the availability of debt or equity capital to fund renovations and capital improvements, and our ability to carry them out will be limited if we cannot obtain satisfactory debt or equity financing, which will depend on, among other things, market conditions. We cannot assure you that we will be able to obtain additional equity or debt financing or that we will be able to obtain such financing on favorable terms. Our failure to renovate our casino properties may put us at a competitive disadvantage.
Any increase in the price of gasoline may have an adverse impact on the results of our operations.
Many of our customers drive to our properties; therefore, an increase in gasoline prices may adversely impact our operations. Gasoline prices have been volatile in recent years. We cannot assure you that gasoline prices will hold steady or decline, and continued increases may adversely affect our customers’ discretionary income and, ultimately, our revenue.
Our business may be adversely affected by legislation prohibiting tobacco smoking.
Legislation in various forms to ban indoor tobacco smoking has been enacted or introduced in jurisdictions in which we operate. The gaming areas of our properties are not currently subject to tobacco restrictions. While gaming areas have generally been exempted from these restrictions, if additional restrictions on smoking are enacted in jurisdictions in which we operate, we could experience a significant decrease in gaming revenue and particularly, if such restrictions are not applicable to all competitive facilities in that gaming market, our business could be materially adversely affected.
Adverse weather conditions in Indiana, the Sierra Nevada Mountains, the Reno-Lake Tahoe area, and the Gulf Coast could have a material adverse effect on the results of operations and financial condition of our casinos, which could lead to an adverse impact on our results of operation and financial condition.
Adverse winter weather conditions, particularly snowfall, can deter customers of Rising Star Casino Resort and our Northern Nevada casinos from traveling or make it difficult for them to frequent these facilities. If these locations were to experience prolonged adverse winter weather conditions, the results of operations and financial condition of these casinos could also be materially adversely affected, thereby adversely affecting our overall results of operations and financial condition. Adverse tropical storm or hurricane weather conditions, particularly high winds and rainfall in the Gulf Coast can deter customers of

Silver Slipper Casino from travelling and make it difficult for them to frequent Silver Slipper Casino. If the Gulf Coast were to experience tropical storm or hurricane weather conditions, the results of operations could be adversely affected and there could be significant damage to the facility.
Riverboat and dockside facilities are subject to risks relating to weather and must comply with applicable regulations.
We own and operate riverboat and dockside casino facilities at our Rising Star Casino Resort, which are subject to risks in addition to those associated with land-based casinos, including loss of service due to casualty, extended or extraordinary maintenance, flood or other severe weather. Reduced patronage and the loss of a dockside or riverboat casino from service for any period of time could adversely affect our results of operations. Riverboats in Indiana are subject to inspection every year, and the riverboat at Rising Star Casino Resort was inspected in June 2013. The next inspection is anticipated to occur in June 2014.
From May 1 to May 27, 2011, Fitz Tunica Casino & Hotel was closed due to flooding of the Mississippi River.
The concentration and evolution of the slot machine industry could impose additional costs on us.
A majority of our revenues are attributable to slot machines at our casinos. It is important, for competitive reasons, that we offer the most popular and up-to-date slot machine games, with the latest technology to our customers.
In recent years, slot machine manufacturers have frequently refused to sell slot machines featuring the most popular games, instead requiring participating lease arrangements. Generally, a participating lease is substantially more expensive over the long-term than the cost to purchase a new slot machine.
For competitive reasons, we may be forced to purchase new slot machines, slot machine systems, or enter into participating lease arrangements that are more expensive than our current costs associated with the continued operation of our existing slot machines. If the newer slot machines do not result in sufficient incremental revenues to offset the increased investment and participating lease costs, it could adversely affect our profitability.
We may experience construction delays and cost overruns in connection with constructing a hotel at Silver Slipper Casino or during other expansion or development projects that could adversely affect our operations.
A hotel at Silver Slipper Casino is currently under construction. In addition, from time to time we may commence other construction projects at our properties. We also evaluate other expansion opportunities as they become available and we may in the future engage in additional construction projects. Construction projects entail significant risks, which can substantially increase costs or delay completion of a project. Such risks include shortages of materials or skilled labor, unforeseen engineering, environmental or geological problems, work stoppages, weather interference and unanticipated cost increases. Most of these factors are beyond our control. In addition, difficulties or delays in obtaining any of the requisite licenses, permits or authorizations from regulatory authorities can increase the cost or delay the completion of an expansion or development. Significant budget overruns or delays with respect to expansion and development projects could adversely affect our results of operations.
We are or may become involved in legal proceedings, that, if adversely adjudicated or settled, could impact our financial condition.
From time to time, we are defendants in various lawsuits and gaming regulatory proceedings relating to matters incidental to our business. As with all litigation, no assurance can be provided as to the outcome of these matters and, in general, litigation can be expensive and time consuming. We may not be successful in the defense or prosecution of our current or future legal proceedings, which could result in settlements or damages that could significantly impact our business, financial condition and results or operations.
Risks Related to Our Industry
We are subject to extensive governmental regulation, the enforcement of which could adversely impact our business, results of operation and financial condition.
The operation of gaming properties is subject to extensive federal, state, local and foreign regulations and taxes. The jurisdictions in which we operate or intend to operate require licenses, permits,

documentation of qualification, including evidence of financial stability, and other forms of approval of us and our officers, directors, major stockholders and key employees, along with our products. Licenses, approvals or findings of suitability may be revoked, suspended, limited or conditioned. We cannot assure you that we will be able to obtain or maintain all necessary registrations, licenses, permits or approvals, that the licensing process will not result in delays or adversely affect our operations and our ability to maintain key personnel, or that complying with these regulations will not significantly increase our costs.
We have not yet obtained gaming licenses to operate Fitz Tunica Casino & Hotel from the Mississippi Gaming Commission. Although we are already licensed in the State of Mississippi to operate Silver Slipper Casino, no assurance can be given that we will obtain the necessary licenses to operate Fitz Tunica Casino & Hotel.
The Indiana, Mississippi and Nevada gaming laws and regulations require us to obtain approval from the gaming regulators for our gaming operations. The regulations also require that we and our officers, directors, major stockholders and key employees obtain and maintain additional licenses, permits or other forms of approvals. If we are unable to obtain or maintain approval of our operations as required by the regulations, or if we or the individuals with whom we are associated are unable to obtain or maintain approvals, licenses or permits required by the regulations, we will be unable to continue some or all of our operations.
In addition, we are subject to anti-money laundering rules arising under federal law and related Indiana, Mississippi and Nevada law and regulations concerning transactions with players, including requirements to record and submit detailed reports to the federal government of currency transactions involving greater than $10,000 at our operations, as well as certain suspicious financial activity that may occur in our gaming operations.
Compliance with regulatory investigations and approval requirements may impose substantial costs on our business and disrupt our operations.
The gaming authorities in certain jurisdictions may investigate companies or individuals who have a material relationship with us or our equity holders to determine whether the selected individual or stockholder is acceptable to the gaming authorities. While any such investigated company, individual or stockholder is obligated to pay the costs of the investigation, such an investigation will be time consuming and may be disruptive to our operations. Failure of companies, individuals or stockholders to cooperate with any such investigation could negatively impact our ability to obtain or maintain our licenses.
Some jurisdictions require gaming licensees to obtain government approval before engaging in certain transactions, such as business combinations, reorganizations, borrowings, stock offerings and share repurchases. Obtaining such pre-approvals can also be time consuming and costly.
We are under continuous scrutiny by the applicable regulatory authorities. Our failure to obtain or maintain regulatory approval in any jurisdiction may prevent us from obtaining or maintaining regulatory approval in other jurisdictions. The failure to maintain a license in a single jurisdiction or a denial of a license by any new jurisdiction may cause a negative “domino effect” in which the loss of a license in one jurisdiction could lead to regulatory investigation and possible loss of a license or other disciplinary action in other jurisdictions.
A decline in the popularity of gaming or the purchasing power of our customers could reduce the number of customers at our properties, which would adversely affect our business.
Our business depends on consumer demand for gaming. Gaming is a discretionary leisure activity, and participation in discretionary leisure activities has in the past, and may in the future, decline during economic downturns because consumers have less disposable income. Gaming activity may also decline based on changes in consumer confidence related to general economic conditions or outlook, fears of war, future acts of terrorism, or other factors. A reduction in tourism could also result in a decline in gaming activity. Finally, a legislature or regulatory authority may prohibit all or some gaming activities in its jurisdiction. A decline in gaming activity as a result of these or any other factors could have a material adverse effect upon our business, results of operations and financial condition.

Changes in consumer preferences could also harm our business. Gaming competes with other leisure activities as a form of consumer entertainment, and may lose popularity as new leisure activities arise or as other leisure activities become more popular. In addition, gaming in traditional gaming establishments may compete with internet-based gaming products, when and if legalized. To the extent that the popularity of gaming in traditional gaming establishments declines as a result of these factors, our business may be adversely affected.
Continued weakness in the United States and global economy may adversely affect consumer spending and tourism trends.
Discretionary consumer spending has been adversely affected by continued economic weakness in the United States and worldwide. Consumers are traveling less and spending less when they do travel. Likewise, corporate spending on conventions and business development is being significantly curtailed as businesses cut their budgets. Since our business model relies on significant expenditure on discretionary items, continuation or deepening of the weak economic conditions will further adversely affect our operations. Adverse conditions in the local, regional, national and global markets would have a material adverse effect upon our business, results of operations and financial condition. In particular, we have seen slow or declining growth in some of our markets.
Acts of terrorism and war, natural disasters and severe weather may negatively impact our future profits.
Terrorist attacks and other acts of war or hostility have created many economic and political uncertainties. We cannot predict the extent to which terrorism, security alerts or war, popular uprisings or hostilities throughout the world will directly or indirectly impact our business, results of operations and financial condition. As a consequence of the threat of terrorist attacks and other acts of war or hostility in the future, premiums for a variety of insurance products have increased, and some types of insurance are no longer available.
In addition, natural and man-made disasters such as major fires, floods, hurricanes, earthquakes and oil spills could also adversely impact our business. Fitz Tunica Casino & Hotel was closed from May 1 to May 27, 2011 due to flooding of the Mississippi River. As our business depends in part on our customers’ ability to travel, severe or inclement weather would have a material adverse effect upon our business, results of operations and financial condition.
Work stoppages, organizing drives and other labor problems could negatively impact our future profits.
Labor unions are making a concerted effort to recruit more employees in the gaming industry. In addition, organized labor may benefit from new legislation or legal interpretations by the current presidential administration. We cannot provide any assurance that we will not experience additional or more successful union activity in the future.
Additionally, lengthy strikes or other work stoppages at any of our casino properties or construction projects could have an adverse effect on our business and result of operations.
Risks Related to This Offering
We do not expect to pay any cash dividends for the foreseeable future. Accordingly, investors in this offering may never obtain a return on their investment.
You should not rely on an investment in our common stock to provide dividend income. Our ability to pay dividends is prohibited by our credit agreements, and we do not anticipate that we will pay any cash dividends to holders of our common stock in the foreseeable future. Instead, we plan to retain any earnings for use in our business operations, debt reduction and growth initiatives.
We may invest or spend the proceeds of this offering in ways with which you may not agree or in ways which may not yield a return.
The net proceeds from the sale of shares by us in this offering may be used for general corporate purposes, including paying down existing indebtedness and working capital. We may also use a portion of the net proceeds to acquire or invest in complementary businesses, technologies or other assets. Our

management will have considerable discretion in the application of the net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. The net proceeds to us from this offering may be invested with a view towards long-term benefits for our stockholders, and this may not increase our operating results or the market value of our common stock. Until the net proceeds are used, they may be placed in investments that do not produce significant income or that may lose value.
An active, liquid trading market for our common stock may not develop or be sustained.
We completed our initial public offering in 1993. Given the relatively limited public float since that time, trading in our common stock has been limited and, at times, volatile. An active trading market for our common stock may not develop or be sustained, and the trading price of our common stock may fluctuate substantially.
If we are unable to implement and maintain effective internal controls over financial reporting in the future, the accuracy and timeliness of our financial reporting may be adversely affected.
If we are unable to maintain adequate internal controls over financial reporting in the future, investor confidence in the accuracy of our financial reports may be impacted or the market price of our common stock could be negatively impacted. Our internal controls could be affected by personnel changes or information technology issues, many of which are out of our control.
In addition, as long as we qualify as a “smaller reporting company”, we will not be subject to the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act. We will qualify as a smaller reporting company as long as the market value of our public float does not exceed $75 million as of the last day of our second fiscal quarter in any fiscal year. We would be required to include the auditor’s attestation on the effectiveness of our internal controls in our Form 10-K for the fiscal year in which we no longer qualify as a smaller reporting company.

Special Note Regarding Forward-Looking Statements
Certain statements made in this prospectus constitute forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words “may,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “project,” “potential,” “intend” or similar expressions. These statements include, among others, statements regarding our expected business outlook, anticipated financial and operating results, business strategy and means to implement the strategy, the amount and timing of capital expenditures, the likelihood of our success in building our business, financing plans, budgets, working capital needs and sources of liquidity. We believe it is important to communicate our expectations to our stockholders. However, there may be events in the future that we are not able to predict accurately or over which we have no control.
Forward-looking statements, estimates and projections are based on management’s beliefs and assumptions, are not guarantees of performance and may prove to be inaccurate. Forward-looking statements also involve risks and uncertainties that could cause actual results to differ materially from those contained in any forward-looking statement and which may have a material adverse effect on our business, financial condition, results of operations and liquidity. A number of important factors could cause actual results or events to differ materially from those indicated by forward-looking statements. These risks and uncertainties include, but are not limited to, those factors listed in this prospectus under “Risk Factors” and the following factors:
  • our growth strategies;
  • our potential acquisitions and investments;
  • successful integration of acquisitions;
  • risks related to development and construction activities;
  • anticipated trends in the gaming industries;
  • patron demographics;
  • general market and economic conditions, including but not limited to, the effects of local and national economic, housing and energy conditions on the economy in general and on the gaming and lodging industries in particular;
  • access to capital and credit, including our ability to finance future business requirements;
  • our dependence on key personnel;
  • the availability of adequate levels of insurance;
  • changes in federal, state, and local laws and regulations, including environmental and gaming license or legislation and regulations;
  • ability to obtain and maintain gaming and other governmental licenses;
  • regulatory approvals;
  • impact of weather;
  • competitive environment, including increased competition in our target market areas;
  • increases in the effective rate of taxation at any of our properties or at the corporate level; and
  • risks, uncertainties and other factors described from time to time in this and our other SEC filings and reports.
You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this prospectus. Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual future results to differ materially from those projected or contemplated in the forward-looking statements.

All forward-looking statements included herein attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent required by applicable laws and regulations, we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events. You should be aware that the occurrence of the events described in the “Risk Factors” section and elsewhere in this prospectus could have a material adverse effect on us.

Use of Proceeds
We estimate that we will receive approximately $_________ million in net proceeds from the sale of our common stock in this offering, or approximately $_________ million if the underwriter’s option to purchase additional shares is exercised in full, at an assumed public offering price of $______ per share, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.
Concurrent with this offering, we are working with potential lenders to obtain a binding commitment for $125.0 million in new debt financing, which along with the net proceeds of this offering will provide the funds for the purchase of the membership interests of Majestic Mississippi, LLC, the owner of Fitz Tunica Casino & Hotel in Tunica, Mississippi. However, because we have not yet obtained a commitment for the $125.0 million debt financing, the terms of the anticipated new debt financing are not yet known. We anticipate that the new debt financing will contain customary covenants and representations, including a provision that the financing will be secured by our assets.
We intend to use the net proceeds of this offering together with new debt financing in the aggregate amount of $125.0 million to (a) repay debt outstanding under our existing first lien credit agreement with Capital One Bank, N.A. (“First Lien Credit Agreement”) and our existing second lien credit agreement with ABC Funding, LLC (“Second Lien Credit Agreement”) in the approximate aggregate amount of $59.5 million as of March 31, 2014, (b) provide funds for the purchase of the membership interests of Majestic Mississippi, LLC in the amount of $62.0 million (less the deposit of $1.75 million), (c) pay estimated financing fees, prepayment premiums and acquisition costs of $6.8 million and (c) provide approximately $36.2 million in remaining funds to be available for future working capital expenditures and development opportunities, including $10.0 million for the completion of the 142-room hotel at the Silver Slipper Casino, $7.0 million in renovations at the Fitz Tunica Casino & Hotel after acquisition of the membership interests of Majestic Mississippi, LLC, and $10.0 million will be reserved for the development of a racetrack and related gaming facilities near Corbin, Kentucky and any future development expenses in Kentucky. As of the date of this prospectus, we cannot specify with certainty all of the particular uses for any remaining net proceeds to us from this offering. In addition, the amount and timing of what we actually spend for these purposes may vary significantly and will depend on a number of factors, including our future revenue and cash generated by operations and the other factors described in “Risk Factors.” Accordingly, our management will have discretion and flexibility in applying the net proceeds of this offering. If following the sale of our common stock in this offering we fail to close on the contemplated $125.0 million debt financing, we will have until June 19, 2014 to pursue additional lenders and financings, enter into discussions with The Majestic Star Casino, LLC to extend the closing of the purchase of the membership interests, or terminate the transaction and not proceed with the purchase of the membership interests of Majestic Mississippi, LLC. We will, however, continue to pursue our expansion opportunities in Kentucky.
Our credit agreements currently consist of (a) the First Lien Credit Agreement, which provides for a $47.5 million term loan inclusive of a $10.0 million undrawn tranche as of December 31, 2013 and a $5.0 million revolving loan, and (b) the Second Lien Credit Agreement, which provides for a $20.0 million term loan. As of December 31, 2013, we had an aggregate of $57.5 million of indebtedness outstanding under our credit agreements. On March 24, 2014, we borrowed an additional $2.0 million on our revolving loan under our First Lien Credit Agreement to fund the $1.75 million deposit under the Interest Purchase Agreement to acquire the membership interests of Majestic Mississippi, LLC, with the remaining amount drawn of $250,000 used for general working capital.
During the year ended December 31, 2012, we prepaid, at our discretion, the principal payment of $1.3 million due April 1, 2013 on the First Lien Credit Agreement, in order to reduce interest costs. As a practice, we consistently prepaid our quarterly payments before their due dates in 2013, and during the year ended December 31, 2013, we prepaid, at our discretion, the sum of $8.8 million in quarterly principal payments, which were due through July 1, 2015. The next scheduled principal payment is due October 1, 2015. We intend to repay $59.5 million outstanding as of March 31, 2014 under our current credit agreements with a combination of the net proceeds of this offering and the contemplated new $125.0 million debt financing. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Banking Relationships andRecent Developments.”

Capitalization
The following table sets forth our consolidated capitalization as of December 31, 2013 on:
  • an actual basis;
  • as adjusted basis to give further effect to the sale by us of ________ shares of our common stock in this offering at an offering price of $____ per share, assuming that the underwriters have not exercised their option to purchase additional shares; and
  • as adjusted basis to give effect to the funding under the contemplated new $125.0 million debt financing.
This table should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.
 
December 31, 2013
(In thousands)
Actual
As Adjusted
(audited)
Cash and cash equivalents
$
14,936
$
      
Indebtedness under our credit agreements(1)
$
57,500
Capital lease(1)
7,719
Stockholders’ equity:
Common stock, par value $0.0001 per share:
100,000,000 shares authorized: 20,107,276 shares issued and 18,750,681 shares outstanding(2); ___________ shares issued, as adjusted
2
Additional paid-in capital
45,350
Treasury stock, 1,356,595 common shares
(1,654
)
Retained earnings
34,116
Total stockholders’ equity
77,814
Total capitalization
$
143,033
$
 
(1)
  • Inclusive of current maturities.
(2)
  • Excludes the following:
  • 1,356,595 shares of common stock held as treasury stock.
  • 137,000 shares of common stock available for future issuance under our Amended and Restated 2006 Incentive Compensation Plan as of December 31, 2013. On January 1, 2014, we granted a total of 120,000 shares of restricted stock to two executives under our Amended and Restated 2006 Incentive Compensation Plan. Therefore, as of January 1, 2014, 17,000 shares of common stock remain available for future issuance under our Amended and Restated 2006 Incentive Compensation Plan.

Unaudited Pro Forma Financial Information
The following unaudited pro forma balance sheet data as of December 31, 2013 and pro forma statement of operations data for the year ended December 31, 2013 have been derived from our audited consolidated financial statements and Majestic Mississippi, LLC’s audited financial statements included elsewhere in this prospectus. The pro forma statement of operations has been prepared to give pro forma effect to the possible acquisition of the membership interests of Majestic Mississippi, LLC, the owner of Fitz Tunica Casino & Hotel, as if the acquisition occurred January 1, 2013, and the pro forma balance sheet has been prepared to give pro forma effect to the combined balance sheet data of us and Majestic Mississippi, LLC on December 31, 2013.
The unaudited pro forma balance sheets and pro forma statements of operations were derived by adjusting our audited financial statements and the audited financial statements of Majestic Mississippi, LLC. The adjustments are based on currently available information and, therefore, the actual adjustments may differ from the pro forma adjustments. We will account for the acquisition of Majestic Mississippi, LLC in accordance with ASC 805 Business Combinations. The pro forma balance sheets and the pro forma statements of operations were derived using the preliminary fair value of the assets and liabilities to be acquired in the acquisition of Majestic Mississippi, LLC. These fair values are subject to change as we complete the fair value determination process.
The unaudited pro forma balance sheet data as of December 31, 2013 and pro forma statement of operations data for the year ended December 31, 2013 have been adjusted to include transactions directly attributable to the acquisition of Majestic Mississippi, LLC, including:
  • To record the acquisition of Majestic Mississippi, LLC based on our estimated allocation of the purchase price of $62.0 million, inclusive of working capital, property, equipment and improvements, intangible assets, goodwill and property cash and fees.
  • To record the incurrence of additional indebtedness, the issuance of additional shares of common stock in this offering, and the repayment of existing debt.
  • To record anticipated interest expense resulting from new indebtedness in connection with debt financing and record a loss on extinguishment of debt, related to the write-off of existing loan fees and prepayment premiums on existing debt.
  • Elimination of Majestic Mississippi, LLC interest expense recorded in the year ended December 31, 2013.
  • Adjust income tax.
  • Reclassify to conform to our presentation.

PRO FORMA BALANCE SHEETS
As of December 31, 2013
(in thousands)
 
Full House
Resorts, Inc.
Majestic
Mississippi, LLC
Pro Forma
Adjustments
Pro Forma
(unaudited)
ASSETS
Current assets
                            
Cash and equivalents
$
14,936
$
7,619
$
4,067
(1)(2)(3)(6)
$
26,622
Accounts receivable, net of allowance for doubtful accounts
1,869
288
2,157
Prepaid expenses
6,288