LV gaming company late with disclosure

John Wilen

Tuesday, May 18, 1999 | noon

NevStar Gaming & Entertainment Corp. said its losses in the quarter that ended March 31 will be less than or comparable to the $1.9 million the company lost in the quarter that ended Dec. 31.

But NevStar notified the Securities and Exchange Commission that it would not be filing earnings by Monday, as required, due to a shortage of accounting personnel, including a controller, and due to management time being spent on efforts to refinance company debt.

"We're very short-staffed," said Brent Duncan, NevStar's chief financial officer.

Notices of late filing --- while generally frowned upon by investors and analysts -- are not unusual for the Las Vegas gaming company.

In February, NevStar filed a similar notice with the SEC. Five days later, NevStar reported the $1.9 million loss, a loss of 49 cents per share, on revenues of $2.4 million in the quarter that ended Dec. 31. In the December 31, 1997 quarter, NevStar was a strictly development-stage company with no revenues and losses of $385,000, or 11 cents per share.

The company has only five additional days to file its earnings, said Duncan.

Last July, NevStar opened its first casino, the Mesquite Star, in Mesquite. The company is developing a second casino in North Las Vegas.

In February, NevStar was sued by A.F. Construction Co., the general contractor that built the Mesquite Star, for $853,500 in construction costs. At that time, Duncan acknowledged NevStar owed A.F. Construction the money, and said the company was attempting to restructure its debts so that it could pay the costs.

On Monday, Duncan said the suit and unpaid bill are still pending. He declined to discuss the status of the debt restructuring, pending the public release of NevStar's quarterly earnings filing with the SEC.

NevStar's notice of late filing says the company incurred losses of $2.3 million that are directly attributable to casino development costs through the first nine months of its fiscal year, which ends June 30. Development-stage losses in the quarter that ended March 31 were $667,000, the company reported.

The company said earnings and costs at the Mesquite Star had not stabilized as of March 31.