Dion Entertainment Corp.- Shareholder Update.
In May of 1994 the board of directors and management set out on a path to re-engineer the company with a back to basics approach respecting charitable gaming beginning in the province of Saskatchewan. During this time we acquired two new halls. Native Gaming Four Winds New Brunswick
Native Gaming is the second area of growth for the company. There are currently only seven publicly traded gaming companies involved in Native Gaming Management and in excess of 100 gaming facilities in North America. In September of 1994 the company embarked on a new direction for Native gaming. That direction has lead to a number of opportunities in Canada. One of the first opportunities came with the announcement of Ft. Folly First Nations, now known as Four Winds Entertainment Facility just outside of Moncton, New Brunswick. This facility was developed, financed, built and is presently operated by Dion. Opened in September of 1995, this thirty-two thousand square foot facility has been remarkably embraced by the community. The gross sales since opening have been $2,723,979. With the player base now established we anticipate this facility to be profitable before the end of the second quarter. St. Mary's New Brunswick
The company is now in the development stages with its second project, the gaming facility on the lands of the St. Mary's First Nation in Fredericton, New Brunswick. Now fully enclosed, this thirty three thousand square foot facility will open before the end of the second quarter. On February 26, 1996 the Canadian Supreme Court handed down a ruling upholding provincial jurisdiction over all gaming, including native gaming. This ruling confirms the continuation of developing high stakes bingo and entertainment facilities in cooperation with provincial gaming authorities and native boards in applicable jurisdictions. Woodstock New Brunswick
Dion continues to move forward, recently completing an agreement with PDS Financial Corporation (NASDAQ:PDSF) to acquire its third native gaming project in New Brunswick on the lands of the Woodstock First Nation. The existing facility a Sprung Structure, in excess of thirty-thousand square feet should re-open before the third quarter. In a effort to continue to be competitive within the gaming industry the latter part of 1994 and early on in 1995 saw the management broaden its base of activities into two new investments, Wolf Gaming L.L.C. and T.V. Bingo within the Czech Republic. Wolf Gaming
Our two million dollar (U.S.) investment in Wolf was designed to give Dion exposure and obtain licensing in the broad U.S. gaming market. Wolf Gaming is an emerging company that proved to be competitive within the supply and distribution market in North America. Wolf was successful in securing exclusive distribution agreements with high profile Sigma Game Inc. and Williams/WMS Industries Inc. for the North American Native gaming market. The association with Wolf has provided Dion with a window of opportunity to seek licensing within the U.S. gaming market of the United States. Dion is now licensed in six jurisdictions and we have two key employees licensed within the state of Colorado.
On February 9, 1996 Wolf announced that Mr. Jack Deremer was selling his interest in the company to a third party (Northern Gaming Inc, a publicly traded company.) This sale further strengthens Dion's position with Wolf. Dion anticipates recouping their original investment over the next year, while still retaining our interest of 4.9 percent. The TV Bingo Lottery
Our third area of growth is in the lottery industry. Dion, through it's affiliation with Double Eagle Entertainment was given the opportunity to expand into the single fastest growing sector within our industry. With few opportunities for involvement in the lottery industry in North America, the company turned its focus to Eastern Europe. Dion became involved with the TV/Bingo Lottery in December 1994 by that time the show had become one of the most popular programs on Czech television. The population base of that country is over 10.5 million people and the show managed to capture 50 percent of the viewing audience. The first year of operations presented the company with some unique challenges. Despite language barriers, fluctuating ticket sales and some negative publicity, the public's enthusiasm for the game remained very strong.
The Company's mandate is for expansion of TV Bingo Lottery game into other countries while strengthening our management team in Eastern Europe. We were very pleased to have the Hon. Otto Jelinek join our board of directors in 1995, his responsibilities were to maintain strong working relations with the Czech government. Mr. Jelinek's expanded role now includes negotiation and liaison with new governments and countries in Europe. To that end we will be moving to a new T.V. station (within the Czech Republic) in mid April. In June of 1995 we tentatively announced our new joint venture partner as being a significant major media partner to develop T.V. Bingo opportunities in other parts of Europe. The partnership today remains intact and we anticipate an announcement with a new license going forward into a new market in 1996.
Mr. Otto Jelenik head of Eastern Europe operations states "The opportunity to participate in the TV/Bingo Lottery in the Czech Republic has been invaluable. Regardless of the outcome, our involvement in Czech has provided us with an entree into other countries where we will see positive long term growth." SHAREHOLDER UPDATE STRENGTHEN OUR FINANCIAL CONDITION
During 1996 Dion will make every effort to strengthen its financial position by; - forming strategic alliances with companies such as (PDS) to assist in financing all gaming related products and to assist in long term financing; - taking on a strategic partner for financing and developing real estate in native gaming projects; - expand our charitable market outside of the Province of Saskatchewan; - increase management depth and opportunities for employment and growth to existing and future employees.
In summary, Dion will strengthen its balance sheet and complete the difficult job of rebuilding and strengthening itself. STRATEGY FOR THE FUTURE
Mr. Alan Campney Chairman of the board states "Management is committed to making Dion Entertainment Corp. one of the premier gaming companies in Canada. We are a development company dedicated to creating a profitable, growth oriented business. We will continue to devote all our time and efforts to projects that will have value for our shareholders. As with our arrangement with companies such as PDS Financial Corp. our mandate will be to continue to align ourselves with strategic partners who can assist us in developing gaming projects in Canada. This will allow us to move forward and create the value and bottom line performance our shareholders deserve."
CONTACT: Dion Entertainment Corp.
Mr. Frank Port, 604/535-7333
800/696-7333 (US Only)
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|Date:||Apr 3, 1996|
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