Rotate Black, Inc. (Company) was incorporated in Nevada on
August 2, 2006 to be the successor by merger of BevSystems International, Inc. and BevSystems International Ltd. (BevSystems).
The Company develops, operates and manages gaming and related
properties. On April 1, 2010, the Company commenced operations under the Gulfport Project management agreement and was no longer
a development stage company. (Note 6)
On May 28, 2010, the Company, Rotate Black, LLC (RBL), an
entity under common control with the Company, and an officer of the Company formed Rotate Black MS, LLC (RBMS), a Mississippi limited
liability company, to own, develop and manage the operations of a casino resort to be located in the property adjacent to the Gulfport,
MS marina. RBMSs initial strategy was to secure an existing gaming vessel, move the vessel to the Gulfport site,
and build land assets on that site to support the gaming vessel. Subsequently, RBMS changed its strategy to an entirely
land-based casino. In August 2012, the Company entered into an Indicative Summary of Terms and Conditions with debt and equity
investors related to a proposed financing for the Gulfport Casino Hotel Project to be developed by RBMS (Borrower). The
proposed financing is for up to $101,800,000 for the development, design, construction, financing, ownership, operation and maintenance
of an approximately 191,000 square foot land based, four star casino, including gaming, restaurant, bar and support space and an
adjacent 205-room hotel in Gulfport, Mississippi.
Terms of the proposed financing call for senior secured term
loans up to an aggregate of $80,900,000 to be provided in one tranche on the closing date, advanced at the rate of 94% of the principal. Full
repayment is expected to be October 2017. Interest on the outstanding balance will be equal to the sum of the LIBOR
rate applicable to the interest period, subject to a floor of 2%, and the applicable margin of 10.5%.
The equity investors shall fund the equity contribution to
RBMS prior to the closing pursuant to the terms of an equity contribution agreement to be entered into by the equity investors,
RBMS, and the Collateral Agent in the aggregate amount of $20,900,000.
Rotate Black Gaming
In October 2008, the Company acquired 75% of the outstanding
common stock of Rotate Black Gaming, Inc., (Gaming), from RBL. Gaming is under contract to develop and manage a world-class destination
casino resort in Sullivan County, New York. Gaming had acquired the property and completed all design layouts (Note 10).
On December 13, 2011, the Company formed a wholly-owned subsidiary,
SlotOne, Inc., to provide slot machines on a participation basis in certain casino locations where the replacement of old equipment
can enhance earnings for the gaming location and Rotate Black, Inc.
On January 11, 2011, the Company entered into a management
agreement whereby a new to-be-formed wholly-owned subsidiary of the Company would act as manager for a proposed casino and entertainment
destination on the Louis Bull Indian Reserve near Edmonton, Canada (Note 11).
In connection with the acquisition of Gaming, the Company
also acquired the Dayton Project, a casino development project in Dayton, Nevada. The Dayton Project was cancelled as of June 30,
2009, and the Company had written-off the deferred expenses of $233,960 (Note 18).
Also in connection with the acquisition of Gaming, the Company
acquired a 50% joint venture interest in Rotate Black India Pvt Ltd. (India), formed to develop a project in India. This project
was cancelled as of December 31, 2009, and the Company had written-off the deferred expenses of $139,782