Item 1.01 Entry into a Material Definitive Agreement
On March 31, 2023, the Company entered into a Letter of Intent with an unrelated
third party. The Agreement provides for purchases of Common Stock of Diamondhead
Casino Corporation and purchases of Common Stock of its wholly-owned subsidiary,
Mississippi Gaming Corporation.
Mississippi Gaming Corporation
The Letter of Intent provides that the Purchaser will purchase a total of 4.5
million shares of Common Stock of Mississippi Gaming Corporation, or 10% of the
Common Stock of Mississippi Gaming Corporation, for a total purchase price of
$6,000,000, in two transactions as follows:
1) On or before April 15, 2023, the Purchaser will purchase five percent of the
total Common Stock of Mississippi Gaming Corporation for $3,000,000. Upon
receipt of payment, Mississippi Gaming Corporation shall issue 2.25 million
shares of Common Stock, or five percent of the total authorized Common Stock of
Mississippi Gaming Corporation, to the Purchaser.
2) On or before June 30, 2023, the Purchaser will purchase an additional five
percent of the total authorized Common Stock of Mississippi Gaming Corporation
for $3,000,000. Upon receipt of payment, Mississippi Gaming Corporation shall
issue an additional 2.25 million shares of Common Stock, or an additional five
percent of the total authorized Common Stock of Mississippi Gaming Corporation
to the Purchaser.
The Purchaser will have the right to nominate two directors to the Board of
Directors of Mississippi Gaming Corporation. The current Board of Directors of
Mississippi Gaming Corporation will examine and review the background,
experience and credentials of the nominees and, once acceptable, pass a
resolution appointing the Purchaser's nominees to the Board of Directors
contingent upon the first Closing and effective on the date of and immediately
following the first Closing. In the event the Purchaser has not nominated a
director(s) prior to the first Closing, the Purchaser may do so at any time
thereafter.
Diamondhead Casino Corporation
The Letter of Intent provides that the Purchaser will purchase 4,000,000 shares
of Common Stock of Diamondhead Casino Corporation at a purchase price of $1.00
per share in two transactions as follows:
3) On or before September 15, 2023, the Purchaser will purchase 2,000,000 shares
of Common Stock of Diamondhead Casino Corporation for a total purchase price of
$2,000,000. Following Closing, the Company will issue instructions to the
Company's transfer agent to issue 2,000,000 shares of Common Stock to the
Purchaser.
4) On or before November 30, 2023, the Purchaser will purchase an additional
2,000,000 shares of Common Stock of Diamondhead Casino Corporation for an
additional purchase price of $2,000,000. Following Closing, the Company will
issue instructions to the Company's transfer agent to issue an additional
2,000,000 shares of Common Stock to the Purchaser.
The Purchaser will have the right to nominate two directors to the Board of
Directors of Diamondhead Casino Corporation. The current Board of Directors of
Diamondhead Casino Corporation will examine and review the background,
experience and credentials of the nominees and, once acceptable, pass a
resolution appointing the Purchaser's nominees to the Board of Directors
contingent upon Closing of the purchase of a minimum of 2,000,000 shares of
Common Stock of Diamondhead Casino Corporation and effective on the date of and
immediately following the Closing. In the event the Purchaser has not nominated
a director(s) prior to the first purchase of Common Stock of Diamondhead Casino
Corporation, the Purchaser may do so at any time thereafter.
The Purchaser's failure to close when required shall render the remainder of the
Agreement null and void.
In consideration of the total purchase price of $10,000,000 for the foregoing
purchases of stock, the Purchaser shall also have the right, but not the
obligation, to purchase up to twenty acres of Mississippi Gaming Corporation's
Diamondhead, Mississippi Property to be used for a senior citizen and/or
assisted living and/or aging complex for an additional purchase price of $75,000
per acre, or a maximum total purchase price of $1,500,000. Mississippi Gaming
Corporation will provide two acres of land contiguous to the facility for an
open park. The location of the twenty acres shall be determined by mutual
agreement of the Purchaser and Mississippi Gaming Corporation, but shall not be
in that acreage approved by the Mississippi Gaming Commission for gaming. This
right to purchase shall terminate two years from the date of inception of the
right ("the Option Period"). The acreage purchased by the Purchaser cannot be
used for gambling or gaming of any type or transferred or conveyed to any person
or entity for such a purpose. Any deed conveying acreage to the Purchaser will
include a prohibition to this effect. In the event a third party tenders an
offer for the entire Diamondhead Property prior to Purchaser's payment of the
Option price and the Board of Directors of Mississippi Gaming Corporation
accepts the third party's offer, the Option will be deemed to have expired. In
the event, Mississippi Gaming Corporation sells Diamondhead Property for less
than Seventy-Five Thousand Dollars per acre in an arms' length transaction
during the Purchaser's Option Period, the Purchase Price for the Purchaser's
Property will be lowered so that the Purchaser is not paying more than another
buyer of the commercial Property.
The proceeds from the foregoing sales of Common Stock are intended to be used to
pay down a substantial portion of the debt that is secured by liens on the
Diamondhead Property, to pay Diamondhead Property taxes, to pay fees and
expenses of outside auditors and accountants to prepare and file the Company's
periodic reports with the Securities and Exchange Commission, to pay legal fees
and other fees and expenses relating to the foregoing transactions, to obtain a
master plan for the Diamondhead Property and for general corporate purposes. The
proceeds from the initial sale of Common Stock will be used to pay
plaintiff/lienholders who are owed payment in the approximate amount of
$2,207,500, pursuant to an Amendment to Settlement Agreement entered into in
Arneault et al. v. Diamondhead Casino Corporation (In the United States District
Court for the District of Delaware (C.A. No. 1:16-cv-00989-LPS).
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