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Atlantis Gaming Corporation's

Strategic Move into Real Estate

 

Following an interim leadership change due to Atlantis Gaming Corp. (“AGC”) Chairman, President and CEO Don Bailey's health concerns, interim CEO Linda I. Bailey initiated and proposed to the AGC BOD a strategic plan to secure real estate investments with trusted, long-term AGC investors. This Q&A explains why AGC is swapping Eight hundred million of the one (1) billion AGC shares for about twenty million dollars ($20,000,000.00) in real estate assets. (AGC has set aside 200 million shares to trade for interest in Skill Gaming company)

 

Q: Why is AGC entering real estate transactions?

A: There are several reasons:

 

1. Solid Assets: Real estate provides AGC with solid assets, transforming it from a shell corporation.
2. Investor Contributions: AGC’s largest shareholders, real estate developers in southeastern Michigan, believe real estate can contribute $1M per year in earnings to AGC.
3. Cash Flow Generation: Real estate can generate cash flow and profits to support AGC's gaming initiatives, including future skill games.

 

Q: Will AGC become a Real Estate Investment Trust (REIT)?

A: No, AGC aims to generate at least $1M a year in asset growth, equivalent to earnings to support its stock price and future development. AGC will acquire assets by swapping shares.

 

Q: How can a few million in real estate deals generate $1M annually in earnings for AGC?

A: Earnings will come mainly from redevelopment, resale, or refinancing. For example, the 54 units Lahser 6 transaction involved a $2.2M note and 75 million AGC shares. With comparable real estate values at $65k per unit, the after-repair value is $3.5M, yielding a $1M profit for AGC upon resale or refinancing.

 

Q: Why don't the owners simply repair the building and extract the equity themselves?

A: The owners are deeply invested in AGC with over $1M and want to stabilize the company. The capitalization rate on real estate in a public company is about 5% compared to 8%-10% in the general market, making stock appreciation more profitable. Additionally, selling the property for depressed shares avoids capital gains taxes when the shares appreciate And mosyt importantly it’s a win win for all stakeholders.

 

 

 

 

 

 

 

 

 

Q: How likely is it that the stock will appreciate with this strategy?

A: While there are no guarantees, stock appreciation is driven by earnings and asset growth. With 15B outstanding shares, AGC needs $10M-$15M annually in asset growth or EBITDA to maintain a healthy stock price. Asset growth comes from exchanging stock for real estate Earnings will come from cash flow or EBITDA derived from  the  , plus annual earnings from asset appreciation, resale, or refinancing.

 

Q: What is the history of Lahser 6 apartments, the property AGC recently acquired?

A: The owners recently foreclosed and reacquired Lahser 6 after the previous buyer defaulted on a land contract. They transfered the building to AGC, for less than its value, and will personally hire management, improve the property and waived debt service for 90 days, thus providing the deal with working capital. The developers are committed to AGC on a long-term basis.

Q: What other joint ventures or real estate transactions are planned, and what will the 1 billion shares be swapped for?

A:

 

1. Lahser 6: 75M shares for a 54-unit apartment building at 22125-45 and 22009 W McNichols Rd, Detroit, MI.
2. 2201 Lawndale: An option to trade 300M shares for a renovated 15-unit building to be held free and clear.
3. 11000 W Nichols: Acquiring a 33k sq. ft. office building for a $2M note and 100M shares, with occupancy rising from 60% to 81%.
4. 6442 Michigan Ave: An option to acquire a 36-unit building for 200M shares if the stock stabilizes at 1 cent.
5. Skill Gaming Company: 200M shares reserved for 20% of a new skill gaming company.
6. Additional Deals: 75M shares available for bartering deals.

 

Q: Where do the 1 billion shares for trading real estate come from?

A: The Bailey family is subordinating their shares to enable these transactions, including 3.5 billion shares to developers and 1 billion shares for trading purposes. The Bailey family will eventually be restored 1B shares, bringing the outstanding shares to 16B, and will be compensated at $0.0005 per share for 3.5 billion shares ($1,750,000).

For questions regarding real estate transactions, please contact lindab@atlantisgamingcorporation.com

Phone: 717 557 9900