On March 28, 2007, American Vantage Companies’ (AVCS.OB) (the “Company”) majority-owned subsidiary, Brownstone LLC (“Brownstone”), issued a press release concerning the signing of a Development Agreement and Credit Agreement with the Big Sandy Rancheria Tribe of Western Mono Indians (“Big Sandy” or the “Tribe”), a Native American tribe whose reservation is located near Fresno, California.
The Development Agreement engages Brownstone as the Tribe’s development partner to assist the Tribe in completing specific project services as they relate to the Tribe’s plans to build a hotel and gaming facility overlooking the San Joaquin Valley on approximately 45 acres of trust land (which is adjacent to approximately 175 acres of fee land also owned by the Tribe) in Friant, California (the “Project”). The Tribe’s planned $400 million hotel and casino is expected to include up to 300 hotel rooms, a 185,000-square-foot Class II and Class III gaming space with slot machines, table games and other amenities including a spa, multiple restaurants, retail space and convention facilities. The Tribe currently operates the Mono Wind Casino in Auberry, California, located approximately 15 miles northeast of the new proposed hotel and casino destination resort location.
Brownstone will assist the Tribe in completing the following Project services:
* Arranging third-party financing
* Obtaining federal, state and local compliance with regulatory matters
* Identifying and negotiating contractual arrangements with architects, contractors, consultants and other professionals for the development, construction and operation of the Project
* Developing the Project business plan
Under the terms of the Development Agreement, for these services Brownstone will receive the following revenues:
* Structuring fee – a fixed percentage of the gross dollars from the initial, bridge, and permanent Project financings.
* Development fee – a fixed percentage of aggregate hard and soft Project costs.
Under the terms of the Credit Agreement, Brownstone may advance an initial funding to the Tribe of up to $900,000, to fund Project pre-development activities and to cover certain Tribe working capital requirements. The Credit Agreement provides for repayment of the initial financing, with accrued interest, upon completion of the bridge financing.
The Tribe, with Brownstone’s assistance, is engaged in securing the bridge financing necessary for the Project and Brownstone has begun the necessary regulatory licensing processes.
The Big Sandy Project is a joint venture between Brownstone, LLC and RFG Gaming & Hospitality, LLC. At Brownstone’s recommendation, the Tribe has engaged a nationally recognized investment banking firm as its financial partner for the bridge and permanent financing; and, Group West Companies PLLC, a Seattle, Washington, firm, for its project engineering, architectural, and design services.
For the Big Sandy Project, no assurance can be given that (i) the Tribe will be successful in its efforts to complete the interim and/or permanent financings and/or at rates favorable to the Tribe; (ii) the Tribe will be successful in its efforts to obtain state and regulatory approvals; (iii) the Tribe will be successful in its efforts to complete the construction of the planned Project facility, and once completed, the planned Project facility will be successful; (iv) the Development Agreement may expire or be terminated prior to construction, and, (v) the Big Sandy Tribal government may change and may alter the Tribe’s Project plans.
Certain statements in this press release are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may be identified by words such as “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “should,” or “will” or the negative of these terms or other comparable terminology. Such statements and all phases of American Vantage Companies’ operations are subject to known and unknown risks, uncertainties and other factors, including overall economic conditions and other factors and uncertainties as are identified in American Vantage Companies’ Form 10-KSB for the year ended December 31, 2005, as well as the company’s filings under the Investment Company Act of 1940. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. American Vantage Companies’ actual results, levels of activity, performance or achievements may be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. The Company undertakes no obligation to update the forward-looking statements in this press release.