Quarterly Report for Quarter Ending June 30, 2024 (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

or

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No: 0-17529

DIAMONDHEAD CASINO CORPORATION

(Exact name of registrant as specified in charter)

Delaware		59-2935476
(State of Incorporation)		(I.R.S. EIN)

1013 Princess Street, Alexandria, Virginia22314

(Address of principal executive offices)

Registrant's telephone number, including area code: 703-683-6800

Securities registered pursuant to Section 12(b)-2 of the Exchange Act.:

Title of each class		Trading Symbol		Name of each exchange on which registered
None

Indicate by check mark whether the Registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes ☐ No☒

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer☒	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the Issuer's classes of common equity as of the latest practicable date: Number of shares outstanding as of August 13, 2024: 39,052,472.

DIAMONDHEAD CASINO CORPORATION

INDEX TO FORM 10-Q

		Page
PART 1:	FINANCIAL INFORMATION	1
ITEM 1:	Unaudited Condensed Consolidated Financial Statements	1
	Unaudited Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023	1
	Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2024 and June 30, 2023	2
	Unaudited Condensed Consolidated Statements of Changes in Stockholders' Deficiency for the Three and Six Months Ended June 30, 2024 and June 30, 2023	4
	Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and June 30, 2023	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
ITEM 2:	Management's Discussion and Analysis of Financial Condition and Financial Results	19
ITEM 3:	Quantitative and Qualitative Disclosures About Market Risk	22
ITEM 4:	Controls and Procedures	22
PART II:	OTHER INFORMATION	23
ITEM 1:	Legal Proceedings	23
ITEM 1A:	Risk Factors	24
ITEM 2:	Unregistered Sales of Equity Securities and Use of Proceeds	24
ITEM 3:	Default Upon Senior Securities	24
ITEM 4:	Mine Safety Disclosures	25
ITEM 5:	Other Information	25
ITEM 6:	Exhibits	25
	Signatures	26

DIAMONDHEAD CASINO CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

		June 30,			December 31,
		2024			2023
ASSETS
Current assets:
Cash		$	74,745			$	426,124
Total current assets			74,745				426,124
Land (Note 3)			5,233,204				5,233,204
Other receivable			154,622				154,622
Other assets			200,080				80
Total assets			5,662,651				5,814,030
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued expenses due related parties (Note 4)		$	8,705,147				8,315,187
Accounts payable and accrued expenses - others (Note 4)			5,634,552				5,272,524
Convertible notes and line of credit payable (Note 5)			1,962,500				1,962,500
Debenture payable (Note 6)			50,000				50,000
Convertible debenture payable (Note 6)			1,800,000				1,800,000
Short term notes and interest bearing advance (Note 7)			65,504				65,504
Notes payable due related parties (net of unamortized debt discount of $3,918and $33,241respectively) (Note 8)			698,601				669,279
Notes payable due others (net of unamortized debt discount of $2,125and $15,761respectively) (Note 9)			555,376				541,739
Total current liabilities			19,471,680				18,676,733
Non-current liabilities
Total liabilities			19,471,680				18,676,733
Commitments and contingencies (Notes 3 and 12)
Stockholders' deficit:
Preferred stock, $0.01par value; shares authorized 5,000,000, outstanding 2,086,000at June 30, 2024 and December 31, 2023 (aggregate liquidation preference of $2,519,080at June 30, 2024 and December 31, 2023)			20,860				20,860
Common stock, $0.001par value; shares authorized 50,000,000, issued: 39,052,472at June 30, 2024 and December 31, 2023 outstanding: 36,297,576at June 30, 2024 and December 31, 2023			39,052				39,052
Additional paid-in capital			36,687,991				36,663,780
Unearned ESOP shares			(2,490,662	)			(2,490,662	)
Accumulated deficit			(47,833,339	)			(46,862,802	)
Treasury stock, at cost, 1,084,431shares at June 30, 2024 and December 31, 2023			(232,931	)			(232,931	)
Total stockholders' deficit			(13,809,029	)			(12,862,703	)
Total liabilities and stockholders' deficit		$	5,662,651			$	5,814,030

DIAMONDHEAD CASINO CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED JUNE 30,

(UNAUDITED)

		Three Months Ended
		June 30,
		2024			2023
COSTS AND EXPENSES
Administrative and general		$	216,756			$	183,015
Other			17,154				16,912
Total costs and expenses			233,910				199,927
OTHER EXPENSE
Interest expense:
Related parties			99,399				98,481
Other			114,981				68,904
Total other expense			214,380				167,385
NET LOSS			(448,290	)			(367,312	)
PREFERRED STOCK DIVIDENDS			(25,400	)			(25,400	)
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS		$	(473,690	)		$	(392,712	)
Weighted average common shares outstanding - basic and diluted			36,297,576				36,297,576
Net loss per common share - basic and diluted		$	(0.01	)		$	(0.01	)

DIAMONDHEAD CASINO CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30,

(UNAUDITED)

		Six Months Ended
		June 30,
		2024			2023
COSTS AND EXPENSES
Administrative and general			413,473			$	383,308
Other			40,034				33,824
Total costs and expenses			453,507				417,132
OTHER EXPENSE
Interest expense:
Related parties			205,172				270,184
Other			261,058				177,953
Total other expense			466,230				448,137
NET LOSS			(919,737	)			(865,269	)
PREFERRED STOCK DIVIDENDS			(50,800	)			(50,800	)
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS		$	(970,537	)		$	(916,069	)
Weighted average common shares outstanding - basic and diluted			36,297,576				36,297,576
Net loss per common share - basic and diluted		$	(0.03	)		$	(0.03	)

DIAMONDHEAD CASINO CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY

FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023

(UNAUDITED)

														Additional																		Total
		Preferred Stock			Common Stock			Paid-in			Unearned ESOP			Accumulated			Treasury Stock			Stockholders'
		Shares			Amount			Shares			Amount			Capital			Shares			Amount			Deficit			Shares			Amount			Deficit
Balances at January 1, 2023			2,086,000				20,860				39,052,472				39,052				36,122,078				1,750,010			$	(2,609,264	)		$	(45,351,375	)			1,004,886			$	(216,227	)		$	(11,994,876	)
Common stock to be issued in connection with notes payable - related parties			-				-				-				-				17,500				-				-				-				-				-				17,500
Dividends			-				-				-				-				-				-				-				(25,400	)			-				-				(25,400	)
Net loss			-				-				-				-				-				-				-				(497,957	)			-				-				(497,957	)
Balances at March 31, 2023			2,086,000				20,860				39,052,472				39,052				36,139,578				1,750,010				(2,609,264	)			(45,874,732	)			1,004,886				(216,227	)			(12,500,733	)
Dividends			-				-				-				-				-				-				-				(25,400	)			-				-				(25,400	)
Net loss			-				-				-				-				-				-				-				(367,312	)			-				-				(367,312	)
Balances at June 30, 2023			2,086,000			$	20,860				39,052,472			$	39,052			$	36,139,578				1,750,010			$	(2,609,264	)		$	(46,267,444	)			1,004,886			$	(216,227	)		$	(12,893,445	)
Balances at January 1, 2024			2,086,000				20,860				39,052,472				39,052				36,663,780				1,670,465			$	(2,490,662	)		$	(46,862,802	)			1,084,431			$	(232,931	)		$	(12,862,703	)
Dividends			-				-				-				-				-				-				-				(25,400	)			-				-				(25,400	)
Net loss			-				-				-				-				-				-				-				(471,447	)			-				-				(471,447	)
Balances at March 31, 2024			2,086,000				20,860				39,052,472				39,052				36,663,780				1,670,465				(2,490,662	)			(47,359,649	)			1,084,431				(232,931	)			(13,359,550	)
Common stock to be issued in connection with notes payable - related parties			-				-				-				-				3,297				-				-				-				-				-				3,297
Common stock to be issued in connection with notes payable - others			-				-				-				-				20,914				-				-				-				-				-				20,914
Dividends			-				-				-				-				-				-				-				(25,400	)			-				-				(25,400	)
Net loss			-				-				-				-				-				-				-				(448,290	)			-				-				(448,290	)
Balances at June 30, 2024			2,086,000			$	20,860				39,052,472			$	39,052			$	36,687,991				1,670,465			$	(2,490,662	)		$	(47,833,339	)			1,084,431			$	(232,931	)		$	(13,809,029	)

DIAMONDHEAD CASINO CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30,

(UNAUDITED)

		Six Months Ending
		June 30,
		2024			2023
Cash flows from operating activities:
Net loss		$	(919,737	)		$	(865,269	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization			42,959				32,168
Common stock to be issued in connection with interest on notes			24,211				-
Changes in operating assets and liabilities:
Other assets			(200,000	)
Accounts payable and accrued expenses - related parties			339,160				458,064
Accounts payable and accrued expenses - other			362,028				298,709
Net cash used in operating activities			(351,379	)			(76,328	)
Cash flows from financing activities:
Proceeds from non-interest bearing advances from related parties			-				22,500
Net cash provided by financing activities			-				22,500
Net decrease in cash			(351,379	)			(53,828	)
Cash at beginning of period			426,124				55,885
Cash at end of period		$	74,745			$	2,057
Supplemental disclosure of cash flow information:
Cash paid for interest		$	-			$	-
Supplemental disclosure of non-cash financing activities:
Common stock to be issued in connection with notes payable - related parties		$	3,297			$	17,500
Common stock to be issued in connection with notes payable - others		$	20,914			$	-
Unpaid preferred stock dividends in accounts payable and accrued expenses		$	50,800			$	50,800

DIAMONDHEAD CASINO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1. Organization and Business

Diamondhead Casino Corporation (the "Company") owns, through its wholly-owned subsidiary, Mississippi Gaming Corporation, an approximate 400-acre undeveloped property located at 7051 Interstate 10, Diamondhead, Mississippi 39525 (hereafter "the Diamondhead Property" or "the Property"). The Company's intent was and is to construct a casino resort and other amenities on the Property unilaterally or in conjunction with one or more joint venture partners. However, the Company has been unable, to date, to obtain financing to move the project forward and/or enter into a joint venture partnership. There can be no assurance that the substantial funds required for the design and construction of the project can be obtained or that such funds can be obtained on acceptable terms. In addition, the Company has been unable to obtain financing to sustain the Company. Due to its lack of financial resources, the Company was forced to explore other alternatives, including a sale of part or all of the Property. The Company's preference is to sell only part of the Property inasmuch as this would appear to be in the best interest of the stockholders of the Company. However, there can be no assurance the Company will be able to sell only part of the Property. The Company intends to continue to pursue a joint venture partnership and/or other financing while seeking a viable purchaser for part or all of the Property. Finally, there can be no assurance that if the requisite financing for the project were obtained and the project were constructed, that the project would be successful.

Note 2. Liquidity and Going Concern

These unaudited condensed consolidated financial statements have been prepared on the basis that the Company is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred losses over the past several years, has no operations, generates no operating revenues and as reflected in the accompanying unaudited condensed consolidated financial statements, incurred a net loss applicable to common stockholders of $970,537and $916,069for the six months ended June 30, 2024 and 2023 respectively. In addition, the Company had an accumulated deficit of $47,833,339on June 30, 2024. Due to its lack of financial resources, the Company has been forced to explore other alternatives, including the sale of part or all the Property.

The Company has had no operations since it ended its gambling cruise ship operations in 2000. Since that time, the Company has concentrated its efforts on the development of its Diamondhead, Mississippi property. That development is dependent upon the Company obtaining the necessary capital, through either equity and/or debt financing, unilaterally or in conjunction with one or more partners, to master plan, design, obtain permits for, construct, open, and operate a casino resort.

In the past, in order to raise capital to continue to pay on-going costs and expenses, the Company has borrowed funds, through Private Placements of convertible instruments as well as through other secured notes which are more fully described in Notes 5 through 9 to these unaudited condensed consolidated financial statements. The Company is in default with respect to payment of both principal and interest under the terms of most of these instruments. In addition, at June 30, 2024, the Company had $14,339,699of accounts payable and accrued expenses, $74,745in cash on hand and $200,000in Certificates of Deposit.

The above conditions raise substantial doubt as to the Company's ability to continue as a going concern.

Note 3. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and in conformity with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X and the related rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, certain information and note disclosures normally included in unaudited condensed consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, we believe that the disclosures included in these unaudited condensed consolidated financial statements are adequate to make the information presented not misleading. The unaudited condensed consolidated financial statements included in this document have been prepared on the same basis as the annual audited consolidated financial statements and, in our opinion, reflect all adjustments, which include normal recurring adjustments necessary for a fair presentation in accordance with GAAP and SEC regulations for interim financial statements. The results for the six months ended June 30, 2024 are not necessarily indicative of the results that we will have for any subsequent period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes to those statements for the year ended December 31, 2023, attached to our annual report on Form 10-K.

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of Diamondhead Casino Corporation and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Land

Land held for development is carried at cost. Costs directly related to site development, such as licensing, permitting, engineering, and other costs, are capitalized.

Land development costs, which have been capitalized, consist of the following at June 30, 2024 and December 31, 2023:

		June 30,			December, 31
		2024			2023
Land		$	4,691,430			$	4,691,430
Licenses			77,000				77,000
Engineering and costs associated with permitting			464,774				464,774
	$	5,233,204			$	5,233,204

Cooperative Energy, a Mississippi Electric Cooperative, sought and has now obtained a permanent easement along the northern portion of the Diamondhead Property on which to construct, maintain and operate electric transmission lines together with an access road. On or about May 24, 2023, Cooperative Energy filed a Complaint for Eminent Domain in the Special Court of Eminent Domain, Hancock County, Mississippi in which it named MGC and all persons and entities holding liens on the Diamondhead, Mississippi Property as defendants.

On September 1, 2023, Cooperative Energy filed a Motion to Approve Settlement, an Amended Statement of Values and a Notice of Hearing for September 11, 2023. On September 26, 2023, the Court entered an Order Granting Plaintiff Right of Immediate Title and Possession. On October 17, 2023, the Court entered an Order Approving Settlement in the amount of $1,000,000and entered an Order Approving Disbursement of Funds to MGC. On October 20, 2023, MGC received $845,378as part of the settlement amount. The parties are working on the wording of two easements: a Cooperative Energy Right-Of-Way Easement and an Access Road Easement. Once the easements are finalized and signed, Cooperative Energy will pay MGC the remaining amount due of $154,622. Therefore, the Company recorded a receivable of $154,622on the consolidated balance sheet as of June 30, 2024 and December 31, 2023.

Management determined that the easement arrangement was outside the scope of ASC 842. Further, the Company determined that the easement reduced the value of the property by $242,893. The remaining $757,107of the $1million easement was recorded as a gain on the condemnation of land in the consolidated statements of operations.

Fair Value Measurements

The Company follows the provisions of ASC Topic 820 "Fair Value Measurements" for financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. The standard discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The standard utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Input other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable input that reflects management's own assumptions.

Financial instruments included in current assets and liabilities are reported at carrying value in the unaudited condensed balance sheets, which approximate fair value due to their short-term nature.

Long-Lived Assets

The Company reviews long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of long-lived assets is measured by comparing the carrying amount of the assets to the estimated undiscounted future cash flows projected to be generated by the assets. If such assets are considered impaired, the impairment to be recognized is measured by the amount the carrying value exceeds the fair value of such assets determined by appraisal, discounted cash flow projections, or other means. Noimpairment existed as of June 30, 2024 and December 31, 2023.

Net Loss per Common Share

Basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings per share is calculated by using the weighted average number of common shares outstanding, plus other potentially dilutive securities. Potentially dilutive securities are excluded from the computation of diluted loss per shares since their effect would be antidilutive. Common shares outstanding consist of issued shares, including allocated and committed shares held by the ESOP trust, less shares held in treasury. The dilutive securities below do not include 5,055,555potentially convertible Debentures, since the requirements for possible conversion had not yet been met and may never be met.

The table below summarizes the components of potential dilutive securities at June 30, 2024 and 2023.

		June 30,			June 30,
Description		2024			2023
Convertible Preferred Stock		$	260,000			$	260,000
Options to purchase Common Shares			4,555,000				4,555,000
	$	4,815,000			$	4,815,000

Recently Adopted Accounting Pronouncements

On March 27, 2023, the FASB issued ASU 2023-01, which amends certain provisions of ASC 842 that apply to arrangements between related parties under common control. Specifically, the ASU:

	●	Offers private companies, as well as not-for-profit entities that are not conduit bond obligors, a practical expedient that gives them the option of using the written terms and conditions of a common-control arrangement when determining whether a lease exists and the subsequent accounting for the lease, including the lease's classification
	●	Amends the accounting for leasehold improvements in common-control arrangements for all entities.

The ASU is effective for fiscal years beginning after December 15, 2023. The ASU did not have any impact on the Company's financial statements.

No other recent accounting pronouncements were issued by FASB that are believed by management to have a material impact on the Company's present or future financial statements.

Note 4. Accounts Payable and Accrued Expenses

The table below outlines the elements included in accounts payable and accrued expenses at June 30, 2024 and December 31, 2023:

		June 30,			December 31,
		2024			2023
Related parties:
Accrued payroll due officers			3,998,006			$	3,869,711
Accrued interest due officers and directors			3,096,427				2,897,159
Accrued director fees			973,750				928,750
Base rents due to the President			403,276				403,276
Associated rental costs			216,380				198,983
Other			17,308				17,308
Total related parties		$	8,705,147			$	8,315,187
Non-related parties:
Accrued interest		$	3,339,467			$	3,115,463
Accrued dividends			1,305,800				1,270,000
Accrued fines and penalties			651,175				578,775
Other			338,110				308,286
Total non-related parties		$	5,634,552			$	5,272,524

Note 5. Convertible Notes and Line of Credit

Line of Credit

In 2008, the Company entered into an agreement with an unrelated third party for an unsecured Line of Credit up to a maximum of $1,000,000. The Line of Credit carries an interest rate on amounts borrowed of 9% per annum. All funds originally advanced under the facility were due and payable by November 1, 2012. As an inducement to provide the facility, the lender was awarded an immediate option to purchase 50,000shares of common stock of the Company at $1.75per share. In addition, the lender received an option to purchase a maximum of 250,000additional shares of common stock of the Company at $1.75per share. The options expire following repayment in full by the Company of the amount borrowed. The Company is in default under the repayment terms of the agreement. At June 30, 2024 and December 31, 2023, the unpaid principal and accrued interest due on the obligation totaled $2,347,559and $2,302,929, respectively.

Convertible Notes

Convertible Notes issued pursuant to the two Private Placements total $962,500in principal and became due and payable beginning in March 2012 and extending to various dates through June 2013. As of the date of the filing of this report, all the aforementioned debt obligations remain unpaid and in default under the repayment terms of the notes. In November 2020, the Superior Court of the State of Delaware awarded Judgments in favor of certain holders of these Promissory Notes who filed suit against the Company. As a result, the Company must carry an aggregate of $486,796(total principal and interest) as debt owed to these noteholders. As of June 30, 2024 and December 31, 2023, all Notes issued had a total outstanding principal of $962,500and accrued interest, including the additional interest awarded pursuant to the Court Judgments, of $1,185,412and $1,145,957respectively.

The table below summarizes the Company's debt arising from the above-described sources as of June 30, 2024 and December 31, 2023:

		June 30,			June 30,
		2024			2023
Private placements - March 1, 2010*		$	475,000			$	475,000
Private placements - October 25, 2010			487,500				487,500
		$	962,500			$	962,500

*

Of the 2010 placements above, $75,000is due to a related party.

Note 6. Convertible Debentures

Pursuant to a Private Placement Memorandum dated February 14, 2014 (the "Private Placement"), the Company offered up to a maximum of $3,000,000of Collateralized Convertible Senior Debentures to accredited or institutional investors. The Offering was conducted contingent on the deposit into Escrow of the purchase price for all the Debentures offered in the principal amount of $3,000,000. The Debentures, once issued, originally bore interest at 4% per annum after 180 days, matured six years from the date of issuance, and were secured by a lien on the Company's Mississippi property. The interest rate on these debentures was raised pursuant to subsequent agreements. The debentures were offered in three tranches as follows:

(a) $1,000,000of First Tranche Collateralized Convertible Senior Debentures convertible into an aggregate of 3,333,333shares of Common Stock of the Company at a conversion price of $.30per share (the "First Tranche Debentures");

(b) $1,000,000of Second Tranche Collateralized Convertible Senior Debentures, convertible into an aggregate of 2,222,222shares of Common Stock of the Company at a conversion price of $.45per share (the "Second Tranche Debentures"); and

(c) $1,000,000of Third Tranche Collateralized Convertible Senior Debentures, convertible into either 1,818,182shares of Common Stock or 1,333,333shares of Common Stock of the Company, at a conversion price of $.55or $.75per share depending upon certain conditions described in the Private Placement Memorandum (the "Third Tranche Debentures").

The conversion rights on each issued Debenture carried an Anti-Dilution Provision. If the Company issued any shares of Common Stock or other securities after March 31, 2014 at a price per security that was less than the conversion price of a Debenture, then the Debenture would have had a new conversion price equal to the price per security that was less than the Conversion Price of the Debenture. The foregoing provision did not apply to the following:

(a) The issuance of any of the other Debentures in the Offering or the issuance of shares of Common Stock upon conversion of any of the Debentures in the Offering.

(b) The issuance of any shares of Common Stock if such issuance relates to an agreement, arrangement or grant to issue shares of Common Stock entered into by the Company prior to the Issue Date of the First Tranche Debentures in the Offering, including but not limited to, for example, previously issued convertible promissory notes, previously issued warrants, previously issued options to purchase Common Stock, or common stock vested or to be issued pursuant to a pre-existing Employee Stock Ownership Plan.

The Anti-Dilution Provisions with respect to a Debenture terminate the earlier of (a) the date (if ever) the Company receives an "Approval to Proceed" from the Mississippi Gaming Commission to develop a casino/hotel on the Property, (b) the date on which the Debenture is converted in full, (c) the date on which the Debenture is paid in full, or (d) the Final Maturity Date of the Debenture (as defined in the Debenture).

Since the issuance of the Debentures, there have been no events that would trigger the above anti-dilution provisions.

When originally issued, in the event the Company failed to meet the conditions for conversion of the Debentures, the First Tranche Convertible Debentures, which total $950,000, would have been due on March 31, 2020and the Second Tranche Convertible Debentures, which total $850,000, would have been due December 31, 2020. The sole remaining non-convertible Debenture in the amount of $50,000would have been due March 31, 2020. However, the Company is in default with respect to interest payments due under the Debenture agreements in the amount of $427,081and as a result, the Debentures payable are reported as current liabilities.

Certain Debenture holders obtained a judgment for amounts due relating to their Debentures. Post judgment interest shall only apply to the $1.5million of principal due under their Debentures. Total accrued interest due on all outstanding Debentures amounted to $817,213and $750,719at June 30, 2024 and December 31, 2023 respectively.

Note 7. Short Term Notes and Interest-Bearing Advance

Promissory Notes

On June 9, 2017, the Company entered into a Promissory Note with an unrelated lender in exchange for proceeds in the amount of $15,000. Interest on the note was 12.5% per annum and payable March 1 of each year the note remained outstanding. Payment in full of the Note was due June 9, 2019. On July 20, 2023, the Noteholder agreed to extend the maturity date of the note to June 9, 2025 with the understanding that the note would be paid in full from the proceeds of an expected eminent domain settlement. Mississippi Gaming Corporation, a wholly owned subsidiary of the Company, guaranteed the Note. In addition, the President of the Company agreed to personally guarantee the Note and to personally secure the Note with an assignment of proceeds due to her under the first lien on the Diamondhead property. The interest payments due on the note since March 1, 2018 were in default. In the fourth quarter of 2023, the Company fully repaid the principal amount of $15,000and settled the accrued interest due on this obligation, which amounted to $14,165.

Bank Credit Facility

Wells Fargo Bank provided an unsecured credit facility of up to $15,000to the Company. The facility required a variable monthly payment of amounts borrowed plus interest, which was applied at 11.24% on direct charges and 24.99% on any cash advanced through the facility. At June 30, 2024 and December 31, 2023, a principal balance of $0on the facility. The lending bank has since cancelled privileges under the facility for non-payment.

Interest Bearing Advances

In 2016, the Company received cash advances totaling $47,500from seven lenders which included $22,500from third parties (see Note 8 for related party advances). The proceeds from the cash advances were earmarked for the payment of accounting and auditing fees and other expenses required to file the Company's Form 10-Q. On August 25, 2016, the Company issued a Note to the foregoing lenders, which matures four yearsfrom the date of issuance and bears interest at 8% per annum, with a full year of interest accruing in any year in which the advance remains unpaid. Accrued interest due on the above notes amounted to $17,800and $16,400at June 30, 2024 and December 31, 2023 respectively.

On February 2, 2017, the Company borrowed $25,000from an unrelated third party. The note carries an annual interest rate of approximately 12.5% and is past due. The Company is in default and as such, the lender may increase the interest rate due by an amount of up to 3% per annum in excess of the rate then otherwise applicable. The Company does not have the funds to repay the advance. The President of the Company has agreed to personally secure the note with an assignment of proceeds due to her under the first lien on the Property. Accrued interest on this obligation amounted to $7,212and $6,644at June 30, 2024 and December 31, 2023 respectively.

Of the amounts discussed above, $47,500in short-term notes and advances are in default under the original agreed upon terms.

Note 8. Current Notes Payable Due Related Parties

In 2016, the Company received cash advances totaling $47,500from seven lenders which included $25,000from three Current Directors of the Company (see Note 7). The proceeds from the cash advances were earmarked for the payment of accounting and auditing fees and other expenses required to file the Company's Form 10-Q. On August 25, 2016, the Company issued a Note to the foregoing lenders, which matures four yearsfrom the date of issuance and bears interest at 8% per annum, with a full year of interest accruing in any year in which the advance remains unpaid. Accrued interest due on the above notes amounted to $18,000and $16,000at June 30, 2024 and December 31, 2023.These amounts are included in current liabilities on the balance sheets as June 30, 2024 and December 31, 2023. This note is secured by a second lien on the Diamondhead Property.

In the third quarter of 2016, the Chairman of the Board of Directors of the Company loaned the Company $90,000. On August 25, 2016, the Company issued a Note to the Chairman of the Board. The Note bears interest at 14% per annum effective August 1, 2016 and matures four yearsfrom the date of issuance. The proceeds of the loan were used for the payment of Mississippi property taxes and auditing, accounting and other corporate expenses. Accrued interest due on the note amounted to $99,834and $93,482as of June 30, 2024, and December 31, 2023, respectively.

In July 2017, at the request of the Company, the current Chairman of the Board of Directors, who is also a Vice President of the Company ("the Chairman"), paid all property taxes due, together with all interest due thereon, to Hancock County, Mississippi on the approximate 400-acre tract of land, owned by Mississippi Gaming Corporation, a wholly owned subsidiary of the Company. The total amount advanced was $67,628.

The Chairman is one of the secured parties under that Land Deed of Trust recorded on September 26, 2014 in Hancock County, Mississippi, to secure Tranche I and Tranche II Debentures issued by the Company in 2014. Under paragraph 5 of the Land Deed of Trust, a secured party who advances sums for taxes due on the Property is secured by the same Land Deed of Trust, but only at that interest rate specified in the note representing the primary indebtedness, namely 4% per annum.

The Chairman advanced the $67,628on condition that: (i) the advance constitute a lien with interest at 4% per annum under that Land Deed of Trust recorded September 26, 2014; (ii) he be paid additional interest of 11% per annum on the amount advanced and owing and that the full 11% interest per annum is payable during any calendar year in which all or part of the amount advanced and owing or interest due thereon remains unpaid; (iii) this additional interest obligation be treated as a separate and secured debt of the Company, to be evidenced by a separate note and is secured with a separate and third lien to be placed on the Property (hereafter "the Third Lien"); (iv) the entire obligation will be treated as an advance to be paid out of any subsequent incoming financing obtained by the Company or any amounts recovered by the Company from a defendant in that collection action brought by the Company in the Circuit Court of Montgomery County, Maryland; and (v) he be indemnified for any losses sustained on the sale of that common stock sold to cover the payment of real estate property taxes and any credit card fees associated with payment ("the indemnification"). The Chairman identified the common stock sold and provided the Company with the documentation required to document the sale of said stock and to calculate the loss, if any, on said stock. The fair value measurement of the derivative indemnification liability at December 31, 2021 was developed using Level 1 inputs, which was valued at $0. On February 4, 2022, the Board of Directors entered into an agreement with the Chairman to issue 35,000shares of common stock of the Company to the Chairman to repurchase the indemnification. See Note 11. On September 30, 2018, Mississippi Gaming Corporation issued a secured promissory note, due one year from the date of issue to the Chairman for an amount up to $100,000to cover the principal and interest due with respect to this note. On August 21, 2018, Mississippi Gaming Corporation placed a third lien on the Property to secure this obligation for $100,000. Accrued interest on the note amounted to $78,330and $69,527at June 30, 2024 and December 31, 2023, respectively.

In March of 2018, the Board of Directors voted to increase up to an additional $200,000the amount secured by the third lien in favor of the Chairman of the Board, for amounts advanced by the Chairman on behalf of the Company, on the following terms and conditions, namely, that (i) the advance constitutes a lien on the Property with interest at 15% per annum; (ii) that the full interest of 15% per annum is payable during any calendar year in which all or part of the amount advanced is due and owing or interest due thereon remains unpaid; (iii) that this debt be evidenced by a separate promissory note and is to be included in and secured with a third lien that is to be placed on the Diamondhead Property to secure previous advances made to the Company (hereafter "the Third Lien"); (iv) that he be indemnified for any losses sustained on the sale of his common stock in an unrelated publicly-traded company to be sold to cover this advance based on a sales price of approximately $2.80 per share with a cap on the maximum loss per share to be at a sales price of $10.00 per share; and (v) that the Chairman's previous indemnification approved by the Board of Directors on July 24, 2017 with respect to any loss on the sale of the same stock also be capped at a maximum of $10.00 per share.The Chairman identified the common stock sold and provided the Company with the documentation required to document the sale of said stock and to calculate the loss, if any, on said stock. On February 4, 2022, the Board of Directors entered into an agreement with the Chairman to issue 35,000shares of common stock of the Company to the Chairman to repurchase the indemnifications. See Note 11.

On September 30, 2018, Mississippi Gaming Corporation issued a secured promissory note, due one year from the date of issue to the Chairman, for an amount up to $200,000to cover the principal and interest due with respect to this note. On August 21, 2018, Mississippi Gaming Corporation placed a third lien on the Diamondhead Property to secure this obligation for $200,000.

In November of 2018, the Board of Directors voted to increase up to an additional $100,000of advances from the Chairman and in March of 2019, the Board of Directors voted to increase the limit of the advances to $200,000. The terms of this advance are identical to the terms as approved above in March 2018.

In July 2020, the Chairman of the Board of the Company paid a total of $67,076for property taxes due for the year 2019 on the Company's 400-acre Diamondhead, Mississippi Property plus $1,573in related fees. The Company placed a fourteenth lien on the Property in July 2021 to secure a promissory note in the amount of $150,000issued to the Chairman of the Board of the Company to secure the payment of these taxes and interest due thereon.

In May 2021, the Chairman of the Board of the Company paid a total of $62,610for property taxes due for the year 2020 on the Company's 400-acre Diamondhead, Mississippi Property plus $1,468in related fees. The Company placed a fifteenth lien on the Property in July 2021 to secure a promissory note in the amount of $100,000issued to the Chairman of the Board of the Company to secure the payment of these taxes and interest due thereon.

On May 30, 2021, the Chairman of the Board of the Company loaned the Company $50,000. The note is non-interest bearing and matures one year from the date of issuance. The Company placed a sixteenth lien on the Property in July 2021 to secure this non-interest bearing note which totals $50,000in principal and calls for the issuance of 100,000shares of common stock. The note is not convertible. As of the issuance date of these unaudited condensed consolidated financial statements, no shares have been issued. The Company recorded a fair value of the stock of $33,500, which was determined by the fair value of the Company's common stock at the date of the loan. The fair value of the stock was recorded as a debt discount, which will be amortized to interest expense over the life of the note. Debt discount was fully amortized during 2022. In May 2024, the Company agreed to pay additional interest and issue additional shares of common stock to the Chairman based on the date the note entered into default. As of June 30, 2024, the Company recorded $3,297in stock compensation pertaining to 31,397shares of common stock that the Company agreed to issue.

On February 17, 2023, the Board of Directors agreed to issue a non-interest bearing promissory note to the Chairman in the principal amount of $25,000together with 50,000shares of common stock of the Company. The note was issued in connection with the Chairman advancing funds to pay accounts payable on behalf of the Company. The note is not convertible. As of the issuance date of these unaudited condensed consolidated financial statements, no shares have been issued. The Company recorded a fair value of the stock of $17,500, which was determined by the fair value of the Company's common stock at the date of the loan. The fair value of the stock was recorded as a debt discount, which will be amortized to interest expense over the life of the note. During the Six months ended June 30, 2024, debt discount was fully amortized to interest expense to related parties. On November 1, 2023, as previously agreed, the Company paid the Chairman the $25,000advanced out of the proceeds of the eminent domain settlement.

On July 28, 2023, the Board of Directors agreed to issue a non-interest bearing promissory note to the Chairman in the principal amount of $75,000together with 150,000shares of common stock of the Company. The note was issued in connection with the Chairman advancing funds to pay property taxes due for the year 2022 on the Diamondhead, Mississippi Property and fees due to the Company's outside auditor for review of the Company's Form 10-Q for the period ending June 30, 2023. The note is not convertible. As of the issuance date of these financial statements, no shares have been issued. The Company recorded a fair value of the stock of $52,500, which was determined by the fair value of the Company's common stock at the date of the loan. The fair value of the stock was recorded as a debt discount, which will be amortized to interest expense over the life of the note. During the six months ended June 30, 2024, $29,048of debt discount was amortized to interest expense to related parties. On November 1, 2023, as previously agreed, the Company paid the Chairman the $75,000advanced out of the proceeds of the eminent domain settlement.

As of June 30, 2024, the Chairman had advanced a total of $467,953, net of repayment of $16,250, under both the March 2018 and March 2019 arrangements and was owed accrued interest in the amount of $409,622and $349,415as of June 30, 2024 and December 31, 2023.

On July 24, 2017, the President of the Company, who is a Director of the Company, agreed to advance the Company up to $20,000for the payment of expenses. In March of 2018, the Board of Directors voted to increase to up to $100,000the amount to be secured by a third lien in favor of the President of the Company for amounts advanced by the President under this note, on the following terms and conditions, namely, that (i) she be paid interest of 15% per annum on the amount advanced and owing and that the full 15% interest per annum is payable during any calendar year in which all or part of the amount advanced and owing or interest due thereon remains unpaid; (ii) the obligation in the maximum principal amount of $100,000 with interest due thereon be treated as a secured debt of the Company, to be evidenced by a separate note and to be secured with a separate lien to be placed on the Diamondhead Property ("the Third Lien") together with the Chairman's Third Lien, as well as a first lien to be placed on the residential lot owned by the Company; (iii) that the Third Lien on the Diamondhead Property also include the two loans ($25,000and $15,000) and interest due thereon and credit facilities in the maximum amount of $15,000; and (iv) that the foregoing will be treated as advances to be paid out of any subsequent incoming financing obtained by the Company or any amounts recovered by the Company from a defendant in that collection action brought by the Company in the Circuit Court of Montgomery County, Maryland.

As of June 30, 2024, the President had advanced a total of $5,007, net of repayments of $68,562, under this agreement. The President previously agreed to secure a $25,000loan and interest due thereon and to secure and guarantee a $15,000loan and interest due thereon due non-related parties discussed above. The President is also personally liable for certain bank-issued credit cards used by the Company to pay expenses incurred by the Company in the approximate amount of $18,000. On September 30, 2018, Mississippi Gaming Corporation issued a secured promissory note, due one year from date of issue to the President for an amount up to $100,000to cover the principal and interest due with respect to this note. On August 21, 2018, Mississippi gaming Corporation placed a third lien on the Diamondhead Property to secure this obligation for $100,000. Accrued interest due on this note amounted to $22,249and $23,763as at June 30, 2024 and December 31, 2023.

The third lien placed on the Diamondhead Property, which secures the above three promissory notes, is for a maximum of $400,000and is payable to the Chairman of the Board ($300,000) and President ($100,000) of the Company.

The principal balance of the notes payable due to the officers and directors discussed above was $698,601, net of debt discount of $3,918and $669,279, net of debt discount of $33,241, as of June 30, 2024 and December 31, 2023, respectively.

Note 9. Notes Payable Due Others

In October 2017, the Company entered a settlement with a holder of $150,000of convertible notes as described in Note 5 above. As part of the settlement, the Company agreed to pay legal fees in the amount of $50,000and issued a four-yearnote at 0% interest to satisfy this obligation. The note is currently in default.

In December 2020, the Company entered into three promissory notes with unrelated lenders in exchange for an aggregate principal amount of $126,250. The Company received total proceeds of $100,000for the notes, resulting in an original issue discount of $26,250. This original issue discount was recorded as a debt discount, which will be amortized to interest expense over the life of the notes. The notes are non-interest bearing and matured in December 2021, one year after the notes' issuances. These notes are currently in default.

In January and February 2021, the Company entered into two promissory notes with unrelated lenders in exchange for principal amounts of $25,000and $31,250. The Company received total proceeds of $50,000for the notes, resulting in an original issue discount of $6,250. This original issue discount was recorded as a debt discount, which will be amortized to interest expense over the life of the notes. The notes are non-interest bearing and matured in January and February 2022, respectively, one year after the notes' issuances. These notes are currently in default.

In April and May 2021, the Company entered into three promissory notes with unrelated lenders in exchange for principal amounts of $70,000, $25,000and $25,000. The Company received total proceeds of $100,000for the three notes, resulting in an original issue discount of $20,000. This original issue discount was recorded as a debt discount, which will be amortized to interest expense over the life of the notes. The notes are non-interest bearing and matured in April and May 2022 one year after the notes' issuances. The notes are currently in default.

In July 2021, the Company entered into a promissory note with an unrelated lender in exchange for the principal amount of $25,000. The Company received proceeds of $25,000for the note. The note is non-interest bearing and matures in July 2022, one year after the note's issuance. The note is currently in default.

In November 2021, the Company entered into a promissory note with an unrelated lender in exchange for the principal amount of $50,000. The Company received proceeds of $50,000for the note. The note is non-interest bearing and matures in November 2022, one year after the note's issuance. The note is currently in default.

In March 2022, unrelated third parties paid a total of $60,436for property taxes due for the year 2021 on the Company's Mississippi Property and loaned the Company an additional $19,564for a total of $80,000. In return for the $80,000, the Company issued two non-interest bearing secured promissory notes for $40,000each, due and payable in one year and, in addition, agreed to issue 80,000shares of common stock for each $40,000loaned, for a total repayment due of $80,000plus 160,000shares of common stock. The note is currently in default.

In April 2022, the Company entered into a promissory note with an unrelated lender in exchange for the principal amount of $50,000. The Company received proceeds of $50,000for the note. The note is non-interest bearing and matures in April 2023, one year after the note's issuance. The note is currently in default.

From April 2021 to June 2022, thirteen liens were placed on the Property to secure the foregoing notes. There is a call for the issuance of a total of 760,000shares of common stock in connection with the notes and liens, however, no shares have been issued to date.In December 2020, the Company recorded a fair value of the stock of $22,050, which was determined by the fair value of the Company's common stock at the date of each loan issuance. In 2021, the Company recorded a fair value of the stock pertaining to the 2021 notes of $102,000. In 2022, the Company recorded a fair value of the stock pertaining to the 2022 notes of $98,000. The fair value of the stock was recorded as a debt discount, which has been fully amortized to interest expense as of December 31, 2023.

On July 25, 2023 and August 8, 2023, the Company entered into two promissory notes with unrelated lenders in exchange for a principal amount of $20,000each. The Company received total proceeds of $40,000for the notes. These notes are non-interest bearing and mature in one year after the notes' issuance. In exchange for the loans, the Company also agreed to issue 40,000shares of common stock of the Company to each lender and agreed to pay each lender the principal due on each note out of the proceeds expected to be received from the settlement of an eminent domain proceeding. The notes are not convertible. As of the issuance date of these unaudited condensed consolidated financial statements, no shares have been issued. The Company recorded a fair value of the stock of $27,200, which was determined by the fair value of the Company's common stock at the date of the loan. The fair value of the stock was recorded as a debt discount, which will be amortized to interest expense over the life of the note. During the six months ended June 30, 2024, $13,563of debt discount was amortized to interest expense to others. On November 1, 2023, as previously agreed, the Company paid the two lenders $20,000each out of the proceeds of the eminent domain settlement.

During the six months ended June 30, 2024 and 2023, $13,563and $24,935of the debt discount was amortized to interest expense due to others. As of June 30, 2024 and December 31, 2023, total notes payable due others, net of unamortized discount, was $555,376and $541,739, respectively.

In May 2024, the Company agreed to pay additional interest and issue additional shares of common stock for certain noteholders based on the dates the respective notes entered into default. As of June 30, 2024, the Company recorded $20,914in stock compensation pertaining to 199,183shares of common stock that the Company agreed to issue. Additionally, the Company incurred an additional $23,973in accrued interest payable in cash to one noteholder.

Note 10. Long Term Notes and Interest-Bearing Advance

Promissory Notes

On June 9, 2017, the Company entered into a Promissory Note with an unrelated lender in exchange for proceeds in the amount of $15,000. Interest on the note is 12.5% per annum and payable March 1 of each year the note remains outstanding. Payment in full of the Note was due June 9, 2019. On July 20, 2023, the noteholder agreed to extend the maturity date of the note to June 9, 2025. Mississippi Gaming Corporation, a wholly owned subsidiary of the Company, guaranteed the Note. In addition, the President of the Company agreed to personally guarantee the Note and to personally secure the Note with an assignment of proceeds due to her under the first lien on the Diamondhead property. On November 28, 2023, the Company fully repaid $15,000along with the accrued interest due on this obligation and no further amount was outstanding.

Note 11. Related Party Transactions

As of June 30, 2024, the President of the Company is owed deferred salary in the amount of $3,791,996and the Vice President and the current Chairman of the Board of Directors of the Company is owed deferred salary in the amount of $121,140. The Board of directors agreed to pay interest at 9% per annum on the foregoing amounts owed. Interest expenses under this agreement amounted to $171,112during the six months ended June 30, 2024, and 2023, respectively. Total interest accrued under this agreement totaled $2,408,952and $2,237,878as of June 30, 2024, and December 31, 2023, respectively.

The Company has a month-to-month lease with the President and then-Chairman of the Board of Directors of the Company, for office space owned by the President in Alexandria, Virginia. The lease calls for monthly base rent in the amount of $4,534and payment of associated costs of insurance, real estate taxes, utilities and other expenses. Rent expense associated with this lease amounted to base rent in the amount of $27,204and associated rental costs of $17,398for a total of $44,602for the six months ended June 30, 2024 and base rent of $27,204and associated rental costs of $16,475for a total of $43,679for the six months ended June 30, 2023. Payment of $27,204and 0was made in six months ended June 30, 2024 and June 30, 2023 respectively. At June 30, 2024 and December 31, 2023, amounts owed for base rent and associated rental costs totaled $619,656and $602,252, respectively.

Directors of the Company are entitled to a director's fee of $15,000per year for their services. The Company has been unable to pay directors' fees to date. A total of $973,750and $928,750was due and owing to the Company's current and former directors as of June 30, 2024 and December 31, 2023, respectively. Directors have previously been compensated and may, in the future, be compensated for their services with cash, common stock, or options to purchase common stock of the Company.

On February 4, 2022, the Board of Directors entered into an agreement with the Chairman of the Board of Directors, to issue 35,000shares of common stock of the Company to Mr. Harrison to repurchase the indemnifications the Company had previously agreed to pay the Chairman for losses, if any, suffered on certain stock he had sold in prior years in an unrelated company to raise funds to pay property taxes due on the Diamondhead, Mississippi Property and to lend additional funds to the Company. This repurchase eliminated any risk to the Company arising from the indemnification which could have been material. During the six months ended June 30, 2024, the Company recorded stock-based compensation of $0for the fair value of these shares, which have not yet been issued as of the issuance date of these unaudited condensed consolidated financial statements.

On February 17, 2023, the Board of Directors agreed to issue a non-interest bearing promissory note to the Chairman in the principal amount of $25,000together with 50,000shares of common stock of the Company. The note was issued in connection with the Chairman advancing funds to pay accounts payable on behalf of the Company.

On July 28, 2023, the Board of Directors agreed to issue a non-interest bearing promissory note to the Chairman in the principal amount of $75,000together with 150,000shares of common stock of the Company. The note was issued in connection with the Chairman advancing funds to pay property taxes on the Diamondhead Property for the year 2022 and to pay fees due to the Company's outside auditor for review of the Form 10-Q for the period ending June 30, 2023. In exchange for the $25,000and $75,000loans, the Company also agreed to pay the principal due out of the proceeds expected to be received from the settlement of an eminent domain proceeding.

On November 1, 2023, as previously agreed, the Company paid the Chairman the $25,000advanced and the $75,000advanced out of the proceeds of the eminent domain settlement.

See Notes 4, 5, 7, 8 and 12 for other related party transactions.

Note 12. Commitments and Contingencies

Liens

As of June 30, 2024, the Company had placed twenty-one liens on the Company's Diamondhead, Mississippi Property ("the Property"). No additional liens have been filed as of the filing of this report. The liens are as follows:

In September of 2014, a first lien was placed on the Property pursuant to a Private Placement dated February 14, 2014, as amended, to secure certain obligations of the Company. The first lien is composed of an (i) Executives Lien and (ii) an Investors' Lien. The liens are in pari passu.

On March 31, 2014, the Company issued $1million of First Tranche Collateralized Convertible Senior Debentures. On December 31, 2014, the Company issued $850,000of Second Tranche Collateralized Convertible Senior Debentures. On September 26, 2014, a first lien was placed on the Diamondhead Property in favor of the Investors to secure the principal due in the amount of $1,850,000and interest due thereon (the "Investors Lien"). The Investors Lien is in pari passu with a first lien placed on the Property in favor of the President of the Company, the Vice President of the Company, and certain directors of the Company for past due wages, compensation, and expenses owed to them in the maximum aggregate amount of $2,000,000(the "Executives Lien"). The CEO will serve as Lien Agent for the Executives Lien.

On December 16, 2016, the Company filed a second lien on the Property in the maximum amount of $250,000to secure certain notes payable, including notes to related parties, totaling $137,500in principal and accrued interest incurred.

On August 21, 2018, the Company filed a third lien on the Property in the maximum amount of $400,000to secure notes issued to the Chairman of the Board and President of the Company arising in the third quarter of 2017 and during 2018, as more fully described in Note 8.

On January 26, 2021, the Company filed a fourth lien on the Property in the amount of $2,000,000to secure a non-interest-bearing note payable in the amount of $2,000,000issued to secure amounts owed to the President of the Company for accrued, but unpaid, salary, rent and other expenses.

On February 17, 2021, the Company filed a fifth lien in the amount of $658,750on the Property to secure a non-interest-bearing note payable in the amount of $658,750, issued to secure amounts owed to nine directors, including the Company's six current directors.

In April 2021, the Company filed six liens on the Property to secure six non-interest-bearing notes payable to be issued to six lenders bringing total liens on the Property to eleven. The six notes issued total $252,500in principal and call for the issuance of 250,000shares of common stock. The notes are not convertible. As of the issuance date of these unaudited condensed consolidated financial statements, no shares have been issued.

In June 2021, the Company filed a twelfth and thirteenth liens on the Property to secure two non-interest bearing notes issued in May of 2021 which total $50,000in principal and call for the issuance of a total of 100,000shares of common stock. The notes are not convertible. As of the issuance date of these unaudited condensed consolidated financial statements, no shares have been issued.

In July 2021, the Company filed a fourteenth lien on the Property to secure a promissory note in the amount of $150,000issued to the Chairman of the Board to secure the payment of taxes and interest that were paid by the Chairman in July 2020.

In July 2021, the Company filed a fifteenth lien on the Property to secure a promissory note in the amount of $100,000issued to the Chairman of the Board to secure the payment of taxes and interest that were paid by the Chairman in May 2021.

In July 2021, the Company filed a sixteenth lien on the Property to secure a non-interest bearing note issued to the Chairman of the Board in May 2021 which totals $50,000in principal and calls for the issuance of 100,000shares of common stock. The note is not convertible. As of the issuance date of these unaudited condensed consolidated financial statements, no shares have been issued.

In July 2021, the Company filed a seventeenth lien on the Property to secure a non-interest bearing note issued to a lender, which totals $25,000in principal and calls for the issuance of 50,000shares of common stock. The note is not convertible. As of the issuance date of these unaudited condensed consolidated financial statements, no shares have been issued.

In November 2021, the Company filed an eighteenth lien on the Property to secure a non-interest bearing note issued in November 2021 which totals $50,000in principal and calls for the issuance of 100,000shares of common stock. The note is not convertible. As of the issuance date of these unaudited condensed consolidated financial statements, no shares have been issued.

In March 2022, the Company filed a nineteenth and twentieth lien on the Property to secure two non-interest bearing notes issued in March of 2022 which total $80,000in principal and call for the issuance of a total of 160,000shares of common stock. The notes are not convertible. As of the issuance date of these unaudited condensed consolidated financial statements, no shares have been issued.

In May 2022, the Company filed a twenty-first lien on the Property to secure a non-interest bearing note issued in April of 2022 which totals $50,000in principal and calls for the issuance of a total of 100,000shares of common stock. The note is not convertible. As of the issuance date of these unaudited condensed consolidated financial statements, no shares have been issued.

Other

The Company is currently delinquent in filing those documents and forms required to be filed in connection with its Employee Stock Ownership Plan ("ESOP") for the years ended December 31, 2023, 2022, 2021, 2020, 2019, 2018, 2017, 2016 and 2015. The Company did not have the funds to pay professionals to prepare, audit and file these documents and forms when due. Although these required filings normally do not result in any tax due to an agency of the government, the Company could be subject to significant penalties for failure to file these forms when due. Penalties are assessed by the Department of Labor on a per diem basis from the original due dates for the required informational filings until the filings are actually made. The Company has accrued $651,175and $578,775on the current delinquent filings as of June 30, 2024 and December 31, 2023, respectively. The Company intends to bring its ESOP-required filings current and when current, will attempt to enroll in a voluntary compliance program with the Department of Labor with respect to any penalties or fines incurred. However, there can be no assurance the Company will be able to enroll in any such program or obtain a reduction of the fines and penalties that may be due.

The Company and its subsidiaries file their federal tax return on a consolidated basis. The Company has not filed its federal tax returns for the years ended December 31, 2023, 2022, 2021, 2020, 2019, 2018, 2017 and 2016. The Company has retained an accountant to prepare its federal tax returns. The Company believes no tax will be due with these federal returns.

The Company has not filed its annual reports together with its franchise tax due with the state of Delaware for 2023, 2022, 2021, 2020, 2019 and 2018. Mississippi Gaming Corporation, a wholly owned subsidiary of the Company, has not filed its annual reports, together with its franchise tax due, with the state of Delaware for 2022, 2021, 2020, 2019 and 2018. Casino World, Inc., a wholly owned subsidiary of the Company, has not filed its annual reports, together with its franchise tax due, with the state of Delaware for 2023, 2022, 2021, 2020, 2019, 2018, 2017 and 2016. Mississippi Gaming Corporation has not filed its corporate income and franchise tax returns, together with the tax due, with the state of Mississippi for 2023, 2022, 2021, 2020, 2019, or 2018. Casino World, Inc. has not filed its corporate income and franchise tax returns, together with the tax due, with the state of Mississippi for 2023, 2022, 2021, 2020, 2019, 2018, 2017 and 2016. As of June 30, 2024, the accrued franchise taxes for Delaware and Mississippi totaled $16,660.

Management Agreement

On June 19, 1993, two subsidiaries of the Company, Casino World Inc. and Mississippi Gaming Corporation, entered into a Management Agreement with Casinos Austria Maritime Corporation (CAMC). Subject to certain conditions, under the Management Agreement, CAMC would operate on an exclusive basis, all of the Company's proposed dockside gaming casinos in the State of Mississippi, including any operation fifty percent (50%) or more of which is owned by the Company or its affiliates.

Unless terminated earlier pursuant to the provisions of the Agreement, the Agreement terminates five years from the first day of actual Mississippi gaming operations and provides for the payment of an annual operational term management fee of 1.2% of all gross gaming revenues between zero and $100,000,000; plus 0.75% of gross gaming revenue between $100,000,000 and $140,000,000; plus 0.5% of gross gaming revenue above $140,000,000; plus two percent of the net gaming revenue between zero and $25,000,000; plus three percent of the net gaming revenue above twenty-five million dollars $25,000,000. The Company believes this Agreement is no longer in effect. However, there can be no assurance that CAMC will not attempt to maintain otherwise which would lead to litigation

Item 2. Management's Discussion and Analysis of Financial Condition and Financial Results

Forward Looking Statements

This section should be read together with the consolidated financial statements and related notes thereto for the year ended December 31, 2023 included with our annual report filed on Form 10-K.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, for which the Private Securities Litigation Reform Act of 1995 provides a safe harbor. These forward-looking statements include, but are not limited to, statements about our plans, objectives, representations and intentions and are not historical facts and typically are identified by use of terms such as "believes," "expects," "anticipates," "estimates," "plans," "intends," "objectives," "goals," "aims," "projects," "forecasts," "possible," "seeks," "may," "could," "should," "might," "likely," "enable," or similar words or expressions, as well as statements containing phrases such as "in our view," "there can be no assurance," "although no assurance can be given," or "there is no way to anticipate with certainty." These statements include, among other things, statements regarding our ability to implement our business plan and business strategy, our ability to obtain financing to sustain the Company, our ability to finance any future development, construction or operations, our ability to attract key personnel, and our ability to operate profitably in the future. These forward-looking statements are based on current expectations and assumptions that are subject to substantial risks and uncertainties which could cause our actual results to differ materially from those reflected in the forward-looking statements. In evaluating these forward-looking statements, you should consider risks and uncertainties relating to various factors, including, but not limited to, financing, licensing, construction and development, competition, legal actions, federal, state, county and/or city government actions, general financing conditions, and general economic conditions.

The Company's actual results may differ significantly from results projected in the forward-looking statements. We undertake no obligation to revise or update forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

Throughout this Annual Report references to "we," "our," "us," "Diamondhead Casino Corporation," the "Company," and similar terms refer to Diamondhead Casino Corporation and its wholly-owned subsidiaries, unless the context indicates otherwise.

The Company's intent was and is to construct a casino resort and other amenities on the Property unilaterally or in conjunction with one or more joint venture partners. However, the Company has been unable, to date, to obtain financing to move the project forward and/or enter into a joint venture partnership. There can be no assurance that the substantial funds required for the design and construction of the project can be obtained or that such funds can be obtained on acceptable terms. In addition, the Company has been unable to obtain financing to sustain the Company. Due to its lack of financial resources, the Company was forced to explore other alternatives, including a sale of part or all of the Property. The Company's preference is to sell only part of the Property inasmuch as this would appear to be in the best interest of the stockholders of the Company. However, there can be no assurance the Company will be able to sell only part of the Property. The Company intends to continue to pursue a joint venture partnership and/or other financing while seeking a viable purchaser for part or all of the Property. Finally, there can be no assurance that if the requisite financing for the project were obtained and the project were constructed, that the project would be successful.

Liquidity

The Company has incurred continued losses over the years and certain conditions raise substantial doubt about the Company's ability to continue as a going concern. The Company has had no operations since it ended its gambling cruise ship operations in 2000. Since that time, the Company has concentrated its efforts on the development of its Diamondhead, Mississippi Property. The development of the Diamondhead Property is dependent on obtaining the necessary capital, through equity and/or debt financing, unilaterally, or in conjunction with one or more partners, to master plan, design, obtain permits for, construct, staff, open, and operate a casino resort. In the past, the Company has been able to sustain itself through various short-term borrowings. At June 30, 2024, the Company had cash of $74,745 and Certificates of Deposit of $200,000, while accounts payable and accrued expenses totaled $14,339,699 and the Company had an accumulated deficit of $47,833,339. The Company is expecting an additional $154,622 of income from its eminent domain settlement. The Company reported a net loss applicable to common shareholders of $970,537 for the six months ended June 30, 2024. While the Company currently has sufficient funds to sustain itself, it is imperative that the Company secure a source of funds to provide further working capital.

Management of the Company believes it will be difficult to secure suitable financing that would allow it to continue to pursue ultimate development of the Property. Therefore, on December 14, 2023, the Company entered into an agreement with an unrelated commercial real estate brokerage firm to sell all or part of the Diamondhead, Mississippi Property or to find an equity investor for the project and/or financing for the project. The agreement became effective December 14, 2023, and terminates December 31, 2025, unless extended in writing by the parties. The agreement is a non-exclusive agreement and provides for a success-based fee only.

The above conditions raise substantial doubt about the Company's ability to continue as a going concern and its ability to generate cash to meet its cash requirements for the following twelve months as of the date of this Form 10-Q.

Financial Results and Analysis

During the six months ended June 30, 2024 and 2023, the Company incurred net losses applicable to common stockholders of $970,537 and $916,069, respectively. The increase in the loss, which totaled $54,468, is primarily due to an increase in interest expense during the last two quarters of 2023 and the two quarters of 2024.

Administrative and general expenses incurred totaled $413,473 and $383,308 for the six months ending June 30 , 2024 and 2023, respectively. The table below depicts the major categories comprising these expenses:

		June 30,		June 30,
		2024		2023
Payroll and Related Taxes		$	150,650			$	150,000
Director Fees			45,000				45,000
Professional Services			59,126				76,328
Rents and Insurances			44,602				43,679
Fines and Penalties			72,400				63,050
All Other Expenses			41,695				5,251
Total General and Administrative Expenses		$	413,473			$	383,308

Other Income and Expense

Interest expenses incurred totaled $466,230 and $448,137 for the six months ending June 30, 2024 and 2023, respectively, an increase of $18,093. The increase in 2024 is primarily attributable to an increase in interest due on the Chairman's related party loans from 2023 to 2024.

Off-Balance Sheet Arrangements

Management Agreement

On June 19, 1993, two subsidiaries of the Company, Casino World Inc. and Mississippi Gaming Corporation, entered into a Management Agreement with Casinos Austria Maritime Corporation (CAMC). Subject to certain conditions, under the Management Agreement, CAMC would operate on an exclusive basis, all of the Company's proposed dockside gaming casinos in the State of Mississippi, including any operation fifty percent (50%) or more of which is owned by the Company or its affiliates. Unless terminated earlier pursuant to the provisions of the Agreement, the Agreement terminates five years from the first day of actual Mississippi gaming operations and provides for the payment of an annual operational term management fee of 1.2% of all gross gaming revenues between zero and $100,000,000; plus 0.75% of gross gaming revenue between $100,000,000 and $140,000,000; plus 0.5% of gross gaming revenue above $140,000,000; plus two percent of the net gaming revenue between zero and $25,000,000; plus three percent of the net gaming revenue above twenty-five million dollars $25,000,000. The Company believes this Agreement is no longer in effect. However, there can be no assurance that CAMC will not attempt to maintain otherwise which would lead to litigation.

Brokerage Agreement

On December 14, 2023, the Company entered into an agreement with an unrelated commercial real estate brokerage firm to sell all or part of Diamondhead, Mississippi Property or to find an equity investor for the project and/or financing for the project. The agreement became effective December 14, 2023 and terminates December 31, 2025, unless extended in writing by the parties. The agreement is a non-exclusive agreement and provides for a success-based fee only.

In the event of a sale of all or part of the Diamondhead Property to the person(s) or entity(ies) the broker brings to the deal, the Company will pay a fee equal to four percent (4%) of the gross sales price of property sold to the person(s) or entity(ies) the broker brings to the deal.

In the event of an equity investment by an equity investor(s) the broker brings to the deal, the Company will pay the broker a fee equal to: (i) four percent (4%) of the amount of the equity invested on the first $25 million invested, plus (ii) 2% of the amount of the equity invested in excess of $25 million. In the event the broker closes an equity financing, the broker shall have a right of first refusal to obtain debt financing for a period of two years commencing with the final date on which the Company receives the equity financing during the term of the agreement or post-termination of the agreement.

In the event the broker secures debt financing for the Company, the Company will pay the broker: (i) one percent (1%) of the amount of any debt financing obtained from the person(s) or entity(ies) the broker brings to the deal on the first $75 million received by the Company, plus (ii) one-half of one percent (.50%) of the amount of any debt financing obtained in excess of the first $75 million received from a person(s) or entity(ies) the broker brings to the deal.

All fees are contingent. Payment of any fee is contingent on the signing of a sales agreement, equity agreement, or loan agreement acceptable to the Company in its sole discretion and payment of the sales price, equity investment or debt financing by the person(s) or entity(ies) the broker brings to the deal and upon receipt of good funds. All fees will be paid at Closing out of monies paid by the person(s) or entity(ies) the broker brings to the deal. If funds are paid periodically, the fee due will be paid periodically upon receipt of said funds and in proportion to the funds received.

There are no other off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues and expenses, results of operations, liquidity, capital expenditures or capital resources, that are material to our stockholders.

Related Party

In July 2017, the Chairman of the Board paid $67,628 for all property taxes due, together with all interest due thereon, to Hancock County, Mississippi for the approximate 400-acre tract of land ("the Diamondhead Property"), owned by Mississippi Gaming Corporation, a wholly-owned subsidiary of the Company. In 2018, the Chairman advanced additional funds totaling $205,250 to the Company. In 2019, the Chairman advanced additional funds totaling $125,396 to the Company. In 2020, the Chairman advanced additional funds totaling $69,679 to the Company. The conditions of the notes under which the Chairman agreed to make the foregoing payments and advances are discussed in full detail in Note 8 of the attached unaudited condensed consolidated financial statements.

Of particular note to these conditions is item (v) which called for the Chairman to be indemnified for any loss sustained on the sale of certain common stock sold to cover the property taxes paid. The Chairman identified the common stock sold and provided the Company with the documentation required to document the sale of said stock and to calculate the contingent future loss, if any, on said stock. Had the Company paid the note in full at December 31, 2021 in addition to the principal and interest due, the Company would not have been liable for any additional funds to indemnify the Chairman pursuant to the terms of the notes. On February 4, 2022, the Board of Directors entered into an agreement with the Chairman to issue 35,000 shares of common stock of the Company to the Chairman to repurchase the indemnification. This repurchase eliminated any risk to the Company arising from the indemnification which could have been material.

During the quarter ended June 30, 2024 and 2023, the Company recorded stock-based compensation of $3,297 and $0 for the fair value for these shares, which have not been issued as of the issuance date of these financial statements.

There are no other off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues and expenses, results of operations, liquidity, capital expenditures or capital resources, that are material to our stockholders.

Critical Accounting Estimates

Impairment of Long-Lived Assets

The Company reviews long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The recoverability of long-lived assets is measured by comparing the carrying amount of the assets to the estimated undiscounted future cash flows projected to be generated by the assets. If such assets are considered impaired, the impairment to be recognized is measured by the amount the carrying value exceeds the fair value of such assets determined by appraisal, discounted cash flow projections, or other means.

Item 3. Quantitative and Qualitative Disclosure about Market Risk

As a smaller reporting company, information under this item is not required to be presented.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

In connection with the preparation of this quarterly report on Form 10-Q, our management, with the participation of our Chief Executive Officer, who also serves as Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2024. Disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, are controls and other procedures that are designed to ensure that the information that we are required to disclose in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's Rules and Forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer/Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Based on the results of this evaluation, the Chief Executive Officer/Chief Financial Officer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level as June 30, 2024. See below for management's report.

The management, under the supervision of our Chief Executive Officer/Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Generally Accepted Accounting Principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with existing policies or procedures may deteriorate.

The Chief Executive Officer/Chief Financial Officer conducted, under the supervision of our principal executive officer and principal financial officer, an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, commonly referred to as the "COSO" criteria. Based on this evaluation, the Chief Executive Officer/Chief Financial Officer concluded that material weaknesses over financial reporting existed as of June 30, 2024. Management identified the following two material weaknesses that have caused management to conclude that, as of June 30, 2024, our disclosure controls and procedures, and our internal control over financial reporting, were not effective at the reasonable assurance level:

	1.	We do not have sufficient segregation of duties within accounting functions inasmuch as we have only one employee.
	2.	Management has not developed and effectively communicated its accounting policies and procedures. This has resulted in inconsistent practices with regards to complex accounting transactions.

The Company has designed and instituted policies and procedures to eliminate and/or mitigate the foregoing.

As a result of the material weaknesses identified above, our internal control over financial reporting was not effective as of June 30, 2024. The Company has initiated a plan to address the above weakness. While segregation of duties is very difficult in a small company with only one employee, the Company intends to utilize third-party consultants to ensure effective financial reporting and disclosures are met.

To address the material weakness identified, management performed additional analyses and other procedures to ensure that the consolidated financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented. Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

Changes in Internal Control Over Financial Reporting

No change in our internal control over financial reporting occurred during the second quarter of the year ending June 30, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II: OTHER INFORMATION

Item 1. Legal Proceedings

Cooperative Energy, a Mississippi Electric Cooperative v. Mississippi Gaming Corporation (In the Special Court of Eminent Domain, Hancock County, Mississippi (Case No. CC20-0221)

Cooperative Energy, a Mississippi Electric Cooperative v. Mississippi Gaming Corporation, et al (all lienholders of the Diamondhead Property. (In the Special Court of Eminent Domain, Hancock County, Mississippi (Case No. CC23-0153)

Since 1994, American Telephone and Telegraph Company ("AT&T") has had an exclusive right of way easement along the northern portion of Mississippi Gaming Corporation's ("MGC") Diamondhead, Mississippi Property ("the Property") to construct, operate, maintain, inspect, alter, replace and remove communications systems which they may require from time to time. Cooperative Energy, a Mississippi Electric Cooperative, also sought and has now obtained a permanent easement along the northern portion of the Property on which to construct, maintain and operate electric transmission lines together with an access road. On or about November 19, 2020, Cooperative Energy filed a Complaint with the Special Court of Eminent Domain, Hancock County, Mississippi seeking an Order authorizing the Cooperative to enter onto the Property for the purpose of examinations and surveys. The matters sought in the Complaint were quickly resolved by agreement of the parties. The Company's understanding and MGC's understanding was that the case would be dismissed, but the case was not dismissed. On or about May 24, 2023, Cooperative Energy filed a Complaint for Eminent Domain in the Special Court of Eminent Domain, Hancock County, Mississippi in which it named MGC and all persons and entities holding liens on the Diamondhead, Mississippi Property as defendants.

On or about February 19, 2023, the parties entered into an Indemnification Agreement to fully indemnify MGC and Diamondhead Casino Corporation and each of their respective directors, officers, employees, agents, attorneys, and affiliates, and hold each of them harmless and defend each of them against any and all claims, losses, damages, expenses and/or liabilities to which an Indemnified Party might become liable arising out of or relating to any activities conducted on or about the Property by Cooperative Energy and/or its respective directors, officers, employees, agents, attorneys, affiliates and/or representatives and/or any unrelated third parties, contractors and/or subcontractors performing any activities on the Property at the request of or for the benefit of Cooperative Energy.

On September 1, 2023, Cooperative Energy filed a Motion to Approve Settlement, an Amended Statement of Values and a Notice of Hearing for September 11, 2023. Cooperative Energy served all interested parties, including all persons or entities holding liens on the Diamondhead Property, as defendants in the case. On September 26, 2023, the Court entered an Order Granting Plaintiff Right of Immediate Title and Possession. On October 17, 2023, the Court entered an Order Approving Settlement in the amount of $1,000,000 and entered an Order Approving Disbursement of Funds to MGC. On October 20, 2023, MGC received $845,378 as part of the settlement amount. The parties are working on the wording of the two easements: a Cooperative Energy Right-Of-Way Easement and an Access Road Easement. Once the easements are finalized and signed, Cooperative Energy will pay MGC the remaining amount due of $154,622.

The two easements are perpetual. The Right-Of-Way Easement is to construct, maintain, operate, add, and/or remove electric transmission lines, distribution lines, towers, wires, poles, appliances, equipment, anchors, frame structures, guys, counter-poise wire or other counter-poise conductors, and appurtenances thereto, all of which are collectively referred to as "Power Lines," upon, over, under and across the land which is the subject of the easement. The Access Road Easement is for ingress and egress for use in the clearing, construction, maintenance and operation of transmission line facilities.

Cooperative Energy has informed MGC that it has obtained an agreement from AT&T concerning AT&T's pre-existing exclusive right of way easement so that the Company will not be in breach of its agreement with AT&T.

Edson R. Arneault, Kathleen Devlin and James Devlin, J. Steven Emerson, Emerson Partners, J. Steven Emerson Roth IRA, Steven Rothstein, and Barry Stark and Irene Stark v. Diamondhead Casino Corporation (In the United States District Court for the District of Delaware (C.A. No. 1:16-cv-00989-LPS)

On October 25, 2016, Edson R. Arneault, Kathleen Devlin and James Devlin, J. Steven Emerson, Emerson Partners, J. Steven Emerson Roth IRA, Steven Rothstein, and Barry Stark and Irene Stark filed a Complaint against the Company in the United States District Court for the District of Delaware for monies due and owing pursuant to certain Collateralized Convertible Senior Debentures issued on March 31, 2014 and December 31, 2014. A companion case was filed in the Superior Court of the State of Delaware by John Hawley, as servicing agent for Argonaut 2000 Partners, L.P. (John Hawley, as servicing agent for Argonaut 2000 Partners, L.P. v. Diamondhead Casino Corporation (Superior Court of the State of Delaware)(Case No. N19C-02-239 RRC) The eight plaintiffs in the two cases were seeking a total of $1.5 million in principal due, plus interest from January 1, 2015, together with costs and fees. On or about December 12, 2019, the parties entered into a Settlement Agreement and on January 13, 2020, the parties filed a Stipulation of Voluntary Dismissal with Prejudice in the case. The case was dismissed with the Court maintaining continuing jurisdiction over the Settlement Agreement.

In or about December 2022, the parties entered into an Amendment to Settlement Agreement. The Amendment provides, in pertinent part, as follows: that on or before March 31, 2023, the Plaintiffs would be paid the principal due under their debentures of $1.5 million, plus interest of four percent (4%) per annum on the principal due from January 1, 2015 through December 31, 2019, plus interest of six percent (6%) per annum on the principal due from January 1, 2020 through March 31, 2022, plus interest of eight percent (8%) per annum on the principal due from April 1, 2022 through the date of payment. In addition the Company agreed to pay legal costs and fees of $175,000 plus 50,000 shares of common stock. In the event payment was not made on or before March 31, 2023, a judgment would be entered in the case. Post judgment interest shall only apply to the $1.5 million principal due. Payment was not made on or before March 31, 2023. On July 5, 2023, the Plaintiffs filed a Motion to Reopen the Action, Vacate Dismissal, and Enter Judgment on Consent. The Company did not object to the Motion. On September 20, 2023, the Court entered an Order Granting Plaintiffs' Motion to Reopen this Action, Vacate Dismissal, and Compel Enforcement of the Settlement Agreement and entered the Consent Judgment previously agreed to by the Company. The Company has accrued legal fees of $195,000 and $16,500 for accrued liability for stock and accrued additional interest of $112,500 for the years ended December 31, 2022 and 2023 respectively.

Edson Arneault, John Hawley as Servicing Agent for Argonaut 2000 Partners, L.P., Kathleen and James Devlin, J. Steven Emerson, Emerson Partners, J. Steven Emerson, as Successor to Steven Emerson Roth IRA, Steven Rothstein, and Barry and Irene Stark v. Diamondhead Casino Corporation (In the United States Bankruptcy Court for the District of Delaware (C.A. No. 24-11354-JKS)

On June 12, 2024, the above-named parties filed a Chapter 7 Involuntary Petition against a Non-Individual (Diamondhead Casino Corporation). The foregoing parties seek a total of $2,422,500. The Petition was served on June 13, 2024. On July 18, 2024, the Company filed a Motion of the Alleged Debtor, Diamondhead Casino Corporation, to Dismiss the Involuntary Bankruptcy Petition or, in the Alternative, to Convert the Case to Chapter 11. The Petitioners' response is due on or before September 3, 2024. A hearing is scheduled for September 25, 2024 for argument in the matter.

Item 1A. Risk Factors

As a smaller reporting company, information under this item is not required to be presented.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Default Upon Senior Securities

Refer to the footnotes for all defaults on the Company's indebtedness.

The Company is in arrears on the payment of dividends due on its three series of preferred stock currently issued and outstanding. The Company has not paid preferred dividends due in the first six months of 2024 in the amount of i) $20,800 on its Series S-PIK preferred stock; ii) $7,500 on its Series S-NR preferred stock; and iii) $7,500 on its Series S preferred stock. The table below summarizes total preferred stock dividends in arrears at June 30, 2024.

		Total Amount
Description		In Arrears
Series S		$	382,500
Series S-NR			382,500
Series S-PIK			540,800
Total in arrears		$	1,305,800

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibits 31.1and 31.2

Attached to this report is the certification of the Chief Executive Officer/Chief Financial Officer of the Company pursuant to Rule 13A-14 of the Securities and Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act.

Exhibits 32.1and 32.2

Attached to this report is the certification of the Chief Executive Officer/Chief Financial Officer of the Company as required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	DIAMONDHEAD CASINO CORPORATION
Date: August 14, 2024		/s/ Deborah A. Vitale
	By:	Deborah A. Vitale
		Chief Executive Officer

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