-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SMBknPbNqxqYURe9T1TwA/3b+eijZuI8m7armlSxcXd5w8nNaR2iC7U3ddgbUp1R sKtCKxpmGA2GA9QQ/GoKyg== 0000950124-98-002834.txt : 19980514 0000950124-98-002834.hdr.sgml : 19980514 ACCESSION NUMBER: 0000950124-98-002834 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980329 FILED AS OF DATE: 19980513 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOTEL DISCOVERY INC CENTRAL INDEX KEY: 0001044738 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 311487885 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-23243 FILM NUMBER: 98618614 BUSINESS ADDRESS: STREET 1: 4801 WEST 81 STREET STREET 2: SUITE 112 CITY: BLOOMINGTON STATE: MN ZIP: 55437 BUSINESS PHONE: 6128379917 MAIL ADDRESS: STREET 1: 4801 WEST 81 STREET STREET 2: SUITE 112 CITY: BLOOMINGTON STATE: MN ZIP: 55437 10QSB 1 FORM 10QSB 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-QSB (MARK ONE) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 29, 1998 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 NUMBER 0-23243 - -------------------------------------------------------------------------------- HOTEL DISCOVERY, INC. (Name of Small Business Issuer in its Charter) MINNESOTA 31-1487885 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Indentification No.) 4801 W. 81ST STREET, SUITE 112 55437 BLOOMINGTON, MN (Zip Code) (Address of principal executive offices) 612-837-9917 (Issuer's telephone number, including area code) Check whether the issuer: (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 issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] As of May 7, 1998, the number of shares outstanding of the Issuer's Common Stock was 8,000,189. Transitional Small Business Disclosure Format (check one): Yes [ ] No [X] 1 2 FORWARD-LOOKING STATEMENTS Certain of the matters discussed in the following pages, particularly regarding estimates of the number and locations of new restaurants that the Company intends to open during fiscal 1998 and 1999, constitute "forward-looking statements" within the meaning of the Securities Act of 1933, as amended and the Securities Exchange Act of 1934, as amended. Forward-looking statements involve a number of risks and uncertainties, and, in addition to the factors discussed in this Form 10-QSB, among the other factors that could cause actual results to differ materially are the following: the Company's ability to identify and secure suitable locations on acceptable terms, obtain additional capital necessary for expansion on acceptable terms, open new restaurants in a timely manner, hire and train additional restaurant personnel and integrate new restaurants into its operations; the continued implementation of the Company's strict business discipline over a growing restaurant base; the economic conditions in the new markets into which the Company expands and possible uncertainties in the customer base in these areas; changes in customer dining patterns; competitive pressures from other national and regional restaurant chains; business conditions, such as inflation or a recession, and growth in the restaurant industry and the general economy; changes in monetary and fiscal policies, laws and regulations; and other risks identified from time to time in the Company's SEC reports, registration statements and public announcements. - -------------------------------------------------------------------------------- 2 3 HOTEL DISCOVERY, INC. INDEX PAGE ---- PART I FINANCIAL INFORMATION 4 ITEM 1. Financial Statements 4 Balance Sheets - March 29, 1998 and December 28, 1997 5 Statements of Operations - For the thirteen weeks ended March 29, 1998 and March 30, 1997 6 Statements of Cash Flows - For the thirteen weeks ended March 29, 1998 and March 30, 1997 7 Condensed Notes to the Financial Statements 8 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 ITEM 3. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 12 PART II OTHER INFORMATION 13 ITEM 1. Legal Proceedings 13 ITEM 4. Submission of Matters to a Vote of Security Holders 13 ITEM 6. Exhibits and Reports on Form 8-K 13 Signatures 14 3 4 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS - INDEX Balance Sheets - March 29, 1998 and December 28, 1997 Statements of Operations - For the thirteen weeks ended March 29, 1998 and March 30, 1997 Statements of Cash Flows - For the thirteen weeks ended March 29, 1998 and March 30, 1997 Condensed Notes to the Financial Statements 4 5 HOTEL DISCOVERY, INC. BALANCE SHEETS
March 29, December 28, 1998 1997 ---- ---- ASSETS (Unaudited) CURRENT ASSETS: Cash and cash equivalents $ 4,873,266 $ 9,222,174 Landlord allowance receivable 1,600,000 --- Inventories 40,012 41,766 Other current assets 418,422 250,043 ------------- ------------- Total current assets 6,931,700 9,513,983 PROPERTY AND EQUIPMENT, net 7,806,207 5,270,160 OTHER ASSETS 52,710 55,908 ------------- ------------- $ 14,790,617 $ 14,840,051 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short-term notes payable --- 200,000 Accounts payable 418,695 669,380 Accrued expenses 121,835 115,774 Salaries and wages payable 179,356 366,674 Current portion of long-term debt 52,065 69,420 ------------- ------------- Total current liabilities 771,951 1,421,249 DEFERRED RENT 1,600,000 --- LONG-TERM DEBT, less current portion 852,165 852,165 CONVERTIBLE PROMISSORY NOTES PAYABLE 150,000 150,000 ------------- ------------- Total liabilities 3,374,116 2,423,414 ------------- ------------- COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Common stock, $.01 par value, 100,000,000 shares authorized; 8,000,189 shares issued and outstanding 80,002 80,002 Additional paid-in capital 20,152,948 20,152,948 Less: Common stock subscribed (400,000) (400,000) Accumulated deficit (8,416,449) (7,416,312) ------------- ------------- Total shareholders' equity 11,416,501 12,416,638 ------------- ------------- $ 14,790,617 $ 14,840,051 ============= =============
The accompanying condensed notes are an integral part of these balance sheets. 5 6 HOTEL DISCOVERY, INC. STATEMENTS OF OPERATIONS (UNAUDITED)
Thirteen weeks ended -------------------- March 29, March 30, 1998 1997 ---- ---- NET SALES $ 804,319 $ 1,047,765 -------------- ------------ COSTS AND EXPENSES: Food, beverage and retail costs 218,416 357,943 Labor and benefits 318,157 592,618 Restaurant operating expenses 363,445 290,793 Depreciation and amortization 125,840 137,000 Selling, general and administrative expenses 742,135 398,293 Pre-opening and development costs 127,318 --- -------------- ------------ Total costs and expenses 1,895,311 1,776,647 -------------- ------------ LOSS FROM OPERATIONS (1,090,992) (728,882) -------------- ------------ INTEREST INCOME (EXPENSE), net 90,855 (19,638) -------------- ------------ NET LOSS $ (1,000,137) $ (748,520) ============== ============ BASIC AND DILUTED WEIGHTED AVERAGE 8,000,189 4,092,400 ============== ============ OUTSTANDING SHARES BASIC AND DILUTED NET LOSS PER SHARE $ (0.13) $ (0.18) ============== ============
The accompanying condensed notes are an integral part of these financial statements. 6 7 HOTEL DISCOVERY, INC. STATEMENTS OF CASH FLOWS (UNAUDITED)
Thirteen weeks ended ------------------------- March 29, March 30, 1998 1997 ---- ---- OPERATING ACTIVITIES: Net loss $ (1,000,137) $ (748,520) Adjustments to reconcile net loss to cash flows from operating ctivities: Depreciation 149,641 137,000 Changes in operating assets and liabilities: Inventories 1,754 20,300 Other current assets (168,379) (48,152) Other assets 3,198 401 Accounts payable (250,685) 18,225 Accrued expenses (181,257) (333,153) ------------- ------------ Net cash used in operating activities (1,445,865) (953,899) ------------- ------------ INVESTING ACTIVITIES: Purchase of property and equipment (2,685,688) (217,117) ------------- ------------ FINANCING ACTIVITIES: Net borrowings/(payments) on short-term notes payable (200,000) (2,500,000) Advances/(payments) from/(to) shareholder --- 650,642 Proceeds from issuance of stock --- 396,000 Principal repayments on long-term debt (17,355) (11,570) ------------- ------------ Net cash used in financing activities (217,355) (1,464,928) ------------- ------------ DECREASE IN CASH AND CASH EQUIVALENTS (4,349,298) (2,635,944) CASH AND CASH EQUIVALENTS, beginning 9,222,174 2,709,136 ------------- --------- CASH AND CASH EQUIVALENTS, ending $ 4,873,266 $ 73,192 ============= ============ SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for interest $ 24,910 $ 44,990 Cash paid for income taxes --- --- Non-cash items - landlord allowance receivable 1,600,000 ---
The accompanying condensed notes are an integral part of these financial statements. 7 8 HOTEL DISCOVERY, INC. NOTES TO THE FINANCIAL STATEMENTS MARCH 29, 1998 AND MARCH 30, 1997 1. GENERAL Hotel Discovery, Inc. (the Company) owns and operates one restaurant in Cincinnati, Ohio (the Kenwood Restaurant), which opened under the name "Hotel Mexico" on December 19, 1996. Prior to the opening of this restaurant, the Company was in the development stage. The Company's predecessor, Hotel Mexico (HMI), was originally incorporated in January 1994 as an Ohio corporation. The Kenwood Restaurant Limited Partnership, an Ohio limited partnership (the Kenwood Partnership), was formed in June 1995 for the purpose of owning and operating the Kenwood Restaurant. HMI's operations and the net assets of the Kenwood Partnership were combined on November 14, 1996. On that date, the Kenwood Partnership contributed all of its net assets totalling $1,567,197 to a newly formed corporation in exchange for shares of such corporation. HMI, with total net assets of $631,966, then merged with and into the newly formed corporation, the name of which remained Hotel Mexico, Inc. (hereafter, Hotel Mexico). Upon consummation of the merger, all outstanding shares of Hotel Mexico were converted into an aggregate of 1,350,000 shares of Common Stock of the newly formed corporation. The shares of Hotel Mexico Common Stock received by the Kenwood Partnership in the reorganization were retained by the Kenwood Partnership until the effective date of the Company's initial public offering, at which time the shares of Common Stock and all other partnership assets were distributed to the general and limited partners in accordance with the partnership agreement and the Kenwood Partnership was dissolved. On August 22, 1997, Hotel Mexico merged with and into Hotel Discovery, Inc., a newly formed Minnesota corporation. The Company has an authorized capital stock of 100,000,000 undesignated shares, and each share of Common Stock of Hotel Mexico was converted into one share of the Company's Common Stock. On February 25, 1998 the Company changed the name of its restaurant concept from Hotel Discovery to Cafe Odyssey. The Company believes that the new name better reflects the concept's primary focus on award winning food, served in a unique environment of adventure, imagination, exploration and innovation. In conjunction with this action, the Company's Board of Directors approved a change in its corporate name from Hotel Discovery, Inc. to Cafe Odyssey, Inc., subject to shareholder approval. The Cafe Odyssey name will be used for the planned Mall of America Restaurant and all subsequent restaurants. At the present time, the company intends to retain the name "Hotel Discovery" for the Kenwood Restaurant because of its already established and well-received perception in the marketplace. 2. BASIS OF FINANCIAL STATEMENT PRESENTATION The accompanying unaudited condensed financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. Although management believes that the disclosures are adequate to make the information presented not misleading, it is suggested that these interim condensed financial statements be read in conjunction with the Company's most recent 10-KSB dated December 28, 1997. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented have been made. Operating results for the thirteen weeks ended March 29, 1998 are not necessarily indicative of the results that may be expected for the fiscal year ended December 27, 1998. The Company has adopted a 52-53-week accounting period ending on the Sunday nearest December 31 of each year. 3. PROPERTY AND EQUIPMENT Property and equipment consisted of the following as of:
March 29, December 28, 1998 1997 ---- ---- Building and leasehold improvements $3,264,307 $3,182,160 Equipment and fixtures 2,397,902 2,294,503 Construction in progress 2,907,639 432,497 ---------- ---------- 8,569,848 5,909,160 Less: accumulated depreciation (763,641) (639,000) ---------- ---------- Total property and equipment, net $7,806,207 $5,270,160 ========== ==========
4. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENT Statement of Financial Accounting Standard (SFAS) No. 130, "Reporting Comprehensive Income", effective beginning in fiscal 1998, establishes standards of disclosure and financial statement display for reporting total comprehensive income and the individual components thereof. The adoption of SFAS No. 130 did not have a material impact on the Company's financial position or results of operations as comprehensive income and net income were the same for all periods presented. The Company adopted in fiscal 1997, Statement of Financial Accounting Standard (SFAS) No. 128, "Earnings per Share", which requires disclosure of basic earnings per share, which requires disclosure of basic earnings per share (EPS) and diluted EPS, which replace the existing primary EPS and fully diluted EPS, as defined by Accounting Principles Board (APB) No. 15. Basic EPS is computed by dividing net income by the weighted average number of shares of Common Stock outstanding during the year. Diluted EPS is computed similarly to primary EPS as previously reported provided that, when applying the treasury stock method to common equivalent shares, the Company must use its average share price for the period rather than the more dilutive greater of the average share price or end-of-period share price required by APB No. 15. The adoption of SFAS No. 128 had no effect on the Company's March 30, 1997 EPS data. 8 9 5. EVENT SUBSEQUENT TO MARCH 29, 1998 During the second quarter of 1998, the Company entered into a lease agreement with Denver Pavilions L.P. to lease approximately 18,000 square feet of space in the Denver Pavilions, an urban retail/entertainment complex to be constructed in downtown Denver, Colorado. The lease has an initial term of fifteen years, with three options to renew for five years each. The lease provides for a fixed minimum annual rent, contingent rent payments based on a percentage of gross revenues, as defined, as well as payments of real estate taxes, insurance and common area costs. In addition, the lease provides for tenant inducements and rent abatement. 9 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in connection with the Company's financial statements and related notes thereto included elsewhere in this report. OVERVIEW The Company was formed in January 1994 as an Ohio corporation to develop, own and operate upscale, casual themed restaurants under the name "Hotel Mexico". The Company opened its first restaurant in the Kenwood Shopping Center in Cincinnati, Ohio (the "Kenwood Restaurant") in December 1996. Prior to opening the Kenwood Restaurant, the Company had no revenues and its activities were devoted solely to development. The Company is presently developing two additional restaurants, the first in the Mall of America (the "Mall of America Restaurant") in Bloomington, Minnesota, a suburb of Minneapolis and the second at Denver Pavilions (the "Denver Restaurant") in Denver, Colorado. Future revenue and profits, if any, will depend upon various factors, including market acceptance of the Hotel Discovery/Cafe Odyssey concept, the quality of the restaurant operations, the ability to expand to multi-unit locations and general economic conditions. The Company's present source of revenue is limited to its existing restaurant. There can be no assurances the Company will successfully implement its expansion plans, in which case it will continue to be dependent on the revenues from the existing restaurant. The Company also faces all of the risks, expenses and difficulties frequently encountered in connection with the expansion and development of a new and expanding business. Furthermore, to the extent the Company's expansion strategy is successful, it must manage the transition to multiple-site operations, higher volume operations, the control of overhead expenses and the addition of necessary personnel. The Company uses a 52- or 53-week fiscal year ending on the Sunday nearest December 31. RESULTS OF OPERATIONS FOR THE THIRTEEN WEEKS ENDED MARCH 29, 1998 AND MARCH 28, 1997 The Company had no revenues or operations during the period from January 13, 1994 (Inception) to December 19, 1996 (the opening of the Kenwood Restaurant). Accordingly, comparisons to periods prior to December 19, 1996 are not meaningful. For the thirteen weeks ended March 29, 1998 (hereinafter referred to as "first quarter of 1998"), the Company had net sales of $804,319 compared to $1,047,765 for the thirteen weeks ended March 30, 1997 (hereinafter referred to as "first quarter of 1997"). This decline in sales is attributable to a comparison of steady-state operations at the Kenwood Restaurant for the first quarter of 1998 as compared to its initial "honeymoon" period in the first quarter of 1997. For the first quarter of 1998, food, beverage and retail costs were $218,416 or 27.2% of sales compared to $357,943 or 34.2% of sales for the first quarter of 1997. The improvement in food, beverage and retail costs as a percentage of sales is due primarily to improved operating efficiencies. For the first quarter of 1998, labor, benefits and other direct restaurant operating expenses were $681,602 or 84.7% of sales compared to $883,411 or 84.3% of sales for the first quarter of 1997. This result occurred despite the lower sales volume in the first quarter of 1998 as compared to the first quarter of 1997 and the relatively high fixed cost component of restaurant operating expenses at the Kenwood Restaurant. Although no assurances can be given, management believes that the Kenwood Restaurant's current level of sales, trained workforce and general operation will continue to improve its restaurant-level performance in future periods. 10 11 For the first quarter of 1998, the Company had a net loss of $1,000,137 compared to a net loss of $748,520 for the first quarter of 1997. The net loss for the first quarter of 1998 is primarily attributable to continued concept development and pre-opening costs of approximately $127,000, as well as additional general and administration expenses incurred as the Company increased its corporate overhead structure for the development of additional restaurants. The net loss for the first quarter of 1997 was largely attributable to the start-up operations at the Kenwood Restaurant. Continued development of the Company's concept will impact pre-opening and general and administrative expenses on an ongoing basis. LIQUIDITY AND CAPITAL RESOURCES Since Inception, the Company's principal capital requirements have been (i) the development of the Company and the Hotel Discovery/Cafe Odyssey concept, (ii) the construction of the Kenwood Restaurant and the acquisition of furniture, fixtures and equipment therein and (iii) the development of the Mall of America Restaurant. Total capital expenditures for the Kenwood Restaurant were approximately $5.1 million, net of landlord contributions. When completed, the Company estimates that capital expenditures for the Mall of America Restaurant will be approximately $4.9 million, net of landlord contributions of $1.6 million and minimum rent abatement of approximately $405,000. As of March 29, 1998, the costs incurred to date for the Mall of America Restaurant were approximately $3.1 million. The Mall of America Restaurant is expected to be complete in the second quarter of 1998. The Company's primary sources of working capital have been proceeds from the sale of Common Stock to and borrowings from its principal shareholder, Stephen D. King, the private placement of Common Stock and debt, as well as the proceeds from the Company's initial public offering of Units in November 1997. For the first quarters of 1998 and 1997, the Company used $1,445,865 and $953,899, respectively, in cash flow for operating activities. As of March 29, 1998 and March 28, 1997, the Company had working capital of $6,159,749 and a working capital deficit of $856,969, respectively. In November 1997, the Company completed an initial public offering of 2,500,000 Units, each Unit consisting of one share of Common Stock and one redeemable Class A Warrant at an initial public offering price of $5.00 per Unit. In December 1997, the Company issued an additional 100,000 Units to its principal underwriter, R.J. Steichen & Company, pursuant to the underwriter's decision to exercise a portion of its over-allotment. The Company received net proceeds of approximately $11.2 million in conjunction with the initial public offering and the partial exercise of the underwriter's over-allotment. The Class A Warrants are subject to redemption by the Company at any time, on not less than 30 days' written notice, at a price of $0.01 per Warrant at any time following a period of 14 consecutive trading days where the per share average closing bid price of the Company's Common Stock exceeds $7.00 (subject to adjustment), provided that a current prospectus covering the shares issuable upon the exercise of the Class A Warrants is then effective under federal securities laws. For these purposes, the closing bid price of the Common Stock shall be determined by the last reported sale price on the primary exchange on which the Common Stock is traded. The Company intends to open one restaurant in 1998 and one to three restaurants in 1999. The Company estimates that its capital expenditures (net of estimated landlord contributions) will be approximately $10 to $15 million in fiscal 1998 and $10 to $20 million in fiscal 1999. The Company expects to finance its concept development and expansion through cash flow from operations, the exercise of its Class A Warrants and other forms of financing such as the sale of additional equity and debt securities, capital leases and other credit facilities. There are no assurances that such financing will be available on terms acceptable or favorable to the Company. 11 12 ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE On February 4, 1998, the Company, with the approval of its Board of Directors and Audit Committee, engaged Arthur Andersen LLP as the independent public accountants for Hotel Discovery, Inc. Prior to the engagement of Arthur Andersen LLP, Ernst & Young LLP had served as the independent public accountants for the Company. The report prepared by Ernst & Young LLP as of December 29, 1996 contained no adverse opinion or disclaimer of opinion and was not qualified or modified as to uncertainty of audit scope or accounting principles. In connection with the audit of the financial statements as of December 29, 1996, and through February 4, 1998, there were no disagreements with Ernst & Young LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Ernst & Young LLP, would have caused Ernst & Young LLP to make reference to the subject matter of the disagreements in its reports. This Current Report was filed on Form 8-K on February 4, 1998 and on Form 8-K/A on February 9, 1998. 12 13 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is involved in routine legal actions in the ordinary course of its business. Although outcomes of any such legal actions cannot be predicted, in the opinion of management there is no legal proceeding pending against or involving the Company for which the outcome is likely to have a material adverse effect upon the financial position or results of operations of the Company. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITS 11. Computation of Net Loss per Common Share 27. Financial Data Schedule (b) REPORTS ON FORM 8-K On February 4, 1998, the Company filed a report on Form 8-K relating to the dismissal by the Company as of February 4, 1998 of Ernst & Young LLP as its independent public accountants and the engagement of Arthur Andersen LLP as its new independent public accountants as of February 4, 1998. 13 14 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. HOTEL DISCOVERY, INC. By: /s/ Anne D. Huemme -------------------- Anne D. Huemme Vice President-Finance and Chief Financial Officer (Principal Financial and Accounting Officer) Date: May 13, 1998 15 EXHIBIT INDEX Exhibit Number Description - -------------- ----------- 11 Computation of Net Loss Per Common Share 27 Financial Data Schedule EX-11 2 EXHIBIT 11 1 EXHIBIT 11 HOTEL DISCOVERY, INC. COMPUTATION OF NET LOSS PER COMMON SHARE
March 29, March 30, 1998 1997 ---- ---- Basic and diluted weighted average number of issued 8,000,189 4,092,400 shares outstanding Effect of: Common stock equivalents outstanding(1) -- -- Shares outstanding used to compute net income (loss) 8,000,189 4,092,400 per share Net loss ($1,000,137) $ (748,520) Basic and Diluted Net loss per share ($0.13) ($0.18) ===== =====
(1) For Basic and Diluted Net loss per share, no common stock equivalents are outstanding due to their anti-dilutive effect. EX-27.1 3 EXHIBIT 27.1
5 3-MOS DEC-27-1998 DEC-29-1997 MAR-29-1998 4,873,266 0 1,600,000 0 40,012 6,931,700 8,569,848 (763,641) 14,790,617 771,951 1,002,165 0 0 80,002 11,336,499 14,790,617 804,319 804,319 218,416 1,895,311 0 0 (90,855) (1,000,137) 0 (1,000,137) 0 0 0 (1,000,137) (0.13) (0.13)
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