-----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, AXFzqxGLLiWO+Fgb+5SQ3V10xXk99c3L+EHVe3aX5nWTPu2d3rXf8jZaTejPt5b+ gij+d4seXWfHLCLVVhkvsQ== 0000930881-98-000007.txt : 19980518 0000930881-98-000007.hdr.sgml : 19980518 ACCESSION NUMBER: 0000930881-98-000007 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HUDSONS GRILL OF AMERICA INC CENTRAL INDEX KEY: 0000729545 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 953477313 STATE OF INCORPORATION: CA FISCAL YEAR END: 1229 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-13642 FILM NUMBER: 98624672 BUSINESS ADDRESS: STREET 1: 16970 DALLAS PKWY STE 402 CITY: DALLAS STATE: TX ZIP: 75248 BUSINESS PHONE: 2149319743 MAIL ADDRESS: STREET 1: 16970 DALLAS PARKWAY STREET 2: SUITE 402 CITY: DALLAS STATE: TX ZIP: 75248 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN RESTAURANTS CORP DATE OF NAME CHANGE: 19910825 10QSB 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1998 Commission file number 0-13642 HUDSON'S GRILL OF AMERICA, INC. (Name of small business issuer in its charter) California (State or other jurisdiction of incorporation) 95-3477313 (IRS Employer Identification Number) 16970 Dallas Parkway, Suite 402, Dallas, Texas 75248 (Address of Principal Executive Offices) Issuer's telephone number, including area code: (972) 931-9237 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 X No APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes No APPLICABLE ONLY TO CORPORATE REGISTRANTS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. 6,056,986 PART I FINANCIAL INFORMATION Item 1. Financial Statements HUDSON'S GRILL OF AMERICA, INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED) ASSETS March 31, December 28, 1998 1997 CURRENT ASSETS: Cash and cash equivalents $ 65,211 $ 42,401 Accounts receivable, net of allowance for doubtful accounts of $47,425 and $49,000 respectively 43,506 69,830 Current portion of notes and leases receivable 100,000 100,000 Prepaid expenses and other 38,531 23,185 Total current assets 247,248 235,416 PROPERTY AND EQUIPMENT, at cost: Leasehold improvements 3,986 2,969 Restaurant equipment 33,678 33,378 Furniture and fixtures 5,851 5,851 Total property and equipment 43,515 42,198 Less accumulated depreciation and amortization (8,728) (7,030) Property and equipment, net 34,787 35,168 LONG TERM PORTION OF NOTES AND LEASES RECEIVABLE, net of allowance for doubtful accounts of $33,000 and $33,000 respectively 775,865 791,858 LIQUOR LICENSES-net of accumulated amortization of $31,500 at March 31, 1998 and $30,000 at December 28, 1997 28,500 30,815 OTHER ASSETS 17,318 23,463 Total assets $ 1,103,718 $ 1,116,720 HUDSON'S GRILL OF AMERICA, INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED) LIABILITIES AND SHAREHOLDERS' EQUITY March 31, December 28, 1998 1997 CURRENT LIABILITIES: Accounts payable $ 74,527 $ 40,886 Accrued liabilities 217,124 201,343 Total current liabilities 291,651 242,229 LONG-TERM DEBT OTHER LONG-TERM LIABILITIES 179,645 206,494 DEFERRED INCOME 762,881 778,367 COMMITMENTS AND CONTINGENCIES (Note 4) SHAREHOLDERS' EQUITY: Preferred stock, 5,000,000 shares authorized, none issued or outstanding Common stock, no par value 100,000,000 shares authorized 6,056,986 shares issued and outstanding 4,456,457 4,456,457 Accumulated deficit (4,586,916) (4,566,827) Total shareholders' equity (130,459) (110,370) Total liabilities and and shareholders' equity $1,103,718 $1,116,720 HUDSON'S GRILL OF AMERICA, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED) For the three months ended March 31, March 31, 1998 1997 REVENUES: Net sales $ 226,745 $ Franchising fees from restaurants under sales contracts 8,093 Franchise revenues 82,974 75,988 Equipment lease income 12,515 16,812 Gain on sales of restaurants 11,423 16,103 Other income 16,330 16,471 Total revenues 349,987 133,467 COSTS AND EXPENSES: Cost of sales 235,549 General and administrative 139,014 134,234 Depreciation and amortization 3,280 8,299 Total costs and expenses 377,843 142,533 Income (loss) from operations (27,856) (9,066) OTHER INCOME (EXPENSE): Interest expense (566) Interest income 7,767 20,357 Total other income (expense) 7,767 19,791 INCOME (LOSS) BEFORE INCOME TAXES (20,089) 10,725 Provision for income taxes NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) $ (20,089) $ 10,725 INCOME (LOSS) PER SHARE Basic and diluted net income (loss) and comprehensive income (loss) per share $ (.003) $ .001 HUDSON'S GRILL OF AMERICA, INC. CONSOLIDATED STATEMENTS OF CASH FLOW For the three months ended March 31, March 31, 1998 1997 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ (20,089) $ 10,725 Adjustments to reconcile net income (loss) to net cash used by operating activities: Depreciation and amortization 3,280 8,299 (Gain) loss on sales and closures of restaurants (11,424) (16,103) Changes in assets and liabilities: Accounts receivable 5,129 29,829 Prepaid expenses and other 1,292 758 Accounts payable 33,641 (32,305) Accrued liabilities and other (1,819) (59,143) Net cash provided (used) by operating activities 10,010 (57,940) CASH FLOWS FROM INVESTING ACTIVITIES: Net proceeds from sale of assets 4,634 Notes receivable principal payments 7,337 37,106 Leases receivable principal payments 7,385 17,923 Fixed assets and other (1,922) Net cash provided (used) by investing activities 12,800 59,663 CASH FLOWS FROM FINANCING ACTIVITIES: Repayments of notes payable (19,771) Net cash provided (used) by financing activities (19,771) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 22,810 (18,048) CASH AND CASH EQUIVALENTS, beginning of period 42,401 78,680 CASH AND CASH EQUIVALENTS, end of period $ 65,211 $ 60,632 SUPPLEMENTAL CASH FLOW INFORMATION: Interest paid $ $ 691 Income taxes paid $ $ HUDSON'S GRILL OF AMERICA, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS, continued SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS: Period ended March 31, 1997 In connection with the sale of a restaurant and equipment, the Company received a note receivable of $114,200 and a lease receivable of $240,000. HUDSON'S GRILL OF AMERICA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS A. Basis of Presentation 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 the disclosures are adequate to make the information presented not misleading. These interim financial statements should be read in conjunction with the Company's annual report and most recent audited financial statements included in the report on Form 10-KSB for the year ended December 28, 1997, filed with the Securities and Exchange Commission. The interim financial information included hereto is unaudited; however, such information reflects all the adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results of operations and cash flows for the interim periods. The results of operations for the three months ended March 31, 1998, are not necessarily indicative of the results to be expected for the full year. Item 2. Management Discussion and Analysis. Material changes in the financial condition of the issuer and in the results of its operations since the end of its last fiscal year and its results from the comparable period in its last fiscal year include the following. The issuer's accounts receivable at March 31, 1998 ("Q1") were $43,506 as compared to $69,830 at December 28, 1997 ("FYE"). Accounts payable increased at Q1 to $74,527 from $40,886 at FYE. Material changes in the results of operations of Q1 compared to the first quarter of 1997 ("Q97") include the following. Net Sales increased to $226,745 in Q1 from $0 in Q97, and cost of sales also increased to $235,549 in Q1 from $0 in Q97. These are a result of the repossession of a restaurant during the first quarter of 1998 and the continued operation of another location; they were operated by subsidiaries and affiliates of the Company, and their results were consolidated into the financial statements of the Company. Franchising fees from restaurants under contract decreased from $8,093 in Q97 to $0 in Q1 because there are currently no restaurants operating while under a sales contract. Franchising fees, franchise revenues, equipment lease income, gains on sale of restaurants, and other income remained about the same from Q97 to Q1. Income from operations decreased slightly from a loss of ($9,066) to a loss of ($27,856). General and administrative expenses also remained about the same from Q97 to Q1. Interest income has dropped from $20,357 in Q97 to $7,767 in Q1. Some of this is due to the declining principal of the Company's notes receivable. The issuer incurred a loss of ($20,089) (($.003) per share) in Q1 as compared to a profit of $10,725 ($.001 per share) in Q97. PART II - OTHER INFORMATION Item 1. Legal Proceedings. The registrant incorporates by reference its response in its Form 10-KSB filed with the Securities and Exchange Commission on May 5, 1998. The registrant is not aware of any other litigation not already disclosed in its recently filed SEC Form 10-KSB. Item 2. Changes in Securities. There were no changes in securities or in the rights of the holders of the registrant's securities during Q1. Item 3. Defaults Upon Senior Securities. The registrant does not currently have any senior securities outstanding. Consequently, there are no defaults on senior securities. Item 4. Submission of Matters to a Vote of Security Holders. There were no matters submitted to a vote of security holders during Q1. Item 5. Other Information. The registrant does not have any material new information that has not already been disclosed in Forms 8-K and 10-KSB filed since January 1, 1998. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibit Index. Following are the exhibits required under Item 601 of Regulation S-B for Form 10-QSB: Item 601 Exhibit No. Description Page Number (2) Plan of Acquisition, Reorgani- zation, Arrangement, Liquida- tion, or Succession n/a (4) Instruments Defining the Rights of Holders Including Indentures n/a (6) No Exhibit Required. n/a (11) Statement Re: Computation of Per Share Earnings n/a (12) No Exhibit Required. n/a (15) Letter on Unaudited Interim Financial Information n/a (18) Letter on Change in Accounting Principles n/a (19) Previously Unfiled Documents n/a (20) Reports Furnished to Security Holders n/a (23) Published Report Regarding Matters Submitted to Vote n/a (24) Consent of Experts and Counsel n/a (25) Power of Attorney n/a (27) Financial Data Schedule attached (28) Additional Exhibits n/a No explanation of the computation of per share earnings on both the primary and fully diluted basis is necessary because the computation can be clearly determined from the financial statements and the notes to the financial statements. No reports on unaudited interim financial information have been prepared by the Company's independent accountants, and therefore, no letter is required from the Company's independent accountants. (b) Reports on Form 8-K. The following reports on Form 8-K were filed during the quarter ending March 31, 1998, or shortly thereafter: 1. April 3, 1998. The Company announced that in March 1998 it had signed a new franchise agreement with Sharfe, L.L.C. to build a Hudson's Grill in Marquette, Michigan, and had already received a franchise fee from Sharfe. Sharfe plans to build a freestanding Hudson's Grill restaurant. The Company's directors decided to ask for a shareholder vote at the next annual meeting to ratify the transfer of assets to Hudson's Grill International, Inc.; to recommend a vote to register the shares of Hudson's Grill International; and then to distribute the shares to the shareholders of the Company. On January 20, 1998, the Company formed a subsidiary, Hudson's Grill of Denton/Trinity, Inc., to operate the Carrollton, Texas, Hudson's Grill on a month to month basis. Hudson's Grill of Whittier, Inc., a subsidiary that operated the Westlake, California, Hudson's Grill, shut down operations at the Westlake location and turned the premises and furniture, non-proprietary fixtures and equipment over to the landlord on March 9, 1998. Also, the Guatemala City, Guatemala, Hudson's Grill was closed in February 1998 by the local franchisee because of insufficient sales. SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) HUDSON'S GRILL OF AMERICA, INC. By: s/s David L. Osborn David L. Osborn, President Date: May 15, 1998 elink\filing\10QSB.981 EX-27 2 ARTICLE 5 FINANCIAL DATA SCHEDULE EXTRACTED FROM FINANCIAL STATEMENTS FOR 1ST QUARTER 1998 FORM 10-QSB
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE REGISTRANT'S QUARTERLY FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS DEC-27-1998 MAR-31-1998 65,211 0 43,506 47,425 0 247,248 43,515 8,728 1,103,718 291,651 0 0 0 4,456,457 (4,586,916) 1,103,718 226,745 349,987 235,549 377,843 (7,767) 0 0 (20,089) 0 (20,089) 0 0 0 (20,089) (.003) (.003)
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