-----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, RlxK2pYNhFSyKF3/0NgLUVc143us5qB5DZk4/wzEGI0gvZ+0l91xRpqLlpo0autx ujSS1qoNu4n2WA14AnhYbg== 0000930881-98-000010.txt : 19981123 0000930881-98-000010.hdr.sgml : 19981123 ACCESSION NUMBER: 0000930881-98-000010 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981116 DATE AS OF CHANGE: 19981120 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HUDSONS GRILL OF AMERICA INC CENTRAL INDEX KEY: 0000729545 STANDARD INDUSTRIAL CLASSIFICATION: 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: 98753417 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 September 30, 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 September 30, December 28, 1998 1997 CURRENT ASSETS: Cash and cash equivalents $ 80,217 $ 42,401 Accounts receivable, net of allowance for doubtful accounts of $85,000 and $49,000 respectively 42,665 69,830 Current portion of notes and leases receivable 100,000 100,000 Prepaid expenses and other receivables 29,833 23,185 Total current assets 252,715 235,416 PROPERTY AND EQUIPMENT, at cost: Leasehold improvements 91,171 2,969 Restaurant equipment 33,378 33,378 Furniture and fixtures 5,851 5,851 Total property and equipment 130,400 42,198 Less accumulated depreciation and amortization (12,079) (7,030) Property and equipment, net 118,321 35,168 LONG TERM PORTION OF NOTES AND LEASES RECEIVABLE, net of allowance for doubtful accounts of $33,000 and $33,000 respectively 770,247 791,858 LIQUOR LICENSES-net of accumulated amortization of $30,000 at December 28, 1997 30,815 OTHER ASSETS 54,457 23,463 Total assets $ 1,195,740 $ 1,116,720 HUDSON'S GRILL OF AMERICA, INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED) LIABILITIES AND SHAREHOLDERS' EQUITY September 30, December 28, 1998 1997 CURRENT LIABILITIES: Accounts payable $ 73,656 $ 40,886 Accrued liabilities 258,731 201,343 Total current liabilities 332,387 242,229 LONG-TERM DEBT 100,000 OTHER LONG-TERM LIABILITIES 146,986 206,494 DEFERRED INCOME 726,633 778,367 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 (4,566,723) (4,566,827) Total shareholders' equity (110,266) (110,370) Total liabilities and and shareholders' equity $1,195,740 $1,116,720 HUDSON'S GRILL OF AMERICA, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) For the three months ended September 30, September 30, 1998 1997 REVENUES: Net sales $ $ 103,890 Franchising fees from restaurants under sales contracts 3,316 Franchise revenues 68,760 69,604 Equipment lease income 12,109 18,097 Gain on sales of restaurants 4,223 17,021 Other income 18,335 17,177 Total revenues 103,427 229,105 COSTS AND EXPENSES: Cost of sales 11 116,938 General and administrative 112,954 168,158 Depreciation and amortization 1,984 8,068 Total costs and expenses 114,949 293,164 Income (loss) from operations (11,522) (64,059) OTHER INCOME (EXPENSE): Interest expense Interest income 15,028 20,315 Total other income (expense) 15,028 20,315 INCOME (LOSS) BEFORE INCOME TAXES 3,506 (43,744) Provision for income taxes NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) $ 3,506 $ (43,744) INCOME (LOSS) PER SHARE Basic and diluted net income (loss) and comprehensive income (loss) per share $ .0003 $ (.007) HUDSON'S GRILL OF AMERICA, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) For the nine months ended September 30, September 30, 1998 1997 REVENUES: Net sales $ 301,441 $ 103,890 Franchising fees from restaurants under sales contracts 15,573 Franchise revenues 212,952 252,463 Equipment lease income 45,172 56,139 Gain on sales of restaurants 36,591 53,165 Other income 52,164 51,440 Total revenues 648,320 532,670 COSTS AND EXPENSES: Cost of sales 310,442 116,938 General and administrative 368,155 445,584 Depreciation and amortization 8,324 24,371 Total costs and expenses 686,921 586,893 Income (loss) from operations (38,601) (54,223) OTHER INCOME (EXPENSE): Interest expense (251) (672) Interest income 38,955 61,494 Total other income (expense) 38,704 60,822 INCOME (LOSS) BEFORE INCOME TAXES 103 6,599 Provision for income taxes NET INCOME (LOSS) $ 103 $ 6,599 INCOME (LOSS) PER SHARE Basic and diluted net income (loss) and comprehensive income (loss) per share $ .00001 $ .0007 HUDSON'S GRILL OF AMERICA, INC. CONSOLIDATED STATEMENTS OF CASH FLOW For the nine months ended September 30, September 30, 1998 1997 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 103 $ 6,599 Adjustments to reconcile net income (loss) to net cash used by operating activities: Depreciation and amortization 8,324 24,371 (Gain) loss on sales and closures of restaurants (36,591) (53,165) Changes in assets and liabilities: Accounts receivable (19,273) 3,944 Prepaid expenses and other (4,947) (8,315) Accounts payable 32,770 (17,100) Accrued liabilities and other (5,534) (118,848) Net cash provided (used) by operating activities (25,148) (162,514) CASH FLOWS FROM INVESTING ACTIVITIES: Net proceeds from sale of assets 20,120 4,634 Notes receivable principal payments 31,712 170,125 Leases receivable principal payments 37,148 51,692 Fixed assets and other (126,016) (4,528) Net cash provided (used) by investing activities (37,036) 221,923 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from notes payable 100,000 Repayments of notes payable (35,542) Net cash provided (used) by financing activities 100,000 (35,542) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 37,816 23,867 CASH AND CASH EQUIVALENTS, beginning of period 42,401 78,680 CASH AND CASH EQUIVALENTS, end of period $ 80,217 $ 102,547 SUPPLEMENTAL CASH FLOW INFORMATION: Interest paid $ 251 $ 902 Income taxes paid $ $ HUDSON'S GRILL OF AMERICA, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS, continued SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS: Period ended September 30, 1998 The Company sold the restaurant located in Carrollton, TX. No note receivable or lease receivable was generated with this sale. Period ended September 30, 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 nine months ended September 30, 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 September 30, 1998 ("Q3") were $42,665 as compared to $69,830 at December 28, 1997 ("FYE"). Cash was $80,217 as compared to $42, 401 at FYE, due largely in part to a long term borrowing of $100,000. Leasehold improvements increased at Q3 to $91,171 from $2,919 at FYE because of the leasehold development of the Richardson, Texas, location by a subsidiary. Accounts payable increased at Q3 to $73,656 from $40,886 at FYE. Accrued liabilities also increased in Q3 to $258,731 from $201,343 at FYE, reflecting an increase in lease obligations. Material changes in the results of operations of Q3 compared to the third quarter of 1997 ("Q97") include the following. Net Sales decreased to $0 in Q3 from $103,890 in Q97, while cost of sales also decreased to $11 in Q3 from $116,938 in Q97. These are a result of the disposition of a restaurant that was in operation as a subsidiary in 1997; their results were consolidated into the financial statements of the Company in 1997. Franchising fees, franchise revenues, equipment lease income, and other income remained about the same from Q97 to Q3. Gneral and administrative expenses dropped to $112,954 at Q3 from $168,158 at FYE due to the termination of a consulting agreement as of December 31, 1997. Income from operations improved from a loss of ($64,059) to a loss of only ($11,522). The issuer incurred a gain of $3,506 ($.0003 per share) in Q3 as compared to a loss of $43,744 (($.007) 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 15, 1998. Currently the only litigation against the registrant are two lawsuits involving leases at former Hudson's Grills in Westlake, California, and Whittier, California, and a lawsuit by a franchisee attempting to recover expenses incurred by the franchisee when they operated a Hudson's Grill in Pomona, California. The lawsuit involving the lease of the former Hudson's Grill at Whittier, was filed during the third quarter of 1998; the current landlord at that location is asking for more than $2 million. The registrant has filed an answer and denies that it owes that much, if anything at all, because of potential defenses and counterclaims. Item 2. Changes in Securities. There were no changes in securities or in the rights of the holders of the registrant's securities during Q3. 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 Q3. 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 July 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 September 30, 1998, or shortly thereafter: 1. September 21, 1998. The Company announced the opening of the Hudson's Grill in Jackson, Michigan, the anticipated opening of the Hudson's Grill in Richardson, Texas, and the results of the annual shareholders meeting. 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: November 16, 1998 elink\filing\10QSB.983 EX-27 2 ARTICLE 5 FINANCIAL DATA SCHEDULE EXTRACTED FROM FINANCIAL STATEMENTS FOR 3RD 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 SEP-30-1998 80,217 0 42,665 85,000 0 252,715 130,400 12,079 1,195,740 332,387 0 0 0 4,456,457 (4,586,916) 1,195,740 0 103,427 11 114,944 (15,028) 0 0 3,506 0 3,506 0 0 0 3,506 .000 .000
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