-----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, FE+manHilPTXylWepxwlCsZ8x432dsTbIkdFOnN04IAygtFyyAVmmvvlFnzW5NZK fSs266blWgowQWPymxbmEA== 0000930881-99-000010.txt : 19990519 0000930881-99-000010.hdr.sgml : 19990519 ACCESSION NUMBER: 0000930881-99-000010 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990518 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: 99629033 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, 1999 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, January 3, 1999 1999 CURRENT ASSETS: Cash and cash equivalents $ 21,045 $ 22,169 Accounts receivable, net of allowance for doubtful accounts of $73,406 and $62,000 respectively 5,708 9,992 Other receivable 4,877 101,633 Current portion of notes and leases receivable 60,350 60,350 Prepaid expenses and other receivables 26,575 26,354 Total current assets 118,555 220,498 PROPERTY AND EQUIPMENT, at cost: Leasehold improvements 294,373 282,877 Restaurant equipment 356,357 91,477 Furniture and fixtures 5,851 5,851 Total property and equipment 656,581 380,205 Less accumulated depreciation and amortization (34,160) (13,763) Property and equipment, net 622,421 366,442 LONG TERM PORTION OF NOTES AND LEASES RECEIVABLE, net of allowance for doubtful accounts of $-0- and $-0- respectively 124,945 134,521 LIQUOR LICENSES, net of accumulated amortization of $-0- and $-0- respectively 2,016 3,288 OTHER ASSETS 16,531 15,981 Total assets $ 884,468 $ 740,730 HUDSON'S GRILL OF AMERICA, INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED) LIABILITIES AND SHAREHOLDERS' EQUITY March 31, January 3, 1999 1999 CURRENT LIABILITIES: Current portion of long-term debt and capital lease obligation $ 36,158 $ 8,689 Accounts payable - trade 229,539 291,772 Advances - related parties 57,150 56,940 Accrued liabilities 225,001 196,210 Total current liabilities 547,848 553,611 LONG-TERM DEBT AND CAPITAL LEASE OBLIGATION, net of current portion 541,166 258,884 OTHER LONG-TERM LIABILITIES 114,325 130,654 DEFERRED INCOME 221,974 231,852 COMMITMENTS AND CONTINGENCIES (Note 5) SHAREHOLDERS' DEFICIT: 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 (4,997,302) (4,890,728) Total shareholders' equity (540,845) (434,271) Total liabilities and and shareholders' equity $ 884,468 $ 740,730 HUDSON'S GRILL OF AMERICA, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) For the three months ended March 31, March 31, 1999 1998 REVENUES: Net sales $ 231,088 $ 226,745 Franchise revenues 39,988 82,974 Equipment lease income 6,849 12,515 Gain on sales of restaurants 6,517 11,423 Other income 21,864 16,330 Total revenues 306,306 349,987 COSTS AND EXPENSES: Cost of sales 283,484 235,549 General and administrative 104,084 139,014 Depreciation and amortization 20,448 3,280 Total costs and expenses 408,016 377,843 Income (loss) from operations (101,710) (27,856) OTHER INCOME (EXPENSE): Interest expense (9,263) Interest income 4,399 7,767 Total other income (expense) (4,864) 7,767 INCOME (LOSS) BEFORE INCOME TAXES (106,574) (20,089) Provision for income taxes NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) $ (106,574) $ (20,089) INCOME (LOSS) PER SHARE Basic and diluted net income (loss) and comprehensive income (loss) per share $ (.0175) $ (.003) HUDSON'S GRILL OF AMERICA, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) For the nine months ended March 31, March 31, 1999 1998 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 three months ended March 31, March 31, 1999 1998 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ (106,574) $ (20,089) Adjustments to reconcile net income (loss) to net cash used by operating activities: Depreciation and amortization 20,448 3,280 (Gain) loss on sales and closures of restaurants (6,517) (11,424) Changes in assets and liabilities: Accounts receivable 89,635 5,129 Prepaid expenses and other (11,755) 1,292 Accounts payable (62,233) 33,641 Accrued liabilities and other 32,922 (1,819) Net cash provided (used) by operating activities (44,074) 10,010 CASH FLOWS FROM INVESTING ACTIVITIES: Notes receivable principal payments 9,576 7,337 Leases receivable principal payments 7,385 Increase in fixed assets (19,552) (1,922) Net cash provided (used) by investing activities (9,976) 12,800 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from long-term debt 60,000 Repayments of long-term debt (7,073) Net cash provided (used) by financing activities 52,927 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (1,123) 22,810 CASH AND CASH EQUIVALENTS, beginning of period 22,168 42,401 CASH AND CASH EQUIVALENTS, end of period $ 21,045 $ 65,211 SUPPLEMENTAL CASH FLOW INFORMATION: Interest paid $ 1,479 $ 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, 1999 In connection with the acquisition of property and equipment, the company executed a capital lease agreement for $256,824 and incurred long-term debt of $256,824. 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 January 3, 1999, 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, 1999 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 other receivables at March 31, 1999 ("Q1") were $4,877 as compared to $101,633 at January 3, 1999 ("FYE"). Its restaurant equipment at Q1 was $356,357 as compared to $91,477 at FYE. Equipment increased because of equipment for the January opening of the Dallas Hudson's Grill. Accounts payable decreased at Q1 to $229,539 from $291,772 at FYE. On the other hand, the current portion of long term debt increased to $36,158 at Q1 from $8,689 at FYE; also accrued liabilities increased at Q1 to $225,001 from $196,210 at FYE. Long term debt and capital lease obligations increased, too, at Q1 to $541,166 from $258,884 at FYE. These increases primarily are a result of the loans received during the first quarter to complete, open and operate the Dallas Hudson's Grill that opened in January 1999. Material changes in the results of operations of Q1 compared to the first quarter of 1998 ("Q98") include the following. Net Sales remained about the same, but cost of sales increased to $283,484 in Q1 from $235,549 in Q98. These are a result of losses that have occurred at the newly opened Dallas location. Franchising revenues from restaurants under contract decreased from $82,974 in Q98 to $39,988 in Q1 because of fewer operating franchises and because some of the franchises have not been paying their fees. The Company is pursuing these fees through litigation. Thus, income from operations decreased substantially from a loss of ($27,856) in Q98 to ($101,710) in Q1. General and administrative expenses dropped somewhat in Q1 to $104, 084 from $139,014 in Q98. Interest expense increased because of the loans for the new Dallas restaurant; in Q98 there was no interest expense, but in Q1 the Company incurred $9,263. The Company incurred a loss of ($106,574) (($.0175) per share) in Q1 as compared to a loss of ($20,089) (($.003) per share) in Q98. The Company does not believe that it will be affected by any Y2K problems as it concerns computing and administration performed by the issuer. The Company may be affected by third parties, however, to an unknown extent. Such third party effects include problems with bank accounts (paying and depositing funds) and with delays in receiving franchiser fees and payments from franchisees who encounter Y2K problems. Since the Company does not rely heavily on computer software and processing to run its business, problems with changing software to accommodate the year 2000 and years thereafter are not likely to have a material impact on the Company. 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 12, 1999. 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. January 29, 1999. The Company announced the opening of its Dallas, Texas, location, which is the first Company owned and operated location to be built in many years. It is a free standing unit based on the Company's most recent design. 2. April 23, 1999. The Company announced the opening of a new Hudson's Grill in Marquette, Michigan, by Sharfe, L.L.C., a franchisee that is owned by Frank and Jim Stabile. It is a free standing unit based on the new design. The Company also announced the settlement of a lawsuit involving the Westlake location formerly operated by the Company. 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, 1999 elink\filing\10QSB.991 EX-27 2 ARTICLE 5 FINANCIAL DATA SCHEDULE EXTRACTED FROM FINANCIAL STATEMENTS FOR 1ST QUARTER 1999 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 JAN-03-1999 MAR-31-1999 21,045 0 10,585 73,406 0 118,555 656,581 34,160 884,468 547,848 0 0 0 4,456,457 (4,997,302) 884,468 231,088 306,306 283,484 408,016 4,864 0 0 (106,574) 0 (106,574) 0 0 0 (106,574) (.018) (.018)
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