-----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, MDHz1uhOKg3hVLcXILCDJZ5YueOrgEf8EPrDKB35FYQcX2FoXVqtT0sMT1HoKq05 jqHHdTG1TGHM38otkFF7RQ== 0000914760-97-000101.txt : 19970520 0000914760-97-000101.hdr.sgml : 19970520 ACCESSION NUMBER: 0000914760-97-000101 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERIHOST PROPERTIES INC CENTRAL INDEX KEY: 0000778423 STANDARD INDUSTRIAL CLASSIFICATION: HOTELS & MOTELS [7011] IRS NUMBER: 363312434 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-15291 FILM NUMBER: 97607380 BUSINESS ADDRESS: STREET 1: 2400 E DEVON AVE STE 280 CITY: DES PLAINES STATE: IL ZIP: 60018 BUSINESS PHONE: 7082984500 MAIL ADDRESS: STREET 1: 2400 E DEVON AVE STREET 2: SUITE 280 CITY: DES PLAINES STATE: IL ZIP: 60018 FORMER COMPANY: FORMER CONFORMED NAME: AMERICA POP INC DATE OF NAME CHANGE: 19871111 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [x] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended MARCH 31, 1997 OR [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File No. 2-90939C AMERIHOST PROPERTIES, INC. (Exact name of Registrant as specified in its charter) DELAWARE 36-3312434 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2400 EAST DEVON AVE., SUITE 280, DES PLAINES, ILLINOIS 60018 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (847) 298-4500 Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 x No As of May 14, 1997, 6,301,397 shares of the Registrant's Common Stock were outstanding. AMERIHOST PROPERTIES, INC. FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 1997 INDEX PART I: Financial Information Page Consolidated Balance Sheets as of March 31, 1997 and December 31, 1996 4 Consolidated Statements of Operation for the Three Months Ended March 31, 1997 and 1996 6 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1997 and 1996 7 Notes to Consolidated Financial Statements 9 Management's Discussion and Analysis 11 Schedule of Earnings Before Interest/Rent, Taxes and Depreciation/Amortization for the Three Months Ended March 31, 1997 and 1996 17 PART II: Other Information Item 6 - Exhibits and Reports on Form 8-K 18 Signatures 18 Part I: Financial Information Item 1: Financial Statements AMERIHOST PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED)
March 31, December 31, 1997 1996 ASSETS Current assets: Cash and cash equivalents $ 3,049,475 $ 3,029,039 Accounts receivable (including $1,284,846 and $3,119,905 from related parties) 3,925,022 5,083,973 Notes receivable (including $1,957,718 and $1,354,461 from related parties) 2,110,533 1,507,276 Prepaid expenses and other current assets 520,214 223,136 Refundable income taxes 744,123 30,629 Costs and estimated earnings in excess of billings on uncompleted contracts (including $4,629,209 and $2,048,259 from related parties) 4,715,209 2,083,259 Total current assets 15,064,576 11,957,312 Investments 1,325,202 1,595,858 Property and equipment: Land 7,722,730 7,334,562 Buildings 31,314,614 27,885,463 Furniture, fixtures and equipment 10,962,960 10,984,572 Construction in progress 3,809,652 4,709,064 Leasehold improvements 1,774,147 2,404,060 55,584,103 53,317,721 Less accumulated depreciation and amortization 7,000,865 7,481,889 48,583,238 45,835,832 Long-term notes receivable (including $631,644 and $1,120,888 from related parties) 3,420,142 3,831,504 Costs of management contracts acquired, net of accumulated amortization of $1,225,058 and $1,158,379 957,590 907,404 Other assets (including deferred taxes of $221,000 and $171,000), net of accumulated amortization of $2,320,060 and $2,082,450 2,839,850 2,773,246 7,217,582 7,512,154 $ 72,190,598 $ 66,901,156 (continued) AMERIHOST PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) March 31, December 31, 1997 1996 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 5,281,005 $ 5,293,184 Bank line-of-credit 4,335,668 1,707,424 Accrued payroll and related expenses 785,930 935,120 Accrued real estate and other taxes 748,122 685,796 Other accrued expenses and current liabilities 1,049,709 828,596 Current portion of long-term debt 1,125,799 1,554,200 Total current liabilities 13,326,233 11,004,320 Long-term debt, net of current portion 34,943,487 32,785,108 Deferred income 624,776 630,899 Commitments Minority interests 1,514,843 1,569,200 Shareholders' equity: Preferred stock, no par value; authorized 100,000 shares; none issued - - Common stock, $.005 par value; authorized 25,000,000 shares; issued 6,292,197 shares at March 31, 1997, and 6,036,921 shares at December 31, 1996 31,461 30,185 Additional paid-in capital 18,504,160 17,170,154 Retained earnings 4,638,805 5,104,457 23,174,426 22,304,796 Less: Stock subscriptions receivable (436,875) (436,875) Notes receivable (956,292) (956,292) 21,781,259 20,911,629 $ 72,190,598 $ 66,901,156 See notes to consolidated financial statements.
AMERIHOST PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, (UNAUDITED)
1997 1996 Revenue: Hotel operations: AmeriHost Inn hotels $ 2,396,566 $ 1,306,138 Other hotels 4,032,034 4,277,358 Development and construction 6,133,742 3,979,802 Management services 604,643 489,682 Employee leasing 2,902,305 2,591,588 16,069,290 12,644,568 Operating costs and expenses: Hotel operations: AmeriHost Inn hotels 1,862,554 885,766 Other hotels 3,682,857 3,853,085 Development and construction 5,175,470 3,113,679 Management services 412,390 372,651 Employee leasing 2,831,611 2,525,909 13,964,882 10,751,090 2,104,408 1,893,478 Depreciation and amortization 1,156,293 802,815 Leasehold rents - hotels 534,632 446,130 Corporate general and administrative 582,150 484,652 Operating (loss) income (168,667) 159,881 Other income (expense): Interest expense (810,007) (665,173) Interest income 135,449 154,359 Other income 3,810 41,909 Gain on sale of property 1,744,599 - Contractual termination expenses (1,697,448) - Equity in net income and losses of affiliates (241,101) (144,638) Loss before minority interests and income taxes (1,033,365) (453,662) Minority interests in (income) loss of consolidated subsidiaries and partnerships 158,713 204,001 Loss before income tax (874,652) (249,661) Income tax benefit 409,000 102,000 Net loss $ (465,652) $ (147,661) Loss per share $ (0.08) $ (0.02) See notes to consolidated financial statements.
AMERIHOST PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
Three Months Ended March 31, 1997 1996 Cash flows from operating activities: Cash received from customers $ 14,664,611 $ 11,839,312 Cash paid to suppliers and employees (15,466,686) (11,868,154) Interest received 72,956 59,039 Interest paid (814,297)(639,973) Income taxes paid (110,352) (44,882) Net cash used in operating activities (1,653,768) (654,658) Cash flows from investing activities: Distributions from affiliates 21,515 107,044 Purchase of property and equipment (5,238,136) (1,327,158) Purchase of investments (100) (250,000) Increase in notes receivable (1,128,914) (1,121,233) Collections on notes receivable 1,037,019 1,050,766 Pre-opening and management contract costs (116,865) (169,827) Proceeds from sales of property 3,390,576 - Contractual termination costs (1,443,891) - Net cash used in investing activities (3,478,796) (1,710,408) Cash flows from financing activities: Proceeds from issuance of long-term debt 3,348,584 1,699,638 Principal payments of long-term debt (1,581,144) (223,572) Proceeds from exercise of common stock options 789,075 - Proceeds from line-of-credit 4,828,244 1,559,128 Payments on line-of-credit (2,200,000) (500,000) Decrease in minority interests (31,759) (13,259) Net cash provided from financing activities 5,153,000 2,521,935 Net increase in cash 20,436 156,869 Cash and cash equivalents, beginning of period 3,029,039 1,371,278 Cash and cash equivalents, end of period $ 3,049,475 $ 1,528,147
(Continued) AMERIHOST PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
Three Months Ended March 31, 1997 1996 Reconciliation of net loss to net cash used in operating activities: Net loss $ (465,652) $ (147,661) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,156,293 802,815 Equity in net loss (income) of affiliates and amortization of deferred income 241,101 144,638 Minority interests in net income of subsidiaries (158,713) (204,001) Amortization of deferred interest and loan discount 9,940 9,940 Increase in deferred income 3,425 - Gain on sale of property (1,744,599) - Increase in deferred tax asset (50,000) - Contractual termination costs 1,697,448 - Compensation paid through issuance of common stock and common stock options 302,065 - Changes in assets and liabilities: Decrease (increase) in accounts receivable 1,220,036 (1,272,382) Increase in interest receivable (61,082) (93,912) Increase in prepaid expenses and other current assets (297,078) (66,515) (Increase) decrease in costs and estimated earnings in excess of billings on uncompleted contracts (2,631,950) 425,217 Increase in other assets (274,164) (45,027) Increase in refundable income taxes (469,352) (146,882) Decrease in accounts payable (12,179) (166,827) (Decrease) increase in accrued expenses and other current liabilities (103,669) 92,087 (Decrease) increase in accrued interest (15,638) 13,852 Net cash used in operating activities $ (1,653,768) $ (654,658) See notes to consolidated financial statements.
1. BASIS OF PREPARATION: The financial statements included herein have been prepared by the Company, without audit. In the opinion of the Company, the accompanying unaudited financial statements contain all adjustments, which consist only of recurring adjustments necessary to present fairly the financial position of Amerihost Properties, Inc. and subsidiaries as of March 31, 1997 and December 31, 1996 and the results of its operations for the three months ended March 31, 1997 and 1996 and cash flows for the three months ended March 31, 1997 and 1996. The results of operations for the three months ended March 31, 1997, are not necessarily indicative of the results to be expected for the full year. It is suggested that the accompanying financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's 1996 Annual Report on Form 10-K. Certain reclassifications have been made to the 1996 financial statements in order to conform with the 1997 presentation. 2. PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and partnerships in which the Company has a majority ownership interest. Significant intercompany accounts and transactions have been eliminated. 3. INCOME TAXES: Deferred income taxes are provided on the differences in the bases of the Company's assets and liabilities determined for tax and financial reporting purposes. The income tax benefit for the three months ended March 31, 1997 and 1996 was based on the Company's estimate of the effective tax rate expected to be applicable for the full year and a $50,000 reduction in the deferred tax asset reserve. The Company expects the effective tax rate to approximate the Federal and state statutory rates. 4. LOSS PER SHARE: Loss per share of common stock is computed by dividing adjusted net loss by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding. The weighted average number of shares used in the computations were 7,031,219 for the three months ended March 31, 1997, and 5,976,293 for the three months ended March 31, 1996. 5. SUPPLEMENTAL CASH FLOW DATA: The following represents the supplemental schedule of noncash investing and financing activities for the three months ended March 31, 1997 and 1996: Three Months Ended March 31, 1997 1996 Purchase of investments through issuance of common stock and decrease in notes and accrued interest receivable $ - $ 143,929 Accrued contractual termination costs $ 253,557 $ - 6. HOTEL LEASES: The Company, through its subsidiaries and consolidated partnerships, has leasehold interests ranging from 50.35% to 100% in seven hotels, the operations of which are included in the Company's consolidated financial statements. All of these leases provide for an option to purchase the hotel. Some of the purchase prices are based upon a multiple of gross room revenues for the preceding twelve months and the others are based upon a fixed amount, typically with annual increases based upon the change in the consumer price index. At March 31, 1997, the aggregate purchase price for these seven hotels was approximately $21,505,000. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL The Company is engaged in the development of AmeriHost Inn hotels, its proprietary brand, and the ownership, operation and management of AmeriHost Inn hotels and other mid-price hotels. As of March 31, 1997, there were 45 AmeriHost Inn hotels open, of which 16 were wholly-owned, two were majority owned, 25 were minority-owned, and two were managed for unrelated third parties. The Company intends to use primarily the AmeriHost Inn brand when expanding its hotel operations segment. All of the hotels currently under construction will be AmeriHost Inn hotels. As of March 31, 1997, 17 AmeriHost Inn hotels were under construction, of which 11 will be wholly-owned, five will be minority- owned, and one which will be owned by an unrelated third party. Same room revenues for all AmeriHost Inns increased approximately 4.1% in the first quarter of 1997 compared to the first quarter of 1996, attributable to an increase of $2.44 in average daily rate and a 0.3% increase in occupancy. Revenues from hotel operations consist of the revenues from all hotels in which the Company has a 100% or controlling ownership or leasehold interest ("Consolidated Hotels"). Investments in other entities in which the Company has a minority ownership interest are accounted for using the equity or cost method. As a result of the Company's focus on increasing the number of Consolidated Hotels, the Company expects that revenues from the hotel operations segment will increase over time as a percentage of the Company's overall revenues. Development and construction revenues consist of one-time fees for new construction, acquisition and renovation activities performed by the Company for minority-owned hotels and unrelated third parties. The Company also receives management services revenue for management services provided to minority-owned hotels and unrelated third parties. Employee leasing revenues consist of revenues the Company receives for leasing its employees to minority-owned hotels and unrelated third parties. All revenues attributable to development, construction, management and employee leasing services with respect to Consolidated Hotels have been eliminated in consolidation. Revenues increased 27.1% to $16.1 million during the three months ended March 31, 1997, from $12.6 million during the three months ended March 31, 1996, due primarily to expanded hotel operations and significant hotel development and construction activity. Net loss for the first quarter increased to ($465,652), or ($0.08) per share in 1997, from ($147,661), or ($0.02) per share in 1996. The Company sold two Consolidated Hotels during the first quarter of 1997, resulting in a total gain, net of minority interests, of $1.7 million. These gains were offset by a non-recurring charge of $1.7 million from the termination of a consulting agreement with Urban 2000 Corp. (a company owned by the Company's Chairman of the Board and a former officer/director) and the departure of an officer/director. The Company incurred an operating loss of ($168,667) during the three months ended March 31, 1997, compared to operating income of $159,881 during the three months ended March 31, 1996. The decrease in operating income was primarily attributable to the impact of seasonality associated with a greater number of Consolidated Hotels and the significant number of hotels operating during their initial stabilization period immediately after opening. The Company uses EBITDA as a supplemental performance measure along with net income to report its operating results. EBITDA is defined as net income, adjusted to eliminate the impact of (i) interest expense; (ii) interest and other income; (iii) leasehold rents for hotels, which the Company considers to be financing costs similar to interest; (iv) income tax expense (benefit), (v) depreciation and amortization; (vi) gains or losses from property transactions; and (vii) non-recurring charges. EBITDA should not be considered as an alternative to net income or cash flows from operating activities as a measure of liquidity. EBITDA for both the first quarter of 1997 and 1996 was $1.5 million. An EBITDA schedule is included herein. The Company is currently in the process of evaluating certain unsolicited proposals received for the acquisition of its common stock. During this evaluation process, the Company has postponed the development of additional hotels for minority-owned entities which were expected to begin construction during the second quarter of 1997. Consequently, the Company does not expect to realize the anticipated levels of revenues and profits in the second quarter of 1997 from the development and construction of hotels for minority-owned entities. Amerihost had an ownership interest in 63 hotels at March 31, 1997 versus 49 hotels at March 31, 1996 (excluding hotels under construction). This increased ownership was achieved primarily through the development of AmeriHost Inn hotels for the Company's own account and for minority-owned entities. These figures include an increase in Consolidated Hotels from 24 at March 31, 1996 to 28 at March 31, 1997. RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THE THREE MONTHS ENDED MARCH 31, 1996 Revenues increased 27.1% to $16.1 million during the three months ended March 31, 1997, from revenues of $12.6 million during the three months ended March 31, 1996. These increases were due primarily to significant increases in the Company's hotel development and hotel operations segments. Hotel operations revenue increased 15.1% to $6.4 million during the three months ended March 31, 1997, compared to $5.6 million during the three months ended March 31, 1996. This increase was primarily attributable to the net addition of four Consolidated Hotels to the hotel operations segment from April 1, 1996 through March 31, 1997. The Company opened seven newly constructed Consolidated AmeriHost Inn hotels during this twelve month period, and acquired the remaining ownership interest in one hotel causing it to become a Consolidated Hotel. These eight additions were offset by the sale of three Consolidated Hotels and the lease termination of one Consolidated Hotel during this same period. The hotel operations segment included the operations of 28 Consolidated Hotels comprising 2,531 rooms at March 31, 1997, compared to 24 Consolidated Hotels comprising 2,516 rooms at March 31, 1996. After considering the Company's ownership interest in the majority-owned Consolidated Hotels, this translates to 2,216 and 2,143 equivalent owned rooms as of March 31, 1997 and 1996, respectively, or an increase of 3.4%. Hotel development revenue increased 54.1% to $6.1 million during the three months ended March 31, 1997, from $4.0 million during the three months ended March 31, 1996. The Company was constructing eight hotels for minority-owned entities or unrelated third parties during the first quarter of 1997, compared to fourteen hotels during the three months ended March 31, 1996. The Company also had several additional projects in various stages of pre-construction development during both three month periods. The increase in segment revenue was due primarily to the significant progress achieved during the first quarter of 1997 on the eight hotels compared to the progress achieved on the 14 hotels during the first quarter of 1996, and the nature of five construction contracts in progress during the 1996 first quarter whereby the Company recognized only a construction management fee instead of the full development revenues. Hotel management revenue increased 23.5% to $604,643 during the three months ended March 31, 1997, from $489,682 during the three months ended March 31, 1996. The number of hotels managed for third parties and minority-owned entities increased from 36 hotels, representing 3,447 rooms, at March 31, 1996 to 45 hotels, representing 3,767 rooms, at March 31, 1997. The addition of management contracts for 16 newly constructed hotels (968 rooms) was partially offset by the termination of four management contracts (426 rooms) with minority-owned entities as a result of the sale of the hotel, the termination of two management contracts (113 rooms) with minority-owned hotels which became Consolidated Hotels due to the Company acquiring additional ownership interests, and the termination of one management contract with an unrelated third party. Management fee revenues were also impacted in the first quarters of 1997 and 1996 by newly constructed hotels operating during their initial stabilization period when revenues are typically lower. The management contracts terminated, all of which were for hotels other than the AmeriHost Inn brand, were typically for larger hotels compared to the 16 hotels added during the twelve months ended March 31, 1997. The Company does not recognize management fees from Consolidated Hotels. Employee leasing revenue increased 12.0% to $2.9 million during the three months ended March 31, 1997, from $2.6 million during the three months ended March 31, 1996, due primarily to the addition of hotels managed for third parties and minority-owned entities as described above, and the associated increase in payroll costs which is the basis for the employee leasing revenue. Total operating costs and expenses increased 29.9% to $14.0 million (86.9% of total revenues) during the three and months ended March 31, 1997, from $10.8 million (85.0% of total revenues) during the three months ended March 31, 1996. Operating costs and expenses in the hotel operations segment increased 17.0% to $5.5 million during the three months ended March 31, 1997, from $4.7 million during the three months ended March 31, 1996, resulting primarily from the net addition of four Consolidated Hotels to this segment and is directly related to the 15.1% increase in segment revenue during the three months ended March 31, 1997. Hotel operations segment operating costs and expenses as a percentage of segment revenue increased to 86.3% during the three months ended March 31, 1997, from 84.9% during the three months ended March 31, 1996, due primarily to a significant number of hotels operating during their initial stabilization period when revenues are typically lower. Operating costs and expenses for the hotel development segment increased 66.2% to $5.2 million during the three months ended March 31, 1997, from $3.1 million during the three months ended March 31, 1996, consistent with the 54.1% increase in hotel development revenues. Operating costs and expenses in the hotel development segment as a percentage of segment revenue increased to 84.4% during the three months ended March 31, 1997, from 78.2% during the three months ended March 31, 1996. The first quarter of 1997 contained a significant level of construction activity which has high operating costs in relation to the revenue recognized. The first quarter of 1996 also contained a significant level of construction activity, however certain contracts were accounted for as a construction manager where the operating costs are significantly lower in relation to the revenue recognized. Hotel management segment operating costs and expenses increased 10.7% to $412,390 during the three months ended March 31, 1997, from $372,651 during the three months ended March 31, 1996 consistent with the 23.5% increase in segment revenues, and partially offset by the termination in the first quarter of 1997 of certain contractual payments which had been made to co-managers. Employee leasing operating costs and expenses increased 12.1% to $2.8 million during the three months ended March 31, 1997, from $2.5 million during the three months ended March 31, 1996, and is consistent with the 12.0% increase in segment revenue. Depreciation and amortization expense increased 44.0% to $1.2 million during the three months ended March 31, 1997, from $802,815 during the three months ended March 31, 1996. This increase was primarily attributable to the net addition of four Consolidated Hotels to the hotel operations segment and the resulting depreciation and amortization therefrom. Leasehold rents - hotels increased 19.8% to $534,632 during the three months ended March 31, 1997, from $446,130 during the three months ended March 31, 1996. The increase during the first quarter of 1997 compared to the first quarter of 1996 was due primarily to the increase in percentage rents for certain hotels which are based on the hotel's operating revenues. During March 1997, one leased Consolidated Hotel was sold and the lease for another Consolidated Hotel was terminated. Corporate general and administrative expense increased 20.1% to $582,150 during the three months ended March 31, 1997, from $484,652 during the three months ended March 31, 1996. The increase was due primarily to the Company's overall growth. The Company incurred an operating loss of ($168,667) during the three months ended March 31, 1997, compared to operating income of $159,881 during the three months ended March 31, 1996. Operating loss from the hotel operations segment increased to ($683,946) during the three months ended March 31, 1997 from ($303,039) during the three months ended March 31, 1996, resulting primarily from the increased impact of seasonality associated with the net addition of four Consolidated Hotels from April 1, 1996 to March 31, 1997 and the impact of the significant number of Consolidated Hotels operating during their initial stabilization period during the first quarter of 1997. Operating income from the hotel development segment increased 10.7% to $940,214 during the first quarter of 1997 compared to $848,996 during the first quarter of 1996. Although more hotels were under construction during the first quarter of 1996, the Company made greater progress on the projects under construction and development during the 1997 first quarter, compared to the progress made on the projects under construction and development during the 1996 first quarter. The hotel management segment generated operating income of $115,014 during the three months ended March 31, 1997 compared to $61,379 during the three months ended March 31, 1996. This increase was due primarily to the net addition of nine hotel management contracts with minority-owned entities during the twelve month period ended March 31, 1997. Employee leasing operating income increased slightly during the first quarter, to $69,795 in 1997 from $64,105 in 1996. Interest expense was $810,007 during the three months ended March 31, 1997, as compared to $665,173 during the three months ended March 31, 1996. This increase was primarily attributable to the increase in mortgage financing for newly constructed Consolidated Hotels. The Company's share of equity in income (loss) of affiliates increased 66.7% to ($241,101) during the three months ended March 31, 1997, from ($144,638) during the three months ended March 31, 1996. The decrease in equity of affiliates was primarily due to the significant number of newly constructed minority-owned hotels which were operating during their initial stabilization period when revenues are typically lower and the increasing impact of seasonality as the number of minority-owned hotels increases. Distributions from affiliates were $21,515 in the first quarter of 1997 compared to $107,044 in the first quarter of 1996. LIQUIDITY AND CAPITAL RESOURCES The Company has four main sources of cash from operating activities: (i) revenues from hotel operations; (ii) fees from development, construction and renovation projects; (iii) fees from management contracts; and (iv) fees from employee leasing services. Cash from hotel operations is typically received at the time the guest checks out of the hotel. A portion of the Company's hotel operations revenues is generated through other businesses and contracts and are usually paid within 30 to 45 days from billing. Fees from development, construction and renovation projects are typically received within 15 to 45 days from billing. Due to the procedures in place for processing its construction draws, the Company typically does not pay its contractors until the Company receives its draw from the equity or lending source. Management fee revenues are typically received by the Company within five working days from the end of each month. Cash from the Company's employee leasing segment is typically received 24 to 48 hours prior to the pay date. During the first three months of 1997, the Company used cash for operations of $1.7 million, compared to $654,658 in the first three months of 1996, or an increase in cash used in operations of $999,110. The decrease in cash flow from operations during the first three months of 1997, when compared to 1996, can be attributed to the increasing impact of seasonality and the significant number of hotels operating during their initial stabilization period as the number of Consolidated Hotels increased from 24 hotels at March 31, 1996 to 28 hotels at March 31, 1997. The impact from hotel operations was partially offset by a significant amount of hotel development and construction activity in both the first quarter of 1997 and 1996. The Company invests cash in three principal areas: (i) the purchase of property and equipment through the construction and renovation of Consolidated Hotels; (ii) the purchase of equity interests in hotels; and (iii) loans to affiliated and non-affiliated hotels for the purpose of construction, renovation and working capital. During the first three months of 1997, the Company used $3.5 million in investing activities compared to $1.7 million in the first three months of 1996. During the first three months of 1997, the Company used $5.2 million to purchase property and equipment for Consolidated Hotels, used $1.4 million for the termination of certain contractual agreements, used $91,895 for loans, net of loan collections, and received $3.4 million from the sale of hotels. During the first three months of 1996, the Company used cash primarily for the purchase of $1.3 million in property and equipment for Consolidated Hotels, used $250,000 for the purchase of minority equity interests in hotels, and used $70,467 for loans, net of repayments from minority-owned hotels. In addition, the Company received distributions from investments in minority-owned hotels of $21,515 in the first three months of 1997, compared to $107,044 in the first three months of 1996. Cash received from financing activities was $5.2 million during the first three months of 1997 compared to $2.5 million during the first three months of 1996. In 1997, the primary factors were net proceeds of $1.8 million from the mortgage financing of Consolidated Hotels, net of principal repayments, net proceeds of $789,075 from the exercise of common stock purchase options, and $2.6 million in net proceeds from the Company's operating line-of-credit. In 1996, the contributing factors were proceeds of $1.5 million from the mortgage financing of Consolidated Hotels, net of principal repayments, and net proceeds of $1.1 million from the Company's operating line-of-credit. At March 31, 1997, the Company had $4.3 million outstanding under its operating line-of-credit. The Company's line-of-credit was renewed and increased effective May 1, 1996 to $5.0 million. The operating line-of-credit (i) is collateralized by a security interest in certain of the Company's assets, including its interest in various joint ventures; (ii) bears interest at an annual rate equal to the lending bank's base rate plus 1/2% (with a minimum interest rate of 7.5%); and (iii) matures June 1, 1997. The same bank providing the operating line-of-credit also provides a $7.5 million line-of-credit to be used for construction financing on hotel projects, of which $5.0 million must be used on contracts which have firm commitments for permanent mortgage financing when the construction is completed. There was no balance outstanding on the construction line-of-credit at March 31, 1997. At March 31, 1997, the Company also had outstanding $2.25 million of its 7% Subordinated Notes which are unsecured obligations due October 9, 1999 and which pay interest quarterly. Pursuant to the terms of the 7% Subordinated Notes, no dividends may be paid on any capital stock of the Company until the 7% Subordinated Notes have been paid in full. At the Company's sole discretion, the 7% Subordinated Notes may be prepaid at any time without prepayment penalty. The Company expects cash from operations to be sufficient to pay all operating and interest expenses in 1997. SEASONALITY The lodging industry, in general, is seasonal in nature. The Company's hotel revenues are generally greater in the second and third calendar quarters than in the first and fourth quarters due to weather conditions in the markets in which the Company's hotels are located and general business and leisure travel trends. This seasonality can be expected to continue to cause quarterly fluctuations in the Company's revenues, and is expected to have an increased impact as the number of Consolidated Hotels increases. Quarterly earnings may also be adversely affected by events beyond the Company's control such as extreme weather conditions, economic factors and other factors affecting travel. In addition, hotel construction is seasonal, depending upon the geographic location of the construction projects. Construction activity in the Midwest may be slower in the first and fourth calendar quarters due to weather conditions. INFLATION Management does not believe that inflation has had, or is expected to have, any significant adverse impact on the Company's financial condition or results of operations for the periods presented. IMPACT OF NEW ACCOUNTING STANDARDS In February 1997, the Financial Accounting Standards Board issued SFAS No. 128, "Earnings Per Share." The new standard simplifies the methods for computing earnings per share and requires the presentation of two new amounts, basic and diluted earnings per share. When the Company adopts SFAS No. 128, it expects to report the following restated amounts for the three months ended March 31: 1997 1996 Basic $ (0.08) $ (0.02) Diluted $ (0.08) $ (0.02) PRIVATE SECURITIES LITIGATION REFORM ACT OF 1996 All statements contained herein that are not historical facts, including but not limited to, statements regarding the Company's hotels under construction and the operation of AmeriHost Inn hotels are based on current expectations. These statements are forward looking in nature and involve a number of risks and uncertainties. Actual results may differ materially. Among the factors that could cause actual results to differ materially are the following: the availability of sufficient capital to finance the Company's business plan on terms satisfactory to the Company; competitive factors, such as the introduction of new hotels or renovation of existing hotels in the same markets; changes in travel patterns which could affect demand for the Company's hotels; changes in development and operating costs, including labor, construction, land, equipment, and capital costs; general business and economic conditions; and other risk factors described from time to time in the Company's reports filed with the Securities and Exchange Commission. The Company wishes to caution readers not to place undue reliance on any such forward looking statements, which statements are made pursuant to the Private Securities Litigation Reform Act of 1996, and as such, speak only as of the date made. AMERIHOST PROPERTIES, INC. AND SUBSIDIARIES SCHEDULE OF EARNINGS BEFORE INTEREST/RENT, TAXES AND DEPRECIATION/AMORTIZATION FOR THE THREE MONTHS ENDED MARCH 31, (UNAUDITED)
1997 1996 Revenue $ 16,069,290 $ 12,644,568 Operating costs and expenses 13,964,882 10,751,090 2,104,408 1,893,478 Corporate general and administrative (582,150) (484,652) Equity in net income and losses of affiliates (241,101) (144,638) Earnings before minority interests 1,281,157 1,264,188 Minority interests in earnings of consolidated subsidiaries and partnerships, excluding minority interest in gain on sale of hotel 205,314 204,001 Earnings before interest/rent, taxes and depreciation/amortization $ 1,486,471 $ 1,468,189
PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K: (a) Exhibits: Exhibit No. 4.a Warrants to purchase common stock - Michael P. Holtz 4.b Warrants to purchase common stock - Russell J. Cerqua 27.0 Financial Data Schedule (b)Reports on Form 8-K: There were no reports on Form 8-K filed during this period covered by this report. Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AMERIHOST PROPERTIES, INC. Registrant Date: May 14, 1997 By: /s/ Russell J. Cerqua Russell J. Cerqua Treasurer/Executive Vice President, Finance By: /s/ James B. Dale James B. Dale Vice President, Finance/Corporate Controller EX-4.A 2 THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT OR LAWS, THE RULES AND REGULATIONS THEREUNDER OR THE PROVISIONS OF THIS WARRANT. WARRANT TO PURCHASE 50,000 SHARES OF COMMON STOCK OF AMERIHOST PROPERTIES, INC. ISSUED TO MICHAEL P. HOLTZ DATED: FEBRUARY 3, 1997 NO. 0297-MPH (INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE) THIS IS TO CERTIFY THAT MICHAEL P. HOLTZ (or his or its registered assigns, herein referred to as the "Warrantholder") is entitled, upon the due exercise hereof and subject to the terms and conditions hereof, anytime commencing on the date of this Certificate (the "Commencement Date"), and ending on the tenth anniversary of the Commencement Date (the "Expiration Date"), to purchase from AMERIHOST PROPERTIES, INC., a Delaware corporation (the "Company"), and the Company shall issue and sell to the Warrantholder, the number of shares of common stock, $.005 par value per share (the "Common Stock"), of the Company (the "Shares") set forth above upon surrender hereof, with the form of election to purchase included herein completed and duly executed, at the office of the Company, and upon simultaneous payment therefor at an exercise price per Share equal to $1.53125 per Share (hereinafter referred to as the "Purchase Price") in cash and/or check payable to the order of the Company. The number and Purchase Price of the Shares are subject to adjustment as provided herein. 1. The Warrantholder acknowledges that it may sell, transfer, assign, hypothecate or otherwise dispose of this Warrant after the Commencement Date, provided such sale, transfer, assignment, hypothecation or other disposition is in accordance with applicable federal and state securities laws and the Company agrees that the Warrantholder has complied with such laws. In connection therewith the Company may require an opinion of counsel and/or other documentation evidencing compliance with such laws. Notwithstanding the foregoing, the Warrantholder acknowledges that it may not sell, transfer or assign this Warrant to other than the original holder's estate or heirs prior to the second anniversary of the Commencement Date. 2. Subject to the restrictions set forth above and in Section 3 hereof, upon surrender of this Warrant, and payment of the Purchase Price as aforesaid, the Company shall issue and deliver with all reasonable dispatch the certificate(s) for the Shares to or upon the written order of the holder of this Warrant and in such name or names as such holder may designate. Such certificate(s) shall represent the number of Shares issuable upon the exercise of the Warrants embodied herein, together with a cash amount (if the holder has so elected in accordance with the provisions of Section 9 hereof) in respect of any fraction of a Share otherwise issuable upon such surrender. Certificate(s) representing the Shares shall be deemed to have been issued and the person so designated to be named therein shall be deemed to have become a holder of record of such Shares as of the date of the surrender of this Warrant and payment of the Purchase Price as aforesaid; provided, however that if, at the date of surrender of this Warrant and payment of such Purchase Price, the transfer books for the Shares or other classes of stock purchasable upon the exercise of this Warrant shall be closed, the certificate(s) for the Shares in respect of which this Warrant is then exercised shall be issuable as of the date on which such books shall next be opened, and until such date the Company shall be under no duty to deliver any certificate(s) for such Shares. This Warrant shall be exercisable, at the election of the registered holder hereof, either as an entirety or from time to time for part of the number of Shares specified herein, but in no event shall fractional Shares be issued with regard to the exercise of this Warrant. In the event that this Warrant is exercised at any time prior to the close of business on the Expiration Date, a new Warrant shall be issued to such holder for the remaining number of Shares, if any, purchasable pursuant hereto. The Company shall cancel this Warrant when it is surrendered upon exercise. Prior to due presentment for registration of transfer of this Warrant, the Company shall deem and treat the Warrantholder in whose name this Warrant shall be issued as the absolute owner of this Warrant (notwithstanding any notation of ownership or other writing on this Warrant made by anyone other than the Company) for the purpose of any exercise hereof, of any distribution to the holder hereof, and for all other purposes, and the Company shall not be affected by any notice to the contrary. 3. The Company shall pay all documentary stamp taxes, if any, attributable to the initial issuance of the Shares issuable upon the exercise of this Warrant, provided, however, that the Company shall not be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issue or delivery of any certificate(s) for Shares in a name other than that of the Warrantholder upon the exercise of this Warrant, and in such case the Company shall not be required to issue or deliver any certificates for Shares until or unless the person or persons requesting the issuance have paid to the Company the amount of such tax or have established to the Company's satisfaction that such tax has been paid. 4. In case this Warrant shall be mutilated, lost, stolen or destroyed, the Company shall issue and deliver, in exchange and substitution for and upon cancellation of a mutilated Warrant, or in lieu of and substitution for a Warrant lost, stolen or destroyed, a new Warrant of like tenor and representing an equivalent number of Shares purchasable upon exercise at equivalent exercise times and exercise prices, but only upon receipt of evidence satisfactory to the Company of such loss, theft or destruction of such Warrant and reasonable indemnity or bond, if requested, also satisfactory to the Company. Applicants for such substitute Warrant shall also comply with such other reasonable conditions and pay such other reasonable charges as the Company may prescribe. 5. (a) For the purpose of enabling it to satisfy any obligation to issue Shares upon the exercise of this Warrant, the Company shall at all times through the Expiration Date, reserve and keep available, free from pre-emptive rights and out of its aggregate authorized but unissued shares of Common Stock, the number of Shares deliverable upon the exercise of this Warrant. (b) Before taking any action which would cause an adjustment pursuant to the terms set forth herein reducing the Purchase Price attributable to any Shares below the then par value (if any) of such Shares, the Company shall take any corporate action which may, in the opinion of its counsel (which may be counsel regularly engaged by the Company), be necessary in order that the Company may validly and legally issue fully paid and nonassessable Shares at the Purchase Price as so adjusted. (c) The Company covenants that all Shares issued upon exercise of the Warrants shall, upon issuance in accordance with the terms hereof, be fully paid and nonassessable and free from all pre-emptive rights and taxes, liens, charges and security interests created by the Company with respect to the issuance and holding thereof. (d) After the Expiration Date, no Shares shall be subject to reservation in respect of this Warrant. 6. Unless this Warrant is surrendered and payment made as herein provided before the Expiration Date, this Warrant will become wholly void and all rights evidenced hereby will terminate. 7. Subject to the provisions of Section 2 above, this Warrant may be exchanged for a number of Warrants of the same tenor as this Warrant for the purchase in the aggregate of the same number of Shares of the Company as are purchasable upon the exercise of this Warrant, upon surrender hereof at the office of the Company with written instructions as to the denominations of the Warrants to be issued in exchange. 8. (a) In case the Company shall at any time after the date of this Agreement (i) declare a dividend on the Common Stock of the Company payable in shares of the Company's capital stock (whether in shares of Common Stock or of capital stock of any other class), (ii) subdivide the outstanding Common Stock, (iii) reverse split the outstanding Common Stock into a smaller number of shares or (iv) issue any shares of the Company's capital stock in a reclassification of the Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing corporation), the Purchase Price in effect with respect to each Share covered hereby, whether or not such Share can then be purchased pursuant to the terms of this Warrant, at the time of the record date for such dividend or of the effective date of such subdivision, reverse split or reclassification, and/or the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Warrant exercised after such time shall be entitled to receive the aggregate number and kind of securities which, if such Warrant had been exercised immediately prior to such date, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, reverse split or reclassification. Such adjustments shall be made successively whenever any event listed above shall occur. (b) In case the Company shall fix a record date for the making of a distribution to all holders of Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than cash dividends or cash distributions payable out of earnings (or consolidated earnings if the Company shall have one or more subsidiaries) or earned surplus, dividends payable in Common Stock or distributions of scrip) or subscription rights, options or warrants, the Purchase Price with respect to each Share covered hereby to be in effect after such record date (whether or not such Share can then be purchased pursuant to the terms of this Warrant) shall be determined by multiplying the Purchase Price for such Share in effect immediately prior to such record date by a fraction, of which the numerator shall be the current market price for a Share (as defined in Section 8(c) hereof) on such record date less the fair market value (as determined by the Board of Directors of the Company, whose determination shall be conclusive) of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights, options or warrants applicable to one Share and of which the denominator shall be the current market price for a Share. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Purchase Price with respect to each Share covered hereby shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. (c) For the purpose of any computation under Section 8(b) hereof, the current market price per Share on any date shall be (i) the average of the last reported sale prices for the past thirty trading days as reported on a national securities exchange or (ii) the average of the last reported bid and asked prices for the past thirty trading days if the Company's Common Stock is reported on the NASDAQ or (iii) if the Company's Common Stock is not on the NASDAQ, the average of the last reported sale price for the past thirty trading days as reported in the "pink sheets" (or an equivalent quotation system) for over-the-counter stocks or, if the Company's Common Stock is not trading, such value as the Board of Directors of the Company, in good faith, shall determine. (d) No adjustment in the Purchase Price with respect to any Share covered hereby shall be required unless such adjustment would require a decrease of at least one cent ($0.01) in such price; provided, however, that any adjustment which (by reason of this Section 8(d)) is not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 8 shall be made to the nearest cent or to the nearest hundredth of a Share, as the case may be, but in no event shall the Company be obligated to issue fractional Shares or fractional portions of any securities upon the exercise of any Warrant. (e) In the event that at any time, as a result of an adjustment made pursuant to Section 8(a) hereof, the holder of any Warrant thereafter exercised shall become entitled to receive any shares of capital stock or warrants or other securities of the Company other than the Shares, thereafter the number of such other shares of capital stock or warrants or other securities so receivable upon exercise of any Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Shares contained in this Section 8, and the provisions of this Warrant with respect to the Shares shall apply, to the extent applicable, on like terms to any such other shares of capital stock or warrants or other securities. (f) In any case in which this Section 8 shall require that an adjustment in the Purchase Price with respect to any Shares covered hereby be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event the issuing to the holder of any Warrants exercised after such record date Shares and such other shares of capital stock or warrants or other securities of the Company, if any, issuable upon such exercise over and above the Shares, on the basis of the Purchase Price with respect to such Shares in effect prior to such adjustment; provided, however that the Company shall deliver to the holder a due bill or other appropriate instrument evidencing such holder's right to receive such shares of capital stock or warrants or other securities upon the occurrence of the event requiring such adjustment. (g) Upon each adjustment of the Purchase Price with respect to each Share covered hereby as a result of the calculations made in Section 8(b) hereof, each Warrant outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase (but only at the applicable times specified herein), that number of Shares (calculated to the nearest hundredth) obtained by (A) multiplying the number of Shares purchasable at the Purchase Price with respect to such Shares upon exercise of a Warrant immediately prior to such adjustment of the number of Shares by the Purchase Price with respect to such Shares in effect immediately prior to such adjustment of the Purchase Price with respect to such Shares and (B) dividing the product so obtained by the Purchase Price with respect to such Shares in effect immediately after such adjustment of the Purchase Price with respect to such Shares. Such adjustments and calculations shall be made with respect to all Shares covered hereby and not only with respect to Shares which are then eligible for purchase pursuant to the terms hereof; however, no such adjustment or calculation shall have the effect of accelerating the vesting schedule set forth above. Additionally, all such adjustments and calculations shall be made separately with respect to Shares purchasable at differing exercise prices pursuant to the terms hereof. (h) In case of any capital reorganization of the Company, or of any reclassification of the Common Stock (other than a change in par value, or from par to no par value, or from no par value to par value, or as a result of subdivision or combination), or in case of the consolidation of the Company with or the merger of the Company into any other corporation (other than a consolidation or merger in which the Company is the continuing corporation) or of the sale of the properties and assets of the Company as, or substantially as, an entirety to any other corporation, each Warrant shall after such reorganization, reclassification, consolidation, merger or sale be exercisable (but only at the applicable times specified herein), upon the terms and conditions specified herein, for the number of shares of Common Stock or other capital stock or warrants or other securities or property to which a holder of the number of Shares purchasable (at the time of such reorganization, reclassification, consolidation, merger or sale, whether or not such right to purchase can then be exercised pursuant to the terms hereof) upon exercise of such Warrant would have been entitled upon such reorganization, reclassification, consolidation, merger or sale; and in any such case, if necessary, the provisions set forth in this Section 8(h) with respect to the rights and interests thereafter of the registered holders of all Warrants purchasable upon the exercise of any portion of this Warrant shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to any Shares of Common Stock or other capital stock or warrants or other securities or property thereafter deliverable on the exercise of the Warrants. The subdivision, reverse split or combination of shares of Common Stock at any time outstanding into a greater or lesser number of shares shall not be deemed to be a reclassification of the Common Stock for the purposes of this Section 8(h). The Company shall not effect any such consolidation or merger or sale unless prior to or simultaneously with the consummation thereof, the successor corporation (if other than the Company) resulting from such consolidation, or merger or the corporation purchasing such assets or other appropriate corporation or entity shall assume, by written instrument executed and delivered to the registered holders of all Warrants, the obligation to deliver to the holders of all Warrants such shares of Common Stock or other capital stock, or warrants or securities or assets as, in accordance with the foregoing provisions, such holder may be entitled to purchase, and any other obligations of the Company under this Warrant. (i) In no event shall an adjustment be made in the Purchase Price or the number of Shares purchasable upon the exercise of this Warrant because the Company issues, in exchange for cash, property or services, Shares, or any securities convertible into or exchangeable for Shares, or securities carrying the right to purchase Shares or such convertible or exchangeable securities; it being understood that the adjustment provided for in this Section 8 shall be made upon the conversion, exchange or exercise (as applicable) of such securities. 9. (a) Upon exercise the Company shall not be required to issue fractions of Shares. In lieu of such fractional Shares, the holders of Warrants shall receive an amount in cash equal to the same fraction of the current market value of one whole Share. For purposes of this Section 9, the current market value of one whole Share shall be determined pursuant to Section 8(c) hereof. All calculations under this Section 9 shall be made to the nearest cent. (b) The exercise price may be paid by check or, at the option of the holder, the holder may instruct the Company in writing to retain certain shares to be received upon exercise and to apply the current value of those shares (based on the closing bid price reported on NASDAQ on the preceding business day) to the payment of the total exercise price. 10. The holder of a Warrant shall not be entitled to any rights of a shareholder of the Company with respect to any Shares purchasable upon the exercise thereof, including voting, dividend or dissolution rights, until such Shares have been paid for in full and issued to such holder. As soon as practicable after such exercise, the Company shall deliver a certificate or certificates for the securities issuable upon such exercise, all of which shall be fully paid and nonassessable, to the person or persons entitled to receive the same; provided, however, that such certificate or certificates delivered to the holder of the surrendered Warrant shall bear a legend reading substantially as follows: No sale, offer to sell or transfer of these securities or this certificate or of any shares or other securities issued in exchange for or in respect of these securities shall be made unless a registration statement under the Securities Act of 1933 (the "Act"), as amended, and any applicable state securities laws, with respect to such securities, is in effect or an exemption from the registration requirements of the Act and such laws is then in fact applicable to such securities, to the Company's satisfaction. 11. (a) Upon any adjustment of the Purchase Price with respect to any Share covered hereby pursuant to Section 8 hereof, the Company within ninety (90) calendar days thereafter shall have on file for inspection by the holder hereof a certificate of the Board of Directors of the Company setting forth the Purchase Price with respect to each Share covered hereby after such adjustment and setting forth in reasonable detail the method of calculation and the facts upon which such calculations are based and setting forth the number of Shares purchasable upon exercise of a Warrant after such adjustment in the Purchase Price, which certificate shall be conclusive evidence of the correctness of the matters set forth therein. (b) In case: (1) the Company shall authorize the issuance to all holders of Common Stock of rights, options or warrants to subscribe for or purchase capital stock of the Company or of any other subscription rights, options or warrants; or (2) the Company shall authorize the distribution to all holders of Common Stock of evidences of its indebtedness or assets (other than cash dividends or cash distributions payable out of earnings (or consolidated earnings if the Company shall have one or more subsidiaries) or earned surplus or dividends payable in Common Stock or distributions of scrip); or (3) of any consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, or of the conveyance or transfer of the properties and assets of the Company substantially as an entirety, or of any capital reorganization or any reclassification of the Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination); or (4) of the voluntary or involuntary dissolution, liquidation or winding up of the Company; or (5) the Company proposes to take any other action which would require an adjustment of the Purchase Price pursuant to Section 8 hereof; then the Company shall give to the holder of a Warrant at his, her or its address appearing below at least twenty (20) calendar days prior to the applicable record date hereinafter specified in (i) or (ii) below, by first-class mail, postage prepaid, a written notice stating (i) the date as of which the holders of record of shares of Common Stock to be entitled to receive any such rights, options, warrants or distribution are to be determined or (ii) the date on which any such consolidation, merger, conveyance, transfer, reorganization, reclassification, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of record of shares of Common Stock shall be entitled to exchange such shares for securities or other property, if any, deliverable upon such consolidation, merger, conveyance, transfer, reorganization, reclassification, dissolution, liquidation or winding up. The failure to give the notice required by this Section 11(b) or any defect therein shall not affect the legality or validity of any distribution right, option, warrant, consolidation, merger, conveyance, transfer, reorganization, reclassification, dissolution, liquidation or winding up or the vote upon any action. (c) Nothing contained herein shall be construed as conferring upon the holder of a Warrant with respect to the Shares the right to vote or to consent or to receive notice as a stockholder in respect of the meetings of stockholders or the election of directors of the Company or any other matter, or any rights whatsoever as a stockholder of the Company. 12. The Company agrees that if, at any time, within the ten (10) year period commencing February 3, 1997, it should file a Registration Statement with the Securities and Exchange Commission (the "Commission") pursuant to the Act and the underwriter(s) for the prospective offering agrees to permit shareholders holding Shares or other securities received upon exercise of the Warrants to include all or a portion of their Shares or other securities in the Registration Statement and register such Shares or other securities for sale, the Company, at its own expense, will offer to the holders of Warrants, not less than 30 days prior to the filing of such Registration Statement, the opportunity to register all or a portion of the Shares that the holders of Warrants have received upon exercise of the Warrants prior to the time of such filing pro rata with all other holders of Shares of the Company that have piggyback registration rights or are otherwise registering their Shares for sale to the public. The Company undertakes no obligation to file a Registration Statement. Further, the Company undertakes no obligation to maintain a current Registration Statement. The Warrantholder's rights provided for above are not applicable to a Registration Statement filed by the Company with the Commission on Forms S-4 or S-8 or any other inapplicable form. 13. Any notice, request, demand or other communication pursuant to the terms of this Warrant shall be in writing and shall be sufficiently given or made when delivered or mailed by first-class or registered mail, postage prepaid, if to the Company addressed to: AMERIHOST PROPERTIES, INC. 2400 East Devon Avenue Suite 280 Des Plaines, Illinois 60018 Attention: Secretary with a copy to: Helen R. Friedli, P.C. McDermott, Will & Emery 227 West Monroe Avenue Chicago, Illinois 60606 or to such other address or such other counsel as the Company may designate by written notice to the holder of a Warrant, and if to the holder of a Warrant at his or its registered address on the records of the Company. 14. All the covenants and provisions herein by or for the benefit of the Company shall bind and inure to the benefit of its respective successors and assigns to the extent permitted hereunder and all of the covenants and provisions herein by or for the benefit of the holder hereof shall inure to the benefit of such holder's successors, legal representatives, heirs or assigns as permitted herein. 15. This Warrant shall be deemed to be a contract made under the laws of the State of Illinois for all purposes and shall be construed in accordance with the internal laws of such State. 16. Nothing in this Warrant shall be construed to give to any person or corporation other than the Company and the holder of this Warrant any legal or equitable right, remedy or claim under this Warrant; but this Warrant shall be for the sole and exclusive benefit of the Company and the holder of this Warrant. * * * IN WITNESS WHEREOF, an authorized officer of the Company has signed this Warrant. AMERIHOST PROPERTIES, INC. By: President ELECTION TO PURCHASE (To be executed by the holder only if he, she or it desires to exercise Warrants evidenced by the original Warrant attached hereto.) TO: AMERIHOST PROPERTIES, INC. 2400 East Devon Avenue Suite 280 Des Plaines, Illinois 60018 The undersigned hereby (1) irrevocably elects to exercise ____________ Warrants, evidenced by the original Warrant attached hereto, for and to purchase thereunder Shares issuable upon exercise of said Warrants, (2) makes payment in full of the Purchase Price of such Shares, (3) requests that certificates for the Shares be issued in the name of: _________________________________________________________________ (Please print name and address) _________________________________________________________________ _________________________________________________________________ ________________________________ (Please print Social Security or Tax Identification Number) and, (4) if said number of Warrants shall not be all the Warrants evidenced by the attached original Warrant, requests that a new Warrant evidencing Warrants not so exercised be issued in the name of and delivered to: __________________________________________________________________ (Please print name and address) __________________________________________________________________ __________________________________________________________________ In lieu of receipt of a fractional Share the undersigned hereby elects (check the appropriate line): (i) to receive a cash payment, and the check representing payment thereof should be made payable to_________________________________________________________ __________________________________________________________________________ (Please print name and address) and should be delivered to _________________________________________________ ________________________________________________________________________ ____________________________________________________________________; or (ii) to credit the amount of such payment against the Purchase Price payable for the Shares issuable upon the exercise of said Warrants. DATED: , Signature: NOTICE: The above signature must correspond with the name as written upon the face of the attached Warrant in every particular, without alteration or enlargement or any change whatsoever. EX-4.B 3 THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT OR LAWS, THE RULES AND REGULATIONS THEREUNDER OR THE PROVISIONS OF THIS WARRANT. WARRANT TO PURCHASE 15,625 SHARES OF COMMON STOCK OF AMERIHOST PROPERTIES, INC. ISSUED TO RUSSELL J. CERQUA DATED: FEBRUARY 3, 1997 NO. 0297-RJC (INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE) THIS IS TO CERTIFY THAT RUSSELL J. CERQUA (or his or its registered assigns, herein referred to as the "Warrantholder") is entitled, upon the due exercise hereof and subject to the terms and conditions hereof, anytime commencing on the date of this Certificate (the "Commencement Date"), and ending on the tenth anniversary of the Commencement Date (the "Expiration Date"), to purchase from AMERIHOST PROPERTIES, INC., a Delaware corporation (the "Company"), and the Company shall issue and sell to the Warrantholder, the number of shares of common stock, $.005 par value per share (the "Common Stock"), of the Company (the "Shares") set forth above upon surrender hereof, with the form of election to purchase included herein completed and duly executed, at the office of the Company, and upon simultaneous payment therefor at an exercise price per Share equal to $1.53125 per Share (hereinafter referred to as the "Purchase Price") in cash and/or check payable to the order of the Company. The number and Purchase Price of the Shares are subject to adjustment as provided herein. 1. The Warrantholder acknowledges that it may sell, transfer, assign, hypothecate or otherwise dispose of this Warrant after the Commencement Date, provided such sale, transfer, assignment, hypothecation or other disposition is in accordance with applicable federal and state securities laws and the Company agrees that the Warrantholder has complied with such laws. In connection therewith the Company may require an opinion of counsel and/or other documentation evidencing compliance with such laws. Notwithstanding the foregoing, the Warrantholder acknowledges that it may not sell, transfer or assign this Warrant to other than the original holder's estate or heirs prior to the second anniversary of the Commencement Date. 2. Subject to the restrictions set forth above and in Section 3 hereof, upon surrender of this Warrant, and payment of the Purchase Price as aforesaid, the Company shall issue and deliver with all reasonable dispatch the certificate(s) for the Shares to or upon the written order of the holder of this Warrant and in such name or names as such holder may designate. Such certificate(s) shall represent the number of Shares issuable upon the exercise of the Warrants embodied herein, together with a cash amount (if the holder has so elected in accordance with the provisions of Section 9 hereof) in respect of any fraction of a Share otherwise issuable upon such surrender. Certificate(s) representing the Shares shall be deemed to have been issued and the person so designated to be named therein shall be deemed to have become a holder of record of such Shares as of the date of the surrender of this Warrant and payment of the Purchase Price as aforesaid; provided, however that if, at the date of surrender of this Warrant and payment of such Purchase Price, the transfer books for the Shares or other classes of stock purchasable upon the exercise of this Warrant shall be closed, the certificate(s) for the Shares in respect of which this Warrant is then exercised shall be issuable as of the date on which such books shall next be opened, and until such date the Company shall be under no duty to deliver any certificate(s) for such Shares. This Warrant shall be exercisable, at the election of the registered holder hereof, either as an entirety or from time to time for part of the number of Shares specified herein, but in no event shall fractional Shares be issued with regard to the exercise of this Warrant. In the event that this Warrant is exercised at any time prior to the close of business on the Expiration Date, a new Warrant shall be issued to such holder for the remaining number of Shares, if any, purchasable pursuant hereto. The Company shall cancel this Warrant when it is surrendered upon exercise. Prior to due presentment for registration of transfer of this Warrant, the Company shall deem and treat the Warrantholder in whose name this Warrant shall be issued as the absolute owner of this Warrant (notwithstanding any notation of ownership or other writing on this Warrant made by anyone other than the Company) for the purpose of any exercise hereof, of any distribution to the holder hereof, and for all other purposes, and the Company shall not be affected by any notice to the contrary. 3. The Company shall pay all documentary stamp taxes, if any, attributable to the initial issuance of the Shares issuable upon the exercise of this Warrant, provided, however, that the Company shall not be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issue or delivery of any certificate(s) for Shares in a name other than that of the Warrantholder upon the exercise of this Warrant, and in such case the Company shall not be required to issue or deliver any certificates for Shares until or unless the person or persons requesting the issuance have paid to the Company the amount of such tax or have established to the Company's satisfaction that such tax has been paid. 4. In case this Warrant shall be mutilated, lost, stolen or destroyed, the Company shall issue and deliver, in exchange and substitution for and upon cancellation of a mutilated Warrant, or in lieu of and substitution for a Warrant lost, stolen or destroyed, a new Warrant of like tenor and representing an equivalent number of Shares purchasable upon exercise at equivalent exercise times and exercise prices, but only upon receipt of evidence satisfactory to the Company of such loss, theft or destruction of such Warrant and reasonable indemnity or bond, if requested, also satisfactory to the Company. Applicants for such substitute Warrant shall also comply with such other reasonable conditions and pay such other reasonable charges as the Company may prescribe. 5. (a) For the purpose of enabling it to satisfy any obligation to issue Shares upon the exercise of this Warrant, the Company shall at all times through the Expiration Date, reserve and keep available, free from pre-emptive rights and out of its aggregate authorized but unissued shares of Common Stock, the number of Shares deliverable upon the exercise of this Warrant. (b) Before taking any action which would cause an adjustment pursuant to the terms set forth herein reducing the Purchase Price attributable to any Shares below the then par value (if any) of such Shares, the Company shall take any corporate action which may, in the opinion of its counsel (which may be counsel regularly engaged by the Company), be necessary in order that the Company may validly and legally issue fully paid and nonassessable Shares at the Purchase Price as so adjusted. (c) The Company covenants that all Shares issued upon exercise of the Warrants shall, upon issuance in accordance with the terms hereof, be fully paid and nonassessable and free from all pre-emptive rights and taxes, liens, charges and security interests created by the Company with respect to the issuance and holding thereof. (d) After the Expiration Date, no Shares shall be subject to reservation in respect of this Warrant. 6. Unless this Warrant is surrendered and payment made as herein provided before the Expiration Date, this Warrant will become wholly void and all rights evidenced hereby will terminate. 7. Subject to the provisions of Section 2 above, this Warrant may be exchanged for a number of Warrants of the same tenor as this Warrant for the purchase in the aggregate of the same number of Shares of the Company as are purchasable upon the exercise of this Warrant, upon surrender hereof at the office of the Company with written instructions as to the denominations of the Warrants to be issued in exchange. 8. (a) In case the Company shall at any time after the date of this Agreement (i) declare a dividend on the Common Stock of the Company payable in shares of the Company's capital stock (whether in shares of Common Stock or of capital stock of any other class), (ii) subdivide the outstanding Common Stock, (iii) reverse split the outstanding Common Stock into a smaller number of shares or (iv) issue any shares of the Company's capital stock in a reclassification of the Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing corporation), the Purchase Price in effect with respect to each Share covered hereby, whether or not such Share can then be purchased pursuant to the terms of this Warrant, at the time of the record date for such dividend or of the effective date of such subdivision, reverse split or reclassification, and/or the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Warrant exercised after such time shall be entitled to receive the aggregate number and kind of securities which, if such Warrant had been exercised immediately prior to such date, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, reverse split or reclassification. Such adjustments shall be made successively whenever any event listed above shall occur. (b) In case the Company shall fix a record date for the making of a distribution to all holders of Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than cash dividends or cash distributions payable out of earnings (or consolidated earnings if the Company shall have one or more subsidiaries) or earned surplus, dividends payable in Common Stock or distributions of scrip) or subscription rights, options or warrants, the Purchase Price with respect to each Share covered hereby to be in effect after such record date (whether or not such Share can then be purchased pursuant to the terms of this Warrant) shall be determined by multiplying the Purchase Price for such Share in effect immediately prior to such record date by a fraction, of which the numerator shall be the current market price for a Share (as defined in Section 8(c) hereof) on such record date less the fair market value (as determined by the Board of Directors of the Company, whose determination shall be conclusive) of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights, options or warrants applicable to one Share and of which the denominator shall be the current market price for a Share. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Purchase Price with respect to each Share covered hereby shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. (c) For the purpose of any computation under Section 8(b) hereof, the current market price per Share on any date shall be (i) the average of the last reported sale prices for the past thirty trading days as reported on a national securities exchange or (ii) the average of the last reported bid and asked prices for the past thirty trading days if the Company's Common Stock is reported on the NASDAQ or (iii) if the Company's Common Stock is not on the NASDAQ, the average of the last reported sale price for the past thirty trading days as reported in the "pink sheets" (or an equivalent quotation system) for over-the-counter stocks or, if the Company's Common Stock is not trading, such value as the Board of Directors of the Company, in good faith, shall determine. (d) No adjustment in the Purchase Price with respect to any Share covered hereby shall be required unless such adjustment would require a decrease of at least one cent ($0.01) in such price; provided, however, that any adjustment which (by reason of this Section 8(d)) is not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 8 shall be made to the nearest cent or to the nearest hundredth of a Share, as the case may be, but in no event shall the Company be obligated to issue fractional Shares or fractional portions of any securities upon the exercise of any Warrant. (e) In the event that at any time, as a result of an adjustment made pursuant to Section 8(a) hereof, the holder of any Warrant thereafter exercised shall become entitled to receive any shares of capital stock or warrants or other securities of the Company other than the Shares, thereafter the number of such other shares of capital stock or warrants or other securities so receivable upon exercise of any Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Shares contained in this Section 8, and the provisions of this Warrant with respect to the Shares shall apply, to the extent applicable, on like terms to any such other shares of capital stock or warrants or other securities. (f) In any case in which this Section 8 shall require that an adjustment in the Purchase Price with respect to any Shares covered hereby be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event the issuing to the holder of any Warrants exercised after such record date Shares and such other shares of capital stock or warrants or other securities of the Company, if any, issuable upon such exercise over and above the Shares, on the basis of the Purchase Price with respect to such Shares in effect prior to such adjustment; provided, however that the Company shall deliver to the holder a due bill or other appropriate instrument evidencing such holder's right to receive such shares of capital stock or warrants or other securities upon the occurrence of the event requiring such adjustment. (g) Upon each adjustment of the Purchase Price with respect to each Share covered hereby as a result of the calculations made in Section 8(b) hereof, each Warrant outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase (but only at the applicable times specified herein), that number of Shares (calculated to the nearest hundredth) obtained by (A) multiplying the number of Shares purchasable at the Purchase Price with respect to such Shares upon exercise of a Warrant immediately prior to such adjustment of the number of Shares by the Purchase Price with respect to such Shares in effect immediately prior to such adjustment of the Purchase Price with respect to such Shares and (B) dividing the product so obtained by the Purchase Price with respect to such Shares in effect immediately after such adjustment of the Purchase Price with respect to such Shares. Such adjustments and calculations shall be made with respect to all Shares covered hereby and not only with respect to Shares which are then eligible for purchase pursuant to the terms hereof; however, no such adjustment or calculation shall have the effect of accelerating the vesting schedule set forth above. Additionally, all such adjustments and calculations shall be made separately with respect to Shares purchasable at differing exercise prices pursuant to the terms hereof. (h) In case of any capital reorganization of the Company, or of any reclassification of the Common Stock (other than a change in par value, or from par to no par value, or from no par value to par value, or as a result of subdivision or combination), or in case of the consolidation of the Company with or the merger of the Company into any other corporation (other than a consolidation or merger in which the Company is the continuing corporation) or of the sale of the properties and assets of the Company as, or substantially as, an entirety to any other corporation, each Warrant shall after such reorganization, reclassification, consolidation, merger or sale be exercisable (but only at the applicable times specified herein), upon the terms and conditions specified herein, for the number of shares of Common Stock or other capital stock or warrants or other securities or property to which a holder of the number of Shares purchasable (at the time of such reorganization, reclassification, consolidation, merger or sale, whether or not such right to purchase can then be exercised pursuant to the terms hereof) upon exercise of such Warrant would have been entitled upon such reorganization, reclassification, consolidation, merger or sale; and in any such case, if necessary, the provisions set forth in this Section 8(h) with respect to the rights and interests thereafter of the registered holders of all Warrants purchasable upon the exercise of any portion of this Warrant shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to any Shares of Common Stock or other capital stock or warrants or other securities or property thereafter deliverable on the exercise of the Warrants. The subdivision, reverse split or combination of shares of Common Stock at any time outstanding into a greater or lesser number of shares shall not be deemed to be a reclassification of the Common Stock for the purposes of this Section 8(h). The Company shall not effect any such consolidation or merger or sale unless prior to or simultaneously with the consummation thereof, the successor corporation (if other than the Company) resulting from such consolidation, or merger or the corporation purchasing such assets or other appropriate corporation or entity shall assume, by written instrument executed and delivered to the registered holders of all Warrants, the obligation to deliver to the holders of all Warrants such shares of Common Stock or other capital stock, or warrants or securities or assets as, in accordance with the foregoing provisions, such holder may be entitled to purchase, and any other obligations of the Company under this Warrant. (i) In no event shall an adjustment be made in the Purchase Price or the number of Shares purchasable upon the exercise of this Warrant because the Company issues, in exchange for cash, property or services, Shares, or any securities convertible into or exchangeable for Shares, or securities carrying the right to purchase Shares or such convertible or exchangeable securities; it being understood that the adjustment provided for in this Section 8 shall be made upon the conversion, exchange or exercise (as applicable) of such securities. 9. (a) Upon exercise the Company shall not be required to issue fractions of Shares. In lieu of such fractional Shares, the holders of Warrants shall receive an amount in cash equal to the same fraction of the current market value of one whole Share. For purposes of this Section 9, the current market value of one whole Share shall be determined pursuant to Section 8(c) hereof. All calculations under this Section 9 shall be made to the nearest cent. (b) The exercise price may be paid by check or, at the option of the holder, the holder may instruct the Company in writing to retain certain shares to be received upon exercise and to apply the current value of those shares (based on the closing bid price reported on NASDAQ on the preceding business day) to the payment of the total exercise price. 10. The holder of a Warrant shall not be entitled to any rights of a shareholder of the Company with respect to any Shares purchasable upon the exercise thereof, including voting, dividend or dissolution rights, until such Shares have been paid for in full and issued to such holder. As soon as practicable after such exercise, the Company shall deliver a certificate or certificates for the securities issuable upon such exercise, all of which shall be fully paid and nonassessable, to the person or persons entitled to receive the same; provided, however, that such certificate or certificates delivered to the holder of the surrendered Warrant shall bear a legend reading substantially as follows: No sale, offer to sell or transfer of these securities or this certificate or of any shares or other securities issued in exchange for or in respect of these securities shall be made unless a registration statement under the Securities Act of 1933 (the "Act"), as amended, and any applicable state securities laws, with respect to such securities, is in effect or an exemption from the registration requirements of the Act and such laws is then in fact applicable to such securities, to the Company's satisfaction. 11. (a) Upon any adjustment of the Purchase Price with respect to any Share covered hereby pursuant to Section 8 hereof, the Company within ninety (90) calendar days thereafter shall have on file for inspection by the holder hereof a certificate of the Board of Directors of the Company setting forth the Purchase Price with respect to each Share covered hereby after such adjustment and setting forth in reasonable detail the method of calculation and the facts upon which such calculations are based and setting forth the number of Shares purchasable upon exercise of a Warrant after such adjustment in the Purchase Price, which certificate shall be conclusive evidence of the correctness of the matters set forth therein. (b) In case: (1) the Company shall authorize the issuance to all holders of Common Stock of rights, options or warrants to subscribe for or purchase capital stock of the Company or of any other subscription rights, options or warrants; or (2) the Company shall authorize the distribution to all holders of Common Stock of evidences of its indebtedness or assets (other than cash dividends or cash distributions payable out of earnings (or consolidated earnings if the Company shall have one or more subsidiaries) or earned surplus or dividends payable in Common Stock or distributions of scrip); or (3) of any consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, or of the conveyance or transfer of the properties and assets of the Company substantially as an entirety, or of any capital reorganization or any reclassification of the Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination); or (4) of the voluntary or involuntary dissolution, liquidation or winding up of the Company; or (5) the Company proposes to take any other action which would require an adjustment of the Purchase Price pursuant to Section 8 hereof; then the Company shall give to the holder of a Warrant at his, her or its address appearing below at least twenty (20) calendar days prior to the applicable record date hereinafter specified in (i) or (ii) below, by first-class mail, postage prepaid, a written notice stating (i) the date as of which the holders of record of shares of Common Stock to be entitled to receive any such rights, options, warrants or distribution are to be determined or (ii) the date on which any such consolidation, merger, conveyance, transfer, reorganization, reclassification, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of record of shares of Common Stock shall be entitled to exchange such shares for securities or other property, if any, deliverable upon such consolidation, merger, conveyance, transfer, reorganization, reclassification, dissolution, liquidation or winding up. The failure to give the notice required by this Section 11(b) or any defect therein shall not affect the legality or validity of any distribution right, option, warrant, consolidation, merger, conveyance, transfer, reorganization, reclassification, dissolution, liquidation or winding up or the vote upon any action. (c) Nothing contained herein shall be construed as conferring upon the holder of a Warrant with respect to the Shares the right to vote or to consent or to receive notice as a stockholder in respect of the meetings of stockholders or the election of directors of the Company or any other matter, or any rights whatsoever as a stockholder of the Company. 12. The Company agrees that if, at any time, within the ten (10) year period commencing February 3, 1997, it should file a Registration Statement with the Securities and Exchange Commission (the "Commission") pursuant to the Act and the underwriter(s) for the prospective offering agrees to permit shareholders holding Shares or other securities received upon exercise of the Warrants to include all or a portion of their Shares or other securities in the Registration Statement and register such Shares or other securities for sale, the Company, at its own expense, will offer to the holders of Warrants, not less than 30 days prior to the filing of such Registration Statement, the opportunity to register all or a portion of the Shares that the holders of Warrants have received upon exercise of the Warrants prior to the time of such filing pro rata with all other holders of Shares of the Company that have piggyback registration rights or are otherwise registering their Shares for sale to the public. The Company undertakes no obligation to file a Registration Statement. Further, the Company undertakes no obligation to maintain a current Registration Statement. The Warrantholder's rights provided for above are not applicable to a Registration Statement filed by the Company with the Commission on Forms S-4 or S-8 or any other inapplicable form. 13. Any notice, request, demand or other communication pursuant to the terms of this Warrant shall be in writing and shall be sufficiently given or made when delivered or mailed by first-class or registered mail, postage prepaid, if to the Company addressed to: AMERIHOST PROPERTIES, INC. 2400 East Devon Avenue Suite 280 Des Plaines, Illinois 60018 Attention: Secretary with a copy to: Helen R. Friedli, P.C. McDermott, Will & Emery 227 West Monroe Avenue Chicago, Illinois 60606 or to such other address or such other counsel as the Company may designate by written notice to the holder of a Warrant, and if to the holder of a Warrant at his or its registered address on the records of the Company. 14. All the covenants and provisions herein by or for the benefit of the Company shall bind and inure to the benefit of its respective successors and assigns to the extent permitted hereunder and all of the covenants and provisions herein by or for the benefit of the holder hereof shall inure to the benefit of such holder's successors, legal representatives, heirs or assigns as permitted herein. 15. This Warrant shall be deemed to be a contract made under the laws of the State of Illinois for all purposes and shall be construed in accordance with the internal laws of such State. 16. Nothing in this Warrant shall be construed to give to any person or corporation other than the Company and the holder of this Warrant any legal or equitable right, remedy or claim under this Warrant; but this Warrant shall be for the sole and exclusive benefit of the Company and the holder of this Warrant. * * * IN WITNESS WHEREOF, an authorized officer of the Company has signed this Warrant. AMERIHOST PROPERTIES, INC. By: President ELECTION TO PURCHASE (To be executed by the holder only if he, she or it desires to exercise Warrants evidenced by the original Warrant attached hereto.) TO: AMERIHOST PROPERTIES, INC. 2400 East Devon Avenue Suite 280 Des Plaines, Illinois 60018 The undersigned hereby (1) irrevocably elects to exercise ____________ Warrants, evidenced by the original Warrant attached hereto, for and to purchase thereunder Shares issuable upon exercise of said Warrants, (2) makes payment in full of the Purchase Price of such Shares, (3) requests that certificates for the Shares be issued in the name of: _________________________________________________________________ (Please print name and address) _________________________________________________________________ _________________________________________________________________ ________________________________ (Please print Social Security or Tax Identification Number) and, (4) if said number of Warrants shall not be all the Warrants evidenced by the attached original Warrant, requests that a new Warrant evidencing Warrants not so exercised be issued in the name of and delivered to: __________________________________________________________________ (Please print name and address) __________________________________________________________________ __________________________________________________________________ In lieu of receipt of a fractional Share the undersigned hereby elects (check the appropriate line): (i) to receive a cash payment, and the check representing payment thereof should be made payable to_________________________________________________________ __________________________________________________________________________ (Please print name and address) and should be delivered to _________________________________________________ ________________________________________________________________________ ____________________________________________________________________; or (ii) to credit the amount of such payment against the Purchase Price payable for the Shares issuable upon the exercise of said Warrants. DATED: Signature: NOTICE: The above signature must correspond with the name as written upon the face of the attached Warrant in every particular, without alteration or enlargement or any change whatsoever. EX-27 4
5 3-MOS DEC-31-1997 MAR-31-1997 3,049,476 0 10,750,764 0 0 15,064,576 55,584,103 7,000,865 72,190,598 13,326,233 0 0 0 31,461 21,749,798 72,190,598 16,069,290 16,069,290 13,964,882 13,964,882 2,273,075 0 810,007 (874,652) (409,000) (465,652) 0 0 0 (465,652) (0.08) (0.08)
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