-----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, CUEYckwN78f74XtF3wa981e7T8zSET47Hu34WUCgIxl/vUxKhYcAwb6qRO8/BSh7 7Oley9lm9Ig8TWcitlULUw== /in/edgar/work/20000815/0000950148-00-500008/0000950148-00-500008.txt : 20000922 0000950148-00-500008.hdr.sgml : 20000921 ACCESSION NUMBER: 0000950148-00-500008 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CINEMASTAR LUXURY THEATERS INC CENTRAL INDEX KEY: 0000931085 STANDARD INDUSTRIAL CLASSIFICATION: [7830 ] IRS NUMBER: 330451054 STATE OF INCORPORATION: CA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-25252 FILM NUMBER: 701988 BUSINESS ADDRESS: STREET 1: 12230 EL CAMINO REAL STREET 2: SUITE 320 CITY: SAN DIEGO STATE: CA ZIP: 92130 BUSINESS PHONE: 6195092777 MAIL ADDRESS: STREET 1: 12230 EL CAMINO REAL STREET 2: SUITE 320 CITY: SAN DIEGO STATE: CA ZIP: 92130 FORMER COMPANY: FORMER CONFORMED NAME: NICKELODEON THEATER CO INC DATE OF NAME CHANGE: 19941128 10QSB 1 e10qsb.txt FORM 10-QSB (06/30/2000) 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-QSB (MARK ONE) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from __________ to __________ Commission File Number 0-25252 CINEMASTAR LUXURY THEATERS, INC. (Exact Name of Registrant as specified in its charter) DELAWARE 33-0451054 (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 12230 EL CAMINO REAL, SUITE 320, SAN DIEGO, CA 92130 (Address of principal executive offices) (Zip Code) (858) 509-2777 (Registrant's telephone number, including area code) Check whether the issuer (1) has filed all reports required to be filed by section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] Common stock, $0.01 par value: 6,289,196 shares outstanding as of August 14, 2000. Transitional Small Business Disclosure Format. (check one): YES [ ] NO [X] 2 CINEMASTAR LUXURY THEATERS, INC. TABLE OF CONTENTS
PAGE NO. -------- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheet as of June 30, 2000 (Unaudited) 3 Condensed Consolidated Statements of Operations for the three months ended June 30, 2000 and 1999 (Unaudited) 4 Condensed Consolidated Statements of Cash Flows for the three months ended June 30, 2000 and 1999 (Unaudited) 5 Notes to Condensed Consolidated Financial Statements (Unaudited) 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 PART II. OTHER INFORMATION Item 1. Legal Proceedings 12 Item 2. Changes in Securities 13 Item 3. Defaults in Senior Securities 13 Item 4. Submission of Matters to a Vote of Securities Holders 13 Item 5. Other Information 13 Item 6. Exhibits and Reports on Form 8-K 13 Signatures 14
2 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CINEMASTAR LUXURY THEATERS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
June 30, 2000 ------------ ASSETS CURRENT ASSETS: Cash and cash equivalents $ 717,718 Prepaid expenses 203,730 Other current assets 346,115 ------------ TOTAL CURRENT ASSETS 1,267,563 Property and equipment, net 13,327,921 Deposits and other assets 561,528 ============ TOTAL ASSETS $ 15,157,012 ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Line of credit $ 2,000,000 Current portion of long-term debt and capital lease obligations 29,391 Accounts payable 1,359,462 Accrued liabilities 426,934 Deferred revenue 485,249 ------------ TOTAL CURRENT LIABILITIES 4,301,036 Long-term debt and capital lease obligations, net of current portion 1,693,498 Deferred rent liability 4,763,968 ------------ TOTAL LIABILITIES 10,758,502 ------------ STOCKHOLDERS' EQUITY: Common stock, $0.01 par value; authorized shares 20,000,000; issued and outstanding shares 6,289,196 62,892 Additional paid-in capital 29,665,121 Accumulated deficit (25,329,503) ------------ TOTAL STOCKHOLDERS' EQUITY 4,398,510 ============ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 15,157,012 ============
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS. 3 4 CINEMASTAR LUXURY THEATERS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months ended June 30, --------------------------------- 2000 1999 ----------- ----------- REVENUES: Admissions $ 4,825,368 $ 5,055,021 Concessions 2,084,307 2,093,434 Other operating revenues 210,476 156,917 ----------- ----------- TOTAL REVENUES 7,120,151 7,305,372 ----------- ----------- COSTS AND EXPENSES: Film rental and booking costs 2,445,249 2,902,221 Cost of concession supplies 369,680 375,812 Theater operating expenses 3,632,663 3,046,044 Selling, general and administrative expenses 642,487 732,784 Depreciation and amortization 797,490 597,127 ----------- ----------- TOTAL COSTS AND EXPENSES 7,887,569 7,653,988 ----------- ----------- OPERATING LOSS (767,418) (348,616) OTHER INCOME (EXPENSE): Interest expense (154,179) (93,016) Interest income 10,861 12,602 ----------- ----------- TOTAL OTHER EXPENSE (143,318) (80,414) ----------- ----------- LOSS BEFORE PROVISION FOR INCOME TAXES (910,736) (429,030) PROVISION FOR INCOME TAXES (62,237) -- ----------- ----------- NET LOSS $ (848,499) $ (429,030) =========== =========== BASIC AND DILUTED NET LOSS PER SHARE $ (0.13) $ (0.11) =========== =========== WEIGHTED AVERAGE SHARES 6,289,196 3,864,986 =========== ===========
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS. 4 5 CINEMASTAR LUXURY THEATERS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months ended June 30, --------------------------------- 2000 1999 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (848,499) $ (429,030) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation and amortization 797,490 597,127 Deferred rent expense 197,386 159,589 Changes in operating assets and liabilities: Prepaid expenses and other current assets (12,662) (89,261) Deposits and other assets (2,058) 4,427 Accounts payable (1,731,160) 522,317 Accrued and other liabilities (278,053) (272,424) ----------- ----------- NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES (1,877,556) 492,745 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment -- (1,019,987) ----------- ----------- NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES -- (1,019,987) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from credit facility borrowings -- 1,000,000 Principal payments on long-term debt and capital lease obligations (24,922) (51,960) Common stock issuance costs (26,809) -- ----------- ----------- NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (51,731) 948,040 ----------- ----------- NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (1,929,287) 420,798 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 2,646,975 2,220,396 ----------- ----------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 717,718 $ 2,641,194 =========== =========== SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 116,786 $ 69,683 =========== =========== Taxes -- -- =========== ===========
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS. 5 6 CINEMASTAR LUXURY THEATERS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000 (UNAUDITED) NOTE 1 The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-QSB. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. For further information, refer to the audited consolidated financial statements for the fiscal year ended March 31, 2000 and footnotes thereto, included in the Company's Annual Report on Form 10-KSB which was filed with the Securities and Exchange Commission. Operating results for the three month period ended June 30, 2000 are not necessarily indicative of the results of operations that may be expected for the year ending March 31, 2001. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and disclosure of contingent assets and liabilities at the date of the financial statements and during the reporting periods. Actual amounts could differ from those estimates. The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. See Results of Operations for further discussion. NOTE 2 The Securities and Exchange Commission has issued Staff Accounting Bulletin No. 101 "Revenue Recognition in Financial Statements" ("SAB 101") which, together with certain amendments, provides guidance on the application of generally accepted accounting principles related to revenue recognition in financial statements. Management believes its presentation of revenues in the Company's consolidated financial statements is consistent with the revenue recognition criteria and other principles mandated by SAB 101, and that its adoption will not have a material financial effect on the Company's consolidated financial statements. The Company will be required to adopt SAB 101 by the fourth quarter of fiscal 2001. NOTE 3 Basic and diluted net loss per share are computed by dividing net loss by the weighted average number of common shares outstanding during the years. Potentially dilutive securities consist of outstanding stock options and warrants, and are not included in the computation as their inclusion would be anti-dilutive. NOTE 4 On September 23, 1997, the Company entered into an agreement (the "CAP Agreement") with CinemaStar Acquisition Partners, LLC ("CAP") and Reel Partners LLP ("Reel") whereby Reel provided $3,000,000 of interim debt financing and CAP acquired a majority equity interest in the Company through a $15 million purchase of newly issued shares of the Company's Common Stock (the "Equity Financing"). Following stockholder approval, the Equity Financing transaction was completed on December 15, 1997. Pursuant to the CAP Agreement, CAP purchased 2,526,352 shares of Common Stock for a purchase price of $5.94 per share. CAP also received, at closing, warrants to purchase 232,947 shares of Common Stock at an exercise price of $5.94 per share. Concurrent with the execution of the CAP Agreement, the Company also issued to CAP a warrant to purchase 142,857 shares of common stock at an exercise price of $5.94 (the "Signing Warrants"). Pursuant to the terms of the CAP Agreement, the Company has and continues to be obligated to issue Adjustment Shares to CAP. The number of Adjustment Shares to be issued is based upon: (i) the recognition of any liabilities not disclosed as of August 31, 1997, (ii) certain expenses incurred and paid by the Company in connection with the 6 7 contemplated transactions, (iii) any negative cash flow incurred by the Company during the period commencing August 31, 1997 and ending December 15, 1997, and (iv) operating losses experienced by, or the costs of closing, the Company's Plaza Americana 10 facility in Tijuana (now in full operation and achieving operating profits) and San Bernardino Facility (opened December 1999). The measurement of the operating losses and/or closing costs for the two facilities is cumulative, calculated in the aggregate and will take place on the earlier to occur of the closing of each such facility or December 15, 2000. The Company issued 193,037 Adjustment Shares to CAP pursuant to the terms of the CAP Agreement, in September 1998. To the extent there are (a) operating losses at the Company's Tijuana and San Bernardino facilities, calculated in the aggregate, for the three-year period ended December 15, 2000, and (b) expenditures in connection with the discovery of liabilities, or defense and/or settlement of claims, in either case relating to periods prior to August 31, 1997, the Company will be obligated to issue additional Adjustment Shares. On March 28, 2000, the Company sold 2,424,158 shares of the Company's common stock to the Company's principal shareholder, SCP Private Equity Partners, LP ("SCP"). The purchase price was $1.44 per share for an aggregate purchase price of $3,500,000. Pursuant to the terms of the Stock Purchase Agreement, under certain circumstances the Company has the option to sell SCP an additional 692,617 shares of common stock at $1.44 per share for an aggregate purchase price of $1,000,000 at any time until March 28, 2002, so long as there have been no material adverse changes in the Company, or in the Company's business subsequent to March 28, 2000. Under the terms of the Stock Purchase Agreement, the Company granted SCP warrants to purchase an additional 779,194 shares of the Company's common stock at a price of $1.44 per share. The warrants issued in conjunction with the Stock Purchase Agreement expire on March 28, 2005. In as much as the warrants were issued at fair value, no value has been assigned to these warrants. NOTE 5 In October 1998, the Company signed a seven year, $15 million Revolving Credit Agreement with a senior, secured lender. The Revolving Credit Agreement contains various positive and negative covenants, such as consolidated leverage ratio, consolidated fixed charge ratio, maximum fixed asset expenditures, consolidated interest coverage ratio and minimum EBITDA. Borrowings under the Revolving Credit Agreement are collateralized by the Company's tangible and intangible assets, and the stock of the Company's wholly owned subsidiaries, Cinemas, Inc. and CinemaStar International. The Company may elect to borrow under the Revolving Credit Agreement at either (i) the higher of the lender's reference rate or the federal funds rate plus 0.50% or (ii) the LIBOR rate, in each case plus the applicable margin. The Company was required to reduce the amount of borrowings outstanding under the facility beginning in March 2000. On April 4, 2000, the Company amended its Revolving Credit Agreement. Under the terms of the amendment, the total available borrowing was reduced from $15,000,000 to $5,000,000, and the termination date of credit facility was changed from August 31, 2005 to December 31, 2000. The amendment required the Company to complete the $3,500,000 sale of stock to its principal shareholder and to use $1,000,000 of the proceeds from the sale of the common stock to reduce the Company's outstanding borrowings on its credit facility from $3,000,000 to $2,000,000. The amendment waived certain covenant violations and adjusted certain positive and negative covenants to make them more consistent with the Company's expected future financial performance. The Company is able at draw against the facility as of June 30, 2000, as the Company's leverage ratio is below the maximum established by the April 4, 2000 amendment to the Revolving Credit Agreement. The amount of borrowings available to the Company under the facility as of June 30, 2000 is not significant, as the borrowings continue to be limited by the leverage ratio covenant. As of June 30, 2000, the Company had outstanding borrowings of $2,000,000 under the facility. 7 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with the Company's Condensed Consolidated Financial Statements and notes thereto included elsewhere in this Form 10-QSB. Except for the historical information contained herein, the discussion in this Form 10-QSB contains certain forward looking statements that involve risks and uncertainties, such as statements of the Company's plans, objectives, expectations and intentions. The cautionary statements made in this Form 10-QSB should be read as being applicable to all related forward-looking statements wherever they appear in this Form 10-QSB. Where possible, the Company uses words like "believes", "anticipates", "expects", "plans" and similar expressions to identify such forward looking statements. The Company's actual results could differ materially from those discussed here. Factors, risks and uncertainties that could cause or contribute to such differences include the availability of marketable motion pictures, the increase of revenues to meet long-term lease obligations and rent increases, risks inherent in the construction of new theaters, the ability to secure new locations on favorable terms, intense competition in the industry, dependence on concession sales and suppliers, earthquakes and other natural disasters and costs associated with potential changes in management and disputes related thereto. The Company began the first quarter of fiscal 2001 with nine theaters with a total of 99 screens. On April 1, 2000, the Company added four stadium-style auditoriums to its Mission Grove complex in Riverside, California. The addition raised the total screen count at the Mission Grove location from 14 to 18, and raised the circuit-wide screen count to 103. On June 30, 2000 the Company closed its six screen theater in Chula Vista, California, reducing the Company's theater and screen count to eight and 97, respectively, as of June 30, 2000. The Company is currently attempting to sell the Chula Vista 6 property. For the entire first quarter of fiscal 2000, the Company operated eight theaters with a total of 79 screens. The Company operates one business segment. Such segment has operations in two geographic regions, California and Northern Mexico. For the three months ended June 30, 2000, total revenues were $5,950,770 in California and $1,169,381 in Northern Mexico, compared to $6,104,236 and $1,201,136 for California and Northern Mexico, respectively in the three months ended June 30, 1999. Total assets for the California and Northern Mexico regions as at June 30, 2000 were $14,499,881 and $657,131, respectively as compared to total assets of $15,627,845 and $439,867, for the California and Northern Mexico regions respectively, as of June 30, 1999. The Company has generated significant net losses in each fiscal year of its operations, including net losses of $5,231,252 in the fiscal year ended March 31, 2000 and a net loss of $848,499 in the quarter ended June 30, 2000. As of June 30, 2000, the Company has an accumulated deficit of approximately $25,330,000, and a working capital deficiency of approximately $3,033,000. As of June 30, 2000, the Company held cash and cash equivalents in the amount of $717,718. The Company is obligated to pay down the $2,000,000 of borrowings against its credit facility, which terminates on December 31, 2000. Management can make no assurances as to the Company's ability to pay down its credit facility debt and fund its working capital requirements over the next twelve months. Management plans to improve the Company's liquidity through securing a new debt facility, either a revolving credit facility or a term loan, from a new senior lender. The Company's ability to secure a new debt facility will be enhanced if it is able to complete the sale of one of its theaters and pay off the related mortgage loan on the property. Management can give no assurances that it will be able to secure a debt facility on terms favorable to the Company, if at all. Further, management can give no assurances that it will be able to sell the theater property. Management is also in the process of implementing strategies to increase theater revenues, reduce theater operating expenses, and reduce general and administrative expenses. To the extent management can increase the Company's Earnings Before Interest, Depreciation, and Amortization (EBITDA), the Company will have an increased capacity for borrowing. Management can give no assurances that its strategies to increase revenues and reduce expenses will be successful, or that it will be able to significantly improve the Company's EBITDA. 8 9 While the Company believes it could attain profitability with its current operations, such profitability is contingent on numerous factors, many of which are outside the control of the Company. Any substantial profitability will depend on, among other things, the Company's ability to continue to grow its operations through the addition of new screens. The ability of the Company to operate depends on the availability of marketable motion pictures. The Company currently obtains the motion pictures for its theaters from approximately 10 to 12 distributors. Poor relationships with distributors or a disruption in the production of motion pictures could limit the Company's ability to obtain films for its theaters. Further, the motion picture exhibition industry is highly competitive, particularly with respect to film licensing, the terms of which can depend on seating capacity, location and configuration of the exhibitor's theaters, the quality of projection and sound equipment, the comfort and quality of theaters and ticket prices. Many of the Company's competitors have been in existence significantly longer than the Company and are better established in the markets where the Company's theaters are or may be located and are better capitalized than the Company. These and other factors, including the poor commercial success of motion pictures or the Company's inability to attract and retain key management personnel, could have a material adverse effect on the Company's business and results of its operations. At this time, however, the Company believes that it has good working relationships with its distributors and is competitive with respect to these matters. These factors, among others, indicate the Company may be unable to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts, or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. THREE MONTHS ENDED JUNE 30, 2000 COMPARED TO THREE MONTHS ENDED JUNE 30, 1999 Total revenues for the three months ended June 30, 2000 decreased $185,221 or 2.5% to $7,120,151 from $7,305,372 for the prior year. Admission revenues decreased $229,653 or 4.5%, concession sales decreased $9,127 or 0.4%, and other operating revenues increased by $53,559, or 34.1%. The decrease in admissions and concession revenues is attributable to a decrease in attendance, offset by modest increases in the average ticket price and concession revenues per patron. Total attendance decreased 5.6% from the first quarter of last year, however the average ticket price and the concession revenue per cap increased 1.1% and 5.4%, respectively, for the first quarter of fiscal 2001 as compared to the first quarter of fiscal 2000. Film rental and booking costs for the three months ended June 30, 2000 decreased $456,972 or 15.8% to $2,445,249 from $2,902,221 for the previous fiscal year's first quarter. The decrease is attributable to a decrease in admission revenues and a reduced cost of film relative to last year's first quarter. As a percentage of admission revenues, film rental and booking costs decreased to 50.7% for the three months ended June 30, 2000 from 57.4% for the three months ended June 30, 1999, due to the timing and terms of new releases in this year's first quarter compared to the prior year. The cost of concession supplies for the three months ended June 30, 2000 decreased $6,132 or 1.6% to $369,680 from $375,812 for the previous year. The decrease is attributable to a decrease in concession revenues and reduced concession product costs relative to last year's first quarter. As a percentage of concession revenues, the cost of concession supplies decreased to 17.7% for the three months ended June 30, 2000 from 18.0% for the three months ended June 30, 1999. Theater operating expenses for the three months ended June 30, 1999 increased $586,619 or 19.3% to $3,632,663 compared to $3,046,044 for the previous year. This increase in operating expenses was due to the addition of the San Bernardino 20 complex which opened in December 1999, and the addition of four screens to the Mission Grove complex in April 2000. As a percentage of total revenues, theater operating expenses increased by 9.3% to 51.0% for the three months ended June 30, 2000, compared to 41.7% for the three months ended June 30, 1999. General and administrative expenses for the three months ended June 30, 2000 decreased $90,297 or 12.3% to $642,487 compared to $732,784 for the previous year. The decrease is primarily attributable to management's efforts to reduce general and administrative costs. As a percentage of total revenues, general and administrative expense decreased by 1.0% to 9.0% for the three months ended June 30, 2000, compared to 10.0% for the three months ended June 30, 1999. 9 10 Depreciation and amortization for the three months ended June 30, 2000 increased $200,363 or 33.6% to $797,490 compared to $597,127 for the previous year, due to the increase in the Company's balance of fixed assets as a result of the addition of the San Bernardino 20 complex and the addition of four screens to the Mission Grove complex. Interest expense for the fiscal three months ended June 30, 2000 increased $61,163 or 65.8% to $154,179 compared to $93,016 for the previous year. This increase is due to an increase in the Company's average debt balance in the first quarter of fiscal 2001 as compared to 2000. Interest income for the three months ended June 30, 2000 decreased $1,741 or 13.8% to $10,861 from $12,602 for the three months ended June 30, 1999. This decrease is attributable to a decrease in the Company's average cash balance in the first quarter of fiscal 2001 as compared to 2000. The net loss for the three months ended June 30, 2000 increased $419,469 or 97.8% to $848,499 from $429,030 for the three months ended June 30, 1999 as a result of the changes in revenues and expenses described in the preceding paragraphs. LIQUIDITY AND CAPITAL RESOURCES The Company's revenues are collected in cash, principally through box office admissions and concession sales. Because its revenues are received in cash prior to the payment of related expenses, the Company has an operating "float" which partially finances its operations. The Company's capital requirements arise principally in connection with the development of new theaters and the acquisition of existing theaters. Historically, new theaters have been financed with internally generated cash flow, long-term debt, convertible debentures, equity, and facility and equipment leasing. On September 23, 1997, the Company entered into an agreement (the "CAP Agreement") with CinemaStar Acquisition Partners, LLC ("CAP") and Reel Partners LLP ("Reel") whereby Reel provided $3,000,000 of interim debt financing, and CAP acquired a majority equity interest in the Company through a $15 million purchase of newly issued shares of the Company's Common Stock (the "Equity Financing"). Following stockholder approval, the Equity Financing transaction was completed on December 15, 1997. Pursuant to the CAP Agreement, CAP purchased 2,526,352 shares of Common Stock for a purchase price of $5.94 per share. CAP also received, at closing, warrants to purchase 232,947 shares of Common Stock at an exercise price of $5.94 per share. Concurrent with the execution of the CAP Agreement, the Company also issued to CAP a warrant to purchase 142,857 shares of common stock at an exercise price of $5.94 (the "Signing Warrants"). Pursuant to the terms of the CAP Agreement, the Company has and continues to be obligated to issue Adjustment Shares to CAP. The number of Adjustment Shares to be issued is based upon: (i) the recognition of any liabilities not disclosed as of August 31, 1997, (ii) certain expenses incurred and paid by the Company in connection with the contemplated transactions, (iii) any negative cash flow incurred by the Company during the period commencing August 31, 1997 and ending December 15, 1997, and (iv) operating losses experienced by, or the costs of closing, the Company's Plaza Americana 10 facility in Tijuana (now in full operation and achieving operating profits) and San Bernardino Facility (opened December 1999). The measurement of the operating losses and/or closing costs for the two facilities is cumulative, calculated in the aggregate and will take place on the earlier to occur of the closing of each such facility or December 15, 2000. The Company issued 193,037 Adjustment Shares to CAP pursuant to the terms of the CAP Agreement, in September 1998. To the extent there are (a) operating losses at the Company's Tijuana and San Bernardino facilities, calculated in the aggregate, for the three-year period ended December 15, 2000, and (b) expenditures in connection with the discovery of liabilities, or defense and/or settlement of claims, in either case relating to periods prior to August 31, 1997, the Company will be obligated to issue additional Adjustment Shares. On March 28, 2000, the Company sold 2,424,158 shares of the Company's common stock to the Company's principal shareholder, SCP Private Equity Partners, LP ("SCP"). The purchase price was $1.44 per share for an aggregate purchase price of $3,500,000. Pursuant to the terms of the Stock Purchase Agreement, under certain circumstances the Company has the option to sell SCP an additional 692,617 shares of common stock at $1.44 per share for an aggregate purchase price of $1,000,000 at any time until March 28, 2002, so long as there have been no material adverse changes in the Company, or in the Company's business subsequent to March 28, 2000. Under the 10 11 terms of the Stock Purchase Agreement, the Company granted SCP warrants to purchase an additional 779,194 shares of the Company's common stock at a price of $1.44 per share. The warrants issued in conjunction with the Stock Purchase Agreement expire on March 28, 2005. In as much as the warrants were issued at fair value, no value has been assigned to these warrants. In October 1998, the Company signed a seven year, $15 million Revolving Credit Agreement with a senior, secured lender. The Revolving Credit Agreement contains various positive and negative covenants, such as consolidated leverage ratio, consolidated fixed charge ratio, maximum fixed asset expenditures, consolidated interest coverage ratio and minimum EBITDA. Borrowings under the Revolving Credit Agreement are collateralized by the Company's tangible and intangible assets, and the stock of the Company's wholly-owned subsidiaries, Cinemas, Inc. and CinemaStar International. The Company may elect to borrow under the Revolving Credit Agreement at either (i) the higher of the lender's reference rate or the federal funds rate plus 0.50% or (ii) the LIBOR rate, in each case plus the applicable margin. The Company was required to reduce the amount of borrowings outstanding under the facility beginning in March 2000. On April 4, 2000, the Company amended its Revolving Credit Agreement. Under the terms of the amendment, the total available borrowing was reduced from $15,000,000 to $5,000,000, and the termination date of credit facility was changed from August 31, 2005 to December 31, 2000. The amendment required the Company to complete the $3,500,000 sale of stock to its principal shareholder, and to use $1,000,000 of the proceeds from the sale of the common stock to reduce the Company's outstanding borrowings on its credit facility from $3,000,000 to $2,000,000. The amendment waived certain covenant violations and adjusted certain positive and negative covenants to make them more consistent with the Company's expected future financial performance. The Company is able at draw against the facility as of June 30, 2000, as the Company's leverage ratio is below the maximum established by the April 4, 2000 amendment to the Revolving Credit Agreement. The amount of borrowings available to the Company under the facility as of June 30, 2000 is not significant, as the borrowings continue to be limited by the leverage ratio covenant. As of June 30, 2000, the Company had outstanding borrowings of $2,000,000 under the facility. The Company has generated significant net losses in each fiscal year of its operations, including net losses of $5,231,252 in the fiscal year ended March 31, 2000 and a net loss of $848,499 in the quarter ended June 30, 2000. The fiscal year ended March 31, 2000 loss included an asset impairment charge of $2,000,000; therefore the net loss for the year excluding the asset impairment charge was $3,231,252. There can be no assurance as to when or if the Company will achieve profitability. While the Company believes it could attain profitability with its current operations, such profitability is contingent on numerous factors, many of which are outside the control of the Company. Any substantial profitability will depend, among other things, on the Company's ability to continue to grow its operations through the addition of new screens. During the three months ended June 30, 2000, the Company's operating activities resulted in a net use of cash of $1,961,689, as compared to a net source of cash of $492,745 for the three months ended June 30, 1999. The primary cause for the difference in cash used versus generated in the first quarter of fiscal 2001 as compared to 2000 was an $1,815,293 reduction in the Company's payables during the first quarter of fiscal 2001. Approximately $1,600,000 of the reduction in payables was related to the payment of construction expenses that had been accrued as of March 31, 2000. The $419,469 increase in the first quarter net loss of the Company in 2001 versus 2000 included increases in non-cash expenses of $200,363 and $37,797 for depreciation and deferred rent expense, respectively. During the three months ended June 30, 2000, the Company's investing activities resulted in a net source of cash of $84,133, as compared to a net use of cash of $1,019,987 for the three months ended June 30, 1999. The Company made minor property dispositions in the first quarter of 2001, where as the Company added $1,019,987 of property in the first quarter of 2000, primarily related to the construction of the San Bernardino 20. During the three months ended June 30, 2000, the Company's financing activities resulted in a net use of cash of $51,731, as compared to a net source of cash of $948,040 for the three months ended June 30, 1999. The primary cause for the difference in cash used versus generated was that the Company only made routine debt payments in the first quarter of 2001, as compared to the first quarter of 2000 when the Company drew $1,000,000 from its credit facility to fund its construction projects, which was partially offset by routine debt payments made by the Company. As of June 30, 2000, the Company held cash and cash equivalents in the amount of $717,718. The Company is obligated to pay down the $2,000,000 of borrowings against its credit facility, which terminates on December 31, 11 12 2000. Management can make no assurances as to the Company's ability to pay down its credit facility debt, and fund its working capital requirements over the next twelve months. Management plans to improve the Company's liquidity through securing a new debt facility, either a revolving credit facility or a term loan, from a new senior lender. The Company's ability to secure a new debt facility will be enhanced if it is able to complete the sale of the Chula Vista 6 property and pay off the related mortgage on the property. Management can give no assurances that it will be able to secure a debt facility on terms favorable to the Company, if at all. Further management can give no assurances that it will be able to sell the Chula Vista 6 property. Management is also in the process of implementing strategies to increase theater revenues, reduce theater operating expenses, and reduce general and administrative expenses. To the extent management can increase the Company's Earnings Before Interest Depreciation and Amortization (EBITDA), the Company will have an increased capacity for borrowing. Management can give no assurances that its strategies to increase revenues and reduce expenses will be successful, or that it will be able to significantly improve the Company's EBITDA. The Company leases eight theater properties and various equipment under non-cancelable operating lease agreements that expire between the years 2000 and 2021 and require various minimum annual rentals. Several of the theater leases provide for renewal options to extend the leases for additional five-to-ten year periods. Certain theater leases also require the payment of property taxes, normal maintenance and insurance on the properties and additional rents based on percentages of gross theater and concession revenues in excess of various specified revenue levels. Certain of the Company's former officers, directors, and stockholders personally guarantee certain of the Company's theater operating leases. The estimated minimum lease payments due under non-cancelable operating leases for fiscal year 2001 was approximately $5,501,000. At June 30, 2000, the aggregate future minimum lease payments due under non-cancelable operating leases was approximately $99,665,000. As of March 31, 2000, the Company had total net deferred income tax assets of approximately $7,192,000. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. As a result of the Company's continued losses and uncertainties surrounding the realization of the net operating loss carryforward and other deferred tax assets, management has determined that the realization of the deferred tax assets is not "more likely than not." Accordingly, a 100% valuation allowance has been recorded against the net deferred income tax assets. As of March 31, 2000, the Company had net operating loss carryforwards ("NOL's") of approximately $15,000,000 and $5,000,000 for Federal and California income tax purposes, respectively. The Federal NOL's are available to offset future years taxable income, and they expire in 2007 through 2021 if not utilized prior to that time. The California NOL's are available to offset future years taxable income, and they expire in 2000 through 2006 if not utilized prior to that time. Federal and state tax laws restrict the utilization of these NOL's as a result of the Company's changes in ownership. The Company's initial public offering and certain other equity transactions have resulted in an "ownership change" as defined in Section 382 of the Internal Revenue Code of 1986, as amended. As a result, the Company's use of its net operating loss carryforwards to offset taxable income in any post-ownership change period will be subject to certain specified annual limitations. SEASONALITY The Company's revenues have been seasonal, coinciding with the timing of major releases of motion pictures by the major distributors. Generally, the most marketable motion pictures are released during the summer and the Thanksgiving through year-end holiday season. The unexpected emergence of a hit film during other periods can alter this trend. The timing of such releases can have a significant effect on the Company's results of operations, and the results of one quarter are not necessarily indicative of results for subsequent quarters. CURRENCY FLUCTUATIONS The Company is subject to the risks of fluctuations in the value of the Mexican Peso relative to the U.S. dollar. These risks are heightened because a majority of the revenues in Mexico are collected in Mexican Pesos, but the lease for the theater complex is denominated in U.S. dollars. While the Company does not believe it has been materially adversely effected by currency fluctuations to date, there can be no assurance it will not be so affected in 12 13 the future, and it has taken no steps to guard against these risks. PART II -- OTHER INFORMATION ITEM 1 -- LEGAL PROCEEDINGS On June 17, 1998, The Clark Real Estate Group, Inc. sued the Company in San Diego Superior Court alleging that the Company breached a 50-year lease relating to commercial real property located in the Rancho Del Rey Business Center consisting of approximately 35,000 square feet. The complaint alleges that the lease was terminated as a result of the Company's failure to perform and seeks damages of $1.25 million. The landlord has already leased the property to another tenant, which the Company believes would mitigate all, or a portion of the damages sought. Recently, the landlord has entered into an agreement to sell the property, which will likely change the damage claim of the plaintiff. Discovery is on hold until completion of the sale transaction. The Company intends to vigorously defend this action. Management does not believe the ultimate outcome of this matter will have a material adverse impact on the Company's financial position or its results of operations. On March 9, 2000, Russell Seheult, a former director of the Company filed suit in the Superior Court for the State of California in San Bernardino County. He alleges the Company has breached its obligation to make weekly payments in the amount of $1,000 pursuant to a purported consulting agreement between him and the Company. This matter is in the early stages of discovery, and a trial date has not been set. Management does not believe the ultimate outcome of this matter will have a material adverse impact on the Company's financial position or its results of operations. In addition, from time to time the Company is involved in routine litigation and proceedings in the ordinary course of its business. The Company is not currently involved in any other pending litigation matters that the Company believes would have a material adverse effect on the Company. ITEM 2 -- CHANGES IN SECURITIES None ITEM 3 -- DEFAULTS IN SENIOR SECURITIES None ITEM 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS None ITEM 5 -- OTHER INFORMATION None ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITS Exhibit 10.1 Fourth Amendment and Waiver dated April 4, 2000 to the Revolving Credit Agreement dated as of October 19, 1998, as amended. Exhibit 27. Financial Data Schedule (b) REPORTS ON FORM 8-K None 13 14 SIGNATURES In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: August 14, 2000 CinemaStar Luxury Theaters, Inc. by: /s/ Jack R. Crosby ------------------------------------------ Jack R. Crosby Chairman and Chief Executive Officer (principal executive officer) by: /s/ Donald H. Harnois, Jr. ------------------------------------------ Donald H. Harnois, Jr. Vice President and Chief Financial Officer (principal financial officer and principal accounting officer) 14 EX-10.1 2 ex10-1.txt EXHIBIT 10.1 1 EXHIBIT 10.1 AMENDMENT FOURTH AMENDMENT AND WAIVER dated April 4, 2000 (this "Amendment "), to the Revolving Credit Agreement, dated as of October 19, 1998 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), among CINEMASTAR LUXURY THEATERS, INC., a Delaware corporation (the "Borrower "), the several banks and other financial institutions or entities from time to time parties thereto (the "Lenders"), and UNION BANK OF CALIFORNIA, NA., as administrative agent (in such capacity, the "Administrative Agent"). WITNESSETH: WHEREAS, the Borrower has requested that the Administrative Agent and Lenders agree to amend certain provisions and waive certain covenants of the Credit Agreement, and, upon this Amendment becoming effective, the Administrative Agent and Lenders have agreed to such amendments and waivers upon the terms and subject to the conditions set forth herein. NOW, THEREFORE, in consideration of the premises and mutual agreements contained herein, and for other valuable consideration the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows: 1. Definitions. All terms defined in the Credit Agreement shall have such defined meanings when used herein unless otherwise deemed herein. 2. Amendment to Section 1.1. Section 1.1 of the Credit Agreement is hereby amended as follows: (a) by deleting and restating in their entireties the following definitions contained in such section to read as follows: "'Consolidated Fixed Charges Coverages Ratio': for any period, the ratio of (a) Consolidated EBITDAR for such period plus the amount by which the cash and cash equivalents of the Borrower and its Subsidiaries at the end of such period exceed $500,000 to (b) Consolidated Fixed Charges for such period." "`Consolidated Interest Expense Coverage Ratio': for any period, the ratio of (a) Consolidated EBITDA for such period plus the amount by which the cash and cash equivalents of the Borrower and its Subsidiaries at the end of such period exceed $500,000 to (b) Consolidated Interest Expense for such period." "`Revolving Termination Date': December 31, 2000." (b) by adding the following definition in the proper alphabetical order: "`Consolidated Adjusted EBITDA'; for any period, Consolidated EBITDA for such period adjusted to delete therefrom the contribution to Consolidated EBITDA for such period of the Internet Subsidiary." (c) by amending and restating in its entirety clause (X) of the definition of "Consolidated EBITDA"contained in such section as follows: "(X) September 30, 2000 and" 2 3. Amendment of Section 2.1. Section 2.1 is amended by inserting at the end thereof the following: "(d) notwithstanding the foregoing, until the date of receipt of the Cash Proceeds referred to in Section 6.11 the aggregate amount of the Revolving Extension of Credit outstanding at any time may not exceed $3,000,000; thereafter, the aggregate amount of the Revolving Extension of Credit outstanding at any time may not exceed $2,000,000 until such time as the Consolidated Leverage Ratio shall be equal to or less than 4.00 to 1.00 or, if less, the then applicable ratio required pursuant to Section 7.1(a)." 4. Amendment of Section 6. Section 6 is amended by inserting immediately after Section 6.10(e) therein the following: "6.11 Equity Investment. (a) Obtain cash proceeds from the investment in common equity of the Borrower by SCP of at least $3,500,000 ("Cash Proceeds") on or prior to March 31, 2000 and (b) immediately upon receipt thereof apply (i) $1,000,000 of the Cash Proceeds to prepay the outstanding Loans under the Credit Agreement, and (ii) thereafter use such Cash Proceeds solely for (x) capital expenditures related to the San Bernardino and Mission Grove properties and (y) for working capital and repayment of outstanding debts." 5. Amendment to Section 7 .1. Section 7.1 of the Credit Agreement is hereby amended as follows: (a) The requirements of Section 7.1(a) are hereby waived to the extent and only to the extent that the Consolidated Leverage Ratio for the period ended December 31, 1999 was greater than 4.00 to 1.00 so long as such ratio was not greater than 4.90 to 1.00. (b) The requirements of Section 7.1(a) are hereby waived for the period ended March 31, 2000 such that the Consolidated Leverage Ratio is not a factor in determining an Event of Default under the Credit Agreement. (c) by deleting the table in Section 7.1(a) in its entirety and substituting in lieu thereof the following table: March 31, 1999- December 31, 1999 1.00 January 1, 2000-March 31, 2000 Not applicable April 1, 2000- June 30, 2000 4.00 to 1.00 July 1, 2000-September 30, 2000 3.75 to 1.00 October 1, 2000-December 31, 2000 3.5 to 1.00" (d) The requirements of Section 7.1 (d) are hereby waived to the extent and only to the extent that the Consolidated EBITDA for the four-quarter period ended December 31, 1999 was less than $1,500,000 so long as such Consolidated EBITDA for such period was greater than $1,000,000. 3 (e) by deleting the table in Section 7.1 (d) in its entirety and substituting in lieu thereof the following table: "Fiscal Quarter Consolidated EBITDA - --------------- ------------------- March 31, 2000 $ 650,000 June 30, 2000 $ 600,000 September 30, 2000 $ 725,000 December 31, 2000 $1,200,000 6. Amendment of Section 7.2. Section 7.2(b) of the Credit Agreement is hereby amended by inserting after the word `Guarantor' the phrase "(other than the Internet Subsidiary)". 7. Amendment of Section 7.4. Section 7.4(a) of the Credit Agreement is hereby amended by inserting in the first line thereof, after the word `Borrower' the phrase "(other than the Internet Subsidiary)". 8. Amendment of Section 7.5. Section 7.5 of the Credit Agreement is hereby amended by inserting at the end thereof the following: "(g) to the extent that it would otherwise be prohibited, the sale of the Chula Vista property, provided that the proceeds of such sale shall be solely used (i) to pay in full the existing Chula Vista property mortgage and (ii) thereafter, to prepay the Revolving Commitments in accordance with Section 2.6(b), provided that the Reinvestment Notice exclusion shall not be available with respect to such proceeds. 9. Amendment of Section 7.8. Section 7.8 of the Credit Agreement is hereby (a) by inserting in paragraph (f) thereof after the word `Person' the phrase "(other than the Internet Subsidiary)". (b) by inserting immediately after paragraph (g) thereof the following new paragraph (h): "(h) The Borrower may enter into a new internet project designed to interface with its cinema operations (the "Internet Project") provided that (i) the Borrower establishes a subsidiary whose sole purpose is the implementation and operation of the Internet Project (the "Internet Subsidiary') (ii) the Internet Project is funded solely by cash common equity investments of SCP in the Borrower that are in excess of the $3,500,000 Cash Proceeds described in Section 6.11 and (iii) the requirements of Section 6.10(c) are complied with at the time of the formation of the Internet Subsidiary." (c) by amending paragraph (h) to be the new paragraph (g) and by inserting at the end of such new paragraph (g) the following proviso: "provided that no Investment pursuant to this paragraph (g) may be made in the Internet Subsidiary." 4 10. Amendment of Section 8. Paragraph (c) of Section 8 is hereby amended by inserting the clause ", Section 6.11" after the reference to Section 6.7(a) therein. 11. Amendment of "Consolidated EBTTDA". The Credit Agreement is hereby amended by deleting the term "Consolidated EBTTDA" in each place it appears in the Credit Agreement (other than (a) the definitions of "Consolidated EBITDA" and "Consolidated Adjusted EBITDA) and substituting therefor the term "Consolidated Adjusted EBITDA." 12. Amendment to Annex A of the Credit Agreement. Annex A to the Credit Agreement is hereby amended by replacing such Annex in its entirety with the Annex A attached to this Amendment. 13. Amendment to Schedule 1.1A to the Credit Agreement. Schedule 1.1A to the Credit Agreement is hereby amended by replacing such Schedule in its entirety with the Schedule 1.1 A attached to this Amendment. 14. Consent. The Lenders hereby consent and agree, anything in Section 7.9 notwithstanding, that the Borrower may obtain the cash common equity investments of SCP, including the $3,500,000 Cash Proceeds referred to in Section 6.11. 15. Representations;No Default. On and as of the date hereof and after giving effect to this Amendment, the Borrower confirms, reaffirms and restates that the representations and warranties set forth in Section 4 of the Credit Agreement and in the other Loan Documents are true and correct in all material respects, provided that the references to the Credit Agreement therein shall be deemed to be references to this Amendment and to the Credit Agreement as amended by this Amendment. 16. Conditions to Effectiveness. This Amendment shall become effective on and as of the date that: (a) the Administrative Agent shall have received counterparts of this Amendment, duly executed and delivered by a duly authorized officer of each of the Borrower, the Administrative Agent, and the Lenders; (b) the Administrative Agent shall have received an executed certificate of an officer of the Borrower in form satisfactory to the Administrative Agent as to the accuracy of the Borrower's representations and warranties set forth in Section 4 of the Credit Agreement and in the other Loan Documents, the absence of any Default or Event of Default after giving effect to this Amendment, and as to such other customary matters as the Administrative Agent may reasonably request; (c) the Borrower shall have delivered to the Administrative Agent a copy of an effective firm commitment from SCP pursuant to which SCP agrees to invest at least $3,500,000 in cash in common equity of the Borrower on or prior to March 31, 2000. (d) the Administrative Agent shall have received an amendment fee in the amount of $20,000 and any other fees agreed upon by the Borrower and the Administrative Agent payable to the Administrative Agent and the Lenders. 5 17. Limited Consent.Amendment. Except as expressly amended herein, the Credit Agreement shall continue to be, and shall remain, in full force and effect. This Amendment shall not be deemed to be a waiver of, or consent to, or a modification or amendment of, any other term or condition of the Credit Agreement or any other Loan Document or to prejudice any other right or rights which the Lenders may now have or may have in the future under or in connection with the Credit Agreement or any of the instruments or agreements referred to therein, as the same may be amended from time to time. 18. Counterparts. This Amendment may be executed by one or more of the parties hereto in any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 19. GOVERNING LAW. THIS AMENDMENT SHALL BE 00VFRNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, TOE LAWS OF THE STATE OF NEW YORK. 6 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to beduly executed and delivered by their respective proper and duly authorized officers as of the date first above written. CINEMASTAR LUXURY THEATER, INC., as Borrower By: /s/ Donald H. Harnois, Jr ----------------------------------- Name: Donald H. Harnois, Jr. Title: Vice President and Chief Financial Officer UNION BANK Of CALIFORNIA, N.A., as Administrative Agent and as a Lender By: /s/ Jenny Dongo ----------------------------- Name: Jenny Dongo Title: Vice President The undersigned does hereby acknowledge and consent to the terms and conditions of the foregoing Amendment CINEMASTAR LUXURY CINEMAS, INC. By: /s/ Donald H. Harnois, Jr -------------------------------------- Name: Donald H. Harnois, Jr. Title: Vice President and Chief Financial Officer 7 SCHEDULE 1.1A COMMITMENTS Lender Revolving Commitment - ------ -------------------- Union Bank of California, N.A. $5,000,000 EX-27 3 ex27.txt FINANCIAL DATA SCHEDULE
5 3-MOS MAR-31-2001 APR-01-2000 JUN-30-2000 717,718 0 203,730 0 346,115 1,267,563 13,889,449 0 15,157,012 4,301,036 10,758,502 0 0 62,892 4,335,618 15,157,012 7,120,151 7,120,151 2,814,929 2,814,929 5,072,640 0 143,318 (910,736) (62,237) 0 0 0 0 (848,499) (.13) 0
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