1 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------- FORM 10-Q/A -------------------- [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ COMMISSION FILE NUMBER 0-21203 DIEDRICH COFFEE, INC. (Exact name of registrant as specified in its charter) DELAWARE 33-0086628 (State or Other Jurisdiction (IRS Employer Incorporate or Organization) Identification No.) 2144 MICHELSON DRIVE IRVINE, CALIFORNIA 92612 (Address of Principal Executive Offices including Zip Code) (714) 260-1600 (Registrant's Telephone Number including Area Code) -------------------- 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 September 10, 1997, there were 5,391,650 shares of common stock of the registrant outstanding. ================================================================================ 2 DIEDRICH COFFEE, INC. INDEX PAGE NO. -------- PART I - FINANCIAL INFORMATION Item 1. Financial Statements Notes to Condensed Financial Statements.................................... 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources............................................ 12 Signatures......................................................................... 15 3 DIEDRICH COFFEE, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS JULY 30, 1997 (UNAUDITED) 5. SUBSEQUENT EVENTS On August 19, 1997, the Company entered into a promissory note, term loan agreement, and security agreement with the Virginia R. Cirica Trust (the "Cirica Trust Loan Documents"). That trust is controlled by Ms. Cirica, who is the spouse of Lawrence Goelman, Chairman and Interim Chief Executive Officer of the Company. Shortly before the Cirica Trust entered into the Cirica Trust Loan Documents, Mr. Goelman loaned Ms. Cirica approximately $250,000. Some of those funds were transferred by Ms. Cirica to the Cirica Trust and advanced by the Cirica Trust to the Company pursuant to the Cirica Trust Loan Documents. The loan is secured by the assets of the Company and provides for borrowings up to $500,000 with interest accruing at the prime rate plus 3 1/2 %. The Company borrowed $500,000 under this loan. All outstanding principal and accrued interest is due and payable on August 19, 2002. In connection with the Cirica Trust Loan Documents, the Company issued a warrant to the Cirica Trust to purchase up to 85,000 shares of the Company's common stock if the loan is repaid in full within 120 days of closing, or up to 170,000 shares of the Company's common stock if the loan is not repaid within 120 days, all at a price of $2.25 a share. The warrants are exercisable immediately and expire on the later of August 19, 2003 or one year following payment in full of the loan. Mr. Goelman disclaims any pecuniary interest in the loan to the Company, and any beneficial interest in the Cirica Trust, except to the extent to which Mr. Goelman is a contingent beneficiary as to certain Cirica Trust assets (not including the loan to the Company) under the terms of the Cirica Trust. 8 4 PART I - FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES On August 19, 1997, the Company entered into a promissory note, term loan agreement, and security agreement with the Virginia R. Cirica Trust (the "Cirica Trust Loan Documents"). That trust is controlled by Ms. Cirica, who is the spouse of Lawrence Goelman, Chairman and Interim Chief Executive Officer of the Company. Shortly before the Cirica Trust entered into the Cirica Trust Loan Documents, Mr. Goelman loaned Ms. Cirica approximately $250,000. Some of those funds were transferred by Ms. Cirica to the Cirica Trust and advanced by the Cirica Trust to the Company pursuant to the Cirica Trust Loan Documents. The loan is secured by the assets of the Company and provides for borrowings up to $500,000 with interest accruing at the prime rate plus 3 1/2 %. The Company borrowed $500,000 under this loan. All outstanding principal and accrued interest is due and payable on August 19, 2002. In connection with the Cirica Trust Loan Documents, the Company issued a warrant to the Cirica Trust to purchase up to 85,000 shares of the Company's common stock if the loan is repaid in full within 120 days of closing, or up to 170,000 shares of the Company's common stock if the loan is not repaid within 120 days, all at a price of $2.25 a share. The warrants are exercisable immediately and expire on the later of August 19, 2003 or one year following payment in full of the loan. Mr. Goelman disclaims any pecuniary interest in the loan to the Company, and any beneficial interest in the Cirica Trust, except to the extent to which Mr. Goelman is a contingent beneficiary as to certain Cirica Trust assets (not including the loan to the Company) under the terms of the Cirica Trust. 12 5 PART II - OTHER INFORMATION 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. Dated: October 22, 1997 DIEDRICH COFFEE, INC. /s/ Lawrence Goelman ------------------------------ Lawrence Goelman, Chairman of the Board and Interim Chief Executive Officer /s/ John Bayley ------------------------------ John Bayley, Vice President of Finance and Controller (principal financial officer) 15