SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A-1
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
June 17, 1996
MAVERICK RESTAURANT CORPORATION
(Exact Name of Registrant as
Specified in its Charter)
0-12145
(Commission File Number)
Kansas 48-0936946
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
Suite 200
302 North Rock Road
Wichita, Kansas 67206
(316) 685-8281
(Registrant's Telephone Number
Including Area Code)
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
A) FINANCIAL STATEMENTS OF HOMESTEAD WEST, INC.
Independent Auditors' Report
Combined Balance Sheets
Combined Statements of Operations
Combined Statements of Stockholders' Equity (Deficit)
Combined Statements of Cash Flows
Notes to Combined Financial Statements
B) PRO FORMA FINANCIAL INFORMATION
Pro Forma Balance Sheet as of April 28, 1996
Pro Forma Statement of Operations for the year ended
January 28, 1996 (Unaudited)
Pro Forma Statement of Operations for the three month
period ended April 28, 1996 (Unaudited)
Notes to Pro Forma Financial Statements
C) EXHIBITS
EXHIBIT NO. DESCRIPTION
----------- -----------
10.1 Asset Purchase Agreement dated June 14, 1996
between Homestead West, Inc., Amagril, Inc.
and the Company. (previously filed)
2
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.
MAVERICK RESTAURANT CORPORATION
Date: January 3, 1997 By: /s/ Linn F. Hohl
--------------------- ---------------------------
Linn F. Hohl, Vice President of
Finance
3
HOMESTEAD WEST, INC. AND AMAGRIL, INC.
Index to Financial Statements
Page
----
Independent Auditors' Report F-2
Combined Balance Sheets F-3
Combined Statements of Operations F-4
Combined Statements of Stockholders' Equity (Deficit) F-5
Combined Statements of Cash Flows F-6
Notes to Combined Financial Statements F-7
F-1
INDEPENDENT AUDITORS' REPORT
The Boards of Directors
Homestead West, Inc. and Amagril, Inc.:
We have audited the accompanying combined balance sheets of Homestead West, Inc.
and Amagril, Inc. as of December 31, 1995 and December 25, 1994, and the related
combined statements of operations, stockholders' equity (deficit), and cash
flows for each of the years in the three-year period ended December 31, 1995.
These combined financial statements are the responsibility of the Companies'
management. Our responsibility is to express an opinion on these combined
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of Homestead
West, Inc. and Amagril, Inc. as of December 31, 1995 and December 25, 1994, and
the results of their operations and their cash flows for each of the years in
the three-year period ended December 31, 1995, in conformity with generally
accepted accounting principles.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Wichita, Kansas
October 18, 1996
F-2
HOMESTEAD WEST, INC. AND AMAGRIL, INC.
Combined Balance Sheets
March 24, 1996, December 31, 1995 and December 25, 1994
March 24,
Assets 1996 1995 1994
------ ---- ---- ----
(Unaudited)
Current assets:
Cash $ 178,879 220,341 182,505
Accounts receivable 21,488 11,292 6,733
Inventory 100,369 97,140 94,178
Prepaid expenses 34,384 10,445 27,973
--------- --------- ---------
Total current assets 335,120 339,218 311,389
Property and equipment, net 1,027,106 1,010,442 497,065
Other assets 19,500 19,500 12,450
--------- --------- ---------
$ 1,381,726 1,369,160 820,904
--------- --------- ---------
--------- --------- ---------
Liabilities and Stockholders' Equity (Deficit)
----------------------------------------------
Current liabilities:
Notes payable $ 591,274 345,000 425,000
Current portion of long-term debt 95,359 96,249 -
Accounts payable 417,854 378,146 299,429
Accrued liabilities 218,683 253,718 278,199
--------- --------- ---------
Total current liabilities 1,323,170 1,073,113 1,002,628
Long-term debt, less current portion 279,042 295,714 -
--------- --------- ---------
Total liabilities 1,602,212 1,368,827 1,002,628
--------- --------- ---------
Stockholders' equity (deficit):
Common stock:
$1 par value. Authorized 100 shares; issued and outstanding
100 shares 100 100 100
No par value. Authorized 1,000 shares; issued and outstand-
ing 20 shares 200 200 -
Additional paid-in capital 252,538 240,186 270,186
Accumulated deficit (68,949) (120,153) (302,010)
Treasury stock, 27, 4 and 5 shares of common stock, at cost, as of
March 24, 1996, December 31, 1995 and December 25, 1994,
respectively (404,375) (120,000) (150,000)
--------- --------- ---------
Total stockholders' equity (deficit) (220,486) 333 (181,724)
Commitments
--------- --------- ---------
$ 1,381,726 1,369,160 820,904
--------- --------- ---------
--------- --------- ---------
See accompanying notes to combined financial statements.
F-3
HOMESTEAD WEST, INC. AND AMAGRIL, INC.
Combined Statements of Operations
Fifty-Three Weeks Ended December 31, 1995, Fifty-Two Weeks Ended
December 25, 1994 and Fifty-Two Weeks Ended December 26, 1993
and the Thirteen Weeks Ended March 24, 1996 and March 19, 1995
Thirteen Weeks Ended
---------------------
March 24, March 19,
1996 1995 1995 1994 1993
---- ---- ---- ---- ----
(Unaudited) (Unaudited)
Net sales $ 1,444,624 1,144,127 5,444,612 4,731,628 4,522,736
--------- --------- --------- --------- ---------
Costs and expenses:
Cost of sales 532,793 399,450 2,015,677 1,761,320 1,699,943
Restaurant operating expenses 739,974 552,620 2,808,664 2,359,383 2,208,372
General and administrative expenses 19,349 35,956 151,931 107,863 105,854
Depreciation 50,469 28,192 112,270 60,400 25,111
--------- --------- --------- --------- ---------
Total costs and expenses 1,342,585 1,016,218 5,088,542 4,288,966 4,039,280
--------- --------- --------- --------- ---------
Operating income 102,039 127,909 356,070 442,662 483,456
--------- --------- --------- --------- ---------
Other income (expense):
Interest expense (21,290) (9,727) (50,013) (16,293) (15)
Interest income 455 273 1,516 1,517 3,387
Loss on sale of property and equipment - - - (28,149) -
Other - - 9,978 2,335 4,842
--------- --------- --------- --------- ---------
Total other income (expense) (20,835) (9,454) (38,519) (40,590) 8,214
--------- --------- --------- --------- ---------
Net earnings $ 81,204 118,455 317,551 402,072 491,670
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
See accompanying notes to combined financial statements.
F-4
HOMESTEAD WEST, INC. AND AMAGRIL, INC.
Combined Statements of Stockholders' Equity (Deficit)
Fifty-Three Weeks Ended December 31, 1995, Fifty-Two Weeks Ended
December 25, 1994 and Fifty-Two Weeks Ended December 26, 1993
and the Thirteen Weeks Ended March 24, 1996
Additional Retained
Common Paid-In Earnings Treasury
Stock Capital (Deficit) Stock Total
----- ------- ------- ----- -----
Balance, December 27, 1992 $ 100 186,677 76,530 (150,000) 113,307
Net earnings - - 491,670 - 491,670
Distributions to stockholders - - (525,000) - (525,000)
Contributed capital - 53,509 - - 53,509
------ ------- ------- ------- -------
Balance, December 26, 1993 100 240,186 43,200 (150,000) 133,486
Net earnings - - 402,072 - 402,072
Distributions to stockholders - - (747,282) - (747,282)
Stock compensation - 30,000 - - 30,000
------ ------- ------- ------- -------
Balance, December 25, 1994 100 270,186 (302,010) (150,000) (181,724)
Net earnings - - 317,551 - 317,551
Distributions to stockholders - - (135,694) - (135,694)
Issuance of common stock 200 - - - 200
Issuance of treasury stock - (30,000) - 30,000 -
------ ------- ------- ------- -------
Balance, December 31, 1995 300 240,186 (120,153) (120,000) 333
Net earnings (unaudited) - - 81,204 - 81,204
Distributions to stockholders (unaudited) - - (30,000) - (30,000)
Contributed capital (unaudited) - 12,352 - - 12,352
Acquisitions of treasury stock (unaudited) - - - (284,375) (284,375)
------ ------- ------- ------- -------
Balance, March 24, 1996 (unaudited) $ 300 252,538 (68,949) (404,375) (220,486)
------ ------- ------- ------- -------
------ ------- ------- ------- -------
See accompanying notes to combined financial statements.
F-5
HOMESTEAD WEST, INC. AND AMAGRIL, INC.
Combined Statements of Cash Flows
Fifty-Three Weeks Ended December 31, 1995, Fifty-Two Weeks Ended
December 25, 1994 and Fifty-Two Weeks Ended December 26, 1993
and the Thirteen Weeks Ended March 24, 1996 and March 19, 1995
Thirteen Weeks Ended
---------------------
March 24, March 19,
1996 1995 1995 1994 1993
---- ---- ---- ---- ----
(Unaudited) (Unaudited)
Cash flows from operating activities:
Net earnings $ 81,204 118,455 317,551 402,072 491,670
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation 50,469 28,192 112,270 60,400 25,111
Loss on sale of property and equipment - - - 28,149 -
Noncash stock compensation expense - - - 30,000 -
Increase (decrease) in cash resulting from
changes in:
Inventory (3,229) 12,696 (2,962) (27,772) 7,605
Accounts receivable (10,196) 2,456 (4,559) (152) 10,140
Prepaid expenses and other assets (23,939) 4,590 10,478 (17,659) 12,828
Accounts payable 39,708 (21,754) 15,423 79,542 (34,070)
Accrued liabilities (35,035) (92,210) (24,481) 34,416 (26,835)
------- ------- ------- ------- -------
Net cash provided by operating activities 98,982 52,425 423,720 588,996 486,449
------- ------- ------- ------- -------
Cash flows from investing activities:
Additions to property and equipment (67,133) (87,920) (562,353) (295,103) (65,137)
Proceeds from sale of property, plant and equipment - - - 11,210 -
------- ------- ------- ------- -------
Net cash used in investing activities (67,133) (87,920) (562,353) (283,893) (65,137)
------- ------- ------- ------- -------
Cash flows from financing activities:
Proceeds from issuance of notes payable and long-
term debt 246,274 - 400,000 425,000 -
Principal payments on notes payable and long-term
debt (17,562) (10,000) (88,037) - -
Distributions to stockholders (30,000) (20,210) (135,694) (747,282) (525,000)
Contributed capital 12,352 9,727 - - 53,509
Acquisition of treasury stock (284,375) - - - -
Proceeds from issuance of common stock - - 200 - -
------- ------- ------- ------- -------
Net cash provided by (used in) financing
activities (73,311) (20,483) 176,469 (322,282) (471,491)
------- ------- ------- ------- -------
Net increase (decrease) in cash (41,462) (55,978) 37,836 (17,179) (50,179)
Cash at beginning of period 220,341 182,505 182,505 199,684 249,863
------- ------- ------- ------- -------
Cash at end of period $ 178,879 126,527 220,341 182,505 199,684
------- ------- ------- ------- -------
------- ------- ------- ------- -------
See accompanying notes to combined financial statements.
F-6
HOMESTEAD WEST, INC. AND AMAGRIL, INC.
Notes to Combined Financial Statements
December 31, 1995 and December 25, 1994
(1) ORGANIZATION AND OPERATIONS
The combined entity is comprised of Homestead West, Inc. (Homestead) and
Amagril, Inc. (Amagril) and such entities are collectively referred to as
the Company. Homestead was incorporated in 1982 and owns and operates
three steakhouse restaurants located in Kansas. The steakhouses operate
under the Amarillo Grill concept which specializes in mesquite-grilled
steaks. Homestead also operated Charlie Tango's (formerly Magnolia Cafe),
a one-unit cajun style restaurant concept that closed in 1995. Amagril was
incorporated in 1995 and owns and operates one Amarillo Grill steakhouse
located in Hutchinson, Kansas. Amagril is owned 50% by Homestead and 20%
by a significant stockholder of Homestead as of December 31, 1995.
In March 1996, Homestead acquired all of the remaining outstanding stock of
Amagril and, accordingly, Amagril became a wholly-owned subsidiary of
Homestead. In June 1996, the assets related to the four Amarillo Grill
steakhouses were acquired by Maverick Restaurant Corporation (Maverick)
pursuant to an Asset Purchase Agreement. Due to the fact the business
assets acquired by Maverick excluded Charlie Tango's, the accompanying
financial statements do not include any of the accounts or operations of
Charlie Tango's.
Intercompany amounts due from or due to Charlie Tango's have been reflected
as distributions to or contributed capital from stockholders in the
accompanying statements of stockholders' equity (deficit).
The accompanying financial statements are presented on a combined basis due
to the common management and ownership of Homestead and Amagril, and the
fact assets from both entities were purchased by Maverick in the
aforementioned business acquisition.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) FISCAL YEAR
The Company operates on a 52/53-week fiscal year ending on the last
Sunday of December.
(b) INVENTORIES
Inventories are stated at the lower of cost or market. Cost is
determined using the first-in, first-out method.
F-7
HOMESTEAD WEST, INC. AND AMAGRIL, INC.
Notes to Combined Financial Statements, Continued
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
(c) PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation is calculated
using the straight-line method over the estimated useful lives of the
assets. Leasehold improvements are amortized on a straight-line basis
over the lesser of the remaining lease term, including renewal periods
when the Company intends to exercise renewal options, or the estimated
useful life of the asset.
(d) INCOME TAXES
Homestead operates as an S corporation. As a result, income tax
expense or benefit was not recorded in the accompanying financial
statements as Homestead's results of operations were reported to its
stockholders for inclusion in their individual income tax returns.
Amagril operates as a C corporation. Deferred income taxes are
recognized for all temporary differences between the tax and financial
reporting bases of Amagril's assets and liabilities and operating loss
carryforwards based on enacted tax laws and statutory tax rates
applicable to the periods in which the differences are expected to
affect taxable income.
(e) STATEMENTS OF CASH FLOWS
Noncash investing activities during 1995 and 1994 included:
1995 1994
---- ----
Property and equipment additions included in accounts
payable $ 166,052 102,758
--------- ---------
--------- ---------
Cash paid during the years for interest is as follows: 1995 - $43,672;
1994 - $8,223 and 1993 - $-0-.
(f) PREOPENING COSTS
Restaurant preopening costs are charged to operations as incurred.
(g) USE OF ESTIMATES
The preparation of financial statements in accordance with generally
accepted accounting principles requires management of the Company to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting periods. Actual results could
differ from these estimates.
F-8
HOMESTEAD WEST, INC. AND AMAGRIL, INC.
Notes to Combined Financial Statements, Continued
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
(h) INTERIM FINANCIAL DATA (UNAUDITED)
The accompanying balance sheet as of March 24, 1996 and the
accompanying statements of operations, stockholders' equity (deficit)
and cash flows for the thirteen weeks ended March 24, 1996 and March
19, 1995 have been prepared by the Company without an audit. In the
opinion of management, all adjustments, consisting only of normal
recurring adjustments, considered necessary for a fair presentation
for such periods have been made. Results for interim periods should
not be considered as indicative of results for a full year.
Footnote disclosures normally included in annual financial statements
prepared in accordance with generally accepted accounting principles
have been omitted herein with respect to the interim financial data.
The interim information herein should be read in conjunction with the
annual financial information presented herein.
(3) PROPERTY AND EQUIPMENT
A summary of property and equipment and accumulated depreciation and
amortization as of December 31, 1995 and December 25, 1994 is as
follows:
1995 1994
---- ----
Equipment $ 1,070,441 624,817
Leasehold improvements 271,859 90,719
---------- ---------
1,342,300 715,536
Less accumulated depreciation and amortization (331,858) (218,471)
---------- ---------
Net property and equipment $ 1,010,442 497,065
---------- ---------
---------- ---------
(4) LEASES
The Company leases its restaurant facilities under noncancelable operating
leases. These leases generally contain renewal options and require the
Company to pay executory costs such as maintenance and insurance. Rent
expense for operating leases aggregated $247,926; $299,875 and $310,196 for
the years ended December 31, 1995, December 25, 1994 and December 26, 1993,
respectively, which includes percentage rent expense of $47,203; $98,340
and $101,088, respectively.
F-9
HOMESTEAD WEST, INC. AND AMAGRIL, INC.
Notes to Combined Financial Statements, Continued
(4) LEASES, CONTINUED
Future minimum lease payments under noncancelable operating leases with
initial or remaining lease terms in excess of one year as of December 31,
1995 are:
Year ending on the last Sunday of December:
1996 $ 248,200
1997 267,550
1998 243,800
1999 149,775
2000 26,400
Thereafter 6,600
-------
Total minimum lease payments $ 942,325
-------
-------
(5) NOTES PAYABLE AND LONG-TERM DEBT
Notes payable at December 31, 1995 consist of two unsecured notes due to a
bank maturing February 13, 1996 and March 27, 1996, respectively. The
notes bear interest at prime rate less .5% (8.25% at December 31, 1995).
Notes payable at December 25, 1994 included two unsecured short-term notes
due to a bank bearing interest at prime rate. Interest-only payments are
due monthly with principal due at maturity.
Long-term debt at December 31, 1995 consists of the following:
Unsecured note payable to a bank, due in monthly installments of
of $1,866 including interest at a fixed rate of 9.0% through
November 1999 $ 73,734
Note payable to a bank, due in monthly installments of $6,771
plus interest at prime plus .75% (9.25% at December 31, 1995)
through November 1999; secured by inventory, equipment and
leasehold improvements as well as personal guarantees of
certain stockholders 318,229
----------
Total long-term debt 391,963
Less current portion of long-term debt 96,249
----------
Long-term debt, less current portion $ 295,714
----------
----------
The aggregate maturities of long-term debt subsequent to December 31, 1995
are as follows: 1996 - $96,249; 1997 - $99,081; 1998 - $100,754 and 1999 -
$95,879.
F-10
HOMESTEAD WEST, INC. AND AMAGRIL, INC.
Notes to Combined Financial Statements, Continued
(6) INCOME TAXES
As described in note 2, Amagril operates as a C corporation. As of
December 31, 1995, Amagril has a net operating loss carryforward of
approximately $20,000 for income tax purposes which, if not used, will
expire in 2010. Amagril also has $5,803 of contribution carryover.
Actual income tax expense differs from the "expected" tax expense computed
by applying the U.S. Federal corporate tax rate of 34% to earnings before
income taxes for the year ended December 31, 1995 as follows:
Computed expected tax expense $ 107,967
S corporation earnings allocated to stockholders (141,024)
Surtax exemption 14,584
Valuation allowance 18,056
Other 417
------------
$ -
------------
------------
The tax effects of temporary differences that give rise to deferred tax
assets and liabilities at December 31, 1995 are presented below:
Deferred tax assets:
Net operating loss and contribution carryforwards $ 4,834
Preopening costs capitalized for tax purposes 12,162
Other 1,060
------------
Total gross deferred tax assets 18,056
Less valuation allowance (18,056)
------------
Net deferred tax asset $ -
------------
------------
F-11
HOMESTEAD WEST, INC. AND AMAGRIL, INC.
Notes to Combined Financial Statements, Continued
(7) FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company has determined the fair value of its financial instruments in
accordance with Statement of Financial Accounting Standards No. 107,
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS. The carrying
amounts of variable rate debt instruments, including the short-term notes
payable and certain long-term debt, approximate their fair value because
the interest rates on these instruments change with market interest rates.
The carrying amounts of fixed-rate long-term debt (including current
portions thereof) approximate fair value based upon interest rates
available to the Company for issuance of similar debt with similar terms
and maturities. For all other financial instruments including cash,
accounts receivable and accounts payable, the carrying amounts approximate
fair value because of the short maturity of these instruments.
F-12
MAVERICK RESTAURANT CORPORATION
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
The following pro forma balance sheet presents the balance sheet of the Company
as of April 28, 1996 as if the acquisition of the assets of combined entity
Homestead West, Inc. and Amagril, Inc. had occurred as of April 28, 1996. The
following pro forma statements of operations present the results of operations
of Maverick Restaurant Corporation (the Company) for the year ended January 28,
1996 and for the three-month period ended April 28, 1996 as if the acquisition
of the combined entity Homestead West, Inc. and Amagril, Inc. had occurred as of
February 1, 1995. The historical combined balance sheet information of
Homestead West, Inc. and Amagril, Inc. included in the pro forma balance sheet
is as of March 24, 1996. The historical combined statement of operations
information of Homestead West, Inc. and Amagril, Inc. included in the pro forma
statements of operations is for the fifty-three weeks ended December 31, 1995
and thirteen weeks ended March 24, 1996. The acquisition of the assets of
combined entity Homestead West, Inc. and Amagril, Inc. by the Company has been
accounted for by the purchase method of accounting. The pro forma financial
information should be read in conjunction with the related historical financial
information of the Company included in its Annual Report on Form 10-K for the
fiscal year ended January 28, 1996 and its Quarterly Report on Form 10-Q for the
quarter ended April 28, 1996, and Homestead West, Inc. and Amagril, Inc.
included elsewhere herein. The unaudited pro forma balance sheet and statement
of operations do not purport to represent what the Company's financial position
or results of operations would actually have been had the transaction in fact
occurred on the aforementioned dates, or to project the Company's results of
operations for any future periods. The pro forma adjustments are based upon
available information and upon certain assumptions that management believes are
reasonable. These adjustments are directly attributable to the transaction and
are expected to have a continuing impact on the financial position and results
of operations of the Company.
MAVERICK RESTAURANT CORPORATION
PRO FORMA BALANCE SHEET (UNAUDITED)
April 28, 1996
Historical
-----------------------------
Homestead
Maverick West,
Restaurant Inc. and Pro Forma
Corporation Amagril, Inc. Adjustments Pro Forma
----------- ------------- ----------- ---------
Current assets:
Cash $ 170,182 178,879 (174,879) 174,182
Accounts receivable 19,868 21,488 (21,488) 19,868
Inventories 122,854 100,369 (16,854) 206,369
Prepaid expenses 66,489 34,384 (34,384) 66,489
----------- ----------- ----------- -----------
Total current assets 379,393 335,120 (247,605)(a) 466,908
Property and equipment, net 4,393,710 1,027,106 (217,106)(b) 5,203,710
Goodwill, net 198,425 - 902,485 (c) 1,100,910
License fees, net 100,147 - - 100,147
Deposits and other assets 6,054 19,500 (19,500)(a) 6,054
----------- ----------- ----------- -----------
Total assets $ 5,077,729 1,381,726 418,274 6,877,729
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
MAVERICK RESTAURANT CORPORATION
PRO FORMA BALANCE SHEET (UNAUDITED), CONTINUED
April 28, 1996
Historical
-----------------------------
Homestead
Maverick West,
Restaurant Inc. and Pro Forma
Corporation Amagril, Inc. Adjustments Pro Forma
----------- ------------- ----------- ---------
Current liabilities:
Current portion long-term debt $ 201,827 95,359 200,000 (d) 401,827
(95,359)(f)
Notes payable - 591,274 (591,274)(f) -
Current capital lease 63,540 - - 63,540
Accounts payable 550,134 417,854 (417,854)(f) 550,134
Accrued liabilities 387,512 218,683 (218,683)(f) 387,512
----------- ----------- ----------- -----------
Total current liabilities 1,203,013 1,323,170 (1,123,170) 1,403,013
Long-term debt, less current portion 401,307 279,042 1,300,000 (e) 1,701,307
(279,042)(f)
Capital lease, less current portion 1,826,383 - - 1,826,383
Deferred credit 23,629 - - 23,629
----------- ----------- ----------- -----------
Total liabilities 3,454,332 1,602,212 (102,212) 4,954,332
Stockholders' equity (deficit) 1,623,397 (220,486) 220,486 (g) 1,923,397
300,000 (h)
----------- ----------- ----------- -----------
Total liabilities and stockholders'
equity (deficit) $ 5,077,729 1,381,726 418,274 6,877,729
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
MAVERICK RESTAURANT CORPORATION
PRO FORMA STATEMENT OF OPERATIONS (UNAUDITED)
For the Year Ended January 28, 1996
Historical
-----------------------------
Homestead
Maverick West,
Restaurant Inc. and Pro Forma
Corporation Amagril, Inc. Adjustments Pro Forma
----------- ------------- ----------- ---------
Net sales $ 10,668,573 5,444,612 - 16,113,185
----------- ----------- ----------- -----------
Costs of goods sold 3,359,662 2,015,677 - 5,375,339
Operating expenses 6,305,378 2,808,664 - 9,114,042
Depreciation and amortization 479,163 112,270 60,166 (i) 658,757
7,158 (j)
General and administrative expenses 493,836 151,931 - 645,767
----------- ----------- ----------- -----------
Total costs and expenses 10,638,039 5,088,542 67,324 15,793,905
----------- ----------- ----------- -----------
Operating income 30,534 356,070 (67,324) 319,280
----------- ----------- ----------- -----------
Other income:
Interest income 18,575 1,516 - 20,091
Interest expense (224,450) (50,013) (73,737)(k) (348,200)
Other income - 9,978 - 9,978
----------- ----------- ----------- -----------
Total other income (205,875) (38,519) (73,737) (318,131)
----------- ----------- ----------- -----------
Earnings (loss) before income taxes (175,341) 317,551 (141,061) 1,149
Income taxes - - - -
----------- ----------- ----------- -----------
Net earnings (loss) $ (175,341) 317,551 (141,061) 1,149
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Net earnings (loss) per share $ (.03) -
----------- -----------
----------- -----------
Average common shares outstanding 6,081,458 1,000,000 (h) 7,081,458
----------- ----------- -----------
----------- ----------- -----------
MAVERICK RESTAURANT CORPORATION
PRO FORMA STATEMENT OF OPERATIONS (UNAUDITED)
For the Three-Month Period Ended April 28, 1996
Historical
-----------------------------
Homestead
Maverick West,
Restaurant Inc. and Pro Forma
Corporation Amagril, Inc. Adjustments Pro Forma
----------- ------------- ----------- ---------
Net sales $ 2,762,316 1,444,624 - 4,206,940
----------- ----------- ----------- -----------
Costs of goods sold 878,369 532,793 - 1,411,162
Operating expenses 1,669,202 739,974 - 2,409,176
Depreciation and amortization 134,067 50,469 15,041 (i) 178,965
(20,612)(j)
General and administrative expenses 125,268 19,349 - 144,617
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Total costs and expenses 2,806,906 1,342,585 (5,571) 4,143,920
----------- ----------- ----------- -----------
Operating income (loss) (44,590) 102,039 5,571 63,020
----------- ----------- ----------- -----------
Other income:
Interest income - 455 - 455
Interest expense (61,143) (21,290) (9,647)(k) (92,080)
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Total other income (61,143) (20,835) (9,647) (91,625)
----------- ----------- ----------- -----------
Earnings (loss) before income taxes (105,733) 81,204 (4,076) (28,605)
Income taxes - - - -
----------- ----------- ----------- -----------
Net earnings (loss) $ (105,733) 81,204 (4,076) (28,605)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Net earnings (loss) per share $ (.02) -
----------- -----------
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Average common shares outstanding 6,081,458 1,000,000 (h) 7,081,458
----------- ----------- -----------
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MAVERICK RESTAURANT CORPORATION
Notes to Pro Forma Financial Statements
NATURE OF TRANSACTION
Certain of the assets of the combined entity of Homestead West, Inc. and
Amagril, Inc. were acquired by the Company through the issuance of 1,000,000
shares of common stock with an estimated fair value of $300,000 and payment of
$1,500,000 in cash pursuant to an asset purchase agreement dated June 14, 1996.
The cost of the acquisition has been allocated to the assets acquired based upon
the Company's estimate of the fair value of such assets.
PRO FORMA ADJUSTMENTS:
Adjustments to the pro forma balance sheet as of April 28, 1996 are as
follows:
(a) To reflect net working capital and other assets not acquired.
(b) To reflect property and equipment acquired at estimated fair value.
(c) To reflect the excess of cost of the acquisition over the fair value
of the assets acquired which is recorded as goodwill.
(d) To reflect the current portion of the borrowings incurred to effect
the acquisition.
(e) To reflect the long-term portion of the borrowings incurred to effect
the acquisition.
(f) To reflect liabilities not assumed by the Company.
(g) To eliminate the deficit of Homestead West, Inc. and Amagril, Inc.
(h) To reflect issuance of 1,000,000 shares of common stock by the Company
used to finance the cost of the acquisition.
Adjustments to the pro forma statement of operations for the year ended
January 28, 1996 and three-month period ended April 28, 1996 are as
follows:
(i) To reflect amortization of goodwill over 15 years using the
straight-line method.
(j) To reflect depreciation and amortization of property and equipment
based upon the cost assigned by the Company.
(k) To reflect interest expense applicable to borrowings incurred to
effect the acquisition.