U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
February 26, 1997
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Date of Report (date of earliest event reported)
SAINT ANDREWS GOLF CORPORATION
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Exact name of Registrant as Specified in its Charter
Nevada 0-24970 88-0203976
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State or Other Jurisdiction Commission File IRS Employer Identification
of Incorporation Number Number
5325 South Valley View Boulevard, Suite 10
Las Vegas, Nevada 89118
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Address of Principal Executive Offices, Including Zip Code
(702) 798-7777
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Registrant's Telephone Number, Including Area Code
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On February 26, 1997, Saint Andrews Golf Corporation (the "Company") and
its majority shareholder Las Vegas Discount Golf & Tennis, Inc. ("Parent" or
LVDG") sold certain of their assets, and transferred certain liabilities to an
unrelated entity ("Buyer") in a transaction pursuant to the Agreement for the
Purchase and Sale of Assets (see Exhibit 10). In particular, the Company's
Parent sold all of its interest in three company-owned "Las Vegas Discount
Golf & Tennis" retail stores located in the Los Angeles, California
metropolitan area including inventory, fixtures and other property, and
certain inventory and assets at its headquarters relating to its business of
selling golf and tennis equipment on a wholesale basis to franchisees of the
Company. The Company sold all of its interest in its business of franchising
"Las Vegas Discount Golf & Tennis" retail stores, including its rights under
agreements with franchisees, the right to franchise such stores, and the
rights to related trade names and marks. The Buyer also assumed certain trade
payables of the two companies.
In connection with the sale of the above-described assets, the Company
and its Parent agreed not to compete with the Buyer in the golf equipment
business except that the Company is permitted to sell golf equipment at
SportPark and driving range facilities which it may operate. In addition, the
Buyer granted to Boreta Enterprises, Ltd., a limited partnership owned by Ron
Boreta, the Company's President, Vaso Boreta, the President of the Company's
Parent, and John Boreta, a principal shareholder of the Company's Parent, the
right to operate "Las Vegas Discount Golf & Tennis" stores in southern Nevada,
except for Summerlin, Nevada.
The total purchase price for the transaction was $5,354,287.25 of which
$4,600,000 was paid in cash, $203,701.62 was paid with a short-term promisory
note, $200,000 was placed in escrow pending the accounting of inventory and
trade payables, $200,000 was placed in escrow for two years to cover potential
indemnification obligations, $60,475 was withheld for sales taxes, and
$29,635.63 was withheld for accrued vacation liabilities. Of the total
purchase price, $2,603,787.25 was allocated to the Parent and $2,750,500 was
allocated to the Company.
As a result of the sale of assets, the Company's business now consists
of developing its All American SportPark program and building its first
SportPark in Las Vegas, Nevada.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(b) PRO FORMA FINANCIAL INFORMATION. The following pro forma financial
statements are filed herewith:
Introduction to Pro Forma Condensed Financial Statements F-1
Pro Forma Condensed Consolidated Balance Sheet as of
September 30, 1996 F-2
Pro Forma Condensed Consolidated Statement of Operation
for the Nine Month Period Ended September 30, 1996 F-3
Pro Forma Condensed Consolidated Statement of Operation
for the Twelve Month Period Ended December 31, 1995 F-3
Notes to Pro Forma Condensed Consolidated Financial
Statements F-4
(c) EXHIBITS. The following exhibits are filed herewith:
EXHIBIT
NUMBER DESCRIPTION
10 Agreement for the Purchase and Sale of Assets
10.1 Amendment dated February 26, 1997, to the Agreement for the
Purchase and Sale of Assets
SAINT ANDREWS GOLF CORPORATION
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
INTRODUCTION TO PRO FORMA CONDENSED FINANCIAL STATEMENTS
The accompanying pro forma condensed financial statements present pro forma
financial information for Saint Andrews Golf Corporation ("SAGC") on a
consolidated basis giving effect to the February 26, 1997 sale of its
franchise business segment, and transfer of certain liabilities, to an
unrelated buyer in a transaction pursuant to the "Agreement for the Purchase
and Sale of Assets" previously described.
The accompanying pro forma condensed consolidated balance sheet as of
September 30, 1996 is presented on the assumption that the transaction
occurred as of that date.
The accompanying pro forma condensed consolidated statements of operations
cover the year ended December 31, 1995 and the nine month period ended
September 30, 1996 for SAGC. Both statements of operations have been
presented on the assumption that the disposition occurred at the beginning of
the earliest period presented.
The pro forma condensed consolidated financial statements are not necessarily
indicative of the results that will be achieved for future periods as a result
of the disposition of the franchise business segment by SAGC as previously
described. These pro forma financial statements and the related notes thereto
should be read in conjunction with the historical financial statements of
SAGC.
F-1
SAINT ANDREWS GOLF CORPORATION
Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 1996
(in thousands)
Pro Forma
September 30, Pro Forma September 30,
1996 Adjustments Ref 1996
------------ ----------- --- -----------
Cash and cash equivalents $ 3,351 $ 2,473 1 $ 5,824
Restricted cash in escrow and note
from sale of business segment - 277 1 277
Accounts receivable from
franchises, net 283 (283) 1 -
Lease termination receivable 3,123 - 3,123
Other current assets 36 - 36
Total current assets 6,793 2,467 9,260
Other assets 1,579 (153) 1 1,426
Total assets $ 8,372 $ 2,314 $ 10,686
Accounts payable and accrued
expenses $ 677 $ - $ 677
Current taxes payable - 842 1 842
Deferred franchise fees 183 (91) 1 92
Other current liabilities 462 - 462
Total current liabilities 1,322 (91) 2,073
Deferred income 98 - 98
Total liabilities 1,420 (91) 2,171
Stockholders' equity 6,952 1,563 1 8,515
Total liabilities and equity $ 8,372 $ 2,314 $ 10,686
The accompanying notes are an integral part of this pro forma condensed
consolidated balance sheet.
F-2
SAINT ANDREWS GOLF CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATION
FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 1996
(in thousands)
Pro Forma
September 30, Pro Forma September 30,
1996 Adjustments Ref 1996
------------ ----------- --- ------------
Franchise fees $ 160 $ (160) 2 $ -
Royalties 903 (903) 2 -
Other 166 (136) 2 30
Total revenues 1,229 (1,199) 30
Cost of sales 134 (134) 2
Selling, general and administrative 1,412 (706) 2 706
SportsPark development costs 207 - 207
Total expenses 1,753 (840) 913
Income (loss) before provision for
income taxes (524) 359 2 (883)
Provision (benefit) for income taxes - - -
Net income (loss) $ (524) $ 359 $ (883)
Loss per share ($0.17) ($0.29)
Weighted average shares 3,000,000 3,000,000
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATION
FOR THE TWELVE MONTH PERIOD ENDED DECEMBER 31, 1995
(in thousands)
Pro Forma
September 30, Pro Forma September 30,
1996 Adjustments Ref 1996
------------ ----------- --- ------------
Franchise fees $ 245 $ (245) 2 $ -
Royalties 1,209 (1,209) 2 -
Other 176 (84) 2 92
Total revenues 1,630 (1,538) 92
Cost of sales 58 (58) 2 -
Selling, general and administrative 1,781 (891) 2 890
SportsPark development costs 108 - 108
Total expenses 1,947 (949) 998
Income (loss) before provision for
income taxes (317) 589 2 (906)
Provision (benefit) for income taxes - - -
Net income (loss) $ (317) $ 589 $ (906)
Loss per share ($0.11) ($0.30)
Weighted average shares 3,000,000 3,000,000
The accompanying notes are an integral part of these pro forma condensed
consolidated statements of operations.
F-3
SAINT ANDREWS GOLF CORPORATION
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
1. This adjustment reflects the proceeds received by SAGC resulting from the
sale of its franchise business segment as well as the assignment of certain
liabilities to the Buyer. The total proceeds received, including the
assignment of liabilities, was $2,841,000 while the business segment assets
disposed of totaled $ 436,000, resulting in an estimated gain of $1,563,00,
net of applicable income taxes of $842,000.
2. This adjustment reflects the elimination of the revenues and costs
associated with the disposition of assets related to the Company's franchise
business. The entry also records management's estimate of the reduction in
specific costs related to the franchise business segment included in selling,
general and administrative costs. The estimated gain to be recognized on the
disposition transaction has been excluded from the pro forma condensed
consolidated statements of operations.
F-4
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, hereunto duly authorized.
SAINT ANDREWS GOLF CORPORATION
Dated: March 13, 1997 By:/s/ Ronald S. Boreta
Ronald S. Boreta, President