UNITED STATES
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
Date of Report (Date of Earliest Event Reported): February 22, 2005
-----------------------------------------------
EACO CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida
-----------------
(State or Other Jurisdiction of Incorporation)
0-14311 59-2597349
(Commission File Number) (IRS Employer Identification No.)
2113 Florida Boulevard, Neptune Beach, Florida 32266
- -----------------------------------------------------------------
(Address of principal executive offices and zip code)
(904) 249-4197
--------------------------------------------------
(Registrant's telephone number, including area code)
None
----------------------------------------------------------
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions (see General
Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the
Securities Act (17 CF 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
- ------------------------------------------------------
On February 22, 2005, EACO Corporation (the "Registrant") entered
into an asset purchase agreement (the "Asset Purchase Agreement")
with Banner Buffets, LLC ("Banner Buffets") under which it will
sell to Banner Buffets, LLC 16 restaurants that EACO now operates
under the Whistle Junction, Florida Buffet and Ryan's names. The
total purchase price for the restaurant premises and all the
equipment and other assets used in the restaurant operations will
be $29,950,000; $25,950,000 in cash at closing and a promissory
note for $4 million. The promissory note pays monthly interest
at 8% per annum and calls for a reduction in principal of
$1.5 million on its second anniversary, an additional reduction
of $1.5 million on its third anniversary, with the remainder to
be paid on the fourth anniversary. The note is secured by
restaurant equipment valued at less than $1 million. Pursuant to
the asset purchase agreement, Banner Buffets will pay up to an
additional $250,000 for each restaurant converted to the Whistle
Junction concept between February 1, 2005 and the closing, which
is expected to be in mid-April. At or prior to the closing, the
remaining 4 restaurants operated under the Ryan's brand will be
converted to Whistle Junction or Florida Buffets brands.
Banner Buffets is not acquiring any of the liabilities of
EACO but is assuming obligations under capital leases of
approximately $6 million. At closing, mortgages and other liens
encumbering the properties totaling about $12.6 million will be
paid off.
Banner Buffets has a 30-day due diligence period during
which it may terminate the transaction if the review reveals any
information that could have a material adverse effect on its
ability to consummate the transaction which cannot be cured prior
to the closing. If the Buyer terminates under that provision, it
is entitled to receive back the $500,000 escrow deposit it has
made. In the event that Buyer fails to obtain suitable financing
within the due diligence period, EACO may terminate the agreement
and retain $250,000 of the deposit.
The transaction is subject to shareholder approval.
Following the expiration of the 30-day due diligence period, an
Information Statement will be mailed to EACO's shareholders fully
describing the transaction and its impact on the Company. The
Company currently plans that following the closing, it will
continue to own 2 restaurant properties, one of which is leased
to another operator, and continue to lease 2 additional
restaurants which are now subleased to other operators. It will
also seek out other business opportunities. The asset purchase
agreement provides that the Company and its principal shareholder
will not for 5 years after the closing participate in any
restaurant similar to or in competition with the current business
of the Company or Banner Buffets within 30 miles of any of the
sold restaurants.
Item 9.01 Financial Statements and Exhibits.
- ---------------------------------------------
(c) Exhibits
The following exhibits are furnished in accordance with the
provisions of Item 601 of Regulation S-B:
Exhibit No. Description
- ----------- -----------
10.1 Asset Purchase Agreement between Banner buffets,
LLC and EACO Corporation dated February 22, 2005
99.1 Press Release
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.
Dated: February 25, 2005 EACO CORPORATION
By:/s/Edward B. Alexander
----------------------
Name: Edward B. Alexander
Title: President and Chief
Operating Officer