UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
- --------------------------------------------------------------------------------
(Mark one)
XX QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- --------- ACT OF 1934
For the quarterly period ended June 30, 1999
- --------- TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
OF 1934
For the transition period from ______________ to _____________
- --------------------------------------------------------------------------------
Commission File Number: 0-27006
Million Dollar Saloon, Inc.
(Exact name of small business issuer as specified in its charter)
Nevada 13-3428657
- ------------------------ ------------------------
(State of incorporation) (IRS Employer ID Number)
6848 Greenville Avenue, Dallas, TX 75231
----------------------------------------
(Address of principal executive offices)
(214) 691-6757
--------------
(Issuer's telephone number)
- --------------------------------------------------------------------------------
Check whether the issuer (1) 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
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: August 5, 1999: 5,731,778
Transitional Small Business Disclosure Format (check one): YES NO X
<PAGE>
Million Dollar Saloon, Inc.
Form 10-QSB for the Quarter ended June 30, 1999
Table of Contents
Page
Part I - Financial Information
Item 1 Financial Statements 3
Item 2 Management's Discussion and Analysis or Plan of Operation 12
Part II - Other Information
Item 1 Legal Proceedings 14
Item 2 Changes in Securities 14
Item 3 Defaults Upon Senior Securities 15
Item 4 Submission of Matters to a Vote of Security Holders 15
Item 5 Other Information 15
Item 6 Exhibits and Reports on Form 8-K 15
Signatures 16
2
<PAGE>
<TABLE>
<CAPTION>
Part 1 - Item 1 - Financial Statements
Million Dollar Saloon, Inc. and Subsidiaries
Consolidated Balance Sheets
June 30, 1999 and 1998
(Unaudited)
Assets
------
1999 1998
----------- -----------
<S> <C> <C>
Current Assets
Cash on hand and in bank $ 644,251 $ 719,685
Note receivable - current portion 24,480 22,604
Prepaid income taxes receivable 12,903 --
Inventory 17,375 12,115
Prepaid expenses 65,872 80,828
----------- -----------
Total current assets 764,881 835,232
----------- -----------
Property and Equipment - At Cost
Buildings and related improvements 1,987,514 1,955,132
Furniture and equipment 805,087 788,706
Vehicles 52,728 52,728
----------- -----------
2,845,328 2,796,566
Less accumulated depreciation (1,614,881) (1,520,298)
----------- -----------
1,230,447 1,276,268
Land 741,488 741,488
----------- -----------
Net property and equipment 1,971,935 2,017,756
----------- -----------
Other Assets
Note receivable - noncurrent portion 67,850 93,094
Accounts receivable from officers, shareholders and affiliates -- 825,965
Organization costs, net of accumulated amortization
of $57,137 and $42,152, respectively 17,791 32,776
Loan costs, net of accumulated amortization of
$23,705 and $17,384 respectively 7,902 14,223
Other 6,975 7,725
----------- -----------
Total other assets 100,518 973,783
----------- -----------
Total Assets $ 2,837,334 $ 3,826,771
=========== ===========
</TABLE>
- Continued -
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
3
<PAGE>
<TABLE>
<CAPTION>
Million Dollar Saloon, Inc. and Subsidiaries
Consolidated Balance Sheets - Continued
June 30, 1999 and 1998
(Unaudited)
Liabilities and Shareholders' Equity
------------------------------------
1999 1998
----------- -----------
<S> <C> <C>
Current Liabilities
Current portion of long-term debt $ 181,905 $ 122,370
Accounts payable - trade 23,510 32,462
Accrued liabilities 43,362 51,733
Dividends payable 57,318 61,445
Tenant deposits 6,500 6,500
----------- -----------
Total current liabilities 312,595 274,510
----------- -----------
Long-term Liabilities
Long-term debt, net of current maturities 67,832 296,514
Deferred tax liability 125,057 98,936
----------- -----------
Total liabilities 505,484 669,960
----------- -----------
Commitments and Contingencies
Shareholders' Equity
Preferred stock - $0.001 par value. 5,000,000 shares
authorized. None issued and outstanding -- --
Common stock - $0.001 par value. 50,000,000 shares
authorized. 5,731,778 and 6,144,451 issued
and outstanding, respectively 5,732 6,144
Additional paid-in capital -- 598,965
Retained earnings 2,326,118 2,581,702
----------- -----------
2,331,850 3,186,811
Treasury stock (30,000 shares at cost) -- (30,000)
----------- -----------
Total shareholders' equity 2,331,850 3,156,811
----------- -----------
Total Liabilities and Shareholders' Equity $ 2,837,334 $ 3,826,771
=========== ===========
</TABLE>
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
4
<PAGE>
<TABLE>
<CAPTION>
Million Dollar Saloon, Inc. and Subsidiaries
Consolidated Statements of Income and Comprehensive Income
Six and Three months ended June 30, 1999 and 1998
(Unaudited)
Six months Six months Three months Three months
ended ended ended ended
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues
Bar and restaurant sales $ 1,644,382 $ 1,648,655 $ 789,174 $ 818,713
Rental income 340,436 239,055 170,525 113,633
----------- ----------- ----------- -----------
Total revenues 1,984,818 1,887,710 959,699 932,346
----------- ----------- ----------- -----------
Cost of Sales - Bar and
Restaurant Operations 1,016,637 986,748 530,539 522,195
----------- ----------- ----------- -----------
Gross Profit 968,181 900,962 429,160 410,151
----------- ----------- ----------- -----------
Operating Expenses
General and administrative 672,906 672,652 339,966 306,465
Interest 16,299 25,610 7,520 19,438
Depreciation and amortization 57,632 55,382 28,815 29,330
----------- ----------- ----------- -----------
Total operating expenses 746,837 753,644 376,301 346,564
----------- ----------- ----------- -----------
Income from Operations 221,344 147,618 52,859 63,587
Other Income (Expenses)
Interest and other miscellaneous 10,235 29,163 5,329 16,115
----------- ----------- ----------- -----------
Income before Income Taxes 231,579 176,481 58,188 79,702
Income tax (expense)
Currently payable (78,750) (59,089) (20,750) (26,089)
Deferred -- -- -- --
----------- ----------- ----------- -----------
Net Income 152,829 117,392 37,438 53,613
Other comprehensive income -- -- -- --
----------- ----------- ----------- -----------
Comprehensive Income $ 152,829 $ 117,392 $ 37,438 $ 53,613
=========== =========== =========== ===========
</TABLE>
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
5
<PAGE>
<TABLE>
<CAPTION>
Million Dollar Saloon, Inc. and Subsidiaries
Consolidated Statements of Income and Comprehensive Income
Six and Three months ended June 30, 1999 and 1998
(Unaudited)
Six months Six months Three months Three months
ended ended ended ended
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net Income $ 152,829 $ 117,392 $ 37,438 $ 53,613
Other comprehensive income -- -- -- --
---------- ---------- ---------- ----------
Comprehensive Income $ 152,829 $ 117,392 $ 37,438 $ 53,613
========== ========== ========== ==========
Earnings per share of common
stock outstanding computed
on net income - basic and
fully diluted $0.03 $0.02 $0.01 $0.01
==== ==== ==== ====
Weighted-average number
of shares outstanding -
basic and fully diluted 5,731,778 5,831,771 5,731,778 6,144,451
========== ========== ========== ==========
</TABLE>
(Remainder of this page left blank intentionally)
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
6
<PAGE>
<TABLE>
<CAPTION>
Million Dollar Saloon, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Six months ended June 30, 1999 and 1998
(Unaudited)
1999 1998
--------- ---------
<S> <C> <C>
Cash Flows from Operating Activities
Net income $ 152,829 $ 117,392
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 57,632 55,382
Common stock issued for consulting fees -- 69,700
Interest income from shareholders capitalized as principal -- (20,281)
(Increase) decrease in
Accounts receivable - trade and other 6,671 --
Federal income taxes receivable 78,750 37,248
Inventory 1,029 3,982
Prepaid expenses (9,412) (7,284)
Increase (decrease) in
Accounts payable and other accrued liabilities (19,321) 19,161
Income taxes payable -- 6,841
--------- ---------
Net cash provided by operating activities 268,178 282,141
--------- ---------
Cash Flows from Investing Activities
Principal collections on note receivable 11,920 12,348
Net proceeds from sale of fixed assets -- --
Purchases of property and equipment (6,714) (31,596)
--------- ---------
Net cash used in investing activities 5,206 (19,248)
--------- ---------
Cash Flows from Financing Activities
Private placement of common stock -- 530,000
Principal payments on long-term notes payable (88,587) (79,276)
Funds advanced to affiliated and shareholders - net -- --
Purchase of treasury stock -- (30,000)
Dividends paid (115,363) (113,884)
--------- ---------
Net cash used in financing activities (203,950) 306,840
--------- ---------
Increase in Cash and Cash Equivalents 69,434 569,733
Cash and cash equivalents at beginning of period 574,817 149,952
--------- ---------
Cash and cash equivalents at end of period $ 644,251 $ 719,685
========= =========
</TABLE>
- Continued -
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
7
<PAGE>
Million Dollar Saloon, Inc. and Subsidiaries
Consolidated Statements of Cash Flows - Continued
Six months ended June 30, 1999 and 1998
(Unaudited)
1999 1998
------- -------
Supplemental Disclosures of Interest
and Income Taxes Paid
Interest paid during the period $16,299 $25,610
======= =======
Income taxes paid $ -- $15,000
======= =======
Supplemental Schedule of Non-Cash Investing
and Financing Activities
Declaration of second quarter dividend,
payable in the third quarter at $0.01
and $0.01 per share, respectively $57,318 $61,445
======= =======
(Remainder of this page left blank intentionally)
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
8
<PAGE>
Million Dollar Saloon, Inc. and Subsidiaries
Notes to Financial Statements
Note 1 - Basis of Presentation
Million Dollar Saloon, Inc. (Company) was incorporated under the laws of the
State of Nevada on September 28, 1987. These financial statements reflect the
books and records of Million Dollar Saloon, Inc. (Nevada), Million Dollar
Saloon, Inc. (Texas), Furrh, Inc., Tempo Tamers, Inc., Corporation Lex and Don,
Inc. for the periods ended June 30, 1999 and 1998, respectively. All significant
intercompany transactions have been eliminated in combination. The consolidated
entities are referred to as Company.
During interim periods, the Company follows the accounting policies set forth in
its Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act
of 1934 on Form 10-KSB filed with the Securities and Exchange Commission. The
accompanying financial statements do not include all disclosures required by
generally accepted accounting principles. Users of financial information
provided for interim periods should refer to the annual financial information
and footnotes contained in its Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934 on Form 10-KSB when reviewing the interim
financial results presented herein.
In the opinion of management, the accompanying interim financial statements,
prepared in accordance with the instructions for Form 10-QSB, are unaudited and
contain all material adjustments, consisting only of normal recurring
adjustments necessary to present fairly the financial condition, results of
operations and cash flows of the Company for the respective interim periods
presented. The current period results of operations are not necessarily
indicative of results which ultimately will be reported for the full fiscal year
ending December 31, 1999.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Note 2 - Summary of Significant Accounting Policies
a.) Cash and cash equivalents
-------------------------
The Company considers all cash on hand and in banks, including accounts in
book overdraft positions, certificates of deposit and other highly-liquid
investments with maturities of three months or less, when purchased, to be
cash and cash equivalents.
9
<PAGE>
Million Dollar Saloon, Inc. and Subsidiaries
Notes to Financial Statements - Continued
Note 3 - Common stock transactions
On March 19, 1998, the Company sold 530,000 shares of restricted, unregistered
common stock to an individual under a Stock Purchase Agreement (Agreement) at a
price of $1.00 per share for total proceeds to the Company of$530,000. The
Agreement also contains a "second closing" clause whereby the individual will
acquire an additional 400,000 shares of equivalent restricted, unregistered
common stock at $1.10 per share for gross proceeds of $440,000, on or before
July 15, 1998. As of June 30, 1999, the individual has not complied with the
"second closing" portion of the Agreement.
Further, the Company has granted the individual the option to purchase an
additional 1,000,000 shares of restricted, unregistered common stock at a price
of $1.25 per share on or before February 28, 1999. The option expiration may be
accelerated if the Company's common stock is traded on the NASDAQ Small-Cap
Market or other national exchange and the closing bid price equals or exceeds
$1.75 per share for 10 consecutive trading days (Trading Period). In this event,
the expiration date of the option shall be the 90th day after the Trading Period
and the Company must notify the individual of the acceleration in writing.
On March 19, 1998, concurrent with the Stock Purchase Agreement discussed above,
the Company entered into a Consulting Agreement with a separate individual for
consulting, advisory and management services to be performed as directed by the
Company's Board of Directors. The Consulting Agreement was for a term of one (1)
year and may be terminated by either party with ten (10) days written notice.
The compensation for the Consulting Agreement was paid in restricted,
unregistered common stock of the Company as follows: 150,000 shares as payment
for consulting, advisory and management services to be performed as directed by
the Company's Board of Directors and an additional 55,000 shares upon receipt of
the $530,000 discussed above. An additional 45,000 shares will be issued to the
consultant upon receipt of the $440,000, which was originally due on or before
July 15, 1998.
The Company, upon execution of the Consulting Agreement and receipt of the
$530,000 related to the Stock Purchase Agreement, issued the respective 150,000
and 55,000 shares due under the terms of the Consulting Agreement. These
transactions were valued at approximately $0.34 per share, or an aggregate
$69,700, which approximated the "fair value" of the Company's restricted stock
issued on the transaction date.
(Remainder of this page left blank intentionally.)
10
<PAGE>
Million Dollar Saloon, Inc. and Subsidiaries
Notes to Financial Statements - Continued
Note 4 - Segment Information
The Company operates with a centralized management structure and has two
identifiable operating segments: an adult entertainment lounge and restaurant
located in Dallas, Texas and commercial rental real estate located in Dallas and
Tarrant Counties, Texas. All revenues are generated from operations in these
geographic areas. The Company has a relationship whereby rental revenues from
various entities under common control comprise approximately 16.6% and 13.1% of
total revenues for the six month period ended June 30, 1999 and 1998,
respectively.
<TABLE>
Restaurant Rental General and
facility real estate administrative Total
----------- ----------- -------------- -----------
<S> <C> <C> <C> <C>
Six months ended June 30, 1999
- ------------------------------
Revenue from external customers $ 1,644,382 $ 340,436 $ -- $ 1,984,818
Revenue (expenses) from/to
intercompany sources -- -- -- --
Interest income -- 4,098 6,137 10,235
Interest expense 1,008 15,291 16,299
Depreciation and amortization 17,427 34,557 5,648 57,632
Income tax expense (benefit) (22,265) 102,235 (1,220) 78,750
Segment assets 420,369 1,940,851 476,114 2,837,334
Fixed asset expenditures -- 6,714 -- 6,714
Six months ended June 30, 1998
- ------------------------------
Revenue from external customers $ 1,648,655 $ 239,055 $ -- $ 1,984,818
Revenue (expenses) from/to
intercompany sources -- -- -- --
Interest income 5,106 14,852 9,205 29,163
Interest expense 1,701 23,909 -- 25,610
Depreciation and amortization 15,686 34,048 5,648 55,382
Income tax expense (benefit) 9,590 74,384 (24,885) 59,089
Segment assets 647,144 2,701,123 478,504 3,826,771
Fixed asset expenditures -- 31,596 -- --
</TABLE>
Note 5 - Commitments
On July 9, 1999, Dewanna Ross, the Company's Chief Operating Officer, Vice
President of Operations, Secretary, Treasurer and a director, entered into an
Employment Agreement (Agreement) with the Company for a term of two years which
provides for a salary of $1,400 per week during the first year of the Agreement
and $1,500 per week during the second year of the Agreement.
11
<PAGE>
Part I - Item 2
Management's Discussion and Analysis of Financial Condition and Results of
Operations
(1) Caution Regarding Forward-Looking Information
This quarterly report contains certain forward-looking statements and
information relating to the Company that are based on the beliefs of the Company
or management as well as assumptions made by and information currently available
to the Company or management. When used in this document, the words
"anticipate," "believe," "estimate," "expect" and "intend" and similar
expressions, as they relate to the Company or its management, are intended to
identify forward-looking statements. Such statements reflect the current view of
the Company regarding future events and are subject to certain risks,
uncertainties and assumptions, including the risks and uncertainties noted.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those described herein as anticipated, believed, estimated, expected or
intended. In each instance, forward-looking information should be considered in
light of the accompanying meaningful cautionary statements herein.
(2) Results of Operations
Bar and restaurant operations remained relatively constant between the first six
months of 1999 as compared to the first six months of 1998. Total bar and
restaurant sales for the 1999 period were approximately $1,644,000 as compared
to approximately $1,649,000 for the 1998 period. Rental income increased by
approximately $101,000 for the same period from approximately $239,000 for the
first six months of 1998 to approximately $340,000 for the first quarter of
1999. This is due to scheduled increases in weekly rental income on the
Company's properties and the execution of a new lease renewal at higher rates in
1998.
The Company continues to seek effective marketing and advertising methods to
maintain and increase its bar and restaurant patronage.
Cost of sales increased by approximately $30,000 during the first six months of
1999 as compared to the same expenses for the same period in 1998. This increase
is a result of an approximate $16,000 increase in entertainer compensation and
charges for upgrading and renovations to stage lighting and sound systems in the
Company's Dallas Texas entertainment facility. Gross profit percentages
increased slightly to 48.78% for the first six months of 1999 versus 47.73% for
the first six months of 1998. Increased cost controls over purchasing, inventory
management protocols and labor management continue to contribute to improving
gross profit percentages.
General and administrative expenses were relatively consistent in the first six
months of 1999 versus the first six months of 1998. The Company continues to
experience relatively constant expenditure levels for other general operating
expenses. Management continues to monitor its expenditure levels to achieve
optimum financial results.
Net income before income taxes was approximately $232,000 for the first six
months of 1999 versus approximately $176,000 for the first six months of 1998.
After-tax net income also increased by approximately $36,000 from approximately
$117,000 for the first six months of 1998 to approximately $153,000 for the
first six months of 1999. The Company experienced earnings per share of
approximately $0.03 per share for the first six months of 1999 as compared to
approximately $0.02 per share for the first six months of 1998.
12
<PAGE>
(2) Liquidity
As of June 30, 1999, the Company has working capital of approximately $452,000
as compared to approximately $441,000 at December 31, 1998 and approximately
$561,000 at March 31, 1998. The Company achieved positive cash flows from
operations of approximately $268,000 for the first six months of 1999 versus
approximately $282,000 for the first six months of 1998. The Company's working
capital position was impacted by the increased calculation of current maturities
of long-term debt for 1999 and the payment of income tax estimates during 1998
which were carried forward into 1999.
The Company has identified no significant capital requirements for the current
annual period. Liquidity requirements mandated by future business expansions or
acquisitions, if any are specifically identified or undertaken, are not readily
determinable at this time as no substantive plans have been formulated by
management.
The Company an aggregate of approximately $115,000 and $114,000 during the first
six months of 1999 and 1998, respectively and declared dividends of
approximately $57,000 and $61,000 to be paid in the third quarter of 1999 and
1998, respectively. Future operating liquidity, debt service and dividend
payments, if any, are expected to be sustained from continuing operations.
(3) Year 2000 Considerations
The Year 2000 (Y2K) date change is believed to affect virtually all computers
and organizations. The Company has undertaken a comprehensive review of its
information systems, including personal computers, software and peripheral
devices, and its general communications systems. The Company has no direct
electronic links with any customer or supplier. In addition, the Company has
held discussions with certain of its software suppliers with respect to the Y2K
date change. The Company has completed its detailed review, as a preliminary
assessment and the Company believes, as of the date of this filing, that it will
not be required to modify or replace significant portions of its computer
hardware or software and any such modifications or replacements are, or will be,
readily available. The Company anticipates that it will complete its detailed
review by June 30, 1999 and complete any modifications, upgrades or replacements
during the third quarter of 1999.
The Company is also planning to hold discussions with its significant suppliers,
shippers, customers and other external business partners related to their
readiness for the Y2K date change.
The Company does not expect the costs associated with the Y2K date change
compliance to have a material effect on its financial position or its results of
operations. There can be no assurance until January 1, 2000, however, that all
of the Company's systems, and the systems of its suppliers, shippers, customers
or other external business partners will function adequately.
13
<PAGE>
Part II - Other Information
Item 1 - Legal Proceedings
The Company is one of several defendants in Cause No. DV99-02585-L; Roy D.
Stedham v. The Million Dollar Saloon, et al.; 193rd District Court, Dallas
County, Texas which is alleged to be a class action seeking monetary damages
for violation of the Texas Finance Code concerning overcharges for purchases
of certain items by the use of a credit card. The Company has denied the
allegations and intends to vigorously contest the claims asserted. The
Company does not believe that the plaintiff/class will prevail on their
claims. The monetary damages sought, plus attorneys' fees, in management's
opinion does not constitute an amount that is material to the Company.
Item 2 - Changes in Securities
On July 9, 1999, W-W Investments, L.L.P., a Texas registered limited
liability partnership ("W-W Investments"), acquired in a private transaction
460,001 shares of the common stock of Million Dollar Saloon, Inc. (the
"Company") from Bjorn Heyerdahl, a former officer and director of the
Company, for $299,000 ($.65 per share) and additionally acquired from Nina J.
Furrh, the President, Chief Executive Officer and a director of the Company,
1,823,297 shares of the common stock of the Company for $1,427,637 ($.7829975
per share). The 2,283,298 shares of the Company's common stock acquired from
the two shareholders represents approximately 39.8% of the outstanding
5,731,778 shares of the Company's common stock.
As part of the transaction, Nina J. Furrh, Sharon Furrh and Ronald W.
Johnston resigned as directors. Nina J. Furrh also resigned as President and
Chief Executive Officer of the Company. Nina Furrh will continue with the
Company until August 31, 1999 as a salaried employee to assist with the
management during the transaction period. Dewanna Ross will continue to serve
as the Company's Chief Operating Officer and Ronald W. Johnston will continue
as the Chief Financial Officer of the Company.
With the acquisition of the 2,283,298 shares of the Company's common stock,
W-W Investments and its affiliates own 3,351,574 shares or approximately
58.5% of the Company's issued and outstanding shares of common stock.
W-W Investments is an investment partnership in which the Estate of Edward
Weaver and Steven Wheeler are partners. Linda Weaver is the independent
executrix of the Estate of Edward Weaver. In addition to the shares acquired
by W-W Investments, Linda Weaver owns 500,000 shares of the common stock and
has an option from the Company to purchase an additional 400,000 shares of
common stock for $440,000 or $1.10 per share. As a result of the acquisition
of the shares by W-W Investment, Linda Weaver owns beneficially, directly or
indirectly, 3,473,898 shares of common stock which includes the 2,283,298
shares owned by W-W Investments, 500,000 shares owned by Linda Weaver,
290,600 shares owned by Diamond Production of Oklahoma, L.P., and 400,000
shares which may be acquired by Linda Weaver pursuant to the option granted
to her by the Company in March 1998.
As a result of the acquisition of the additional shares by W-W Investments,
Steven Wheeler beneficially owns, directly or indirectly, 2,851,574 shares of
the Company's common stock which includes the 2,283,298 shares acquired by
W-W Investments, 218,000 shares owned by Steven Wheeler, 290,600 shares owned
by Diamond Production of Oklahoma, L.P. and 59,676 shares owned by Diamond
Production Company L.L.C., which is owned by The Wheeler Trust '89. Linda
Weaver is a limited partner of Diamond Production of Oklahoma, L.P. and
Diamond Production Company L.L.C. is the General Partner.
14
<PAGE>
Neither W-W Investments nor any of its partners borrowed from any third party
the funds necessary to make the purchase of the shares from the two
shareholders nor has W-W Investment nor any of its partners pledged to a
third party any of the shares of the Company's common stock owned by them to
obtain any funds for this transaction.
W-W Investments has the right to elect up to three directors to fill the
vacancies created by the resignations of Nina J. Furrh, Sharon Furrh and
Ronald Johnston. On July 9, 1999, Michael R. Garrett was elected to the Board
of Directors to fill one of the vacancies created by the director
resignations. It is anticipated that within the next 30 days, W-W Investments
will submit two additional nominees to be elected to the Board of Directors
of the Company.
Item 3 - Defaults on Senior Securities
None
Item 4 - Submission of Matters to a Vote of Security Holders
The Company has held no regularly scheduled, called or special meetings of
shareholders during the reporting period.
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
Exhibit 27 Financial Data Schedule
July 9, 1999 Form 8-K disclosing items discussed in Part II -Item 2 and
Part II - Item 5 above.
(Remainder of this page left blank intentionally)
15
<PAGE>
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.
Million Dollar Saloon, Inc.
August 9 , 1999 /s/ Dewanna Ross
------- ----------------------------------
Dewanna Ross
Chief Operating Officer
and Director
August 9 , 1999 /s/ Ronald W. Johnston
------- ---------------------------------
Ronald W. Johnston
Chief Financial Officer
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
</LEGEND>
<CIK> 0001002396
<NAME> Million Dollar Saloon, Inc.
<MULTIPLIER> 1
<CURRENCY> US Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 644251
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 17375
<CURRENT-ASSETS> 764881
<PP&E> 3586816
<DEPRECIATION> 1614881
<TOTAL-ASSETS> 2837334
<CURRENT-LIABILITIES> 312595
<BONDS> 0
0
0
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