SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
-------------
Date of Report (Date of earliest event reported): December 12, 1997
Clearview Cinema Group, Inc.
(Exact name of registrant as specified in charter)
Delaware 001-13187 22-3338356
(State or other (Commission file (IRS employer
jurisdiction of number) identification
incorporation) no.)
97 Main Street 07928
Chatham, New Jersey (Zip code)
(Address of principal
executive offices)
Registrant's telephone
number, including area code:
(973) 377-4646
<PAGE>
The following amends and restates in its entirety Item 7 of the Form
8-K of Clearview Cinema Group, Inc. which reported an event dated December 12,
1997, and which was filed with the Securities and Exchange Commission on
December 23, 1997:
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial statements of businesses acquired.
CJM Theaters at Kin-Mall, Middlebrook, Cedar Grove and Bellevue
Independent Auditors' Report
Combined Balance Sheet as of September 30, 1997
Combined Statements of Income and Changes in Retained
Earnings for the Year Ended December 31, 1996 and
the Nine Months Ended September 30, 1997
Combined Statements of Cash Flows for
the Year Ended December 31, 1996 and the Nine Months
Ended September 30, 1997
Notes to Combined Financial Statements
(b) Pro forma financial information.
Clearview Cinema Group, Inc.
Pro Forma Condensed Consolidated Balance Sheet
as of September 30, 1997 (Unaudited)
Pro Forma Condensed Consolidated Statement of Operations
for the Nine Months Ended September 30, 1997 (Unaudited)
Pro Forma Condensed Consolidated Statement of Operations
for the Year Ended December 31, 1996 (Unaudited)
Notes to Pro Forma Condensed Financial Statements
(c) Exhibits.
2.01 Agreement and Plan of Reorganization dated as of November
14, 1997 by and among the Clearview Cinema Group, Inc., CCC
Bellevue Cinema Corp., The New Bellevue Theater Corp. and
Jesse Sayegh (previously filed)
2.02 Asset Purchase Agreement dated as of November 14, 1997 by
and among Clearview Cinema Group, Inc., CCC Cedar Grove
Cinema Corp., C.J.M. Enterprises, Inc. and Jesse Sayegh, as
amended by Amendment No. 1 to Asset Purchase Agreement dated
as of December 12, 1997 (previously filed)
2.03 Asset Purchase Agreement dated as of November 14, 1997 by
and among Clearview Cinema Group, Inc., CCC Kin Mall Cinema
Corp., Kin Mall Cinemas, Inc., C.J.M. Enterprises, Inc. and
Jesse Sayegh, as amended by Amendment No. 1 to Asset
Purchase Agreement dated as of December 12, 1997 (previously
filed)
- 2 -
<PAGE>
2.04 Asset Purchase Agreement dated as of November 14, 1997 by
and among Clearview Cinema Group, Inc., CCC Middlebrook
Cinema Corp., Middlebrook Galleria Cinemas, Inc. and Jesse
Sayegh, as amended by Amendment No. 1 to Asset Purchase
Agreement dated as of December 12, 1997 (previously filed)
9.01 Voting Trust Agreement dated as of December 12, 1997 by and
among The New Bellevue Theater Corp., Jesse Sayegh and A.
Dale Mayo, as Trustee (previously filed)
10.01 Lease dated December 1997 between Jesse Y. Sayegh and CCC
Bellevue Cinema Corp. together with Rider to Lease, as
amended by Rider Attachment to Lease dated December 12, 1997
(previously filed)
10.02 Registration Rights Agreement dated as of December 12, 1997
by and among Clearview Cinema Group, Inc., The New Bellevue
Theater Corp. and Jesse Sayegh (previously filed)
10.03 Assignment and Assumption and Consent to Assignment of Lease
dated December 12, 1997 by and among Jesse Sayegh, CCC Cedar
Grove Cinema Corp., Clearview Cinema Group, Inc. and Leonard
Diener Investment Company, assigning that certain Lease
Agreement by and between Beatrice Diener d/b/a/ Leonard
Diener Investment Company and Jessee Sayegh dated May 29,
1990, as amended by letter dated March 26, 1997 (previously
filed)
10.04 Assignment and Assumption and Consent to Assignment of Lease
dated December 12, 1997 by and among Jesse Sayegh, CCC Kin
Mall Cinema Corp., Clearview Cinema Group, Inc. and C.J.M.
Enterprises, Inc., assigning that certain Lease by and
between Lester M. Entin Associates and C.J.M. Enterprises,
Inc. dated December 17, 1991, as amended by First Amendment
to lease dated December 31, 1996 (previously filed)
10.05 Assignment and Assumption and Consent to Assignment of Lease
dated December 12, 1997 by and among Jesse Sayegh, CCC
Middlebrook Cinema Corp., Clearview Cinema Group, Inc.,
Westwood Oaks, Inc. and Westwood Oaks Associates, assigning
that certain Lease by and between Westwood Oaks, Inc. and
Jesse Sayegh dated September 28, 1993, together with Rider
LC to Lease (previously filed)
10.06 Amended and Restated Credit Agreement dated as of September
12, 1997 by and among Clearview Cinema Group, Inc., its
wholly-owned subsidiaries and The Provident Bank (previously
filed)
10.07 First Amendment to Amended and Restated Credit Agreement
dated as of December 12, 1997 by and among Clearview Cinema
Group, Inc., et al. and The Provident Bank (previously
filed)
- 3 -
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
Clearview Cinema Group, Inc.
We have audited the combined balance sheet of the CJM Theaters at Kin-Mall,
Middlebrook, Cedar Grove and Bellevue (the "CJM Theaters") as of September 30,
1997 and the related combined statements of income and retained earnings and
cash flows for the nine months ended September 30, 1997 and the year ended
December 31, 1996. These combined financial statements are the responsibility of
the management of CJM Entertainment, Inc. 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 combined financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the combined 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 financial position of the CJM Theaters at
September 30, 1997, and the results of their operations and their cash flows for
the nine months ended September 30, 1997 and the year ended December 31, 1996,
in conformity with generally accepted accounting principles.
WISS & COMPANY, LLP
Woodbridge, New Jersey
December 4, 1997
- 4 -
<PAGE>
CJM THEATERS AT KIN-MALL, MIDDLEBROOK,
CEDAR GROVE AND BELLEVUE
COMBINED BALANCE SHEET
September 30, 1997
<TABLE>
<CAPTION>
ASSETS
CURRENT ASSETS:
<S> <C> <C>
Cash $1,030,467
Inventories 15,657
Other current assets
31,668
------
Total current assets $1,077,792
PROPERTY AND EQUIPMENT, NET OF
ACCUMULATED DEPRECIATION 2,479,993
OTHER ASSETS 30,280
$3,588,065
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 377,445
AMOUNTS DUE TO OFFICER 2,313,489
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock 19,000
Retained earnings 878,131
-------
Total stockholders' equity 897,131
$3,588,065
==========
See accompanying notes to combined financial statements.
</TABLE>
- 5 -
<PAGE>
CJM THEATERS AT KIN-MALL, MIDDLEBROOK,
CEDAR GROVE AND BELLEVUE
COMBINED STATEMENTS OF INCOME AND CHANGES IN RETAINED EARNINGS
<TABLE>
<CAPTION>
Nine Months
Year Ended Ended
December 31, September 30,
1996 1997
------------- -------------
THEATER REVENUES:
<S> <C> <C>
Box office $3,774,264 $3,532,934
Concession 1,211,383 1,015,434
Other 10,008 12,300
------ ------
4,995,655 4,560,668
--------- ---------
OPERATING EXPENSES:
Film rental and booking fees 1,703,429 1,608,263
Cost of concessions 248,766 194,289
Theater operating expenses 1,823,464 1,695,748
General and administrative
expenses 181,116 114,834
Depreciation and amortization 314,976 191,781
------- -------
4,271,751 3,804,915
--------- ---------
OPERATING INCOME 723,904 755,753
INTEREST EXPENSE 182,296 151,409
INCOME BEFORE PROVISION FOR INCOME
TAXES 541,608 604,344
PROVISION FOR INCOME TAXES 18,761 25,500
------ ------
NET INCOME 522,847 578,844
RETAINED EARNINGS, BEGINNING OF 326,579 643,381
PERIOD
DISTRIBUTIONS TO STOCKHOLDERS (206,045) (344,094)
-------- --------
RETAINED EARNINGS, END OF PERIOD $ 643,381 $ 878,131
=========== ============
See accompanying notes to combined financial statements.
</TABLE>
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<PAGE>
CJM THEATERS AT KIN-MALL, MIDDLEBROOK,
CEDAR GROVE AND BELLEVUE
COMBINED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months
Year Ended Ended
December 31, September 30,
1996 1997
------------ -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $522,847 $578,844
Adjustments to reconcile net
income to net cash flows from
operating activities:
Depreciation and amortization 314,976 191,781
Changes in operating assets and
liabilities:
Inventories 40 (2,795)
Other current assets 2,060 (10,553)
Other assets (29,668) 1,501
Accounts payable and
accrued expenses 28,296 (148,958)
------ --------
Net cash flows from
operating activities 838,551 609,820
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and
equipment (398,904) (293,327)
-------- --------
Net cash flows from
investing activities (398,904) (293,327)
-------- --------
CASH FLOW FROM FINANCING ACTIVITIES:
Distributions to stockholders (206,045) (344,094)
Net advances from officer 58,418 30,666
Proceeds from issuance of
common stock 2,000
----- ---------
Net cash flows from
financing activities (145,627) (313,428)
-------- --------
NET CHANGE IN CASH 294,020 3,065
CASH, BEGINNING OF PERIOD 733,382 1,027,402
CASH, END OF PERIOD $1,027,402 $1,030,467
========== ==========
SUPPLEMENTAL CASH FLOW
INFORMATION:
Interest paid $ 182,296 $ 151,409
=========== ===========
Income taxes paid $ 8,500 $ 18,000
=========== ===========
See accompanying notes to combined financial statements.
</TABLE>
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<PAGE>
CJM THEATERS AT KIN-MALL, MIDDLEBROOK,
CEDAR GROVE AND BELLEVUE
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 1 - Nature of the Business and Summary of Significant Accounting Policies:
Principles of Combination - The combined financial
statements include the accounts of certain theater
affiliates of CJM Entertainment, Inc. ("CJM") at Kin- Mall,
Middlebrook, Cedar Grove and Bellevue (the "CJM Theaters").
All significant inter-location balances and transactions
have been eliminated in combination.
Nature of the Business - The CJM Theaters operated multi-
screen theaters located in Morris, Essex and Monmouth
Counties, New Jersey.
Revenues and Film Rental Costs - The CJM Theaters recognize
revenues from box office admissions and concession sales at
the time of sale. Film rental costs are based on a film's
box office receipts and length of a film's run.
Seasonality - The CJM Theaters' business is seasonal with a
large portion of their revenues and profits being derived
during the summer months(June through August) and the
holiday season (November and December).
Estimates and Uncertainties - 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, as determined at a later
date, could differ from those estimates.
Property and Equipment - Property and equipment are
stated at cost. Theater equipment and office furniture
and equipment are depreciated using straight line and
accelerated methods over the estimated useful lives of
the assets of 7 years. Leasehold improvements are
amortized using the straight-line method over the term of
the related lease or the estimated useful life of the
asset, whichever is less.
- 8 -
<PAGE>
CJM THEATERS AT KIN-MALL, MIDDLEBROOK,
CEDAR GROVE AND BELLEVUE
NOTES TO COMBINED FINANCIAL STATEMENTS
Rent Expense - The CJM Theaters included in the combined
financial statements are operated under leases that contain
predetermined increases in the rentals payable during the
term of such leases. For these leases, the aggregate rental
expense over the lease terms is recognized on a
straight-line basis over the lease terms. The differences
between the expense charged to operations and the amount
payable under that lease are recorded annually as deferred
rent expense, which will ultimately reverse over the lease
term. Additional rent is paid for common area maintenance
and may also be charged based on a percentage of net revenue
in excess of a predetermined amount.
Financial Instruments - Financial instruments include cash
and accounts payable and accrued expenses The amounts
reported for financial instruments are considered to be
reasonable approximations of their fair values, based on
market information of financial instruments with similar
characteristics available to management.
Income Taxes - The CJM Theaters have elected under Section
1361 of the Internal Revenue Code and under New Jersey
corporate statutes to be taxed as small business
corporations. Under these provisions, all earnings and
losses of the CJM Theaters are reported on the tax returns
of the shareholders. Accordingly, no provision has been made
for federal income taxes and the CJM Theaters are subject to
state taxes at a nominal rate.
Impairment of Long-Lived Assets - In 1996, the CJM Theaters
adopted Statement of Financial Accounting Standards ("SFAS")
No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed Of". The effect of
adoption of the statement did not have a material effect on
the financial statements.
- 9 -
<PAGE>
CJM THEATERS AT KIN-MALL, MIDDLEBROOK,
CEDAR GROVE AND BELLEVUE
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 2 - Property and Equipment:
Property and equipment at September 30, 1997 are summarized
as follows:
Leasehold improvements $ 2,323,240
Furniture and other equipment 1,480,472
---------
3,803,712
Less: Accumulated depreciation and
amortization 1,323,719
---------
$ 2,479,993
CJM THEATERS AT KIN-MALL, MIDDLEBROOK,
CEDAR GROVE AND BELLEVUE
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 3 - Common Stock:
Common stock consist of the following at September 30, 1997:
Kin-Mall:
No par value, authorized 2500
shares, issued and outstanding $ 2,000
200 shares
Middlebrook:
No par value, authorized 2500 10,000
shares, issued and outstanding
100 shares
Cedar Grove:
No par value, authorized 2500
shares, issued and outstanding 5,000
200 shares
Bellevue:
No par value, authorized 2500
shares, issued and outstanding
200 shares 2,000
-----
$ 19,000
- 10 -
<PAGE>
CJM THEATERS AT KIN-MALL, MIDDLEBROOK,
CEDAR GROVE AND BELLEVUE
NOTES TO COMBINED FINANCIAL STATEMENTS
Note 4 - Commitments and Contingencies:
Theater Leases - The following is a schedule of future
minimum rental payments required for all non-cancellable
operating leases that have initial or remaining lease terms
in excess of one year at September 30, 1997:
Year Ending September 30,
1998 $ 712,112
1999 668,135
2000 448,250
2001 470,325
2002 430,326
2003 and thereafter 2,249,744
---------
$4,978,892
==========
Rent expense for theater operating leases for the nine
months ended September 30, 1997 and the year ended December
31, 1996, was approximately $608,000 and $750,000,
respectively.
Note 5 - Related Party Transactions:
Due to Officer - The amount due to officer represent
advances made to each of the respective CJM Theaters' since
their inception. No specified payment terms have been
determined.
Note 6 - Subsequent Event (Unaudited):
In December 1997, CJM sold substantially all of the assets,
including leasehold interests, equipment and various
operating contracts of the CJM Theaters at Kin-Mall,
Middlebrook, Cedar Grove and Bellevue to Clearview Cinema
Group, Inc. ("Clearview").
CJM received 62,500 shares of common stock of Clearview in
exchange for certain furniture, fixtures, equipment, and
personal property related to the operation of its Bellevue
theater, a four-screen theater located in Upper Montclair,
New Jersey and a leasehold interest in the real property on
which that theater is located.
- 11 -
<PAGE>
CJM THEATERS AT KIN-MALL, MIDDLEBROOK,
CEDAR GROVE AND BELLEVUE
NOTES TO COMBINED FINANCIAL STATEMENTS
Pursuant to three separate asset purchase agreements, CJM
sold the respective leasehold interests and furniture,
fixtures, equipment and personal property related to the
operation of its eight-screen Kin-Mall theater located in
Kinnelon, New Jersey; its five-screen theater located in
Cedar Grove, New Jersey; and its ten-screen Middlebrook
theater located in Ocean Township, New Jersey. The aggregate
purchase price of these three acquisitions totaled $8.75
million; $7.25 million in cash and the right to receive
1,500 shares of Clearview's Class B Non-Voting Cumulative
Redeemable Preferred Stock (the "Class B Preferred Stock").
CJM will receive cash of $1.5 million (plus interest
accrued at 10 1/2%) in lieu of the Class B Preferred Stock
if Clearview consummates a specified debt offering by
certain prescribed dates. In addition, the right to receive
750 of the 1,500 shares of Clearview's Class B Preferred
Stock will also terminate if, prior to December 12, 1999,
any other party receives all material governmental approvals
for the construction of a new theater complex in a specified
location.
- 12 -
<PAGE>
CLEARVIEW CINEMA GROUP, INC.
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA
The following unaudited pro forma condensed consolidated financial information
and related notes give effect to the acquisition of the CJM Theaters at
Kin-Mall, Middlebrook, Cedar Grove and Bellevue (the "CJM Acquisition")
Clearview Cinema Group, Inc. (the "Company"). The pro forma financial
information includes: (i) an unaudited pro forma condensed consolidated balance
sheet of the Company giving effect to the CJM Acquisition as if it had occurred
on September 30, 1997; (ii) an unaudited pro forma consolidated statement of
operations of the Company for the nine months ended September 30, 1997 giving
effect to the CJM Acquisition and the Company's prior acquisitions as if they
had occurred on January 1, 1997; and (iii) an unaudited pro forma consolidated
statement of operations of the Company for the year ended December 31, 1996
giving effect to the CJM Acquisition and the Company's prior acquisitions as if
they had occurred on January 1, 1996.
This pro forma financial information is based on the estimates and assumptions
set forth herein and in the notes thereto and has been prepared utilizing the
consolidated and combined financial statements and notes thereto appearing in
the Company's Registration Statement on Form SB-2 (as amended), which became
effective on August 12, 1997 (the "Form SB-2"), its Form 10-QSB for the quarter
ended September 30, 1997 and its Form 8-K/A (the "NF Form 8-K/A"), which
reported the Company's acquisition of the Nelson Ferman Theaters at Parsippany
and Roxbury (the "NF Acquisition") (See Notes 1 and 3).
The following unaudited pro forma financial information is presented for
informational purposes only and is not necessarily indicative of (i) the results
of operations of the Company that actually would have occurred had the CJM
Acquisition and the Company's prior acquisitions been consummated on the dates
indicated or (ii) the results of operations of the Company that may occur or be
obtained in the future. The following information is qualified in its entirety
by reference to and should be read in conjunction with the Company's
consolidated financial statements, including the notes thereto, and the other
financial information appearing in the Company's Form SB-2, its Form 10-QSB for
the quarter ended September 30, 1997 and its NF Form 8-K/A, which reported the
NF Acquisition.
- 13 -
<PAGE>
CLEARVIEW CINEMA GROUP, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
September 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma -
Company and Pro Forma
Prior CJM ------------------------------
Acquisitions Theaters Adjustments Amount
----------- --------- ----------- ------
(Note 1) (Note 2)
ASSETS
CURRENT ASSETS:
<S> <C> <C> <C> <C>
Cash $ 795,712 $ 1,030,467 $ (1,106,124) $ 720,055
Inventories 78,236 15,657 -- 93,893
Other current assets 721,365 31,668 (31,668) 721,365
------------ ------------ ------------ ------------
Total current
assets 1,595,313 1,077,792 (1,137,792) 1,535,313
------------ ------------ ------------ ------------
PROPERTY AND EQUIPMENT,
LESS ACCUMULATED
DEPRECIATION 25,072,010 2,479,993 1,825,632 29,377,635
------------ ------------ ------------ ------------
OTHER ASSETS:
Intangible assets,
less accumulated
amortization 17,560,478 -- 4,457,500 22,017,978
Security deposits
and other assets 526,014 30,280 (30,280) 526,014
------------ ------------ ------------ ------------
18,086,492 30,280 4,427,220 22,543,992
------------ ------------ ------------ ------------
$ 44,753,815 $ 3,588,065 $ 5,115,060 $ 53,456,940
============ ============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities
of long-term debt $ 3,637,696 $ -- $ 362,500 $ 4,000,196
Current maturities of 491,046 -- -- 491,046
subordinated notes
payable
Accounts payable
and accrued expenses 1,936,235 377,445 (377,445) 1,936,235
------------ ------------ ------------ ------------
Total current
liabilities 6,064,977 377,445 (14,945) 6,427,477
------------ ------------ ------------ ------------
LONG-TERM LIABILITIES:
Long-term debt,
less current
maturities 22,050,454 -- 6,887,500 28,937,954
Amounts due to officer -- 2,313,489 (2,313,489) --
Subordinated notes
payable, less current
maturities 6,599,530 -- -- 6,599,530
------------ ------------ ------------ ------------
28,649,984 2,313,489 4,574,011 35,537,484
------------ ------------ ------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock 8 -- 8 16
Common stock 21,505 -- 625 22,130
Additional paid-in
capital 11,612,016 19,000 1,433,492 13,064,508
Accumulated deficit (1,594,675) 878,131 (878,131) (1,594,675)
------------ ------------ ------------ ------------
Total stockholders'
equity 10,038,854 897,131 555,994 11,491,979
------------ ------------ ------------ ------------
$ 44,753,815 $ 3,588,065 $ 5,115,060 $ 53,456,940
============ ============ ============ ============
</TABLE>
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<PAGE>
CLEARVIEW CINEMA GROUP, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma -
Company and Pro Forma
Prior CJM -------------------
Acquisitions Theaters Adjustments Amount
----------- --------- ----------- ------
(Note 3) (Note 4)
THEATER REVENUES:
<S> <C> <C> <C> <C>
Box office $ 14,659,802 $ 3,532,934 $ -- $ 18,192,736
Concession 4,063,197 1,015,434 -- 5,078,631
Other 350,410 12,300 -- 362,710
------------- ------------ ------------ ------------
19,073,409 4,560,668 -- 23,634,077
------------- ------------ ------------ ------------
OPERATING EXPENSES:
Film rental and
booking fees 6,951,836 1,608,263 -- 8,560,099
Cost of concession
sales 493,655 194,289 -- 687,944
Theater operating
expenses 6,798,265 1,695,748 -- 8,494,013
General and
administrative 1,646,881 114,834 -- 1,761,715
Depreciation and
amortization 2,646,734 191,781 669,500 3,508,015
------------ ------------ ------------ ------------
18,537,371 3,804,915 669,500 23,011,786
------------ ------------ ------------ ------------
OPERATING INCOME (LOSS) 536,038 755,753 (669,500) 622,291
INTEREST EXPENSE 2,711,101 151,409 392,400 3,254,910
--------- ------- ------- ---------
NET INCOME (LOSS) BEFORE
TAXES (2,175,063) 604,344 (1,061,900) (2,632,619)
PROVISION FOR INCOME TAXES -- 25,500 (25,500) --
------- ------- ------- ----------
NET INCOME (LOSS) $(2,175,063) 578,844 $ (1,036,400) $ (2,632,619)
=========== ======= ============ ============
NET INCOME (LOSS) PER
SHARE $ (.81) $ (.96)
============ ============
</TABLE>
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<PAGE>
CLEARVIEW CINEMA GROUP, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma -
Company and Pro Forma
Prior CJM -------------------------
Acquisitions Theaters Adjustments Amount
----------- --------- ----------- ------
(Note 3) (Note 4)
THEATER REVENUES:
<S> <C> <C> <C> <C>
Box office $ 18,647,137 $ 3,774,264 $ -- $ 22,421,401
Concession 4,786,717 1,211,383 -- 5,998,100
Other 530,990 10,008 -- 540,998
----------- ------------ ------------ ------------
23,964,844 4,995,655 -- 28,960,499
------------ ------------ ------------ ------------
OPERATING EXPENSES:
Film rental and
booking fees 8,830,150 1,703,429 -- 10,533,579
Cost of concession
sales 540,670 248,766 -- 789,436
Theater operating
expenses 8,993,273 1,823,464 -- 10,816,737
General and
administrative 2,228,297 181,116 -- 2,409,413
Depreciation and
amortization 3,228,452 314,976 772,000 4,315,428
Impairment of long-
lived assets 224,908 -- -- 224,908
------------ ------------ ------------ ------------
24,045,750 4,271,751 772,000 29,089,501
------------ ------------ ------------ ------------
OPERATING INCOME (LOSS) (80,906) 723,904 (772,000) (129,002)
INTEREST EXPENSE
3,348,846 182,296 542,700 4,073,842
------------ ------------ ------------ ------------
NET INCOME (LOSS) BEFORE
TAXES (3,429,752) 541,608 (1,314,700) (4,202,844)
PROVISION FOR INCOME
TAXES -- 18,761 (18,761) --
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ (3,429,752 $ 522,847 $ (1,295,939) $ (4,202,844)
------------ ------------ ------------ ------------
NET INCOME (LOSS) PER
SHARE $ (1.27) $ (1.48)
------------ -------------
</TABLE>
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<PAGE>
CLEARVIEW CINEMA GROUP, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In December 1997, the Company acquired substantially all of the assets,
including inventories, leasehold interests, equipment and various operating
contracts of the CJM Theaters at Kin-Mall, Middlebrook, Cedar Grove and Bellevue
(the "CJM Theaters") for $7.25 million in cash obtained from the Company's
credit facility, 62,500 shares of common stock of the Company valued at
approximately $703,000 and 1,500 shares of the Company's Class B Non-Voting
Cumulative Preferred Stock (the "Class B Preferred Stock"), of which 750 shares
are not issuable if any other party receives all governmental approvals to build
a new theater at or around a specified location by December 12, 1999.
NOTE 1 - Basis of Presentation
The pro forma condensed consolidated balance sheet as of September 30,
1997 has been derived from the NF Form 8-K/A. The NF Form 8-K/A
included the Company's historical balance sheet as reflected in its
September 30, 1997 Form 10-QSB, (which included all of the Company's
acquisitions through September 30, 1997) and the pro forma balance
sheet reflecting the NF Acquisition. The pro forma condensed
consolidated balance sheet included herein also includes the balance
sheet of the CJM Theaters and the pro forma adjustments as described
in Note 2.
The CJM Acquisition will be accounted for under the purchase method of
accounting. Under the purchase method of accounting, the results of
operations of an acquired entity are included in the Company's
historical consolidated financial statements from its acquisition
date. Under that method of accounting, the acquired assets are
included based on the allocation of their aggregate purchase price as
of their date of acquisition. The Company acquired from CJM
Entertainment, Inc. the operations of the CJM Theaters and certain
leasehold interests and the theater equipment of the four theater
locations. Cash, other current assets, other assets, amounts due to
officer and accounts payable and accrued expenses of the acquired
theaters will remain the property of, or the obligation of, the
seller, CJM Entertainment, Inc. The net equity of the theaters
acquired has been eliminated in combination.
- 17 -
<PAGE>
CLEARVIEW CINEMA GROUP, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 - Acquisition of the CJM Theaters
The purchase price of the CJM Acquisition is approximately $8.76
million, including the issuance of the common stock and the Class B
Preferred Stock (excluding contingent shares) and estimated costs
of approximately $60,000. An allocation of the purchase price,
based on current management estimates, is as follows:
Leasehold improvements $2,425,000
Equipment 1,880,625
Covenant not to compete 2,089,000
Goodwill 2,368,500
---------
$ 8,763,125
Less: Carrying value of assets in
the historical financial
statements of the
CJM Theaters -
Property and equipment $ 2,479,993
Adjustment to carrying value of
assets acquired $ 6,283,132
The adjustment to the carrying
value ofthe assets acquired is
recorded as follows:
Increase in property and
equipment $ 1,825,632
Increase in intangible assets $ 4,457,500
------------
$ 6,283,132
The pro forma adjustments to the September 30, 1997 pro forma
balance sheet also include bank financing for $7.25 million, the
issuance of 750 shares of Class B Preferred Stock valued at
$750,000 and the issuance of 62,500 shares of common stock in
connection with the CJM Acquisition. An additional 750 shares of
Class B Preferred Stock, which will be issued only after certain
conditions are satisfied, are not recorded herein based on the
contingent nature of the issuance.
NOTE 3 - Pro Forma Condensed Consolidated Statements of Operations
The pro forma condensed consolidated statement of operations for
the nine months ended September 30, 1997 includes (in column 1) the
pro forma statement of operations as derived
- 18 -
<PAGE>
CLEARVIEW CINEMA GROUP, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
from the Company's recent filing of its NF Form 8-K/A. This pro
forma column includes the Company's historical statement of
operations and the pro forma statement of operations for all prior
acquisitions (including the NF Acquisition) for the nine months
ended September 30, 1997. The pro forma condensed consolidated
statement of operations for the year ended December 31, 1996
includes (in column 1) the pro forma statement of operations as
derived from the Company's recent filing of its NF Form 8-K/A. This
pro forma column includes the Company's historical statement of
operations as derived from the Company's Form SB-2 and the pro
forma statement of operations for all prior acquisitions, including
the NF Acquisition, for the year ended December 31, 1996.
NOTE 4 - Pro Forma Adjustments
Pro forma adjustments to the pro forma statements of operations at
September 30, 1997 and December 31, 1996 have been made for the
following:
a) Increase to depreciation expense resulting from the increase in
the carrying value of the acquired theaters' property and
equipment.
b) Increase in amortization expense to reflect, over a 15 year
period, the amortization of the excess of cost over the fair
value of assets acquired ("goodwill") and, over a five-year
period, the covenant not to compete and,
c) Increase in interest expense to reflect the interest cost of
debt obligations incurred as if the related acquisition
financing had occurred on January 1, 1996.
d) Elimination of income tax expense.
- 19 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this amendment to report to be signed
on its behalf by the undersigned thereunto duly authorized.
CLEARVIEW CINEMA GROUP, INC.
By: /s/ A. Dale Mayo
--------------------------------
A. Dale Mayo
Chairman of the Board, President
and Chief Executive Officer
Date: February 21, 1998
<PAGE>
Exhibit
Index
Sequential
Exhibit No. Document Page No.
----------- -------- --------
2.01 Agreement and Plan of Reorganization dated previously
as of November 14, 1997 by and among the filed
Clearview Cinema Group, Inc., CCC Bellevue
Cinema Corp., The New Bellevue Theater
Corp. and Jesse Sayegh
2.02 Asset Purchase Agreement dated as of previously
November 14, 1997 by and among Clearview filed
Cinema Group, Inc., CCC Cedar Grove Cinema
Corp., C.J.M. Enterprises, Inc. and Jesse
Sayegh, as amended by Amendment No. 1 to
Asset Purchase Agreement dated as of
December 12, 1997
2.03 Asset Purchase Agreement dated as of previously
November 14, 1997 by and among Clearview filed
Cinema Group, Inc., CCC Kin Mall Cinema
Corp., Kin Mall Cinemas, Inc., C.J.M.
Enterprises, Inc. and Jesse Sayegh, as
amended by Amendment No. 1 to Asset
Purchase Agreement dated as of December
12, 1997
2.04 Asset Purchase Agreement dated as of previously
November 14, 1997 by and among Clearview filed
Cinema Group, Inc., CCC Middlebrook Cinema
Corp., Middlebrook Galleria Cinemas, Inc.
and Jesse Sayegh, as amended by Amendment
No. 1 to Asset Purchase Agreement dated as
of December 12, 1997
9.01 Voting Trust Agreement dated as of previously
December 12, 1997 by and among The New filed
Bellevue Theater Corp., Jesse Sayegh and
A. Dale Mayo, as Trustee
10.01 Lease dated December 1997 between Jesse Y. previously
Sayegh and CCC Bellevue Cinema Corp. filed
together with Rider to Lease, as amended
by Rider Attachment to Lease dated
December 12, 1997
10.02 Registration Rights Agreement dated as of previously
December 12, 1997 by and among Clearview filed
Cinema Group, Inc., The New Bellevue
Theater Corp. and Jesse Sayegh
10.03 Assignment and Assumption and Consent to previously
Assignment of Lease dated December 12, filed
1997 by and among Jesse Sayegh, CCC Cedar
Grove Cinema Corp., Clearview Cinema
Group, Inc. and Leonard Diener Investment
Company, assigning that certain Lease
Agreement by and between Beatrice Diener
d/b/a/ Leonard Diener Investment Company
and Jessee Sayegh dated May 29, 1990, as
amended by letter dated March 26, 1997
<PAGE>
Exhibit
Index
Sequential
Exhibit No. Document Page No.
----------- -------- --------
10.04 Assignment and Assumption and Consent to previously
Assignment of Lease dated December 12, filed
1997 by and among Jesse Sayegh, CCC Kin
Mall Cinema Corp., Clearview Cinema Group,
Inc. and C.J.M. Enterprises, Inc.,
assigning that certain Lease by and
between Lester M. Entin Associates and
C.J.M. Enterprises, Inc. dated December
17, 1991, as amended by First Amendment to
lease dated December 31, 1996
10.05 Assignment and Assumption and Consent to previously
Assignment of Lease dated December 12, filed
1997 by and among Jesse Sayegh, CCC
Middlebrook Cinema Corp., Clearview Cinema
Group, Inc., Westwood Oaks, Inc. and
Westwood Oaks Associates, assigning that
certain Lease by and between Westwood
Oaks, Inc. and Jesse Sayegh dated
September 28, 1993, together with Rider LC
to Lease
10.06 Amended and Restated Credit Agreement dated previously
as of September 12, 1997 by and filed
among Clearview Cinema Group, Inc., its
wholly-owned subsidiaries and The Provident
Bank
10.07 First Amendment to Amended and Restated previously
Credit Agreement dated as of December 12, filed
1997 by and among Clearview Cinema Group,
Inc., et al. and The Provident Bank
