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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 of 15(d) of the
Securities Exchange Act of 1934
May 5, 1998
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Date of Report (date of earliest event reported)
LAS VEGAS DISCOUNT GOLF & TENNIS, INC.
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Exact name of Registrant as Specified in its Charter
Colorado 0-17436 84-1034868
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State or Other Jurisdiction Commission File IRS Employer Identification
of Incorporation Number Number
5325 South Valley View Boulevard, Suite 4, 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
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
During 1997, Saint Andrews Golf Corporation ("Saint Andrews"), a
majority-owned subsidiary of Las Vegas Discount Golf & Tennis, Inc. (the
"Company"), and Callaway Golf Company ("Callaway") formed All-American Golf,
LLC (the "LLC"), to construct, manage and operate the "Callaway Golf Center",
a premier golf facility at the site of Saint Andrews' All-American SportPark.
Saint Andrews contributed the value of expenses incurred relating to the
design and construction of the golf center plus cash in the combined amount of
$3 million for 80% of the membership units. Callaway contributed equity
capital of $750,000 for the remaining 20% of the membership units and loaned
the LLC $5.25 million (the "Callaway loan"). The Callaway loan bore interest
at a rate of 10% per annum with monthly interest payments commencing 60 days
after the opening of the golf center on October 1, 1997.
On May 5, 1998, Saint Andrews sold its 80% interest in All-American Golf
to Callaway in exchange for $1.5 million in cash and the cancellation of a $3
million collateralized note evidencing amounts loaned to Saint Andrews in
March and April 1998 by Callaway, and related accrued interest thereon. Of
the consideration, $500,000 was withheld by Callaway until it had secured all
rights necessary to operate the Callaway Golf Center of which all was
collected by September 30, 1998. In connection with the sale of its
membership units, Saint Andrews resigned as manager of the LLC and agreed not
to compete with the Callaway Golf Center in Clark County, Nevada for a period
of two years. The agreement also provides for a buy back option which enables
Saint Andrews to repurchase its 80% equity ownership for a period of 2 years
on essentially the same financial terms that it sold its interest to the
Callaway Golf Company.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) PRO FORMA FINANCIAL INFORMATION. The following pro forma financial
information is filed herewith:
Unaudited Pro Forma Financial Statements ................... F-1
Unaudited Pro Forma Condensed Consolidated
Balance Sheet as of March 31, 1998 ......................... F-2
Unaudited Pro Forma Condensed Consolidated Statement
of Operations for the Year Ended December 31, 1997 ......... F-3
Unaudited Pro Forma Condensed Consolidated Statement
of Operations for the Three Months Ended March 31, 1998 .... F-4
Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements ....................................... F-5
(c) EXHIBITS. The following exhibits are filed herewith:
EXHIBIT
NUMBER DESCRIPTION LOCATION
- ------- ----------- --------
10.1 Membership Interest Purchase Incorporated by reference to
Agreement dated May 5, 1998, Exhibit 10.27 to Saint Andrews
by and among Callaway Golf Golf Corporation's Report on
Company, CGV, Inc., Saint Form 10-QSB for the quarter
Andrews Golf Corporation, ended September 30, 1998 (SEC
et al. File No. 0-24970)
2
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10.2 Option Agreement dated May 5, Incorporated by reference to
1998, between CVG, Inc. and Exhibit 10.28 to Saint Andrews
Saint Andrews Golf Corporation Golf Corporation's Report on
Form 10-QSB for the quarter
ended September 30, 1998 (SEC
File No. 0-24970)
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.
LAS VEGAS DISCOUNT GOLF & TENNIS, INC.
Dated: January 20, 1999 By:/s/ Vaso Boreta
Vaso Boreta, President
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LAS VEGAS DISCOUNT GOLF & TENNIS, INC.
UNAUDITED PRO FORMA FINANCIAL STATEMENTS
The following pro forma financial data are not necessarily indicative of the
Company's results of operations that might have occurred had the transaction
been completed as of the dates specified, and do not purport to represent what
the Company's consolidated results of operations might be for any future period.
The unaudited pro forma condensed consolidated financial statements are based
on assumptions the Company believes are reasonable, factually supportable and
directly attributable to Saint Andrews' sale of its interest in All-American
Golf. Such unaudited pro forma condensed consolidated financial statements
and accompanying notes should be read in conjunction with the audited
Consolidated Financial Statements of the Company and the related notes thereto
which are included in the Company's Annual Report on form 10-KSB for its year
ended December 31, 1997, and the Company's Quarterly Report on Form 10-QSB for
the three months ended March 31, 1998.
The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March
31,1998, reflects the historical consolidated balance sheet of the Company
adjusted to give effect to the sale of Saint Andrews' interest in All-American
Golf to Callaway as if the disposition had occurred on March 31, 1998.
The Unaudited Pro Forma Condensed Consolidated Statements of Operations for
the Year Ended December 31, 1997, and for the Three Months Ended March 31,
1998, reflect the historical consolidated statements of operations of the
Company adjusted to give effect to the sale of Saint Andrews' interest in
All-American Golf to Callaway as if the disposition had occurred on October 1,
1997, the inception date of operations of All-American Golf.
F-1
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LAS VEGAS DISCOUNT GOLF & TENNIS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1998
Historical Pro Forma
March 31, March 31,
1998 Adjustments 1998
----------- ------------ -----------
(Unaudited) (Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 285,000 $ 2,589,000 (A) $ 2,750,000
(124,000)(B)
Accounts receivable 252,000 500,000 (C) 707,000
(45,000)(B)
Inventories 536,000 - 536,000
Due from affiliated store 138,000 (47,000)(B) 91,000
Due from officer 3,000 - 3,000
Prepaid expenses and other 44,000 (12,000)(B) 32,000
Preopening costs, net 77,000 (77,000)(B) -
----------- ------------ -----------
Total current assets 1,335,000 2,784,000 4,119,000
Leasehold improvements and
equipment, net 10,014,000 (9,705,000)(B) 309,000
Project development costs 13,468,000 - 13,468,000
Other long-term receivables 209,000 - 209,000
Deposit for land lease 396,000 - 396,000
Other assets 73,000 - 73,000
----------- ------------ -----------
$25,495,000 $ (6,921,000) $18,574,000
=========== ============ ===========
See accompanying notes to unaudited pro forma condensed consolidated financial
statements.
F-2
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LAS VEGAS DISCOUNT GOLF & TENNIS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1998
Historical Pro Forma
March 31, March 31,
1998 Adjustments 1998
----------- ------------ -----------
(Unaudited) (Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of notes
payable $ 5,351,000 $ (1,433,000)(D) $ 3,918,000
Current portion of
obligations under capital
leases 77,000 (31,000)(B) 46,000
Accounts payable and
accrued expenses 4,384,000 (936,000)(B) 3,448,000
Due to affiliated store 417,000 (40,000)(B) 377,000
----------- ------------ -----------
Total current liabilities 10,229,000 (2,440,000) 7,789,000
----------- ------------ -----------
Note payable to shareholder 400,000 - 400,000
----------- ------------ -----------
Note payable 5,250,000 (5,250,000)(B) -
----------- ------------ -----------
Obligation under capital
leases, net of current
portion 192,000 (192,000)(B) -
----------- ------------ -----------
Deferred income 570,000 - 570,000
----------- ------------ -----------
Deferred tax liability 743,000 - 743,000
----------- ------------ -----------
Preferred stock of subsidiary 5,000,000 - 5,000,000
----------- ------------ -----------
Minority interest 1,375,000 (595,000)(E) 1,299,000
519,000 (F)
----------- ------------ -----------
Total minority interest 1,375,000 (76,000) 1,299,000
----------- ------------ -----------
SHAREHOLDERS' EQUITY:
Convertible preferred stock,
Series A, no par value;
5,000,000 shares authorized;
no shares issued and
outstanding - - -
Common stock, no par value;
15,000,000 shares authorized;
5,831,807 shares issued and
outstanding 3,876,000 - 3,876,000
Accumulated deficit (2,140,000) 1,037,000 (F) (1,103,000)
----------- ------------ -----------
Total shareholders' equity 1,736,000 1,037,000 2,773,000
----------- ------------ -----------
$25,495,000 $ (6,921,000) $18,574,000
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See accompanying notes to unaudited pro forma condensed consolidated financial
statements.
F-3
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LAS VEGAS DISCOUNT GOLF & TENNIS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
Historical Pro Forma
Year Ended Year Ended
December 31, December 31,
1997 Adjustments 1997
----------- ------------ -----------
(Unaudited)
REVENUE:
Net merchandise sales $ 4,678,000 $ - $ 4,678,000
Callaway Golf Center 322,000 (322,000)(B) -
Other 153,000 - 153,000
----------- ------------ -----------
Total revenue 5,153,000 (322,000) 4,831,000
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COST OF REVENUE:
Retail 3,565,000 - 3,565,000
Callaway Golf Center 570,000 (570,000)(B) -
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Total cost of revenue 4,135,000 (570,000) 3,565,000
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Gross profit 1,018,000 248,000 1,266,000
OPERATING EXPENSES:
Selling, general and
administrative 2,264,000 - 2,264,000
Depreciation and amortization 170,000 (130,000)(B) 40,000
SportPark development costs 255,000 - 255,000
Preopening expenses 603,000 - 603,000
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Operating loss (2,274,000) 378,000 (1,896,000)
Interest income (expense), net 106,000 122,000 (B) 228,000
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Loss from continuing operations
before income taxes and
minority interest (2,168,000) 500,000 (1,668,000)
Provision for income taxes - - -
----------- ------------ -----------
Loss from continuing opera-
tions before minority
interest (2,168,000) 500,000 (1,668,000)
Minority interest (74,000) (233,000)(E) (307,000)
----------- ------------ -----------
LOSS FROM CONTINUING
OPERATIONS (2,242,000) 267,000 (1,975,000)
----------- ------------ -----------
DISCONTINUED OPERATIONS:
Loss from disposed franchise
business operations (39,000) - (39,000)
Gain on disposal of franchise
operations, net of applicable
income taxes of $575,000 2,926,000 - 2,926,000
----------- ------------ -----------
Income from discontinued
operations 2,887,000 - 2,887,000
----------- ------------ -----------
Net Income $ 645,000 $ 267,000 $ 912,000
=========== ============ ===========
INCOME (LOSS) PER COMMON SHARE
- Basic and Diluted:
Loss from continuing
operations $ (0.40) $ 0.05 $ (0.35)
Income from discontinued
operations 0.52 - 0.52
----------- ------------ -----------
$ 0.12 $ 0.05 $ 0.17
=========== ============ ===========
See accompanying notes to unaudited pro forma condensed consolidated financial
statements.
F-4
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LAS VEGAS DISCOUNT GOLF & TENNIS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998
Historical Pro Forma
Three Months Three Months
Ended Ended
March 31, March 31,
1998 Adjustments 1998
----------- ------------ -----------
(Unaudited) (Unaudited)
REVENUE:
Net merchandise sales $ 751,000 $ - $ 751,000
Callaway Golf Center 502,000 (502,000)(B) -
Other 37,000 - 37,000
----------- ------------ -----------
Total revenue 1,290,000 (502,000) 788,000
----------- ------------ -----------
COST OF REVENUE:
Retail 582,000 - 582,000
Callaway Golf Center 503,000 (503,000)(B) -
----------- ------------ -----------
Total cost of revenue 1,085,000 (503,000) 582,000
----------- ------------ -----------
Gross profit 205,000 1,000 206,000
OPERATING EXPENSES:
Selling, general and
administrative 826,000 - 826,000
Depreciation and amortization 117,000 (113,000)(B) 4,000
Preopening expenses 23,000 (23,000)(B) -
----------- ------------ -----------
Operating loss (761,000) 137,000 (624,000)
Interest income (expense), net (135,000) 135,000 (B) -
----------- ------------ -----------
Loss from continuing opera-
tions before income taxes and
minority interest (896,000) 272,000 (624,000)
Provision for income taxes - - -
----------- ------------ -----------
Loss from continuing opera-
tions before minority
interest (896,000) 272,000 (624,000)
Minority interest 250,000 (127,000)(E) 123,000
----------- ------------ -----------
Net loss $ (646,000) $ 145,000 $ (501,000)
=========== ============ ===========
NET LOSS PER COMMON SHARE
- Basic and Diluted: $ (0.11) $ 0.02 $ (0.09)
=========== ============ ===========
See accompanying notes to unaudited pro forma condensed consolidated financial
statements.
F-5
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LAS VEGAS DISCOUNT GOLF & TENNIS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(A) To reflect cash proceeds from Saint Andrews' sale of interest in
All-American Golf LLC.
(B) To reflect removal of assets, liabilities and operating results of
All-American Golf LLC.
(C) To reflect proceeds withheld from sale of Saint Andrews' interest in
All-American Golf LLC until all rights secured by Callaway Golf Company.
(D) To reflect forgiveness of draws outstanding under note to Callaway Golf
Company as of March 31, 1998.
(E) To reflect removal of Callaway Golf Company minority interest in
All-American Golf LLC.
(F) To reflect the Company's share of Saint Andrews' gain on sale of interest
in All-American Golf LLC.
F-6
