<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) January 30, 1997
----------------
BIKERS DREAM, INC.
- -------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
California 0-15501 33-0140149
- -------------------------------------------------------------------------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) (Identification No.)
1420 Village Way, Santa Ana, California 92705
- -------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (714) 835-8464
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE> 2
The Registrant hereby amends Item 7 of its Form 8-K Report for January 30, 1997
as follows:
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Businesses Acquired
The audited combined financial statements of Ultra Bikers, LLC
and Ultra Kustom Cycles for the period from inception (September 19, 1996) to
December 31, 1996.
(b) Pro Forma Financial Information
The pro forma financial statements of Bikers Dream, Inc., Ultra
Bikers, LLC and Ultra Kustom Cycles for the year ended December 31, 1996.
2
<PAGE> 3
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 thereunto duly authorized.
Dated: April 15, 1997 BIKERS DREAM, INC.
By: /s/ DONALD J. DUFFY
--------------------------
Donald J. Duffy,
Co-Chief Executive Officer
3
<PAGE> 4
ULTRA BIKERS, LLC AND
ULTRA KUSTOM CYCLES
COMBINED FINANCIAL STATEMENTS
FOR THE PERIOD FROM
INCEPTION (SEPTEMBER 19, 1996) TO
DECEMBER 31, 1996
<PAGE> 5
ULTRA BIKERS, LLC AND ULTRA KUSTOM CYCLES
CONTENTS
AS OF DECEMBER 31, 1996
- --------------------------------------------------------------------------------
Page
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 1
FINANCIAL STATEMENTS
Combined Balance Sheet 2
Combined Statement of Operations 3
Combined Statement of Cash Flows 4
Notes to Combined Financial Statements 5 - 7
<PAGE> 6
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Members of
Ultra Bikers, LLC
We have audited the accompanying combined balance sheet of Ultra Bikers, LLC
and Ultra Kustom Cycles (a division of Mull Acres Investments, Inc.) as of
December 31, 1996, and the related statements of operations and cash flows for
the period from inception (September 19, 1996) to December 31, 1996. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the 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 audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the combined financial position of Ultra Bikers, LLC
and Ultra Kustom Cycles as of December 31, 1996, and the combined results of
their operations and their combined cash flows for the period from inception
(September 19, 1996) to December 31, 1996, in conformity with generally
accepted accounting principles.
/s/ SINGER LEWAK GREENBAUM & GOLDSTEIN LLP
- --------------------------------------------
SINGER LEWAK GREENBAUM & GOLDSTEIN LLP
Los Angeles, California
April 8, 1997
<PAGE> 7
ULTRA BIKERS, LLC AND ULTRA KUSTOM CYCLES
COMBINED BALANCE SHEET
AS OF DECEMBER 31, 1996
- --------------------------------------------------------------------------------
ASSETS
CURRENT ASSETS
Accounts receivable - related party $ 106,504
Amounts due from related parties, net (Note 2) 554,177
Inventories 1,468,700
Prepaid expenses and other current assets 2,424
----------
Total current assets 2,131,805
FURNITURE AND EQUIPMENT, net of accumulated depreciation of $16,330
(Note 3) 310,270
----------
Total assets $2,442,075
==========
LIABILITIES AND MEMBERS' CAPITAL
CURRENT LIABILITIES
Book overdraft $ 217,480
Other accrued expenses 70,000
Amounts due to related parties, net (Note 2) 104,445
----------
Total current liabilities 391,925
----------
COMMITMENTS AND CONTINGENCIES (Note 4)
MEMBERS' CAPITAL
Capital contributions (Note 5) 1,939,822
Retained earnings 110,328
----------
Total members' capital 2,050,150
----------
TOTAL LIABILITIES AND MEMBERS' CAPITAL $2,442,075
==========
The accompanying notes are an integral part of these financial statements.
2
<PAGE> 8
ULTRA BIKERS, LLC AND ULTRA KUSTOM CYCLES
COMBINED STATEMENT OF OPERATIONS
FOR THE PERIOD FROM INCEPTION (SEPTEMBER 19, 1996) TO DECEMBER 31, 1996
- --------------------------------------------------------------------------------
Net sales $1,139,831
Cost of goods sold 713,834
----------
Gross profit 425,997
Selling, general, and administrative expenses 315,669
----------
Net income $ 110,328
==========
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 9
ULTRA BIKERS, LLC AND ULTRA KUSTOM CYCLES
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION (SEPTEMBER 19, 1996) TO DECEMBER 31, 1996
- --------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 110,328
Adjustments to reconcile net income to net cash
used in operating activities
Depreciation of furniture and equipment 16,330
(Increase) in
Accounts receivable (106,504)
Inventory (1,380,478)
Prepaid assets (2,424)
Increase in
Other accrued expenses 70,000
-----------
Net cash used in operating activities (1,292,748)
-----------
CASH FLOWS FROM INVESTING ACTIVITIES
Due from related parties, net (554,177)
-----------
Net cash used in investing activities (554,177)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in book overdraft 217,480
Due to related parties, net 104,445
Capital contributions 1,525,000
-----------
Net cash provided by financing activities 1,846,925
-----------
Net increase in cash -
CASH - BEGINNING OF PERIOD -
-----------
CASH - END OF PERIOD $ -
===========
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Mull Acres Investment, Inc. contributed $88,222 of inventory and $326,600 of
furniture and equipment.
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 10
ULTRA BIKERS, LLC AND ULTRA KUSTOM CYCLES
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Line of Business
In September 1996, Bikers Dream, Inc. ("Bikers") entered into an
agreement with Mull Acres Investments, Inc. ("Mull Acres") to become a
member of Ultra Bikers, LLC, a newly-formed California limited liability
company (the "LLC"). Bikers contributed $1,525,000 for a 49% interest
in the LLC, and Mull Acres received a 51% interest for its expertise in
the business of manufacturing, distributing, and selling custom
motorcycles.
Bikers' investment in the LLC was loaned to the Ultra Kustom Cycles
division ("UKC") of Mull Acres to be used to manufacture motorcycles and
related parts and accessories. UKC sells the motorcycles and related
parts and accessories to the LLC at cost, and the LLC then sells the
motorcycles to Bikers and unrelated parties. The operations of UKC
began substantially on September 19, 1996 after receiving the necessary
capital from the LLC to fund its production activities.
On January 30, 1997, Bikers entered into an agreement with Mull Acres to
purchase the assets, which included the employee base and manufacturing
expertise, of UKC for $3,800,000. After the close of the transaction,
the LLC was dissolved and Bikers owned 100% of the assets of UKC.
Principles of Combination
The accompanying combined financial statements include the accounts of
Ultra Bikers, LLC and the Ultra Kustom Cycles division of Mull Acres
Investments, Inc. (collectively the "Company") for the period from
inception (September 19, 1996) to December 31, 1996. All intercompany
transactions and balances have been eliminated in the combination.
Inventories
Inventories are stated at the lower of cost (first-in, first-out basis)
or market and consists primarily of motorcycles and motorcycle parts
which are categorized as finished goods.
Furniture and Equipment
Furniture and equipment are stated at cost less accumulated
depreciation. The Company provides for depreciation using the straight-
line method over the estimated useful lives of five years or the term of
the lease as follows:
Furniture and fixtures 5 years
Equipment 5 years
Autos and trucks 5 years
Repairs and maintenance are expensed as incurred. When furniture and
equipment are retired or disposed of, the related costs and accumulated
depreciation are eliminated from the accounts and any gain or loss on
such disposition is reflected in operations.
Revenue Recognition
Revenue from the sale of motorcycles and related products is recognized
at the time of sale to customers.
5
<PAGE> 11
ULTRA BIKERS, LLC AND ULTRA KUSTOM CYCLES
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income Taxes
The income or loss from the LLC is reported on the tax returns of its
members, and the income or loss from UKC is reported on the tax return
of Mull Acres. Accordingly, income taxes are not provided for in these
combined financial statements.
Concentration of Risk
The Company is operating in a growing market due to the current
nationwide popularity of custom motorcycles. Its future success is
dependent on the continuation of interest in the recreational motorcycle
industry.
The Company also sells a majority of its motorcycles to Bikers. The
Company's ability to maintain its current sales volume is dependent on
the financial strength of Bikers and the Company's ability to sell
motorcycles to other customers.
Estimates
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 disclosures of contingent assets and liabilities at the date of the
financial statements as well as the reported amounts of revenue and
expenses during the reported period. Actual results could differ from
those estimates.
Fair Value of Financial Instruments
The Company measures its financial assets and liabilities in accordance
with generally accepted accounting principles. For certain of the
Company's financial instruments, including cash, accounts receivable,
accounts payable, and accrued expenses, the carrying amounts approximate
fair value due to their short maturities.
NOTE 2 - RELATED PARTIES
Amounts due to/from related parties are non-interest bearing and are
payable/receivable on demand.
Accounts receivable - related party represents amounts due from Bikers.
Also see Note 4.
6
<PAGE> 12
ULTRA BIKERS, LLC AND ULTRA KUSTOM CYCLES
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
NOTE 3 - FURNITURE AND EQUIPMENT
Furniture and equipment consist of the following:
Furniture and fixtures $ 53,300
Equipment 167,200
Autos and trucks 106,100
----------
326,600
Less accumulated depreciation 16,330
----------
TOTAL $ 310,270
==========
NOTE 4 - COMMITMENTS AND CONTINGENCIES
Operating Leases
The Company leases certain facilities for its corporate offices and
warehouse space under a sublease agreement with Mull Acres that expires
in 1999.
Future minimum lease payments under these leases with initial or
remaining terms of one year or more are as follows:
Year ending
December 31,
------------
1997 $ 55,550
1998 56,788
1999 13,671
--------
TOTAL $126,009
========
Rent expense was $16,088 for the period from inception (September 19,
1996) to December 31, 1996.
NOTE 5 - MEMBERS' CAPITAL
Bikers contributed $1,525,000 cash and Mull Acres contributed $88,222 of
inventory and $326,600 of furniture and equipment totaling $1,939,822.
7
<PAGE> 13
BIKERS DREAM, INC./
ULTRA BIKERS, LLC/
ULTRA KUSTOM CYCLES
PRO FORMA FINANCIAL STATEMENTS
FOR THE YEAR ENDED
DECEMBER 31, 1996
<PAGE> 14
BIKERS DREAM, INC./ULTRA BIKERS, LLC/
ULTRA KUSTOM CYCLES
CONTENTS
As of December 31, 1996
- -------------------------------------------------------------------------------
Page
FINANCIAL STATEMENTS
Pro Forma Balance Sheet 1 - 2
Pro Forma Statement of Operations 3
Notes to Pro Forma Financial Statements 4
<PAGE> 15
BIKERS DREAM, INC./ULTRA BIKERS, LLC/
ULTRA KUSTOM CYCLES
PRO FORMA BALANCE SHEET
As of December 31, 1996
- --------------------------------------------------------------------------------
ASSETS
<TABLE>
<CAPTION>
Ultra
Bikers, LLC/
Bikers Ultra Kustom
Dream Cycles Adjustments Total
---------- ---------- -------------- ----------
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 247,891 $ (217,480) $ - $ 30,411
Accounts receivable 142,127 106,504 c (106,504) 142,127
Amounts due from related
parties - 554,177 - 554,177
Inventories 1,442,426 1,468,700 - 2,911,126
Prepaid expenses and other
current assets 79,114 2,424 - 81,538
---------- ---------- -------------- ----------
Total current assets 1,911,558 1,914,325 (106,504) 3,719,379
FURNITURE AND EQUIPMENT 758,149 310,270 - 1,068,419
INVESTMENT IN ULTRA BIKERS,
LLC, AT EQUITY 1,508,855 - a (1,508,855) -
DEPOSITS AND OTHER ASSETS 29,508 - - 29,508
EXCESS COST OVER FAIR VALUE
OF NET ASSETS ACQUIRED - - b 3,385,178 3,385,178
---------- ---------- -------------- ----------
TOTAL ASSETS $4,208,070 $2,224,595 $ 1,769,819 $8,202,484
========== ========== ============== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
1
<PAGE> 16
BIKERS DREAM, INC./ULTRA BIKERS, LLC/
ULTRA KUSTOM CYCLES
PRO FORMA BALANCE SHEET (CONTINUED)
AS OF DECEMBER 31, 1996
- --------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY/MEMBERS' CAPITAL
<TABLE>
<CAPTION>
Ultra
Bikers, LLC/
Bikers Ultra Kustom
Dream Cycles Adjustments Total
---------- ------------ ------------- -----------
<S> <C> <C> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 440,932 $ - $c (106,504) $ 334,428
Other accrued expenses 1,018,695 70,000 - 1,088,695
Amounts due from related
parties - 104,445 - 104,445
Current portion of long-term
debt 81,211 - - 81,211
Current portion of notes payable 50,516 - - 50,516
Note payable to shareholder 48,000 - - 48,000
----------- ---------- ------------ -----------
Total current liabilities 1,639,354 174,445 (106,504) 1,707,295
DEFERRED RENT 67,537 - - 67,537
LONG-TERM DEBT, less current
portion 371,823 - - 371,823
NOTES PAYABLE, less current
portion 86,926 - - 86,926
NOTE PAYABLE TO SHAREHOLDER,
less current portion 36,000 - 36,000
NOTE PAYABLE TO MULL ACRES
INVESTMENTS, INC. - - b 3,800,000 3,800,000
----------- ---------- ------------ -----------
Total liabilities 2,201,640 174,445 3,693,496 6,069,581
----------- ---------- ------------ -----------
SHAREHOLDERS' EQUITY/MEMBERS
CAPITAL
Preferred stock 1,102,500 - - 1,102,500
Common stock 7,477,913 - - 7,477,913
Capital contributions - 1,939,822 a (1,525,000) -
b (414,822)
(Accumulated deficit)/
retained earnings (6,573,983) 110,328 a 16,145 (6,447,510)
----------- ---------- ------------ -----------
Total shareholders' equity/
members' capital 2,006,430 2,050,150 (1,923,677) 2,132,903
----------- ---------- ------------ -----------
TOTAL LIABILITIES AND
SHAREHOLDERS'
EQUITY/MEMBERS'
CAPITAL $ 4,208,070 $2,224,595 $ 1,769,819 $ 8,202,484
=========== ========== ============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE> 17
BIKERS DREAM, INC./ULTRA BIKERS, LLC/
ULTRA KUSTOM CYCLES
PRO FORMA STATEMENT OF OPERATIONS
For the Year Ended December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ULTRA
BIKERS, LLC/
BIKERS ULTRA KUSTOM
DREAM CYCLES ADJUSTMENTS TOTAL
--------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
REVENUES
Product sales $ 8,903,517 $ 1,139,831 $d (632,714) $ 9,410,634
Financing contracts 93,142 - - 93,142
--------------- --------------- -------------- ---------------
Total revenues 8,996,659 1,139,831 (632,714) 9,503,776
COST OF GOODS SOLD 7,476,786 713,834 d (632,714) 7,557,906
--------------- --------------- -------------- ---------------
GROSS PROFIT 1,519,873 425,997 - 1,945,870
--------------- --------------- -------------- ---------------
EXPENSES
Selling, general, and
administrative expenses 4,963,229 299,339 - 5,262,568
Depreciation and amortization 197,476 16,330 e 56,250 270,056
Interest expense 169,731 - - 169,731
Franchise income (34,290) - - (34,290)
Loss on closure of store 166,634 - - 166,634
Equity in loss of Ultra Bikers,
LLC 16,145 - a (16,145) -
Other (income) expense 70,316 - - 70,316
--------------- --------------- -------------- ---------------
Total expenses 5,549,241 315,669 40,105 5,905,015
--------------- --------------- -------------- ---------------
(LOSS) INCOME BEFORE PROVISION
FOR INCOME TAXES (4,029,368) 110,328 (40,105) (3,959,145)
PROVISION FOR INCOME TAXES 800 - - 800
--------------- --------------- -------------- ---------------
NET (LOSS) INCOME $ (4,030,168) $ 110,328 $ (40,105) $ (3,959,945)
============== =============== ============== ===============
NET (LOSS) INCOME PER SHARE $ (0.59) $ (0.58)
============== ===============
WEIGHTED AVERAGE SHARES
OUTSTANDING 6,824,091 6,824,091
============== ===============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 18
BIKERS DREAM, INC./ULTRA BIKERS, LLC/
ULTRA KUSTOM CYCLES
NOTES TO PRO FORMA FINANCIAL STATEMENTS
December 31, 1996
- --------------------------------------------------------------------------------
NOTE 1 - BASIS OF PRESENTATION
The accompanying pro forma balance sheet presents the accounts of
Bikers Dream, Inc. ("Bikers"), Ultra Bikers, LLC (the "LLC"), and
Ultra Kustom Cycles ("UKC") as if the acquisition of the assets of UKC
by Bikers and the dissolution of the LLC occurred on December 31,
1996, and the pro forma statement of operations presents the accounts
of Bikers, the LLC, and UKC as if the acquisition took place on
September 19, 1996 (the date substantial production of custom
motorcycles began).
The following adjustments would be required if the acquisition
occurred as indicated above:
a) To eliminate Bikers' investment of $1,525,000 in the LLC and
corresponding loss in the LLC.
b) To record the note payable of $3,800,000 in consideration of
the assets acquired.
c) To eliminate intercompany payables and receivables.
d) To eliminate intercompany sales and related cost of goods
sold.
e) To record amortization of excess of cost over fair value of
net assets acquired.
4