SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Earliest Event Reported): February 3, 1997
Exact name of Registrant
as specified in its charter: Entree Corporation
State or Other Jurisdiction of Incorporation: Delaware
Commission File Number: 0-16226
I.R.S. Employer Identification Number: 39-1566009
Address of Principal Executive Office: 26025 Mureau Road
Calabasas, CA 91302
Registrant's Telephone Number, Including Area Code: (818) 878-7711
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On February 3, 1997, the Board of Directors of the Company
approved the sale of a majority of the assets of Atlanta Provision
Company, Inc. ("APC") to Colorado Boxed Beef Company ("Colorado").
APC was the Company's sole operating subsidiary. As a result of
the sale of APC, the Company has no remaining continuing
operations. The sale closed on February 3, 1997.
Colorado purchased the following assets of APC for $13.5
million: receivables, inventories, machinery and equipment,
furniture and fixtures, and certain other current assets. Colorado
made a cash payment to APC of $6.9 million of which $712,000 is
restricted pursuant to the terms of the Asset Purchase Agreement.
Colorado also assumed accounts payable and accrued liabilities of
APC of $6.6 million. APC repaid $5.8 million to its lender to
extinguish all obligations under its revolving line of credit.
APC retained real estate with a net book value of $2.6
million at February 1, 1997. The real estate is collateral for two
mortgage notes that amount to $794,000. APC has entered into a one
year lease with Colorado. Each party can terminate the lease with
180 days written notice. The real estate will soon be listed for
sale.
<PAGE>
The loss on disposal of discontinued operations for the
twelve weeks ended January 4, 1997 represents the Company's loss on
the sale of APC. This amount reflects a provision for certain
liabilities related to the sale and is net of an anticipated gain
on the sale of APC's real estate of $367,000. APC had an operating
loss of $250,000 subsequent to January 4, 1997 through the date of
sale which will be reflected as a loss from discontinued operations
in the fourth quarter. APC also incurred expenses of $281,000
subsequent to January 4, 1997 resulting from the early termination
of the revolving line of credit established on October 4, 1996.
The Company will reflect an extraordinary charge of $281,000 in the
fourth quarter for these expenses.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro Forma Financial Information:
The following unaudited pro forma condensed
consolidated financial information is filed with this
report:
Pro Forma Condensed Consolidated Balance Sheet
at January 4, 1997
Pro Forma Condensed Consolidated Statements of
Operations for the 52 Weeks Ended March 30,
1996 and the 40 Weeks Ended January 4, 1997
The following unaudited pro forma financial statements give
effect to the sale of a majority of APC's assets (the "Sale"). The
unaudited pro forma condensed consolidated balance sheet presents
the combined financial position of Entree Corporation as of January
4, 1997 assuming that the Sale had occurred as of January 4, 1997.
The unaudited pro forma condensed consolidated statement of
operations for the 52 weeks ended March 30, 1996 gives effect to
the Sale as of the beginning of the period.
The unaudited condensed consolidated statement of operations
for the 40 weeks ended January 4, 1997 included in the Form 10-Q
for the period ended January 4, 1997 reflects the results of APC as
discontinued operations. No further pro forma adjustments are
required with respect to the Sale.
The unaudited pro forma condensed consolidated financial
information has been prepared by the Registrant based upon
assumptions deemed proper by it. The unaudited pro forma condensed
consolidated financial information presented herein is shown for
illustrative purposes only and is not necessarily indicative of the
future financial position or future results of operations of the
Registrant, or of the financial position or results of operations
of the Registrant that would have actually occurred had the
transaction been in effect as of the date or for the periods
presented.
The unaudited pro forma condensed consolidated financial
information should be read in conjunction with the historical
financial statements and related notes of the Registrant.
<PAGE>
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.
ENTREE CORPORATION
(Registrant)
Date: February 28, 1997 /s/ R. Scott Miswald
Secretary
<PAGE>
PRO FORMA FINANCIAL INFORMATION
ENTREE CORPORATION AND SUBSIDIARY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AT JANUARY 4, 1997
UNAUDITED
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Pro Forma Pro
Historical Adjustments Forma
---------- ----------- -----
<S> <C> <C> <C>
ASSETS
Current assets
Cash $ 1,359 $ (928) $ 431
Net current assets of
discontinued operations --- 843 843
------ ----- ------
Total current assets 1,359 (85) 1,274
Net noncurrent assets of
discontinued operations 2,785 (1,021) 1,764
------ ----- ------
$ 4,144 $(1,106) $ 3,038
====== ===== ======
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities
Net current liabilities of
discontinued operations $ 1,106 (1,106) $ ---
------ ----- ------
Total current liabilities 1,106 (1,106) ---
Preferred stock of subsidiary
owned by parent 7,400 --- 7,400
Shareholders' deficit (4,362) --- (4,362)
------ ----- ------
$ 4,144 $(1,106) $ 3,038
====== ===== ======
</TABLE>
See accompanying notes to pro forma condensed consolidated financial
information.
<PAGE>
PRO FORMA FINANCIAL INFORMATION
ENTREE CORPORATION AND SUBSIDIARY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE 52 WEEKS ENDED MARCH 30, 1996
UNAUDITED
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Pro Forma Pro
Historical Adjustments Forma
---------- ----------- -----
<S> <C> <C> <C>
Net sales $236,108 $(236,108) $ ---
Cost of sales 231,575 (231,575) ---
------- -------- ------
Gross profit 4,533 (4,533) ---
Selling and administrative
expenses 4,026 (4,026) ---
Write-off of goodwill 852 (852) ---
------- -------- ------
Operating loss (345) 345 ---
Interest expense (980) 980 ---
Non-operating income 183 (183) ---
Equity in earnings of
unconsolidated subsidiary 7 (7) ---
------- -------- ------
Loss from continuing
operations $ (1,135) $ 1,135 $ ---
======= ======== ======
Earnings (loss) per
common share $ (.14) $ .00
====== ======
Weighted average number of
common shares outstanding 8,000 8,000
====== ======
</TABLE>
See accompanying notes to pro forma condensed consolidated financial
information.
<PAGE>
PRO FORMA FINANCIAL INFORMATION
ENTREE CORPORATION AND SUBSIDIARY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE 40 WEEKS ENDED JANUARY 4, 1997
UNAUDITED
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Pro Forma Pro
Historical Adjustments Forma
---------- ----------- -----
<S> <C> <C> <C>
Earnings (loss) from continuing
operations $ --- $ --- $ ---
Discontinued operations:
Loss from discontinued
operations (584) --- (584)
Estimated loss on disposal of
discontinued operations (1,800) --- (1,800)
------- ------- -----
Loss before extraordinary item (2,384) --- (2,384)
Extraordinary item (227) --- (227)
------- ------- -----
Net loss $ (2,611) $ --- $(2,611)
======= ======= =====
Loss per common share:
Continuing operations $ --- $ ---
Discontinued operations:
Loss from discontinued
operations (.08) (.08)
Estimated loss on disposal (.22) (.22)
Extraordinary item (.03) (.03)
------- -----
Net loss $ (.33) $ (.33)
======= =====
Weighted average number of
common shares outstanding 8,000 8,000
======= =====
</TABLE>
See accompanying notes to pro forma condensed consolidated financial
information.
<PAGE>
ENTREE CORPORATION AND SUBSIDIARY
NOTES TO PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
Pro Forma Condensed Consolidated Balance Sheet:
The pro forma adjustment reflects the sale of the following assets of APC:
receivables, inventories, machinery and equipment, furniture and fixtures and
certain other current assets. It also reflects the assumption of accounts
payable and accrued liabilities of APC by the Buyer and the full repayment of
all obligations under the revolving line of credit. After these
transactions, APC had (i) unrestricted cash of $431,000, (ii) restricted cash
of $712,000 and other net current assets of $131,000 and (iii) real estate,
net of the mortgage, with a net book value of $1,764,000 at January 4, 1997.
Pro Forma Statement of Operations:
The pro forma statement of operations for the 52 weeks March 30, 1996 ended
reflects a pro forma adjustment for the reclassification of the results of
operations of APC as discontinued operations. As a result of the Sale, there
are no remaining continuing operations.
The statement of operations for the forty weeks ended January 4, 1997
included in the Form 10-Q for the period ended January 4, 1997 reflects the
results of APC as discontinued operations. No further pro forma adjustments
are required with respect to the sale of APC.
