U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB/A
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For Fiscal Year Ended: December 31, 1997
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from To
Commission file number 33-20111
Eat at Joe's Ltd.
(Name of small business issuer in its charter)
Delaware 75-2636283
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
P.O. Box 500, Yonkers, New York 10704
(Address of principal executive offices) (zip code)
Issuer's telephone number (914) 725-2700
Securities registered under Section 12(b) of the Act: NONE
Securities registered under Section 12(g) of the Act:
Common Stock Par Value $0.0001
(Title of class)
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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
Total pages: 17
Exhibit Index Page: 15
Check if there is no disclosure of delinquent filers pursuant to Item 405
of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this form 10-KSB. [ ]
State issuer's revenues for its most recent fiscal year. $84,781
As of March 26, 1998, there were 12,733,805 shares of the Registrant's
common stock, par value $0.0001, issued and outstanding and 1,060,000 warrants
to purchase common stock at $1.00 per share. The aggregate market value of the
Registrant's voting stock held by non-affiliates of the Registrant was
approximately $12,750,968 computed at the average bid and asked price as of
March 25, 1998.
DOCUMENTS INCORPORATED BY REFERENCE
If the following documents are incorporated by reference, briefly describe
them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated: (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"): NONE
Transitional Small Business Disclosure Format (check one): Yes ; NO X
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TABLE OF CONTENTS
Item Number and Caption Page
PART I
Item 1. Description of Business 4
Item 2. Description of Property 7
Item 3. Legal Proceedings 8
Item 4. Submission of Matters to a Vote of Security Holders 8
PART II
Item 5. Market for Common Equity and Related Stockholder Matters 8
Item 6. Management's Discussion and Analysis or Plan of Operations 9
Item 7. Financial Statements11
Item 8. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure 11
PART III
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange Act 11
Item 10. Executive Compensation 13
Item 11. Security Ownership of Certain Beneficial Owners and
Management 14
Item 12. Certain Relationships and Related Transactions 15
Item 13. Exhibits and Reports on Form 8-K 15
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PART I
ITEM 1 DESCRIPTION OF BUSINESS
General
The Company is seeking to effect a merger, exchange of capital stock, asset
acquisition or other similar business combination with an operating business.
The business objective of the Company is to effect a business combination with a
business which the Company believes has significant growth potential. The
Company intends to utilize equity in affecting a business combination. On
September 13, 1996 the Company changed its name to Eat at Joe's Ltd. and on
November 11, 1996 raised $60,000 pursuant to Regulation D under Rule 504. The
Company intends to open and operate theme restaurants styled in an "American
Diner" atmosphere where families can eat wholesome, home-cooked food in a safe
friendly atmosphere. Eat at Joe's, the classic American grill, is a restaurant
concept that takes you back to eating in the era when favorite old rockers were
playing on chrome-spangled jukeboxes and neon signs reflected on shiny tabletops
of the 1950's. The Company's common stock is traded on the National Association
of Security Dealers, Inc. (the "NASD's") OTC Bulletin Board Under the symbol
"JOES."
History
The company was incorporated as Conceptualistics, Inc. on January 6, 1988
in Delaware as a wholly owned subsidiary of Halter Venture Corporation ("HVC"),
a publicly-owned corporation (now known as Debbie Reynolds Hotel and Casino,
Inc.) In 1988, HVC divested itself of approximately 14% of its holdings in the
Company by distributing 1,777,000 shares of the issued and outstanding stock of
the Company to its shareholders. The then majority shareholder of HVC became the
majority shareholder of the Company. Its authorized capital stock is 50,000,000
shares of common stock, par value $0.0001 per share and 10,000,000 shares of
preferred stock, par value $0.0001 per share.
During the period from September 30, 1988 to March 1, 1990, the company
remained in the development stage while attempting to enter the mining industry.
The Company acquired certain unpatented mining claims and related equipment
necessary to mine, extract, process and otherwise explore for kaolin clay,
silica, feldspar, precious metals, antimony and other commercial minerals from
its majority stockholder and unrelated third parties. The Company was
unsuccessful in these start up efforts and all activity ceased during 1992 as a
result of foreclosure on various loans in default and/or abandonment of all
assets.
From March 1, 1990 to January 1, 1997, the Company did not engaged in any
business
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activities.
On January 1, 1997, the Shareholders adopted a plan or reorganization and
merger between the Company and E. A. J. Holding Corp. Inc. ("Hold") to be
effective on or before January 31, 1997. Under the plan, the Company acquired
all the issued and outstanding shares of "Hold", a Delaware corporation making
"Hold" a wholly owned subsidiary of the Company for 5,505,000 common shares of
the Company.
The Company through its wholly owned subsidiary, Hold, has ten wholly owned
subsidiaries: E.A.J. PHL airport, Inc. a Pennsylvania corporation, Eat At Joe's
U. of P., Inc. a Pennsylvania corporation, E.A.J. Cherry Hill, Inc., a New
Jersey corporation, Eat At Joe's Harborplace, Inc., a Maryland corporation, Eat
At Joe's Neshaminy, Inc. a Pennsylvania corporation, Eat At Joe's Plymouth,
Inc., a Pennsylvania corporation, E.A.J. Echelon Mall, Inc., a New Jersey
corporation, E.A.J. Gallery, Inc., a Pennsylvania corporation, E.A.J.
Moorestown, Inc., a New Jersey corporation, and E.A.J. Shoppingtown, Inc., a New
York corporation.
Each of the subsidiaries will operate a single restaurant. Two restaurants,
E.A.J. Cherry Hill and Eat At Joe's U. of P. were opened November and December
1997.
The principal executive offices of the Company are located at 670 White
Plains Road, Suite 118, Scarsdale, NY 10583. The Company also has an office in
Cherry Hill, New Jersey, where the restaurant operations are managed.
OPERATING LOSSES
The Company has incurred net losses of $211,522 and $18,700 for the fiscal
years ended December 31, 1997 and December 31, 1996, respectively. Such
operating losses reflect developmental and other start-up activities. The
Company expects to incur losses in the near future until profitability is
achieved. The Company's operations are subject to numerous risks associated with
establishing any new business, including unforeseen expenses, delays and
complications. There can be no assurance that the Company will achieve or
sustain profitable operations or that it will be able to remain in business.
FUTURE CAPITAL NEEDS AND UNCERTAINTY OF ADDITIONAL FUNDING
The Company has generated minimal revenues from product distribution.
Revenues are not yet sufficient to support the Company's operating expenses and
are not expected to reach such levels until the fourth quarter of 1998. Since
the Company's formation, it has funded its operations and capital expenditures
primarily through private placements of debt and equity securities. See "Recent
Sales of Unregistered Securities." The Company expects that it will be required
to seek additional financing in the future. There can be no assurance that such
financing will be available at all or available on terms acceptable to the
Company.
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GOVERNMENT REGULATION
The Company is subject to all pertinent Federal, State, and Local laws
governing its business. Each Eat at Joe's is subject to licensing and regulation
by a number of authorities in its State or municipality. These may include
health, safety, and fire regulations. The Company's operations are also subject
to Federal and State minimum wage laws governing such matters as working
conditions, overtime and tip credits.
RISK OF LOW-PRICED STOCKS
Rules 15g-1 through 15g-9 promulgated under the Securities Exchange Act of
1934 (the "Exchange Act") impose sales practice and disclosure requirements on
certain brokers and dealers who engage in certain transactions involving "a
penny stock."
Currently, the Company's Common Stock is considered a penny stock for
purposes of the Exchange Act. The additional sales practice and disclosure
requirements imposed on certain brokers and dealers could impede the sale of the
Company's Common Stock in the secondary market. In addition, the market
liquidity for the Company's securities may be severely adversely affected, with
concomitant adverse effects on the price of the Company's securities.
Under the penny stock regulations, a broker or dealer selling penny stock
to anyone other than an established customer or "accredited investor"
(generally, an individual with net worth in excess of $1,000,000 or annual
incomes exceeding $200,000, or $300,000 together with his or her spouse) must
make a special suitability determination for the purchaser and must receive the
purchaser's written consent to the transaction prior to sale, unless the broker
or dealer or the transaction is otherwise exempt. In addition, the penny stock
regulations require the broker or dealer to deliver, prior to any transaction
involving a penny stock, a disclosure schedule prepared by the Securities and
Exchange Commission (the "SEC") relating to the penny stock market, unless the
broker or dealer or the transaction is otherwise exempt. A broker or dealer is
also required to disclose commissions payable to the broker or dealer and the
registered representative and current quotations for the Securities. In
addition, a broker or dealer is required to send monthly statements disclosing
recent price information with respect to the penny stock held in a customer's
account and information with respect to the limited market in penny stocks.
LACK OF TRADEMARK AND PATENT PROTECTION
The Company relies on a combination of trade secret, copyright and
trademark law, nondisclosure agreements and technical security measures to
protect its products. Notwithstanding these safeguards, it is possible for
competitors of the company to obtain its trade secrets and to imitate its
products. Furthermore, others may independently develop products similar or
superior to those developed or planned by the Company.
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COMPETITION
The Company faces competition from a wide variety of food distributors,
many of which have substantially greater financial, marketing and technological
resources than the Company.
EMPLOYEES
As of March 25, 1998, the Company had 22 employees, none of whom is
represented by a labor union.
ITEM 2 DESCRIPTION OF PROPERTY
Since 1992 all administrative activities of the Company have been conducted
by corporate officers from either their home or business offices. Currently,
there are no outstanding debts owed by the Company for the use of these
facilities and there are no commitments for future use of the facilities.
The company's wholly-owned subsidiary, E.A.J. Shoppingtown, Inc. leases
approximately 2,453 square feet in the Shoppington Mall, DeWitt, New York
pursuant to a shopping center lease dated January 1, 1998. E.A.J. Shoppingtown
pays $4,167 per month rent under the lease which expires December 21, 2012.
The Company's wholly-owned subsidiary, Eat At Joe's Cherry Hill, Inc.
leases approximately 660 square feet in the Cherry Hill Mall, Cherry Hill, New
Jersey pursuant to a shopping center lease dated October 1, 1997. Eat At Joe's
Cherry Hill pays $4,400 per month rent under the lease which expires September
30, 2007.
The Company's wholly-owned subsidiary, Eat At Joe's Gallery, Inc. leases
approximately 2,000 square feet in the Gallery at Market East, Philadelphia,
Pennsylvania pursuant to a shopping center lease dated August 1, 1997. Eat At
Joe's Gallery pays $4,167 per month rent under the lease which expires December
31, 2007.
The Company's wholly-owned subsidiary, E.A.J. Holding Corporation, Inc.
leases approximately 3,683 square feet in the Moorestown Mall, Moorestown, New
Jersey pursuant to a shopping center lease dated July 1, 1997. The Company pays
$6,250 per month rent under the lease which expires June 30, 2012.
The Company's wholly-owned subsidiary Eat At Joe's U. of P., Inc. leases
approximately 456 square feet in the Shoppes at Penn, Philadelphia, Pennsylvania
pursuant to a prime lease dated October 30, 1997. Eat at Joe's U. of P. pays
$1,710 per month rent under the lease which expires December 31, 2008.
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ITEM 3 LEGAL PROCEEDINGS
NONE
ITEM 4 SUBMISSION OF MATTERS TO A
VOTE OF SECURITY HOLDERS
On January 1, 1997 the Shareholders approved the acquisition of E.A.J.
Holding Corporation, Inc. (A newly organized Delaware corporation) for the
issuance of 5,505,000 shares of the Company's common stock.
PART II
ITEM 5 MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
MARKET INFORMATION
The Company's Common Stock is traded on the NASD's OTC Bulletin Board under
the symbol "JOES." The following table presents the high and low bid quotations
for the Common Stock as reported by the NASD for each quarter during the last
two years. Such prices reflect inter-dealer quotations without adjustments for
retail markup, markdown or commission, and do not necessarily represent actual
transactions.
Year Period Low High
1996 First Quarter To the best knowledge of management,
Second Quarter there was no trading of shares during 1996.
Third Quarter
Fourth Quarter
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Year Period Low High
1997 First Quarter $4.00 $5.63
Second Quarter 2.00 4.50
Third Quarter 1.50 3.50
Fourth Quarter .88 2.44
DIVIDENDS
The Company has never declared or paid any cash dividends. It is the
present policy of the Company to retain earnings to finance the growth and
development of the business and, therefore, the Company does not anticipate
paying dividends on its Common Stock in the foreseeable future.
The number of shareholders of record of the Company's Common Stock as of
March 25, 1998 was 377.
RECENT SALES OF UNREGISTERED SECURITIES
On November 11, 1996 the Company completed a Regulation D Section 504
private placement whereby the Company issued 600,000 common shares for $60,000.
Each share included detachable warrants to purchase one common share at $1.00
per share.
ITEM 6 MANAGEMENT'S DISCUSSION AND
ANALYSIS OR PLAN OF OPERATIONS
Plan of Operations - Eat at Joe's Ltd. Intends to open and operate theme
restaurants styled in an "American Diner" atmosphere where families can eat
wholesome, home cooked food in a safe friendly atmosphere. Eat at Joe's, the
classic American grill, is a restaurant concept that takes you back to eating in
the era when favorite old rockers were playing on chrome-spangled jukeboxes and
neon signs reflected on shiny tabletops of the 1950's. Eat at Joe's fulfills the
diner dream with homey ambiance that's affordable while providing food whose
quality and variety is such you can eat there over and over, meal after meal. To
build on the diner experience, a retail section in each Eat at Joe's would allow
customers to take the good feelings home with them, in the form of 50's
memorabilia.
The Company's expansion strategy is to open restaurants either through
Joint Venture agreements or Company owned units. Units may consist of a
combination of full service restaurants or food court locations. Restaurant
construction will take from 90-150 days to complete on a leased site.
In considering site locations, the Company concentrates on trade
demographics, such as traffic volume, accessibility and visibility. High
Visibility Malls and Strip Malls in densely populated suburbs are the preferred
locations. The Company also scrutinizes the potential competition and the
profitability of national restaurant chains in the target market area. As part
of the expansion program,
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the Company will inspect and approve each site before approval of any joint
venture or partnership.
A typical food court unit is approximately 500 square feet, whereas for a
full service operation it is approximately 3,500 square feet. Food court
operation consists of a limited menu. A full service restaurant consists of
30-35 tables seating about 140- 150 people. The bar area will hold 6-8 tables
and seats 30-35 people.
The restaurant industry is an intensely competitive one, where price,
service, location, and food quality are critical factors. The Company has many
established competitors, ranging from similar casual-style chains to local
single unit operations. Some of these competitors have substantially greater
financial resources and may be established or indeed become established in areas
where the Eat at Joe's Company operates. The restaurant industry may be affected
by changes in customer tastes, economic, demographic trends, and traffic
patterns. Factors such as inflation, increased supplies costs and the
availability of suitable employees may adversely affect the restaurant industry
in general and the Eat at Joe's Company Restaurant in particular. Significant
numbers of the Eat at Joe's personnel are paid at rates related to the federal
minimum wage and accordingly, any changes in this would affect the Company's
labor costs.
Results of Operations - From March 1, 1990 to December 12, 1995 the Company was
an inactive corporation. From December 12, 1995 to November 1997 the Company was
a development stage company and had not begun principal operations. During
November and December, 1997 two restaurants were opened and began operations.
LIQUIDITY AND CAPITAL RESOURCES
The Company has generated minimal revenues from product sales. Revenues are
not yet sufficient to support the Company's operating expenses, however, the
Company is cautiously optimistic that operating revenues will be adequate to
meet operating expenses during the next year. Since the Company's formation, it
has funded its operations and capital expenditures primarily through private
placements of debt and equity securities and has borrowed approximately $265,000
from unrelated entities as of December 31, 1997. The notes are payable one year
from the date of issuance together with interest at 6.50% A.P.R. The Company
will be required to seek additional financing in the future. There can be no
assurance that such financing will be available at all or available on terms
acceptable to the Company.
The increase in capital resources for 1997 and 1996 is attributable to the
private placement of Common Stock and the issuance of debt.
Government Regulations - The Company is subject to all pertinent Federal, State,
and Local laws
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governing its business. Each Eat at Joe's is subject to licensing and regulation
by a number of authorities in its State or municipality. These may include
health, safety, and fire regulations. The Company's operations are also subject
to Federal and State minimum wage laws governing such matters as working
conditions, overtime and tip credits.
ITEM 7 FINANCIAL STATEMENTS
The financial statements of the Company and supplementary data are included
beginning immediately following the signature page to this report. See Item 13
for a list of the financial statements and financial statement schedules
included.
ITEM 8 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
There are not and have not been any disagreements between the Company and
its accountants on any matter of accounting principles, practices or financial
statements disclosure.
PART III
ITEM 9 DIRECTORS EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF
THE EXCHANGE ACT
Executive Officers and Directors
The following table sets forth the name, age, and position of each
executive officer and director of the Company:
Director's Name Age Office Term Expires
Joseph Fiore 37 Chief Executive officer, Next
Chairman of the Board of Annual
Directors/Secretary Meeting
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Director's Name Age Office Term Expires
James Mylock, Jr. 31 Director Next
Annual
Meeting
Andrew Cosenza, Jr. 29 President/Treasurer/ Next
Chief Operating Officer/ Annual
Director Meeting
Joseph Fiore has served as chairman/chief executive
officer/secretary/director of the Company since October 5, 1996. A native New
Yorker and graduate with honors from Fordham University, B.S. in Finance, Mr.
Fiore began his career in food service before he graduated from college when he
purchased his first restaurant in the Galleria Mall in White Plains, N.Y. After
graduation, he began working on the development of a 1950's theme restaurant
concept with a traditional American menu of hamburgers, hot dogs, french fries,
and ice cream - Eat at Joe's. Mr. Fiore will be working with the investment
community as well as all administrative activities within the Company.
James Mylock, Jr. has served as a director of the Company since October 5,
1996. Mr. Mylock went to work for Eat at Joe's after graduation from the State
University of New York at Buffalo in 1990 with a B.A. in Sociology and an A.A.S.
in Business Administration. Combining his management skills with his interest in
social trends and marketing, Mr. Mylock took a management position within a
corporate retail unit where he gained a vast knowledge of the restaurant
industry as well as discovering innovative ways to meet customer needs. He will
be responsible for business development and aid in territorial acquisitions.
Andrew Cosenza, Jr. has served as President/Treasurer/Chief Operating
Officer and director of the Company from October 5, 1996. Andrew Cosenza, Jr. is
a graduate of Drexel University where he majored in Finance with a minor in
Hotel and Restaurant Management. Mr. Cosenza successfully owned and operated
sit-down restaurants, pizzerias, and free-standing fast-food outlets. Each of
Mr. Cosenza's food outlets are operated as if they are individually owned.
Managers are experienced, mature and motivated to succeed. Mr. Cosenza brings an
enormous amount of hands-on operational experience to Eat at Joe's as well as
corporate expertise.
The Company's Certificate of Incorporation provides that the board of
directors shall consist of from one to nine members as elected by the
shareholders. Each director shall hold office until the next annual meeting of
stockholders and until his successor shall have been elected and qualified.
Board Meetings and Committees
The Directors and Officers will not receive remuneration from the Company
until a subsequent offering has been successfully completed, or cash flow from
operating permits, all in the discretion
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of the Board of Directors. Directors may be paid their expenses, if any, of
attendance at such meeting of the Board of Directors, and may be paid a fixed
sum for attendance at each meeting of the Board of Directors or a stated salary
as Director. No such payment shall preclude any Director from serving the
Corporation in any other capacity and receiving compensation therefor. No
compensation has been paid to the Directors. The Board of Directors may
designate from among its members an executive committee and one or more other
committees. No such committees have been appointed.
Compliance with Section 16(a) of the Exchange Act
Based solely upon a review of forms 3, 4, and 5 and amendments thereto,
furnished to the Company during or respecting its last fiscal year, no director,
officer, beneficial owner of more than 10% of any class of equity securities of
the Company or any other person known to be subject to Section 16 of the
Exchange Act of 1934, as amended, failed to file on a timely basis reports
required by Section 16(a) of the Exchange Act for the last fiscal year.
ITEM 10 EXECUTIVE COMPENSATION
None of the executive officer's salary and bonus exceeded $100,000 during
any of the Company's last two fiscal years.
Employment Agreements
Effective January 1, 1997, the Company entered into an employment Agreement
with Joseph Fiore (the "Fiore Employment Agreement") under which Joseph Fiore
serves as chairman of the board and chief executive officer of the Company.
Pursuant to the Fiore Employment Agreement, Mr. Fiore was to be paid $100,000 in
1997. He deferred $100,000 of his salary for the year 1997. Mr. Fiore will be
paid a salary of $225,000 in 1998 and $350,000 thereafter provided that the
salary of $350,000 payable after the second year of employment is conditioned
upon the business operating at least 10 units by the end of 1998. In addition,
Mr. Fiore will receive family health insurance coverage until age 70 and life
insurance coverage until age 70 with a death benefit of $1,000,000 and the use
of an automobile, with all expenses associated with the maintenance and
operation of the automobile paid by the Corporation. Mr. Fiore deferred these
benefits until after 1997.
Effective January 1, 1997, the Company entered into an employment agreement
with Andrew A. Cosenza, Jr. (The"Cosenza Employment Agreement") under which
Andrew A. Cosenza, Jr. serves as president and chief operating office of the
Company as well as serve as a member of the Corporation's board of directors.
Pursuant to the Cosenza Employment Agreement, Mr. Cosenza was paid $12,500. He
deferred $87,500 of his salary for the year 1997. Mr. Cosenza will be paid a
salary of $225,000 in 1998 and $350,000 thereafter provided that the salary of
$350,000 payable
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after the second year of employment is conditioned upon the business operating
at least 10 units by the end of 1998. In addition, Mr. Cosenza will receive the
use of an automobile, with all expenses associated with the maintenance and
operation of the automobile paid by the Corporation, family health insurance
coverage to age 70 and life insurance coverage until age 70 with a death benefit
of $1,000,000. Mr. Cosenza deferred some of these benefits until after 1997 but
did receive the use of the automobile for part of the year at a cost to the
Company of approximately $16,000 .
ITEM 11 SECURITY OWNERSHIP OF BENEFICIAL OWNERS
AND MANAGEMENT
Principal Shareholders
The table below sets forth information as to each person owning of record
or who was known by the Company to own beneficially more than 5% of the
12,733,805 shares of issued and outstanding Common Stock of the Company as of
March 26, 1998 and information as to the ownership of the Company's Stock by
each of its directors and executive officers and by the directors and executive
officers as a group. Except as otherwise indicated, all shares are owned
directly, and the persons named in the table have sole voting and investment
power with respect to shares shown as beneficially owned by them.
To the best of management's knowledge there is not any shareholder who owns
more than 5% of the Company's common stock.
# of
Name and Address Nature of Shares
of Beneficial Owners Ownership Owned Percent
Directors
Joseph Fiore Common Stock 2,949,934 23%
James Mylock, Jr. Common Stock None -0-
Andrew Cosenza, Jr. Common Stock 2,700,000 21%
All Executive Officers Common Stock 5,649,934 44%
and Directors as a Group
(3 persons)
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ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company utilized office space that is shared with companies controlled
by two officers of the Company. During 1997 Cozco Management received $546,574
as reimbursement for rent, telephone, equipment, travel, automotive salaries and
other shared expenses. During 1997 the two officers and/or companies controlled
by the two officers paid expenses and made advances to the Company totaling
$702,922.
ITEM 13. EXHIBITS, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report.
1. Financial Statements
Page
Report of Robison, Hill & Co., Independent Certified Public Accountants F-1
Consolidated Balance Sheets as of December 31, 1997, and 1996 F-2
Consolidated Statements of Operations for the years ended
December 31, 1997, and 1996 F-4
Consolidated Statement of Stockholders' Equity for the years ended
December 31, 1997, and 1996 F-5
Consolidated Statements of Cash Flows for the years ended
December 31, 1997, and 1996 F-6
Notes to consolidated Financial Statements F-8
2. Financial Statement Schedules
The following financial statement schedules required by Regulation S-X are
included herein.
All schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.
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3. Exhibits
The following exhibits are included as part of this report:
Exhibit
Number Title of Document
3.01 Articles of Incorporation of Conceptualistics, Incorporated Inc.
a Delaware Corporation now known as Eat At Joe's, LTD. (1)
3.02 Bylaws (1)
23.01 Consent of Accountants(1)
27.1 Financial Date Schedule
(1) Incorporated by reference
(b) No reports on Form 8-K were filed.
(c) The exhibits listed in Item 14(a)(3) are incorporated by reference.
(d) No financial statement schedules required by this paragraph are
required to be filed as a part of this form.
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SIGNATURES
Pursuant to the requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on it behalf by the undersigned, thereunto duly authorized.
EAT AT JOE'S LTD.
Dated: August 25, 1998 By /S/ Joseph Fiore
------------------------
Joseph Fiore,
C.E.O., Chairman, Secretary, Director
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities indicated on this 30TH day of March 1998.
Signatures Title
/S/ Joseph Fiore
Joseph Fiore C.E.O., Chairman, Secretary, Director
(Principal Executive, Financial
and Accounting Officer)
/S/ James Mylock, Jr.
James Mylock, Jr. Director
/S/ Andrew Cosenza, Jr.
Andew Cosenza, Jr. Director, President, C.O.O., Treasurer
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Eat At Joe's, Ltd.:
We have audited the accompanying consolidated balance sheet of East At
Joe's, Ltd. and subsidiaries as of December 31, 1997 and 1996 and the related
consolidated statements of operations, changes in stockholder's equity and cash
flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated 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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the consolidated 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Eat At
Joe's, Ltd. and subsidiaries (formerly a development stage enterprise) as of
December 31, 1997 and 1996 and the results of their operations and their cash
flows for the years then ended, in conformity with generally accepted accounting
principles.
Respectfully submitted ROBISON,
HILL & Co.
/s/ Robison, Hill & Co.
Certified Public Accountants
Salt Lake City, Utah
March 23, 1998
F-1
<PAGE>
EAT AT JOE'S LTD., AND SUBSIDIARIES
(Formerly a development stage enterprise)
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1997 AND 1996
1997 1996
----------- ---------
ASSETS
Current Assets:
Cash and cash equivalents ...................... $ 232,601 $ 35,016
Receivables .................................... -- 70,000
Inventory ...................................... 7,488 --
Other .......................................... 400 --
Prepaid expense ................................ 30,993 3,975
Deposits ....................................... 12,701 10,991
----------- --------
Total Current Assets ...................... 284,183 119,982
----------- --------
Property and equipment:
Equipment ...................................... 279,667 --
Office furniture ............................... 1,000 --
Leasehold improvements ......................... 1,527,099 12,495
----------- --------
1,807,766 12,495
Less accumulated depreciation .................. (11,546) --
----------- --------
1,796,220 12,495
----------- --------
Other Assets:
Intangible and other assets
net of $2,150 amortization in 1997 ............. 234,569 158,595
----------- --------
Total Assets .............................. $ 2,314,972 $291,072
=========== ========
F - 2
<PAGE>
EAT AT JOE'S LTD., AND SUBSIDIARIES
(Formerly a development stage enterprise)
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1997 AND 1996
(Continued)
1997 1996
----------- -----------
LIABILITIES
Current Liabilities:
Accounts payable ............................. $ 347,295 $ 7,235
Accrued liabilities........................... 87,500 --
Short-term notes payable ..................... 264,940 --
Shareholders loans ........................... 702,922 12,500
----------- -----------
Total Liabilities ....................... 1,402,657 19,735
----------- -----------
STOCKHOLDERS EQUITY
Preferred stock - $0.0001 par value ..........
10,000,000 shares authorized;
none issued and outstanding ................ -- --
Common Stock - $0.0001 par value .............
50,000,000 shares Authorized ...............
12,733,805 and 11,833,805 issued
and Outstanding, respectively .............. 1,273 1,183
Common Stock To Be Issued .................... 4 --
Additional paid-in capital ................... 2,284,295 1,344,389
Retained deficit ............................. (1,373,257) (1,074,235)
----------- -----------
Total Stockholders' Equity .............. 912,315 271,337
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY ......................... $ 2,314,972 $ 291,072
=========== ===========
The accompanying notes are an integral part of these financial statements.
F - 3
<PAGE>
EAT AT JOE'S LTD., AND SUBSIDIARIES
(Formerly a development stage enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1997, AND 1996
1997 1996
--------- --------
Revenues ........................................ $ 84,781 $ --
Cost of revenues ................................ 56,855 --
--------- --------
Gross Margin .................................... 27,926 --
Expenses
General and administrative ................... 322,644 14,762
--------- --------
Net loss from continuing operations ............. (294,718) (14,762)
--------- --------
Other Income (Expense)
Interest income .............................. 3,759 --
Interest expense ............................. (7,311) (3,938)
Loss on sale of assets ....................... (752) --
--------- --------
Net Other Income (Expense) ...................... (4,304) (3,938)
--------- --------
Net loss before income taxes .................... (299,022) (18,700)
Income tax expense (benefit) .................... -- --
--------- --------
Net Loss ........................................ $(299,022) $(18,700)
========= ========
Basic Loss Per Common Share: .................... $ (.02) $ --
The accompanying notes are an integral part of these financial statements.
F - 4
<PAGE>
<TABLE>
EAT AT JOE'S LTD. AND SUBSIDIARIES
(Formerly a development stage company)
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1997, AND 1996
<CAPTION>
Common Stock Additional
To Be Issued Common Stock Paid-in Retained
Shares Amount Shares Amount Capital Deficit
--------- --------- ---------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balances at January 1, 1996 .. -- $ -- 314,350 $ 31 $1,055,504 $(1,055,535)
Adjustment in connection
with pooling of interests .... -- -- 5,505,000 550 219,037 --
--------- --------- ---------- --------- ---------- -----------
Balances at January 1, 1996,
as restated .................. -- -- 5,819,350 581 1,274,991 (1,055,535)
May 1996, shares issued
to Company for cash ....... -- -- 14,455 2 9,998 --
November 1996, shares
issued in Reg D-504
offering ..................... -- -- 6,000,000 600 59,400 --
Net loss for the year ........ -- -- -- -- -- (18,700)
--------- --------- ---------- --------- ---------- -----------
Balances at December 31,
1996......................... -- -- 11,833,805 1,183 1,344,389 (1,074,235)
March 1997, shares issued
on exercise of warrants ... -- -- 400,000 40 399,960 --
April 1997, shares issued on
exercise of warrants ...... -- -- 300,000 30 299,970 --
November 1997 shares
issued on exercise of
warrants ..................... 40,000 4 200,000 20 239,976 --
Net loss for the year ........ -- -- -- -- -- (299,022)
--------- --------- ---------- --------- ---------- -----------
Balance at December 31,
1997......................... 40,000 $ 4 12,733,805 $ 1,273 $2,284,295 $(1,373,257)
========= ========= ========== ========= ========== ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
F - 5
<PAGE>
EAT AT JOE'S LTD. AND SUBSIDIARIES
(Formerly a development stage company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1997, AND 1996
1997 1996
----------- --------
Cash Flows From Operating Activities
Net loss for the period ............................ $ (299,022) $(18,700)
Adjustments to reconcile net loss to net cash
Provided by operating activities
Loss from sale of marketable securities .......... 752 --
Depreciation ..................................... 11,546 --
Payment of organization costs .................... (78,124) (8,558)
Amortization of organization costs ............... 2,150 --
Decrease (Increase) in Receivables ............... 70,000 --
Increase in inventory ............................ (7,488) --
Increase in other assets ......................... (400) --
Increase in prepaid expense ...................... (27,018) (3,975)
Decrease (increase) in deposits .................. (1,710) (10,991)
Increase in accounts payable and accrued liablities 427,560 7,235
----------- --------
Net Cash Provided by (Used in) Operating Activities ... 98,246 (34,989)
----------- --------
Cash Flows From Investing Activities
Purchase of property and equipment ................. (1,795,271) (12,495)
Proceeds from sale of marketable securities ........ 143,248 --
Purchase of marketable securities .................. (144,000) --
----------- --------
Net Cash Provided by Investing Activities ............. (1,796,023) (12,495)
----------- --------
Cash Flows From Financing Activities
Issuance of common stock ........................... 940,000 70,000
Advances from majority stockholders ................ 690,422 12,500
Proceeds from short-term notes payable ............. 264,940 --
----------- --------
Net Cash Provided by Financing Activities ............. 1,895,362 82,500
----------- --------
Increase in Cash ...................................... 197,585 35,016
Cash at beginning of period ........................... 35,016 --
----------- --------
Cash at End of Period ................................. $ 232,601 $ 35,016
=========== ========
F - 6
<PAGE>
EAT AT JOE'S LTD. AND SUBSIDIARIES
(Formerly a development stage company)
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1997, AND 1996
(Continued)
1997 1996
------------ ------------
Supplemental Disclosure of Interest and
Income Taxes Paid
Interest paid for the period .................. $ -- $ 3,938
============ ============
Income taxes paid for the period .............. $ -- $ --
============ ============
Supplemental Disclosure of Non-cash Investing
and Financing Activities
Intangible Assets Acquired with Issuance of
Common stock ............................... $ 149,832 $ --
============ ============
Organization Costs Acquired with Issuance
Common stock ............................... $ 200 $ --
============ ============
The accompanying notes are an integral part of these financial statements.
F - 7
<PAGE>
EAT AT JOE'S LTD. AND SUBSIDIARIES
(Formerly a development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, AND 1996
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for Eat At Joe's, Ltd. And subsidiaries
is presented to assist in understanding the Company's financial statements. The
accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements.
Organization and Basis of Presentation
Eat At Joe's Ltd. (Company) was incorporated on January 6, 1988, under the
laws of the State of Delaware, as a wholly-owned subsidiary of Debbie Reynolds
Hotel and Casino, Inc. (DRHC) (formerly Halter Venture Corporation or Halter
Racing Stables, Inc.) a publicly-owned corporation. DRHC caused the Company to
register 1,777,000 shares of its initial 12,450,000 issued and outstanding
shares of common stock with the Securities and Exchange Commission on Form S-18.
DRHC then distributed the registered shares to DRHC stockholders.
During the period September 30, 1988 to December 31, 1992, the Company
remained in the development stage while attempting to enter the mining industry.
The Company acquired certain unpatented mining claims and related equipment
necessary to mine, extract, process and otherwise explore for kaolin clay,
silica, feldspar, precious metals, antimony and other commercial minerals from
its majority stockholder and other unrelated third-parties. The Company was
unsuccessful in these start-up efforts and all activity was ceased during 1992
as a result of foreclosure on various loans in default and/or the abandonment of
all assets.
From 1992 until 1996 the Company has had no operations, assets or
liabilities.
Principles of Consolidation
The consolidated financial statements include the accounts of Eat At Joe's,
LTD. And its wholly- owned subsidiary, E.A.J. Holding Corporation, a Delaware
corporation ("Holding"). Holding includes the accounts of its wholly-owned
subsidiaries, E.A.J. PHL Airport, Inc. a Pennsylvania corporation, Eat At Joe's
U. of P., Inc. a Pennsylvania corporation, E.A.J. Cherry Hill, Inc., a New
Jersey corporation, Eat At Joe's Harborplace, Inc., a Maryland corporation, Eat
At Joe's Neshaminy, Inc. a Pennsylvania corporation, Eat At Joe's Plymouth,
Inc., a Pennsylvania corporation, E.A.J. Echelon Mall, Inc., a New Jersey
corporation, E.A.J. Gallery, Inc., a Pennsylvania corporation, E.A.J.
Moorestown, Inc., a New Jersey corporation, and E.A.J. Shoppingtown,Inc., a New
York corporation. All significant intercompany accounts and transactions have
been eliminated.
F - 8
<PAGE>
EAT AT JOE'S LTD. AND SUBSIDIARIES
(Formerly a development stage company)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, AND 1996
(Continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Nature of Business
The Company is developing, owns and operates theme restaurants styled in an
"American Diner" atmosphere.
Inventories
Inventories consist of food, paper items and related materials and are
stated at the lower of cost (first-in, first-out method) or market.
Income Taxes
The Company accounts for income taxes under the provisions of SFAS No. 109,
"Accounting for Income Taxes." SFAS No.109 requires recognition of deferred
income tax assets and liabilities for the expected future income tax
consequences, based on enacted tax laws, of temporary differences between the
financial reporting and tax bases of assets and liabilities.
Depreciation
Office furniture, equipment and leasehold improvements, are stated at cost.
Depreciation and amortization are computed using the straight-lin method over
the estimated economic useful lives of the related assets as follows:
Office furniture 5-10 years
Equipment 5-7 years
Leasehold improvements 8-15 years
Maintenance and repairs are charged to operations; betterments are
capitalized. The cost of property sold or otherwise disposed of and the
accumulated depreciation thereon are eliminated from the property and related
accumulated depreciation accounts, and any resulting gain or loss is credited or
charged to income.
Amortization
Organization costs are amortized over a sixty month period. Intangible
assets are amortized over useful life of 10 years.
F - 9
<PAGE>
EAT AT JOE'S LTD. AND SUBSIDIARIES
(Formerly a development stage company)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, AND 1996
(Continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
The Company has adopted the Financial Accounting Standards Board SFAS No.,
121, "Accounting for the Impairment of Long-lived Assets." SFAS No. 121
addresses the accounting for (i) impairment of long-lived assets, certain
identified intangibles and goodwill related to assets to be held and used, and
(ii) long-live lived assets and certain identifiable intangibles to be disposed
of. SFAS No. 121 requires that long-lived assets and certain identifiable
intangibles be held and used by an entity be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. If the sum of the expected future cash flows from the
used of the asset and its eventual disposition (undiscounted and without
interest charges) is less than the carrying amount of the asset, an impairment
loss is recognized.
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles required 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.
Concentration of Credit Risk
The Company has no significant off-balance-sheet concentrations of credit
risk such as foreign exchange contracts, options contracts or other foreign
hedging arrangements. The Company maintains the majority of its cash balances
with one financial institution, in the form of demand deposits.
Reverse Stock Split
Effective May 3, 1997 the Stockholders approved a 50 to 1 reverse split of
the common stock and effective October 7, 1997 the Stockholders approved a 4 to
1 reverse split. The financial statements have been retroactively restated to
reflect the reverse stock split as if it had been effective prior to the
earliest date presented.
F - 10
<PAGE>
EAT AT JOE'S LTD. AND SUBSIDIARIES
(Formerly a development stage company)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, AND 1996
(Continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.
Earnings (Loss) Per Share
In 1997, the Financial Accounting Standards Board issued SFAS No. 128,
"Earnings per Share" (EPS). SFAS No. 128 replaced the calculation of primary and
fully diluted earnings per share with basic and diluted earnings per share. The
application of SFAS No. 128 had no effect of the earnings per share for 1996 as
previously reported.
Diluted net income per common share was calculated based on an increased
number of shares that would be outstanding assuming that the 1,060,000 warrants
are converted to 1,060,000 common shares. The effect of outstanding common stock
equivalents are antidilutive for 1997 and 1996 and are thus not considered.
The reconciliations of the numerators and denominators of the basic
earnings per share computations are as follows:
<TABLE>
For the Year Ended 1997 For the Year Ended 1996
------------------------------- ----------------------------
<CAPTION>
Per Share Per Share
Income Shares Amount Income Shares Amount
<S> <C> <C> <C> <C> <C> <C>
Basic EPS
Income available to
common shareholders $(299,022) 11,729,107 $ (.02) $(18,700) 6,535,247 $ -
========== ========== ======= ========= ========= ======
</TABLE>
F - 11
<PAGE>
EAT AT JOE'S LTD. AND SUBSIDIARIES
(Formerly a development stage company)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, AND 1996
(Continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Reclassifications
Certain reclassifications have been made in the 1996 financial statements
to conform with the 1997 presentation.
NOTE 2 - SHORT-TERM NOTES PAYABLE
Short-Term Notes Payable consist of loans from unrelated entities as of
December 31, 1997. The notes are payable one year from the date of issuance
together with interest at 6.50% A.P.R.
NOTE 3 - INCOME TAXES
Deferred taxes result from temporary differences in the recognition of
income and expenses for income tax reporting and financial statement reporting
purposes. Deferred benefits of $71,000 and $4,000 for the years ended December
31, 1997 and 1996 respectively, are the result of net operating losses and the
gaming license rights reserve.
The Company has recorded net deferred income taxes in the accompany
consolidated balance sheets as follows:
As at December 31,
1997 1996
Future deductible temporary differences related to
Reserves, accruals, and net operating losses $ 387,000 $ 341,000
Valuation allowance (387,000) (341,000)
---------- ----------
Net Deferred Income Tax $ - $ -
========== ==========
As of December 31, 1997, the Company had a net operating loss ("NOL") carry
forward for income tax reporting purposes of approximately $1,141,000 available
to offset future taxable income. This net operating loss carry forward expires
at various dates between December 31, 2003 and 2012. A loss generated in a
particular year will expire for federal tax purposes if not utilized within 15
years. Additionally, the Internal Revenue Code contains provisions which could
reduce or limit the availability and utilization of these NOLs if certain
ownership changes have taken place or will take place. In accordance with SFAS
No. 109, a valuation allowance is provided when it is more likely than not that
all or some portion of the deferred tax asset will not be realized. Due to the
uncertainty with respect to the ultimate realization of the NOLs, the Company
established a valuation allowance for the entire net deferred income tax asset
of $387,000 as of December 31, 1997. Also consistent with SFAS No. 109, an
allocation of the income (provision) benefit
F - 12
<PAGE>
EAT AT JOE'S LTD. AND SUBSIDIARIES
(Formerly a development stage company)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, AND 1996
(Continued)
NOTE 3 - INCOME TAXES (Continued)
has been made to the loss from continuing operations.
The difference between the effective income tax rate and the federal
statutory income tax rate on the loss from continuing operations are presented
below:
As at December 31,
1997 1996
Benefit at the federal statutory rate of 34% $ 71,000 $ 4,000
Nondeductible expenses (1,000) -
Utilization of net operating loss carryforward (70,000) (4,000)
---------- -----------
$ - $ -
========== ===========
NOTE 4 - PURCHASE OF SUBSIDIARIES
On January 1, 1997 the shareholders of the Company approved an agreement
whereby 5,505,000 shares of the Company's common stock was exchanged for a 100%
interest in E.A.J. Holding Corporation, Inc. ("Holding"), a Delaware
corporation. Holding, which was organized on February 14, 1997, had total assets
with a historical cost value of $150,037, consisting of the Eat at Joe's trade
mark, business plan, graphics, illustrations/renderings, corporate brochure and
website with a historical value of $149,837, organization costs of $200 and no
liabilities on the date of the exchange.
During March, 1997 Holding acquired 100% of the issued and outstanding
stock of E.A.J.: PHL, Airport Inc. ("PHL Airport"), a Pennsylvania corporation
organized August 19, 1996 for $25,000. At the time of the acquisition PHL
Airport had assets with a historical cost value of $37,500, consisting of
developmental costs and organizational costs and liabilities of $12,500.
These transactions have been accounted for as a reorganization of ownership
interests between related parties as if it were a "Pooling of Interest."
Accordingly, assets and liabilities are reflected at their historical values.
The accompanying financial statements for 1997 are based on the assumption that
the companies were combined for the full year, and the financial statements of
1996 have been restated to give effect to the combination.
Following is a reconciliation of the amounts of net sales and net income
previously reported for 1996 with restated amounts:
F - 13
<PAGE>
EAT AT JOE'S LTD. AND SUBSIDIARIES
(Formerly a development stage company)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, AND 1996
(Continued)
NOTE 4 - PURCHASE OF SUBSIDIARIES (continued)
Year Ended
December 31, 1996
Revenues:
As previously reported $ -
Acquired companies -
-------------
As restated $ -
=============
Net Loss:
As previously reported $ 13,288
Acquired companies 5,412
-------------
As restated $ 18,700
=============
NOTE 5 - RENT AND LEASE EXPENSE
The Company occupies various retail restaurant space under operating leases
beginning October 1997 and expiring at various dates through 2012.
The minimum future lease payments under these leases for the next five
years are:
Year Ended December 31, Real Property Equipment
----------------------- ------------- ---------
1998 $ 298,320 $ -
1999 298,320 -
2000 298,320 -
2001 298,320 -
2002 298,320 -
------------- ---------
Total minimum future lease payments $ 1,491,600 $ -
============ =========
The leases generally provides that insurance, maintenance and tax expenses
are obligations of the Company. It is expected that in the normal course of
business, leases that expire will be renewed or replaced by leases on other
properties.
F - 14
<PAGE>
EAT AT JOE'S LTD. AND SUBSIDIARIES
(Formerly a development stage company)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, AND 1996
(Continued)
NOTE 6 - RELATED PARTY TRANSACTIONS
The Company utilized office space that is shared with companies controlled
by two officers of the Company. During 1997 Cozco Management received $546,574
as reimbursement for rent, telephone, equipment, travel, automotive salaries and
other shared expenses. During 1997 the two officers and/or companies controlled
by the two officers paid expenses and made advances to the Company totaling
$702,922.
NOTE 7 - PRIVATE PLACEMENT OF COMMON STOCK
On November 11, 1996 the Company completed a Regulation D section 504
private placement whereby the Company issued 600,000 common shares for $60,000.
Each share included detachable warrants to purchase one common share at $1.00
per share.
NOTE 8 - SELECTED FINANCIAL DATA (Unaudited)
The following table set forth certain unaudited quarterly financial
information:
1997 Quarters Ended
Mar 31 Jun 30 Sep 30 Dec 31
-------- --------- -------- ---------
Income statement data:
Net sales ...................... $ -- $ -- $ -- $ 84,781
Gross profit ................... -- -- -- 27,926
-------- --------- -------- --------
Income (loss) from operations .. (60,733) (152,046) (68,971) (12,968)
Other income ...................... 6 1,926 1,075 (7,311)
-------- --------- -------- --------
Income (loss) before tax .......... (60,727) (150,120) (67,896) (20,279)
Income tax (provision) benefit .... -- -- -- --
-------- --------- -------- --------
Net Income (Loss) ................. $(60,727) $(150,120) $(67,896) $(20,279)
======== ========= ======== ========
F - 15
<PAGE>
EAT AT JOE'S LTD. AND SUBSIDIARIES
(Formerly a development stage company)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, AND 1996
(Continued)
NOTE 8 - SELECTED FINANCIAL DATA (Unaudited) (continued)
1996 Quarters Ended
Mar 31 Jun 30 Sep 30 Dec 31
--------- --------- -------- ---------
Income statement data:
Net sales ...................... $ -- $ -- $ -- $ --
Gross profit ................... -- -- -- --
-------- --------- -------- --------
Income (loss) from operations .. (10,000) -- -- (4,762)
Other income ...................... -- -- -- (3,938)
-------- --------- -------- --------
Income (loss) before tax .......... (10,000) -- -- (8,700)
Income tax (provision) benefit .... -- -- -- --
-------- --------- -------- --------
Net Income (Loss) ................. $(10,000) $ -- $ -- $ (8,700)
======== ========= ======== ========
F - 16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE OF EAT AT JOE'S LTD. AS OF DECEMBER 31, 1997 AND THE RELATED STATEMENTS
OF OPERATIONS AND CASH FLOWS FOR THE YEAR THEN ENDED AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 233
<SECURITIES> 0
<RECEIVABLES> 7
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 284
<PP&E> 1808
<DEPRECIATION> 12
<TOTAL-ASSETS> 2315
<CURRENT-LIABILITIES> 1403
<BONDS> 0
0
0
<COMMON> 1
<OTHER-SE> 911
<TOTAL-LIABILITY-AND-EQUITY> 2315
<SALES> 85
<TOTAL-REVENUES> 85
<CGS> 57
<TOTAL-COSTS> 57
<OTHER-EXPENSES> 323
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7
<INCOME-PRETAX> (299)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (299)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
