<PAGE> 1
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U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
----------- -----------
Commission file number: 0-16808
SIXX HOLDINGS, INCORPORATED
(Name of small business issuer in its charter)
DELAWARE 75-2222883
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
300 CRESCENT COURT, SUITE 1630
DALLAS, TEXAS 75201
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (214) 855-8800
Securities Registered Pursuant to Section 12(b) of the Act:
None
Securities Registered Pursuant to Section 12(g) of the Act:
Title of each class
--------------------------------------
Common Stock, $.01 par value per share
Check whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 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
--- ---
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form and no disclosure will be
contained, to the best or 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. [X]
Revenues for the year ended December 31, 1999 were $7,313,000.
As of February 28, 2000, the registrant had issued and outstanding
1,359,274 shares of the Company's common stock, $.01 par value.
The aggregate market value of the approximately 17% of the voting stock
held by non-affiliates of the registrant, based on the closing price of such
stock on February 28, 2000, was approximately $382,281. For purposes of this
computation, all executive officers, directors and 10% beneficial owners of the
registrant are deemed to be affiliates. Such determination should not be deemed
an admission that such executive officers, directors and 10% beneficial owners
are affiliates.
DOCUMENTS INCORPORATED BY REFERENCE
None
Transitional Small Business Disclosure Format Yes [ ] No [ X ]
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<PAGE> 2
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Sixx Holdings, Incorporated (formerly "Yates Unit, Inc."), a Delaware
corporation ("Sixx" or the "Company"), was organized in January 1988 to hold the
interests of Caspen Oil, Inc. (formerly Summit Energy, Inc.) in the Yates Field
Unit. The assets and operations were transferred to Sixx on March 3, 1988 and,
after settlement of certain litigation in August 1989, consisted primarily of
cash and cash equivalents until April 25, 1994 when Patrizio Restaurant, Inc., a
Texas corporation and Patrizio North, Inc., a Texas corporation, were merged
(the "Merger") with and into Patrizio Acquisition, Inc., a Texas corporation and
wholly-owned subsidiary of the Company. At the effective time of the Merger, the
name of Patrizio Acquisition, Inc. was changed to Patrizio Restaurant, Inc.
Prior to the Merger, Patrizio Restaurant, Inc. owned and operated an
upscale Italian food restaurant in Dallas, Texas (Patrizio I) and Patrizio
North, Inc. owned and operated a similar restaurant in Plano, Texas (Patrizio
II). All assets acquired in the Merger, which include the two existing
restaurants, the "Patrizio" concept, design and motif, and other assets used in
the day-to-day operations of the two existing restaurants, will continue to be
utilized in operating the existing two restaurants.
PATRIZIO RESTAURANT, INC.
The Company's primary business is operating full service restaurants under
the name "Patrizio" that offer moderately priced, high quality, Italian-style
cuisine and alcoholic beverages. The Company continually evaluates and revises
its menu to improve its products. The restaurants are open daily for lunch and
dinner and offer entrees that generally range from $5.26 to $9.80. Alcoholic
beverages, which are served primarily with meals (as opposed to bar service)
generated approximately 26% of all restaurant revenues in both 1999 and 1998.
Patrizio I opened September 1989 and seats approximately 235 people including
approximately 75 people outdoors, weather permitting, and is approximately 4,268
square feet. Patrizio II opened March 1994 and seats approximately 320 people
including approximately 120 people outdoors, weather permitting, and is
approximately 6,588 square feet. The Company utilizes local advertising, which
emphasizes the restaurants as New York style "trattorias" featuring eighteenth
century Italian paintings, an antique European bar and beautiful old world rugs
with everything prepared with the freshest of ingredients.
SERVICE MARKS
The Company has obtained federal registration of the service marks
"Patrizio" and the Patrizio design. These service marks are of material
importance to the operation of the Company's business.
EMPLOYEES
As of December 31, 1999, the Company employed five persons in its corporate
headquarters and approximately 164 in its restaurants. None of the employees are
covered by collective bargaining agreements and the Company has never
experienced a work stoppage, strike or labor dispute. The Company considers its
employee relations to be good.
COMPETITION
The restaurant business is highly competitive and competition among
restaurants serving Italian cuisine is increasing. The Company believes that the
principal competitive factors in its restaurant business are quality, value,
service, atmosphere, and location. The Company believes that its competitive
position is enhanced by its quality food, up-scale atmosphere and moderately
priced menu.
2
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GOVERNMENTAL REGULATION
The Company is subject to various federal, state, and local laws affecting
its business. Many stringent and varied requirements of local governmental
bodies with respect to zoning, land use, and environmental factors have
increased, and can be expected to continue to increase, both the cost of and the
time required for constructing new restaurants as well as the cost of operating
Company restaurants. The Company's restaurants are subject to various health,
sanitation, and safety standards and are also subject to state and local
licensing and regulation with respect to the service of alcoholic beverages. The
service of alcoholic beverages is material to the business of the Company. The
failure to receive or retain, or a delay in obtaining, a liquor license in a
particular location could adversely affect the Company's operations in that
location. Liquor licenses must be renewed annually. The Company has not
encountered any significant problems relating to alcoholic beverage licenses and
permits to date.
The Company may be subject in certain states to "dram-shop" statutes, which
may establish liability for improper alcoholic beverage service. The Company
carries liquor liability coverage as part of its existing comprehensive general
liability insurance.
The Company is also subject to state and federal labor laws. These include
the Fair Labor Standards Act, which governs such matters as minimum wages,
overtime, and other working conditions; the Immigration and Naturalization Act,
which governs employee citizenship requirements, and the Americans with
Disabilities Act, which governs non- discriminating employment practices and
reasonable accommodations for disabled persons, both employees and customers. A
significant portion of the Company's food service personnel are paid at rates
related to the federal minimum wage; and accordingly, increases in the minimum
wages increase the Company's labor costs. The federal minimum wage per hour was
increased from $4.75 to $5.15 for non-service personnel effective September 1,
1997 and remained at that level to present day.
ITEM 2. DESCRIPTION OF PROPERTIES
As of December 31, 1999, the Company owned two restaurants, each located in
a strip shopping center. The Patrizio I lease was renewed in February 1998 and
the lease expires in February 2005. The Patrizio I lease has one five- year
renewal option in 2005 at the then prevailing market rates. The Patrizio II
lease expires in 2003 and has two five-year renewal options at the then
prevailing market rates. The leases provide for rentals generally competitive
with rates in the same area. The Company's corporate office is located at the
Crescent Court. Its lease expired in March 1998 and was not renewed. The Company
now rents the same space on a month-to-month basis from its majority shareholder
at the price paid by the Company's majority shareholder.
ITEM 3. LEGAL PROCEEDINGS
There are no legal proceedings to which the Company is a party.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of the fiscal year covered by this report, no
matter was submitted to a vote of security holders, through the solicitation of
proxies or otherwise.
3
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
The Company's Common Stock began trading in the over-the-counter market and
was quoted on the National Association of Securities Dealers Automated Quotation
System (NASDAQ) through October 8, 1997. Effective October 9, 1997, the
Company's shares of common stock, traded under the symbol "SIXX", continue to
trade in the over-the-counter market. The following table sets forth the high
and low closing bid prices for the Common Stock of the Company as reported in
the consolidated transaction reporting system for the calendar periods
indicated. These quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commission and may not represent actual transactions.
<TABLE>
<CAPTION>
1999: High Bid Low Bid
<S> <C> <C>
First Quarter 1.75 .06
Second Quarter .21 .06
Third Quarter .25 .20
Fourth Quarter .31 .25
1998:
First Quarter .75 .53
Second Quarter .81 .50
Third Quarter .53 .34
Fourth Quarter .31 .06
</TABLE>
As of February 28, 2000, there were approximately 1,940 holders of record
of the Company's Common Stock. The Company has not paid cash dividends and has
no plans to pay dividends at the present time.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The Company owns and operates two upscale Italian restaurants. Patrizio I,
located in Dallas, Texas was opened in 1989 and Patrizio II, located in Plano,
Texas was opened in 1994.
CAPITAL RESOURCES AND LIQUIDITY
As of December 31, 1999, the Company's cash was $63,300. Management
believes that sales at the current annual levels will provide sufficient cash
flow to fund operations at existing restaurants for the foreseeable future.
All outstanding notes payable to stockholder and related interest accruals
were paid during 1999. The interest rates on the notes was 9.50% through
September 30, 1998, at which time all interest rates were changed to 8.00%.
RESULTS OF OPERATIONS
The Company's restaurant revenues increased 8% from $6,777,100 to
$7,313,000 for the years ended December 31, 1998 and 1999, respectively. Results
of operations increased 218% from a loss in 1998 of $103,300 to income of
$122,300 in 1999.
The principal reasons for the increase in restaurant revenues were the
strong local economy and more temperate weather in the spring, summer and fall
of 1999 which significantly increased the number of patio diners. Also, a 2%
increase in menu prices in the fourth quarter of 1998 contributed an additional
estimated $142,000 of revenue in 1999. Patrizio I accounted for 56.4% and 54.2%
of total revenues in 1999 and 1998, respectively.
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Cost of sales as a percent of restaurant revenues decreased to 29.3% for
the year ended December 31, 1999 from 29.6% for the same period in 1998.
Restaurant expenses totaled $4,024,800 for the year ended December 31, 1999, a
7.7% increase over 1998. Restaurant expenses were 53.2% of revenue at Patrizio I
compared to 53.8% in the prior year and Patrizio II's restaurant expenses were
57.8% of revenue in 1999 compared to 57.4% in 1998.
Depreciation and amortization was $283,400 for the year ended December 31,
1999 and $364,600 for the year ended December 31, 1998. General and
administrative expenses were $738,600 for the year ended December 31, 1999,
compared to $770,900 in 1998.
Interest expense-stockholder of $18,400 reflects a decrease of $25,200 from
the 1998 expense of $43,600 as a result of decreased principal amounts
outstanding in 1999.
Other income (expense) was ($2,500) for the year ended December 31, 1999
and other income (expense) was ($1,700) for the year ended December 31, 1998.
As described in note 6 to the Company's audited consolidated financial
statements, no federal or state income taxes were payable or receivable by the
Company during the years presented.
YEAR 2000
The Company was not significantly impacted nor did it experience adverse
material effects in its day to day operations or in its business technology due
to the arrival of the year 2000.
IMPACT OF INFLATION
The Company is subject to the effect of inflation on its restaurant labor,
food and occupancy costs. The Company employs workers who are paid hourly rates
based upon the federal minimum wage. Enactment of legislation increased the
minimum wage by $0.40 per hour effective September 1, 1997. Operating margins at
the restaurant level have been maintained through rigorous food cost control,
procurement efficiencies and minimal menu price adjustments. The cost of taxes,
maintenance and insurance all have an impact on the Company's occupancy costs,
which continued to increase during the period. Management believes the current
practice of maintaining operating margins through a combination of small menu
price increases and cost controls, careful evaluation of property and equipment
needs, and efficient purchasing practices is the most effective means to manage
the effects of inflation, including the increase in the minimum wage.
SEASONALITY
The Company's business is somewhat seasonal in nature, with restaurant
revenues being stronger in the spring and autumn when patrons can be seated
comfortably on each restaurant's outdoor patio.
FORWARD-LOOKING STATEMENTS
Certain of the statements made in this report are forward-looking
statements that involve a number of risks and uncertainties. Statements that
should generally be considered forward-looking include, but are not limited to,
those that contain the words "estimate," "anticipate," "in the opinion of
management," "believes," and similar phrases. Among the factors that could cause
actual results to differ materially from the statements made are the following:
general business conditions in the local market served by the Company's
restaurants, competitive factors such as changes in the locations, menus,
pricing or other aspects of competitors' operations, the weather in each of the
locations, expense pressures relating to labor and supplies, and unanticipated
general and administrative expenses, including the costs of additional
acquisitions, expansion or financing.
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ACCOUNTING MATTERS
In June 1998, Statement of Financial Accounting Standards ("SFAS") No. 133,
Accounting for Derivative Instruments and Hedging Activities, was issued. This
statement establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. As amended by SFAS No. 137, the
provisions of SFAS No. 133 are effective for fiscal years beginning after June
15, 2000, although early adoption is allowed. The Company does not expect the
adoption of this Statement to have a material impact on the Company's financial
condition or reported results of operations.
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements are set forth herein commencing on
page F-1.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The Company has nothing to report under this item.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Set forth below is certain information concerning the directors and
executive officers of the Company:
<TABLE>
<CAPTION>
Name Age Position with the Company
---- --- -------------------------
<S> <C> <C>
Jack D. Knox 62 Chairman of the Board,
President and Director
Dorothy L. Douglas 55 Secretary and Treasurer
G. Michael Boswell 59 Director
R. Ted Enloe, Jr. 61 Director
Richard Mullen 60 Director
</TABLE>
The Bylaws of the Company provide that the Board of Directors shall consist
of not fewer than two nor more than 15 members and that the number of the
directors, within such limits, shall be determined by resolution of the Board of
Directors at any meeting. The Certificate of Incorporation and the Bylaws of the
Company provide for the division of the Board of Directors into three classes,
with each class having a three-year term of office expiring in different years.
Currently, the Board of Directors of the Company is composed of four directors.
Because the company has not elected directors during the past three years, all
directors' terms expire in May 2000 or until their successor shall have been
duly elected and qualified.
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The following is a brief account of the business experience, during the
past five years, of each director and executive officer of the Company. Each of
the directors and the officers is a citizen of the United States.
Jack D. Knox has been Chairman of the Board and President of the Company
since January 1988. Mr. Knox served as President of Summit Energy, Inc., Dallas,
Texas, an American Stock Exchange listed oil and gas company, from its inception
in 1970 through April 1989, and as a director through January 1990. Mr. Knox
also served as a director of El Chico Restaurants, Inc., a restaurant company
listed on the NASDAQ, from 1990 through January 1998.
Dorothy L. Douglas was elected Treasurer of the Company in April 1988 and
Secretary in May 1990. Ms. Douglas also served as Secretary of Caspen Oil, Inc.
from December 1987 until May 1990. Prior to joining Caspen Oil, Inc. in February
1986 as Administrative Assistant to Jack D. Knox, Ms. Douglas was employed by
May Petroleum Inc. from May 1965 until January 1986, serving as Administrative
Vice President from 1975 until 1980 and as Secretary from 1974 until 1986.
G. Michael Boswell has been a director of the Company since April 1988. He
served as Secretary of the Company from January 1988 to May 1990. Mr. Boswell is
presently involved in private investments and the practice of law. He served as
the Chariman of the Board and President of Sunshine Mining Co., Dallas, Texas, a
New York Stock Exchange listed silver mining, precious metals, and oil and gas
producing company, from October 1977 to November 1992.
Robert Ted Enloe III has been a director of the Company since February
1993. He is the managing general partner of Balquita Partners, Ltd., a real
estate and securities investment partnership. From 1975 to August 1986 he served
as President, and from April 1992 to August 1996 as Chief Executive Officer, of
Liberte Investors. He was President of L&N Housing Corp. from 1981 to April 1992
and a director of that entity from 1981 to 1996. From 1975 to September 1991 he
served as President of Lomas Financial Corporation, and as a director of that
company from 1970 to 1991. Mr. Enloe serves as a director of Compaq Computer
Corporation, a computer manufacturer, Leggett & Platt, Inc., a manufacturer of
components primarily for the furnishings and bedding industries, Liberte
Investors, Inc., a holding company seeking acquisitions of operating companies,
and SierraCities.com, a commercial leasing firm.
Richard T. Mullen has been a director of the Company since February 1993.
He is President of The Mullen Company, Dallas, Texas, a real estate brokerage,
development, and management company, and has served in this position for more
than five years. He also serves as a director of Targeted Marketing Systems,
Inc., a privately-held firm specializing in customer loyalty programs.
There is no family relationship among the nominees or present directors and
any executive officer of the Company.
SECTION 16 COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors, and persons who own more than 10 percent
of a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "SEC"). Officers, directors and greater than 10-percent shareholders are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file. Based solely on its review of the copies of such forms
received by it, or written representations from certain reporting persons that
no Forms 5 were required for those persons, the Company believes that during
1999 all filing requirements applicable to its officers, directors, and greater
than 10-percent beneficial owners were complied with.
ITEM 10. EXECUTIVE COMPENSATION
The total compensation paid during 1998, 1997, and 1996 to the Chief
Executive Officer of the Company, Jack D. Knox, is set forth below in the
following Summary Compensation Table:
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SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation Awards
---------------------------------------------- -------------------
Securities
Other Underlying
Annual Options/ All Other
Name Year Salary Bonus Comp. SARs(#) Compensation
- ------------- ---- ------- ----- --------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Jack D. Knox 1999 $ (1) $ -- $ 1,044(2) -- $ 5,689(3)
Chairman of the Board 1998 $ --(1) $ -- $ 1,909(2) -- $ 4,310(3)
and President (Chief 1997 $ --(1) $ -- $ 1,227(2) -- $ 2,755(3)
Executive Officer)
</TABLE>
(1) Mr. Knox has not received a salary from the Company since April 30, 1994.
However, Mr. Knox and affiliates received payments from, and certain
services provided by, the Company pursuant to agreements entered into in
connection with the Merger. Information with respect to these agreements
for 1999, 1998 and 1997 is included in "Certain Relationships and Related
Transactions."
(2) Consists of payment by the Company with respect to Mr. Knox's percentage of
personal use of a company car and $0, $600 and $1,800 for the years ended
December 31, 1999, 1998 and 1997, respectively, in fees paid to Mr.Knox as
a director of the Company.
(3) Reflects the Company-paid premium for a health insurance policy in 1999,
1998 and 1997 and a life insurance policy on the life of Mr. Knox, the
beneficiary of which is Mr. Knox's estate, in 1999, 1998 and 1997.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of the Record Date, with
respect to (I) any person known to the Company to be the beneficial owner of
more than 5% of the Common Stock, (ii) the number of shares of Common Stock
beneficially owned by each director and nominee for director, (iii) the number
of shares of Common Stock beneficially owned by each executive officer named in
the Summary Compensation Table presented below under the heading "Compensation
of Directors and Executive Officers," and (iv) the number of shares of Common
Stock owned by all directors and officers of the Company as a group.
<TABLE>
<CAPTION>
Amount Percent
Name & Address of Beneficially of
Beneficial Owner Owned (1) Class
- ------------------------- ------------ --------------
<S> <C> <C>
Jack D. Knox 1,111,273 81.8%
300 Crescent Court, #1630
Dallas, Texas
G. Michael Boswell - 0 - --
Danbury, Texas
Robert Ted Enloe III 6,375 less than 1.0%
Dallas, Texas
Richard T. Mullen 6,375 less than 1.0%
Dallas, Texas
All Directors and
Officers as a Group
(5 persons) 1,124,023 82.7%
</TABLE>
- ------------------
(1) Each person has sole voting and dispositive power over the shares
indicated.
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ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On April 25, 1994, a subsidiary of the Company merged (the "Merger") with
entities wholly-owned by the Company's majority shareholder to own and operate
two existing upscale Italian food restaurants, the restaurant concept, design
and motif and the other assets used in the day-to-day operation of the
restaurants.
In connection with the Merger, the Company entered into agreements with Mr.
Knox and entities affiliated with Mr. Knox ("Mr. Knox"). Under a five-year
Consulting Agreement, Mr. Knox agreed to serve without pay as an officer and
Chairman of the Board of the Company (if elected) and to provide certain
services to the Company in exchange for consulting fees of 1-1/2 % of defined
revenues of the Company up to 32 restaurants. In addition, Mr. Knox developed
and refined the Patrizio concept, design, and motif over a five-year period. A
separate agreement provides that Mr. Knox earn a developer's royalty ranging
from 1/2 of 1% to 2% of defined gross revenues of the Company based on the
number of open restaurants, capped at 32 restaurants. From inception through
1999, this fee has been 1/2 of 1%.
Pursuant to these agreements, Mr. Knox earned consulting and royalty fees
of approximately $146,300 and $135,500 in 1999 and 1998, respectively. The fees
are included in general and administrative expenses. No payment of the 1999 or
1998 fees earned were made and, accordingly, they are included in payable to
affiliates.
The Company charges its majority shareholder and affiliates on a
time-incurred basis for certain shared general and administrative resources.
Such charges reduced general and administrative expenses by $237,600 and
$237,600 for years ended December 31, 1999 and December 31, 1998, respectively.
The notes payable to Mr. Knox were unsecured and payable on demand.
Effective January 1, 1997, the interest rates of notes bearing interest at rates
less than 9.25% were modified to 9.25%. Effective July 1, 1997, the interest
rates of all notes were modified to 9.50%. Notes totaling $419,600 were
outstanding at December 31, 1998. Effective October 1 1998, the interest rates
of all notes were modified to 8.0%. Interest expense for such notes aggregated
approximately $18,396 and $42,900 in 1999 and 1998, respectively. The notes were
fully retired on December 29, 1999.
PART IV
ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
(1) Financial Statements:
The Consolidated Financial Statements are listed in the Index to
Consolidated Financial Statements on page F-1 of this report.
(2) Financial Statement Schedules:
None.
(3) Exhibits:
3.1 Certificate of Incorporation of the Company (filed as
exhibit 3.1 of the Company's General Form of Registration
of Securities on Form 10 filed April 29, 1988, and
incorporated herein by reference).
3.2 Amendment to Certificate of Incorporation of the Company,
filed on January 22, 1990 (filed as exhibit 3.2 to the
Company's Annual Report on Form 10-K for the fiscal year
ended July 31, 1990, and incorporated herein by
reference).
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<PAGE> 10
3.3 Amendment to Certificate of Incorporation of the Company,
filed on March 15, 1996 (filed as exhibit 3.3 to the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997, and incorporated herein by
reference).
3.4 Bylaws of the Company (filed as exhibit 3.2 of the
Company's General Form for Registration of Securities on
Form 10 filed April 29, 1988, and incorporated herein by
reference).
3.5 Amendment to Bylaws of the Company, adopted June 29, 1990
(filed as exhibit 3.4 to the Company's Annual Report on
Form 10-K for the fiscal year ended July 31, 1990, and
incorporated herein by reference).
10.1 Consulting Agreement, by and between Sixx and Comico
Corporation ("Comico"), dated as of April 25, 1994 (filed
as exhibit A of Exhibit 2.1 to the Company's Current
Report on Form 8-K filed April 23 , 1994, and incorporated
herein by reference).
10.2 Registration Rights Agreement, by and between Sixx and
Knox, dated April 25, 1994 (filed as exhibit B of Exhibit
2.1 to the Company's Current Report on Form 8-K filed
April 23, 1994, and incorporated herein by reference).
10.3 Developer's Royalty Agreement, by and between Sixx and
Knox, dated as of April 25, 1994 (filed as exhibit C of
Exhibit 2.1 to the Company's Current Report on Form 8-K
filed April 23, 1994, and incorporated herein by
reference).
27.1 Financial Data Schedule.
(b) Reports on Form 8-K
The Company filed no current reports on Form 8-K during the last quarter of
the period covered by this report.
10
<PAGE> 11
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Date: March 30, 2000
SIXX HOLDINGS, INCORPORATED
By: /s/ Jack D. Knox
-------------------------------------
Jack D. Knox, Chairman of the Board,
President, and Director
Pursuant to the requirements of the Securities and Exchange Act of 1934,
this report has been signed below by the following persons in the capacities and
the dates indicated.
<TABLE>
<CAPTION>
Signatures Titles Date
---------- ------ ----
<S> <C> <C>
/s/ Jack D. Knox Chairman of the Board, President, March 30, 2000
- -------------------------- and Director (Principal Executive
Jack D. Knox Officer)
/s/ DeAndra L. Trepagnier Chief Financial Officer (Principal March 30, 2000
- -------------------------- Financial and Accounting Officer)
DeAndra L. Trepagnier
/s/ G. Michael Boswell Director March 30, 2000
- --------------------------
G. Michael Boswell
/s/ Robert Ted Enloe III Director March 30, 2000
- --------------------------
Robert Ted Enloe III
/s/ Richard T. Mullen Director March 30, 2000
- --------------------------
Richard T. Mullen
</TABLE>
11
<PAGE> 12
SIXX HOLDINGS, INCORPORATED AND SUBSIDIARIES
Consolidated Financial Statements
December 31, 1999 and 1998
(With Independent Auditors' Report Thereon)
<PAGE> 13
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
Sixx Holdings, Incorporated:
We have audited the accompanying consolidated balance sheets of Sixx Holdings,
Incorporated and subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of operations, stockholders' equity and cash flows for
the years then ended. These consolidated 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 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 Sixx Holdings,
Incorporated and subsidiaries as of December 31, 1999 and 1998, and the results
of their operations and their cash flows for the years then ended, in conformity
with generally accepted accounting principles.
Dallas, Texas
February 25, 2000
<PAGE> 14
SIXX HOLDINGS, INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 1999 and 1998
(Rounded to nearest hundred, except share and per share amounts)
<TABLE>
<CAPTION>
ASSETS 1999 1998
----------- -----------
<S> <C> <C>
Current assets:
Cash $ 63,300 127,400
Accounts receivable 68,900 62,400
Receivable from affiliate (note 7) 46,100 50,100
Inventories 93,100 84,300
Prepaid expenses 63,200 66,300
----------- -----------
Total current assets 334,600 390,500
Net property and equipment (note 2) 1,360,900 1,540,500
Other assets 11,800 11,800
----------- -----------
$ 1,707,300 1,942,800
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 62,900 34,600
Accrued liabilities (note 3) 248,300 213,400
Payable to affiliates (note 7) 549,300 530,100
Notes payable to stockholder (notes 7 and 8) -- 419,600
----------- -----------
Total current liabilities 860,500 1,197,700
Capital lease obligations (note 5) -- 1,200
Deferred rent liabilities (note 4) 30,400 28,900
----------- -----------
Total liabilities 890,900 1,227,800
----------- -----------
Stockholders' equity:
Common stock of $.01 par value. Authorized 12,000,000
shares; 1,359,274 shares issued and outstanding 13,600 13,600
Additional paid-in capital 4,408,900 4,408,900
Accumulated deficit (since August 1, 1989) (3,606,100) (3,707,500)
----------- -----------
Total stockholders' equity 816,400 715,000
Commitments (note 5)
----------- -----------
$ 1,707,300 1,942,800
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE> 15
SIXX HOLDINGS, INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Operations
Years ended December 31, 1999 and 1998
(Rounded to nearest hundred, except per share amounts)
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Restaurant revenues $ 7,313,000 6,777,100
----------- -----------
Costs and expenses:
Cost of sales 2,143,900 2,006,700
Restaurant expenses 4,024,800 3,738,200
Depreciation and amortization 283,400 364,600
General and administrative expenses (note 7) 738,600 770,900
----------- -----------
Total costs and expenses 7,190,700 6,880,400
----------- -----------
Income (loss) from operations 122,300 (103,300)
Nonoperating income (expense):
Interest expense - stockholder (note 7) (18,400) (43,600)
Other income (expense) (2,500) (1,700)
----------- -----------
Net income (loss) $ 101,400 (148,600)
=========== ===========
Income (loss) per common share - basic and diluted $ .07 (.11)
=========== ===========
Weighted average common shares outstanding $ 1,359,274 1,359,274
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 16
SIXX HOLDINGS, INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
Years ended December 31, 1999 and 1998
(Rounded to nearest hundred, except share amounts)
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TOTAL
------------------------- PAID-IN ACCUMULATED STOCKHOLDERS'
SHARES AMOUNT CAPITAL DEFICIT EQUITY
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1997 1,359,274 $ 13,600 4,408,900 (3,558,900) 863,600
Net loss -- -- -- (148,600) (148,600)
---------- ---------- ---------- ---------- ----------
Balance at December 31, 1998 1,359,274 13,600 4,408,900 (3,707,500) 715,000
Net income -- -- -- 101,400 101,400
---------- ---------- ---------- ---------- ----------
Balance at December 31, 1999 1,359,274 $ 13,600 4,408,900 (3,606,100) 816,400
========== ========== ========== ========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 17
SIXX HOLDINGS, INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years ended December 31, 1999 and 1998
(Rounded to nearest hundred)
<TABLE>
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 101,400 (148,600)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization 283,400 364,600
Changes in assets and liabilities:
Accounts receivable (6,500) (5,500)
Receivable from affiliates 4,000 (50,100)
Inventories (8,800) (7,900)
Prepaid expenses 3,100 (5,600)
Other assets -- --
Accounts payable 28,300 (2,400)
Accrued liabilities 34,900 14,900
Payable to affiliates 19,200 171,000
Deferred rent liabilities 1,500 1,500
--------- ---------
Net cash provided by operating activities 460,500 331,900
--------- ---------
Cash flows used in investing activities - additions
to property and equipment, net (103,800) (137,900)
--------- ---------
Cash flows from financing activities:
Repayments of notes payable to stockholder (419,600) (130,000)
Payments of capital lease obligations (1,200) (2,800)
--------- ---------
Net cash used in financing activities (420,800) (132,800)
--------- ---------
Net increase (decrease) in cash (64,100) 61,200
Cash at beginning of year 127,400 66,200
--------- ---------
Cash at end of year $ 63,300 127,400
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 18
SIXX HOLDINGS, INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1999 and 1998
(Rounded to nearest hundred, except share amounts)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) GENERAL
Sixx Holdings, Incorporated, a Delaware corporation (the Company), was
organized in January 1988 to hold the interests of Caspen Oil, Inc.
(Caspen) in the Yates Field Unit. Certain assets and operations of
Caspen, along with liabilities associated therewith and certain
litigation, were transferred to the Company on March 3, 1988. As a
result of the settlement of the Yates Field litigation, the assets of
the Company consisted principally of cash and cash equivalents until
April 25, 1994 when the Company merged (the Merger) with Patrizio
Restaurant, Inc. and Patrizio North, Inc., both Texas corporations
wholly-owned by the Company's majority shareholder. The Company and its
subsidiaries own and operate two full service, Italian concept Patrizio
restaurants located in the Dallas, Texas metropolitan area. The
restaurants were opened on September 22, 1989 and March 14, 1994,
respectively.
(b) PRINCIPLES OF CONSOLIDATION
The consolidated financial statements present the consolidated financial
information of the Company and its subsidiaries. All significant
intercompany balances and transactions have been eliminated in
consolidation.
(c) STATEMENTS OF CASH FLOWS
The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents. The
Company held no cash equivalents at December 31, 1999 and 1998. The
Company paid no income taxes during the years presented. Interest of
$18,400 and $18,100 was paid during the years ended December 31, 1999
and 1998, respectively.
(d) INVENTORIES
Inventories, consisting mainly of food and beverages, are stated at the
lower of cost or market; cost is determined using the first-in,
first-out method.
(e) PROPERTY AND EQUIPMENT
Property and equipment is stated at cost, net of accumulated
depreciation. Depreciation is calculated on the straight-line method
over the estimated useful lives of the assets which range from 2 to 10
years.
Leasehold improvements are amortized using the straight-line method over
the lesser of the life of the lease, including renewal options, or the
estimated useful lives of the improvements of generally 10 to 15 years.
Repairs and maintenance are charged to operations as incurred.
6 (Continued)
<PAGE> 19
SIXX HOLDINGS, INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1999 and 1998
(Rounded to nearest hundred, except share amounts)
(f) ADVERTISING COSTS
Advertising costs are expensed as incurred. Advertising costs amounted
to $57,800 and $43,500 in 1999 and 1998, respectively.
(g) INCOME TAXES
Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax bases and operating loss and tax credit carryforwards. Deferred tax
assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.
(h) INCOME (LOSS) PER COMMON SHARE
Basic earnings per share (EPS) is computed by dividing income (loss)
available to common shareholders by the weighted-average number of
common shares outstanding for the period. Diluted EPS reflects the
potential dilution that could occur if securities or other contracts to
issue common stock were exercised or converted into common stock or
resulted in the issuance of common stock that then shared in earnings of
the entity. The Company has no such securities or other contracts in
1999 and 1998. Loss per share is computed by dividing net loss by the
weighted average number of common shares outstanding in 1999 and 1998.
(i) IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF
Recoverability of assets to be held and used is measured by a comparison
of the carrying amount of an asset to future undiscounted net cash flows
expected to be generated by the asset. If such assets are considered to
be impaired, the impairment to be recognized is measured by the amount
by which the carrying amount of the assets exceeds the fair value of the
assets. Assets to be disposed of are reported at the lower of the
carrying amount or fair value less costs to sell.
(j) USE OF ESTIMATES
The preparation of the consolidated 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 the disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
7 (Continued)
<PAGE> 20
SIXX HOLDINGS, INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1999 and 1998
(Rounded to nearest hundred, except share amounts)
(k) RECLASSIFICATIONS
Certain previously reported financial information has been reclassified
to conform to the 1999 presentation.
(l) SEGMENT INFORMATION
The Company provides disclosures required by Statement of Financial
Accounting Standards (SFAS) No. 131, Disclosures about Segments of an
Enterprise and Related Information regarding its operating segments and
the geographic areas in which the Company operates.
The Company has identified its two Italian concept restaurants as
operating segments and aggregates those segments and its corporate
operations into a single reporting segment. The Company's operations are
all domestic.
(2) PROPERTY AND EQUIPMENT
A summary of property and equipment follows:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------
1999 1998
----------- -----------
<S> <C> <C>
Leasehold improvements $ 2,253,400 2,231,900
Furniture, fixtures and equipment 1,662,500 1,595,900
----------- -----------
3,915,900 3,827,800
Less accumulated depreciation
and amortization (2,555,000) (2,287,300)
----------- -----------
$ 1,360,900 1,540,500
=========== ===========
</TABLE>
The gross amounts of furniture, fixtures and equipment and related
accumulated amortization recorded under capital leases were $6,800 and
$5,600 in 1999 and $6,800 and $1,400 in 1998, respectively.
8 (Continued)
<PAGE> 21
SIXX HOLDINGS, INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1999 and 1998
(Rounded to nearest hundred, except share amounts)
(3) ACCRUED LIABILITIES
Accrued liabilities consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1999 1998
-------- --------
<S> <C> <C>
Current portion - capital lease obligation $ 1,300 2,400
Current portion - deferred rent liabilities 3,600 3,500
Labor and related costs 71,800 56,600
Franchise, sales, liquor and property taxes 75,400 67,000
Gift certificate obligation 90,800 80,095
Other 5,400 3,805
-------- --------
$248,300 213,400
======== ========
</TABLE>
(4) DEFERRED RENT LIABILITIES
Deferred rent liabilities represent the difference between cash payments for
minimum lease rentals and the recognition of such minimum lease rentals as
expense on a straight-line basis over the respective terms of the restaurant
facility operating leases. Additionally, certain contingent rent abatements
and incentives earned relating to restaurant facility leases are deferred
and recognized on a straight-line basis over the remaining respective lease
terms.
(5) LEASES
The Company leases its restaurant facilities, corporate office and storage
under operating leases. The restaurant facilities have lease terms expiring
in February 2005 and September 2003. These restaurant leases have one
five-year and two five-year renewal clauses exercisable at the option of the
Company and have provisions for contingent rentals based on a percentage of
revenues, as defined. The corporate office is leased on a month-to-month
basis from the majority shareholder (see note 7). The storage lease expired
in March 1999 and was not renewed. A summary of rent expense follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------
1999 1998
---------- ----------
<S> <C> <C>
Minimum rentals $443,100 420,200
Contingent rentals 54,100 43,300
-------- --------
$497,200 463,500
======== ========
</TABLE>
In addition, the Company is obligated under capital leases for certain
equipment that expire in 2000.
9 (Continued)
<PAGE> 22
SIXX HOLDINGS, INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1999 and 1998
(Rounded to nearest hundred, except share amounts)
As of December 31, 1999, commitments for future minimum lease payments under
operating leases and executed renewals with initial or remaining
noncancelable lease terms in excess of one year and future minimum capital
lease payments are as follows:
<TABLE>
<CAPTION>
OPERATING CAPITAL
LEASES LEASES
----------- -----------
<S> <C> <C>
2000 $ 343,400 1,400
2001 350,400 --
2002 349,400 --
2003 348,600 --
Thereafter 243,700 --
----------- -----------
Total minimum lease payments $ 1,635,500 1,400
===========
Less amount representing interest at 9.5% (100)
-----------
Present value of net minimum capital lease
payments 1,300
Less current portion of obligations under
capital leases 1,300
-----------
Obligation under capital leases, excluding
current portion $ --
===========
</TABLE>
INCOME TAXES
No federal or state income taxes were payable by the Company during the
years presented and none have been provided in the accompanying consolidated
financial statements. The Company and its subsidiaries file a consolidated
tax return.
Actual income tax benefit differs from the "expected" income tax benefit
(computed by applying the U.S. federal corporate tax rate of 34% to net loss
before income taxes) as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------
1999 1998
-------- --------
<S> <C> <C>
Computed "expected" tax expense (benefit) $ 34,500 (50,500)
Change in valuation allowance for deferred tax
assets allocated to income tax expense (18,000) 21,600
Losses with no tax benefit -- 45,000
FICA tip tax credit (18,300) (19,100)
Disallowed expenses and other 1,800 3,000
-------- --------
Actual income tax expense (benefit) $ -- --
======== ========
</TABLE>
10 (Continued)
<PAGE> 23
SIXX HOLDINGS, INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1999 and 1998
(Rounded to nearest hundred, except share amounts)
The tax effects of the primary temporary differences giving rise to the
deferred federal income tax assets and liabilities are as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------
1999 1998
----------- -----------
<S> <C> <C>
Deferred tax assets:
Deferred rent costs in excess of rent paid $ 10,900 2,500
Net operating loss carryforwards 1,304,500 1,401,200
Alternative minimum tax credit carryforwards 716,000 716,000
Consulting and developer's royalty fees and
interest accrued for stockholder 187,900 177,300
FICA tip tax credit carryforwards 153,900 126,200
Basis in property and equipment 117,400 75,800
Other 5,900 15,500
----------- -----------
Total gross deferred tax assets 2,496,500 2,514,500
Less valuation allowance (2,496,500) (2,514,500)
----------- -----------
Net deferred taxes $ -- --
=========== ===========
</TABLE>
In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Realization of deferred tax assets (in
excess of deferred tax liabilities) is dependent upon the generation of
future taxable income during the periods in which those temporary
differences become deductible. At present, management is unable to conclude
on a more likely than not basis that the net deferred assets will be
realized.
Net operating loss carryforwards of $3,836,800 for federal income tax
purposes expire between 2004 and 2011. Capital loss carryforwards of
$132,500 expired in 1998. General business credits of $153,900 expire in
years 2009 through 2012. The alternative minimum tax credit carryforward of
$716,000 is available for an indefinite period.
(7) RELATED PARTY TRANSACTIONS
In connection with the Merger (see note 1), and effective April 25, 1994,
the Company entered into two agreements with Mr. Knox, the majority
shareholder, and entities affiliated with Mr. Knox. Under a five-year
Consulting Agreement, which was extended until April 25, 2004, Mr. Knox
agreed to serve without pay as an officer and Chairman of the Board of the
Company (if elected) and to provide certain management services to the
Company in exchange for a consulting fee of 1 1/2% of defined gross revenues
in each restaurant up to a maximum of 32 Company restaurants. In addition, a
separate agreement provides that Mr. Knox earns a developer's royalty
ranging from 1/2 of 1% to 2% of defined gross revenues of the Company based
on the number of restaurants that are opened, up to a maximum of 32
restaurants. From inception through December 31, 1999, this fee has been the
minimum 1/2 of 1%.
11 (Continued)
<PAGE> 24
SIXX HOLDINGS, INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1999 and 1998
(Rounded to nearest hundred, except share amounts)
Pursuant to these agreements, Mr. Knox earned consulting and royalty fees of
approximately $146,300 and $135,500 in 1999 and 1998, respectively. These
consulting and royalty fees are included in general and administrative
expenses. No payments of either the 1999 or the 1998 fees earned have been
made and, accordingly, they are included in payable to affiliates.
The Company charges its majority shareholder and affiliates on a
time-incurred basis for certain shared general and administrative resources.
Such charges reduced general and administrative expenses by $237,600 for the
years ended December 31, 1999 and 1998, respectively. Receivable from
affiliate for shared general and administrative resources amounted to
$46,100 and $50,100 for the years ended December 31, 1999 and 1998,
respectively. Effective May 1, 1998, the corporate office lease expired and
was not renewed by the Company. The new lease for the same space was
executed by the majority shareholder and the Company leases this space on a
month-to-month basis from the majority shareholder for the full base rent
amount of approximately $8,300 per month and additional occupancy charges,
as incurred. For the years ended December 31, 1999 and 1998, the majority
shareholder was paid $99,600 and $66,400, respectively, under this
arrangement.
The notes payable to stockholder were unsecured and payable on demand. The
interest rates on the notes was 9.50% through September 30, 1998. Effective
October 1, 1998, the interest rate of all notes was modified to 8.00%.
Interest expense for such notes aggregated approximately $18,400 and $43,600
in 1999 and 1998, respectively. All notes payable to stockholder were paid
during 1999. The Company paid $18,000 directors fees to Board members in
1999 and 1998. The amounts are recorded in general and administrative
expense.
(8) FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts of cash, accounts receivable, payables and accrued
liabilities approximate fair value due to the short maturity of those
instruments.
Notes payable to stockholder (see note 7) had an aggregate fair value of
approximately $419,600 at December 31, 1998. The fair value is based on
discounted future cash flows over an estimated four year period outstanding,
respectively, using an estimated 8.00% incremental borrowing rate. Such
estimates were determined by the Company based on future operating cash flow
and market interest rate assumptions.
12
<PAGE> 25
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
3.1 Certificate of Incorporation of the Company (filed as
exhibit 3.1 of the Company's General Form of Registration
of Securities on Form 10 filed April 29, 1988, and
incorporated herein by reference).
3.2 Amendment to Certificate of Incorporation of the Company,
filed on January 22, 1990 (filed as exhibit 3.2 to the
Company's Annual Report on Form 10-K for the fiscal year
ended July 31, 1990, and incorporated herein by
reference).
3.3 Amendment to Certificate of Incorporation of the Company,
filed on March 15, 1996 (filed as exhibit 3.3 to the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997, and incorporated herein by
reference).
3.4 Bylaws of the Company (filed as exhibit 3.2 of the
Company's General Form for Registration of Securities on
Form 10 filed April 29, 1988, and incorporated herein by
reference).
3.5 Amendment to Bylaws of the Company, adopted June 29, 1990
(filed as exhibit 3.4 to the Company's Annual Report on
Form 10-K for the fiscal year ended July 31, 1990, and
incorporated herein by reference).
10.1 Consulting Agreement, by and between Sixx and Comico
Corporation ("Comico"), dated as of April 25, 1994 (filed
as exhibit A of Exhibit 2.1 to the Company's Current
Report on Form 8-K filed April 23 , 1994, and incorporated
herein by reference).
10.2 Registration Rights Agreement, by and between Sixx and
Knox, dated April 25, 1994 (filed as exhibit B of Exhibit
2.1 to the Company's Current Report on Form 8-K filed
April 23, 1994, and incorporated herein by reference).
10.3 Developer's Royalty Agreement, by and between Sixx and
Knox, dated as of April 25, 1994 (filed as exhibit C of
Exhibit 2.1 to the Company's Current Report on Form 8-K
filed April 23, 1994, and incorporated herein by
reference).
27.1 Financial Data Schedule.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 63,300
<SECURITIES> 0
<RECEIVABLES> 115,000
<ALLOWANCES> 0
<INVENTORY> 93,100
<CURRENT-ASSETS> 334,600
<PP&E> 3,915,900
<DEPRECIATION> (2,555,000)
<TOTAL-ASSETS> 1,707,300
<CURRENT-LIABILITIES> 860,500
<BONDS> 0
0
0
<COMMON> 13,600
<OTHER-SE> 802,800
<TOTAL-LIABILITY-AND-EQUITY> 1,707,300
<SALES> 7,313,000
<TOTAL-REVENUES> 7,313,000
<CGS> 2,143,900
<TOTAL-COSTS> 7,190,700
<OTHER-EXPENSES> 0
<LOSS-PROVISION> (2,500)
<INTEREST-EXPENSE> 18,400
<INCOME-PRETAX> 101,400
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 101,400
<EPS-BASIC> .07
<EPS-DILUTED> .07
</TABLE>
