<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
JUNE 12, 1997
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AMERICAN CINEMASTORES, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-23138 95-4374952
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
2300 S. EASTERN AVENUE, CITY OF COMMERCE, CALIFORNIA 90040
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(Address of principal executive offices)
Registrant's telephone number, including area code (213) 725-4955.
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AMERICAN CINEMASTORES, INC.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
On June 12, 1997, American CinemaStores, Inc. (The "Company") acquired 100%
of the common stock of Susan Burrowes, Ltd., a California Corporation, ("SBL").
(b) PRO FORMA FINANCIAL INFORMATION.
Pro Forma financial statements for the period ended May 31, 1997, and the
audited balance sheet for the 12 month period ending February 28, 1997, are
being provided.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICAN CINEMASTORES, INC.
By: /s/ Christopher J. Ebert
---------------------------------------------
Christopher J. Ebert, Chief Financial Officer
Date: June 27, 1997
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AMERICAN CINEMASTORES, INC.
ITEM 2. ACQUISITION OF ASSETS.
The control of the assets of SBL represented by the acquisition of one
hundred percent (100%) of the common stock of SBL was acquired by the Company
on June 12, 1997, pursuant to the Stock Purchase Agreement. SBL is engaged
in the design, manufacture, and distribution of moderately priced women's
apparel items. SBL was incorporated in California in 1978. The mailing
address of SBL's executive offices is 2300 S. Eastern Avenue, City of
Commerce, California 90040; the telephone number is (213) 725-4955.
Currently, SBL's major business activities are focused in the design and
merchandizing of wholesale women's apparel in the areas of career dressing for
sizes ranging from petite, missy and women's, incorporating several trademarks
and brand names for distribution of sales to major retail chains both nationally
and internationally. The company also intends to pursue long-term, growth
oriented strategies to enhance its business activities.
(a) EXHIBITS.
Stock Purchase Agreement by and among American CinemaStores, Inc., and
Susan Burrowes, Ltd.
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AMERICAN CINEMASTORES, INC., AND SUSAN BURROWES, LIMITED
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEETS
FOR THE PERIOD ENDED MAY 31, 1997 FOR
<TABLE>
<CAPTION>
AMERICAN SUSAN PRO FORMA PRO FORMA
CINEMASTORES BURROWES COMBINED ADJUSTMENTS COMBINED
------------ -------- -------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current Assets
Cash and equivalents . . . . . . . . $ 1,401,185 $ 3,656 $ 1,404,841 $(1,000,000) (3) $ 404,841
Accounts receivable (net). . . . . . 109,645 103,808 213,453 213,453
Notes receivable . . . . . . . . . . 300,000 50,080 350,080 350,080
Inventory (net). . . . . . . . . . . 77,849 1,979,000 2,056,849 2,056,849
Prepaid and other. . . . . . . . . . 28,633 94,493 123,126 123,126
----------- ---------- ----------- ----------- -----------
Total current assets . . . . . . . . . 1,917,312 2,231,037 4,434,349 (1,000,000) 3,148,349
Property, plant and equipment (net). . 70,859 289,599 360,458 75,000 (4) 435,458
Goodwill . . . . . . . . . . . . . . . 427,685 -- 427,685 909,000 (5) 1,336,685
Other assets . . . . . . . . . . . . . 7,333 28,847 36,180 36,180
----------- ---------- ----------- ----------- -----------
TOTAL ASSETS . . . . . . . . . . . . . $ 2,423,189 $2,549,483 $ 4,972,672 $ (16,000) $4,956,672
----------- ---------- ----------- ----------- -----------
----------- ---------- ----------- ----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable . . . . . . . . . . $ 126,885 1,392,847 $ 1,519,732 $ (600,000) (3) $ 919,732
Accrued liabilities. . . . . . . . . 107,726 104,903 212,629 -- 212,629
Notes payable, bank. . . . . . . . . 150,267 11,720 161,987 -- 161,987
Due to factor . . . . . . . . . . . . - 909,122 909,122 (400,000) (3) 509,122
----------- ---------- ----------- ----------- -----------
Total current liabilities. . . . . . . 384,878 2,418,592 2,803,470 (1,000,000) 1,803,470
Stockholders' equity
Preferred stock. . . . . . . . . . . 5 -- 5 -- 5
Common stock . . . . . . . . . . . . 13,251 25,000 38,251 (24,800) (6) 13,451
Additional paid in capital . . . . . 9,579,724 -- 9,579,724 1,114,691 (7) 10,694,415
Retained earnings (deficit). . . . . (7,554,669) 105,891 (7,448,778) (105,891) (8) (7,554,669)
----------- ---------- ----------- ----------- -----------
TOTAL STOCKHOLDERS' EQUITY . . . . . . 2,038,311 130,891 2,169,202 984,000 9,802,691
----------- ---------- ----------- ----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY . . . . . . . . . . . . . . . . $ 2,423,189 $2,549,483 $ 4,972,672 $ (16,000) $ 4,956,672
----------- ---------- ----------- ----------- -----------
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</TABLE>
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
STATEMENTS.
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AMERICAN CINEMASTORES, INC. AND SUSAN BURROWES, LTD.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR THE TWELVE MONTHS ENDED
MAY 31, 1997
<TABLE>
<CAPTION>
AMERICAN SUSAN PRO FORMA PRO FORMA
CINEMASTORES BURROWES COMBINED ADJUSTMENTS COMBINED
------------ -------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Sales. . . . . . . . . . . . . . . $ 1,675,350 $ 12,188,000 $ 13,863,350 $ -- $ 13,863,350
Cost of Sales. . . . . . . . . . . . . 1,022,799 8,501,000 9,523,799 (300,000) (9) 9,223,799
------------ ----------- ------------ ---------- ---- ------------
GROSS PROFIT . . . . . . . . . . . . . 652,551 3,687,000 4,339,551 300,000 4,639,551
Selling, general and administrative
expenses . . . . . . . . . . . . . . 1,726,980 4,128,000 5,854,980 (635,000) (9) 5,219,980
------------ ----------- ------------ ---------- ---- ------------
Income (loss) from
operations . . . . . . . . . . . . . (1,074,429) (441,000) (1,515,429) 935,000 (580,429)
Interest Expense (Income). . . . . . . (20,952) 388,000 359,048 (300,000) (10) 9,048
------------ ----------- ------------ ---------- ---- ------------
Net income (loss):
From operations. . . . . . . . . . . (1,053,477) (829,000) (1,874,477) 1,300,000 (589,477)
------------ ----------- ------------ ---------- ------------
One time expense, acquisition expense
write-off. . . . . . . . . . . . 347,243 -- 347,243 (347,243) (11) --
------------ ----------- ------------ ---------- ---- ------------
Net income (loss). . . . . . . . . . . $ (1,400,720) $ (829,000) $ (2,221,720) $1,647,243 $ (589,427)
------------ ----------- ------------ ---------- ------------
------------ ----------- ------------ ---------- ------------
Net loss per share . . . . . . . . . . $ (0.11) $ (0.04)
------------ ------------
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Weighted average common
shares outstanding . . . . . . . . 13,251,000 13,451,000
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</TABLE>
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
STATEMENTS.
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION. The pro forma condensed combined historical
financial statements are based on the assumptions that the acquisition of
Susan Burrowes, Ltd. ("SBL") was effected by American CinemaStores, Inc.
("Company") providing $1,000,000 for working capital and 200,000 shares of
the Company's common stock to the shareholder of SBL as the acquisition
considerations, in exchange for all of the outstanding, capital stock of the
SBL, pursuant to the terms of the Stock Purchase Agreement.
2. FEDERAL INCOME TAX STATUS OF THE TARGET COMPANIES. The Stockholder of SBL
had elected under Subchapter S of the Internal Revenue Code of 1986, as amended,
to include the income of SBL as their own for income tax purposes. For pro forma
purposes, SBL has been treated as C-corporations. Considering the consolidated
tax loss of the Company, no taxes have been provided for.
3. CASH AND CASH EQUIVALENTS - PRO FORMA ADJUSTMENT. The decrease in cash for
the combined company is as result the Company providing $1,000,000 for working
capital to SBL, as part of the acquisition agreement, as well as investment and
legal fees of approximately $50,000.
4. PROPERTY, PLANT AND EQUIPMENT - PRO FORMA ADJUSTMENT. A revaluation of
fixed assets whereby a higher valuation for such assets has been established
resulted from the review of the recent audit and purchase price allocation.
5. GOODWILL - PRO FORMA ADJUSTMENT. An analysis of the components of goodwill
is being made to determine the appropriate asset accounts to which such
components should be allocated. The resulting amount of goodwill will be
amortized over a period of 15 years.
6. COMMON STOCK - PRO FORMA ADJUSTMENT. The amount consist of (1) 200,000
shares issued upon the acquisition, less the elimination of the Target
Companies' common stock upon combination.
7. ADDITIONAL PAID IN CAPITAL - Accounts for the $1,000,000 working capital and
the 200,000 shares of common stock consideration for the acquisition.
8. RETAINED EARNINGS - PRO FORMA ADJUSTMENT. The amount consist of the
elimination of SBL's retained earnings upon combination.
9. COST OF SALES AND SELLING, GENERAL AND ADMINISTRATIVE EXPENSES -
Adjustments to reflect reduced payroll expenses as a result of layoffs and
terminations of more than 40 people which have taken place with SBLand the
Company as well as well as the Company's corporate restructure which has
resulted in reduced rent, utilities and other overhead expenses.
10. INTEREST EXPENSE - Adjustment reflecting the virtual pay-off of factor bank
debt upon the acquisition.
11. NON-RECURRING EXTRAORDINARY ITEM - These charges were of a non-recurring
nature and should not be considered on a go forward pro forma basis.
<PAGE>
SUSAN BURROWES, LIMITED
AUDITED BALANCE SHEET
FOR THE PERIOD ENDED FEBRUARY 28, 1997
ASSETS
Current Assets
Cash and equivalents . . . . . . . . . . . . . . . . $ 1,000
Accounts receivable (net) . . . . . . . . . . . . . . 65,000
Inventory (net) . . . . . . . . . . . . . . . . . . . 2,216,000
Loan receivable, officer 75,000
Prepaid and other . . . . . . . . . . . . . . . . . . 164,000
-----------
Total current assets . . . . . . . . . . . . . . . . . 2,521,000
Property, plant and equipment (net) . . . . . . . . . . 290,000
Goodwill . . . . . . . . . . . . . . . . . . . . . . . --
Other assets . . . . . . . . . . . . . . . . . . . . . 29,000
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TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . $ 2,840,000
-----------
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable . . . . . . . . . . . . . . . . . . 1,373,000
Accrued liabilities . . . . . . . . . . . . . . . . . 379,000
Notes payable, bank . . . . . . . . . . . . . . . . . 18,000
Due to factor . . . . . . . . . . . . . . . . . . . . 955,000
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Total current liabilities . . . . . . . . . . . . . . . 2,418,592
Stockholders' equity
Preferred stock . . . . . . . . . . . . . . . . . . . --
Common Stock . . . . . . . . . . . . . . . . . . . . 25,000
Additional paid in capital . . . . . . . . . . . . . --
Retained earnings (deficit) . . . . . . . . . . . . . 90,000
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TOTAL STOCKHOLDERS' EQUITY . . . . . . . . . . . . . . 115,000
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY . . . . . . $ 2,840,000
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<PAGE>
AMERICAN CINEMASTORES, INC.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
On June 12, 1997, American CinemaStores, Inc. (The "Company") acquired 100%
of the common stock of Susan Burrowes, Ltd., a California Corporation, ("SBL").
(b) PRO FORMA FINANCIAL INFORMATION.
Pro Forma financial statements for the period ended May 31, 1997, and the
audited balance sheet for the 12 month period ending February 28, 1997, are
being provided.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICAN CINEMASTORES, INC.
By: /S/ Christopher J. Ebert
---------------------------------------------
Christopher J. Ebert, Chief Financial Officer
Date: June 27, 1997
<PAGE>
AMERICAN CINEMASTORES, INC.
ITEM 2. ACQUISITION OF ASSETS.
The control of the assets of SBL represented by the acquisition of one
hundred percent (100%) of the common stock of SBL was acquired by the Company on
June 12, 1997, pursuant to the Stock Purchase Agreement. SBL is engaged in the
design, manufacture, and distribution of moderately priced women's apparel
items. SBL is engaged in the design, manufacture, and distribution of
moderately priced women's apparel items. SBL was incorporated in California in
1978. The mailing address of SBL's executive offices is 2300 S. Eastern Avenue,
City of Commerce, California 90040; the telephone number is (213) 725-4955.
Currently, SBL's major business activities are focused in the design and
merchandizing of wholesale women's apparel in the areas of career dressing for
sizes ranging from petite, missy and women's, incorporating several trademarks
and brand names for distribution of sales to major retail chains both nationally
and internationally. The company also intends to pursue long-term, growth
oriented strategies to enhance its business activities.
(a) EXHIBITS.
Stock Purchase Agreement by and among American CinemaStores, Inc., and
Susan Burrowes, Ltd.
