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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
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
APPAREL TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 0-23138 95-4374952
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation or Organization) File Number) Identification No.)
2300 SOUTH EASTERN AVENUE, CITY OF COMMERCE, CALIFORNIA 90040
(Address of principal executive offices)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (213) 725-4955
FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT:
AMERICAN CINEMASTORES INC.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a ), (b) Financial Statements of Business Acquired; Pro Forma Financial
Information.
The Registrant is filing this Amendment to correct the pro forma
financial statements previously filed by the Registrant on June 30, 1997,
reflecting the acquisition by the Registrant of Susan Burrowes, Ltd.
(c) Exhibits.
American CinemaStores Inc. and Susan Burrowes Limited unaudited pro
forma condensed combined financial statements.
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AMERICAN CINEMASTORES, INC. AND SUSAN BURROWES, LIMITED
PRO FORMA CONDENSED COMBINED BALANCE SHEETS
FOR THE PERIOD ENDED MAY 31, 1997
AMERICAN CINEMASTORES ,INC. (AUDITED) AND
SUSAN BURROWES, LTD. (UNAUDITED)
<TABLE>
<CAPTION>
NOTE 6 Continued
American Susan Pro Forma Pro Forma
CinemaStores Burrowes Combined Adjustments Combined
------------ -------- -------- ----------- --------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets
Cash and equivalents $ 155,319 $ 3,656 $ 158,975 $ 983,500 (3) $1,142,475
Accounts receivable (net) 101,645 103,808 205,453 205,453
Notes receivable 300,000 50,080 350,080 ( 50,080)(4) 300,000
Inventory (net) 28,180 295,392 323,572 323,572
Prepaid and other - 94,493 94,493 94,493
--------------------------------------------------------------------------------------------------
Total current assets 585,144 547,429 1,132,573 933,420 2,065,993
Property, plant and
equipment (net) 84,359 289,599 373,958 373,958
Goodwill 265,840 -- 265,840 1,718,797 (5) 1,984,637
Other assets 11,750 28,847 40,597 40,597
--------------------------------------------------------------------------------------------------
Total assets $ 947,093 $ 865,875 $ 1,812,968 $2,652,217 $4,465,185
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
Liabilities and
Stockholders' Equity
Current liabilities
Accounts payable $ 147,782 $1,392,847 $ 1,540,629 $1,540,629
Accrued liabilities 205,794 104,903 310,697 310,697
Notes payable 150,267 11,720 161,987 161,987
Convertible debt 200,000 200,000 -- 200,000
Due to factor 909,122 909,122 909,122
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Total current liabilities 703,843 2,418,592 3,122,435 3,122,435
Stockholders' equity
Preferred stock -- -- --
Common Stock 8,251 25,000 33,251 (19,800)(6) 13,451
Additional paid in capital 8,593,211 -- 8,593,211 1,094,300 (7) 9,687,511
Retained earnings (deficit) (8,358,212) (1,577,717) (9,935,929) 1,577,717 (8) (8,358,212)
----------- ---------- ------------- ----------- ----------
Total stockholders' equity 243,250 (1,552,717) (1,309,467) $2,652,217 1,342,750
----------- ---------- ------------- ----------- ----------
Total liabilities and
stockholders' equity $ 947,093 $ 865,875 $ 1,812,968 $2,652,217 $4,465,185
----------- ---------- ------------- ----------- ----------
----------- ---------- ------------- ----------- ----------
</TABLE>
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS.
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American CinemaStores, Inc., and Susan Burrowes, Limited
Pro Forma Condensed Combined Statement of Operations
For the Twelve Month Period Ended May 31, 1997 for
American CinemaStores, Inc. (Audited) and
Susan Burrowes, Ltd. (Unaudited)
<TABLE>
<CAPTION>
NOTE 6 Continued
American Susan Pro Forma Pro Forma
CinemaStores Burrowes Combined Adjustments Combined
------------ -------- -------- ----------- --------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
Net Sales $ 1,675,350 $ 12,188,000 $ 13,863,350 $ -- $13,863,350
Cost of Sales 1,072,509 8,501,000 9,573,509 9,573,509
---------------------------------------------------------------------------------------
Gross Profit 602,841 3,687,000 4,289,841 4,289,841
Selling, general and
administrative expenses 2,182,040 4,128,000 6,310,040 115,000 (9) 6,425,040
---------------------------------------------------------------------------------------
Income (loss) from
operations (1,579,199) (441,000) (2,020,199) (115,000) (2,135,199)
Other expense (income) 112,381 380,000 492,381 492,381
---------------------------------------------------------------------------------------
Net income (loss):
From operations (1,691,580) (821,000) (2,512,580) (115,000) (2,627,580)
---------------------------------------------------------------------------------------
Dividends to preferred
shareholder 512,633 512,633 512,633
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Net loss allocable
to common shareholders $2,204,213 (821,000) $(3,025,213) (115,000) $(3,140,213)
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Net loss per share $ (0.30) $ (0.27)
Weighted average common
shares outstanding 7,314,943 11,514,943
</TABLE>
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS.
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NOTE 6 Continued
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 (a) the acquisition of Susan
Burrowes, Ltd. ("SBL") was effected by American CinemaStores, Inc. ("Company")
in exchange for 200,000 shares of the Company's common stock to the shareholder
of SBL and forgiveness of a $50,080 note owed to SBL by the shareholder and (b)
the Company raised $983,500 from the Regulation D private placement of 5
million shares of common stock to provide working capital to SBL.
2. FEDERAL INCOME TAX STATUS. 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 a C-corporation. Considering the consolidated tax
loss of the Company, no taxes have been provided for.
3. CASH AND CASH EQUIVALENTS - PRO FORMA ADJUSTMENT. The increase in cash
for the combined company is the result of the Company raising net proceeds of
$983,500 for working capital to SBL, as part of the acquisition agreement,
via a Regulation D private placement of common stock to accredited
shareholders on June 12, 1997.
4. NOTES RECEIVABLE - PRO FORMA ADJUSTMENT. The note receivable is from the
principal shareholder of Susan Burrowes. As part of the consideration for the
acquisition, the Company has agreed to not collect on this note and forgive any
future payments,
5. GOODWILL - PRO FORMA ADJUSTMENT. Goodwill will be amortized over a period
of 15 years.
6. COMMON STOCK - PRO FORMA ADJUSTMENT. The amount consists of 200,000 shares
issued upon the acquisition, less the elimination of Susan Burrowes' common
stock upon consolidation. In addition, the adjustment reflects the issuance of 5
million shares of common stock, at $0.25 per share, as a result of the
Regulation D private placement used to raise working capital for Susan Burrowes.
7. ADDITIONAL PAID IN CAPITAL ADJUSTMENT. Accounts for value of the 200,000
shares of common stock issued to the principal of Susan Burrowes at $0.58 per
share, its fair value at the date of the closing of the acquisition. In
addition, the adjustment reflects the net proceeds associated with issuance
of 5 million shares of common stock, at $0.25 per share, as a result of the
Regulation D private placement used to raise working capital for Susan
Burrowes.
8. RETAINED EARNINGS - PRO FORMA ADJUSTMENT. The amount consist of the
elimination of SBL's retained earnings upon consolidation.
9. SG & A - PRO FORMA ADJUSTMENT. Adjustment to reflect the amortization of
goodwill over its 15 year life.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
APPAREL TECHNOLOGIES, INC.
(Registrant)
Date: January 28, 1998 By: /s/ Barry Hall
----------------------------
Barry Hall,
Chief Financial Officer
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