UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended JUNE 30, 1997
OR
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transaction period from_______________________to________________________
Commission File Number 0 - 23136
COUNTRY STAR RESTAURANTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 62-1536550
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
4929 WILSHIRE BLVD., SUITE 428, LOS ANGELES, CA 90010
(Address of Principal Executive Offices) (Zip Code)
(213) 634-5588
(Registrant's telephone number, including area code)
11150 SANTA MONICA BLVD., SUITE 650, LOS ANGELES, CA 90025
(Former name, former address, and former fiscal year, if
changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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
--- ---
The number of shares of common stock outstanding
as of August 16, 1997: 25,438,690
<PAGE>
COUNTRY STAR RESTAURANTS, INC.
Index
Page
----
PART I - Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheet at
June 30, 1997 (unaudited)............................. 3
Condensed Consolidated Statements of Operations
for the Quarter Ended June 30, 1997
and June 30, 1996 (unaudited)........................ 5
Condensed Consolidated Statements of Cash Flows
for the Quarter Ended June 30, 1997
and June 30, 1996 (unaudited)........................ 7
Notes to Condensed Consolidated Financial Statements
(unaudited)........................................... 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations .................. 12
PART II - Other Information
Item 1. Legal Proceedings.......................................... 16
Item 2. Changes in securities...................................... 16
Item 4. Submission of matter to a vote of security holders ........ 16
Item 6. Exhibits and Reports on Form 8-K........................... 18
SIGNATURES ...................................................... 19
2
<PAGE>
COUNTRY STAR RESTAURANTS, INC.
Condensed Consolidated Balance Sheet
(Unaudited)
June 30, 1997
-------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 166,699
Inventories 324,608
Prepaid rent 275,175
Other current assets 338,382
-----------
Total current assets 1,104,864
-----------
PROPERTY AND EQUIPMENT AT COST, net of
accumulated depreciation of $742,192
Leasehold improvements 14,077,301
Furniture and equipment 1,915,722
Memorabilia 483,565
Capital lease 770,188
-----------
Total property and equipment 17,246,776
-----------
OTHER ASSETS 250,912
-----------
Total assets $18,602,552
===========
(continued)
3
<PAGE>
COUNTRY STAR RESTAURANTS, INC.
Condensed Consolidated Balance Sheet (continued)
(Unaudited)
June 30, 1997
-------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 1,456,614
Accrued expenses 457,437
------------
Total current liabilities 1,914,051
DEFERRED RENTALS 789,959
CONVERTIBLE DEBT 6,450,000
------------
Total liabilities 9,154,010
------------
MINORITY INTERESTS 1,389,116
------------
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par
value, 2,000,000 shares
authorized - 6% Cumulative
Convertible Series A - 0 shares
issued and outstanding --
Common stock, $0.001 par value,
250,000,000 shares authorized,
23,619,144 shares issued and outstanding 23,619
Additional paid-in-capital 38,156,860
Unamortized stock option cost (118,428)
Accumulated deficit (30,002,625)
------------
Total stockholders' equity 8,059,426
------------
Total liabilities and stockholders' equity $ 18,602,552
============
See accompanying notes to financial statements
4
<PAGE>
COUNTRY STAR RESTAURANTS, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
For the Quarter Ended June 30,
-------------------------------
1997 1996
------------ ------------
Revenues $ 1,731,401 $ 1,077,112
------------ ------------
Costs and expenses
Cost of revenues 585,709 293,493
Operating 1,647,325 1,001,590
General and administrative 813,090 890,737
Depreciation and amortization 386,011 117,127
------------ ------------
3,432,135 2,302,947
------------ ------------
Loss from operations (1,700,734) (1,225,835)
Interest (expense) income (126,616) 119,436
Minority interests 322,280 --
------------ ------------
Loss before extraordinary item (1,505,070) (1,106,399)
------------ ------------
Extraordinary gain - settlement
of accounts payable, net of
income tax of $0 1,325,986 --
------------ ------------
Net Loss $ (179,084) $ (1,106,399)
============ ============
INCOME (LOSS) PER SHARE
Before extraordinary gain (0.09) (0.10)
Extraordinary gain 0.08 --
------------ ------------
Net loss $ (0.01) $ (0.10)
============ ============
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 17,524,080 11,481,108
============ ============
See accompanying notes to financial statements
5
<PAGE>
COUNTRY STAR RESTAURANTS, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
For the Six Months
Ended June 30,
---------------------------------
1997 1996
------------ ------------
Revenues $ 3,995,876 $ 2,081,302
------------ ------------
Costs and expenses
Cost of revenues 1,506,143 621,940
Operating 3,739,717 1,773,152
General and administrative 2,241,939 1,909,277
Depreciation and amortization 771,533 233,803
------------ ------------
8,259,332 4,538,172
------------ ------------
Loss from operations (4,263,456) (2,456,870)
Interest (expense) income (194,374) 132,516
Minority interests 735,330 --
------------ ------------
Loss before extraordinary item (3,722,500) (2,324,354)
------------ ------------
Extraordinary gain - settlement
of accounts payable, net of
income tax of $0 1,353,478 --
------------ ------------
Net Loss $ (2,369,022) $ (2,324,354)
============ ============
INCOME (LOSS) PER SHARE
Before extraordinary gain (0.23) (0.25)
Extraordinary gain 0.08 --
------------ ------------
Net loss $ (0.15) $ (0.25)
============ ============
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 16,122,392 9,401,786
============ ============
See accompanying notes to financial statements
6
<PAGE>
COUNTRY STAR RESTAURANTS, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For the Quarter
Ended June 30,
---------------------------
1997 1996
------------ -----------
NET CASH USED IN OPERATING ACTIVITIES $(1,727,505) $(1,517,878)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property and equipment (10,445) (4,124,815)
----------- -----------
Net cash used by investing activities (10,445) (4,124,815)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common
and preferred stock 1,983,999 2,431,500
Capital lease payments (504,711) (20,649)
----------- -----------
Net cash provided by financing activities 1,479,288 2,410,851
----------- -----------
NET (DECREASE) IN CASH (258,662) (3,231,842)
Cash and cash equivalents, beginning of period 425,361 9,280,429
----------- -----------
Cash and cash equivalents, end of period $ 166,699 $ 6,048,587
=========== ===========
Supplemental schedule of non-cash
financing activity:
Purchase of leased equipment through
issuance of 600,000 shares of common stock $ 447,462 --
=========== ===========
See accompanying notes to financial statements
7
<PAGE>
COUNTRY STAR RESTAURANTS, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For the Six Months
Ended June 30,
---------------------------
1997 1996
----------- ------------
NET CASH USED IN OPERATING ACTIVITIES $(2,723,680) $(2,069,479)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property and equipment (10,445) (4,630,578)
----------- -----------
Net cash used by investing activities (10,445) (4,630,578)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common
and preferred stock 1,991,856 3,028,757
Proceeds from convertible debt 500,000 --
Capital lease payments (540,237) (40,788)
----------- -----------
Net cash provided by financing activities 1,951,619 2,987,969
----------- -----------
NET (DECREASE) IN CASH (782,506) (3,712,088)
Cash and cash equivalents, beginning of period 949,205 9,760,675
----------- -----------
Cash and cash equivalents, end of period $ 166,699 $ 6,048,587
=========== ===========
Supplemental schedule of non-cash
financing activity:
Purchase of leased equipment through
issuance of 600,000 shares of common stock $ 447,462 --
=========== ===========
See accompanying notes to financial statements
8
<PAGE>
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
of Country Star Restaurants, Inc. have been prepared by the Company
pursuant to the rules and regulations of the Securities and Exchange
Commission.
The information furnished herein reflects all adjustments, consisting
of only normal recurring accruals and adjustments which are, in the
opinion of management, necessary to fairly state the operating results
for the respective periods. Certain information and footnote
disclosures normally included in annual financial statements prepared
in accordance with generally accepted accounting principles have been
omitted pursuant to such rules and regulations. The notes to the
condensed consolidated financial statements should be read in
conjunction with the notes to the consolidated financial statements
contained in the Company's Form 10-KSB for the year ended December 31,
1996. Company management believes that the disclosures are sufficient
for interim financial reporting purposes.
NOTE B - CAPITAL TRANSACTIONS AND CHANGE IN MANAGEMENT
On February 12, 1997, the Company entered into a secured loan agreement
with Dan Rubin ("Rubin") and Cameron Capital Ltd., an institutional
investor ("Cameron").
The secured loan agreement provided that Cameron had the fully
assignable right to name three (3) members of the Board of Directors of
the Company and that the Board of Directors shall not consist of more
than five (5) members. Cameron assigned this right to Rubin as its
agent. Immediately after the closing of the secured financing, Rubin's
nominees, Darren Rice, William Wei and Robert Nardone were elected to
the Board of Directors of the Company. The Board then elected Rubin to
fill the last seat on the Board of Directors.
The Board then elected Dan Rubin as Chief Executive Officer and
President, and Robert L. Davidson as Secretary of the Company. Mr.
Rubin assumed control of day-to-day operations of the Company. Mr.
Rubin is being compensated at the rate of $20,000 per month, payable in
cash or common stock of the Company, valued at market value at the time
of issuance. Mr. Rubin's employment is terminable at will.
Rubin now owns warrants to acquire and convertible debt which if
converted would allow him to acquire an aggregate of 929,510 shares of
the Company's common stock. Upon exercise of such warrants and
conversion of the convertible debt, Rubin would own 3.7% of the common
stock of the Company now outstanding. None of the other newly elected
directors own any shares or warrants or other rights to acquire any
shares of the Company's common stock.
(continued)
9
<PAGE>
NOTE B - CAPITAL TRANSACTIONS AND CHANGE IN MANAGEMENT (continued)
Under the secured financing agreement, Rubin has made a $3,500,000 line
of credit loan available to the Company, of which an initial advance of
$500,000 was committed at closing. Rubin, in his sole discretion, may
make additional advances to the Company under this line of credit, but
is not required to make any such additional advances. All advances
under the line of credit loan bear interest at the rate of prime plus
four percent (4%), semi-annually commencing December 31, 1997. The
principal balances of all line of credit advances are due and payable
on October 9, 1999. In consideration for the initial line of credit
advance of $500,000, the Company issued a warrant to acquire 166,667
shares of its common stock at an exercise price of $.625 per share,
which was the market value of the Company's common stock on February
12, 1997.
All additional line of credit advances shall have the same terms and
conditions as the initial line of credit advance. For each such
additional advance, Rubin shall receive one (1) common stock purchase
warrant for every $3 advanced. The exercise price for these warrants
shall be $.625 per share. All of the warrants issued or to be issued to
Rubin shall be subject to adjustment in the event of stock splits,
stock dividends, mergers, consolidations, or similar corporate events.
Cameron exchanged its 4,000 shares of Series B Convertible Preferred
Stock of the Company, with an aggregate liquidation preference of
$4,000,000, for a convertible term note in the principal amount of
$4,000,000. The convertible term note bears interest at the rate of
seven percent (7%) per annum, payable semi-annually commencing December
31, 1997. The principal balance is due and payable on October 9, 1999.
Any portion or all of the principal amount of the note outstanding may
be converted into common stock of the Company commencing ninety (90)
days after the date of closing of the financing. Upon conversion, the
Company shall issue that number of shares of its common stock obtained
by dividing the principal amount of the loan converted by the lesser of
(i) $1.33, or (ii) 80% of the average closing bid price of the common
stock for the five (5) consecutive trading days preceding the date of
conversion. The maximum number of shares into which the convertible
note may be converted shall not exceed 3,000,000. The conversion
formula is subject to adjustment in the event of stock splits, stock
dividends, mergers, consolidations, or similar transactions.
In connection with the commitment to make the line of credit loan,
Rubin and other investors in the Company have agreed to settle certain
claims against the Company for the amount of $1,950,000, plus $50,000
in fees and expenses. The Company has issued its convertible term notes
in the aggregate amount of $1,950,000 and agreed to pay $50,000 to
Rubin and these investors, in settlement of their claims. These
convertible
(continued)
10
<PAGE>
NOTE B - CAPITAL TRANSACTIONS AND CHANGE IN MANAGEMENT(continued)
term notes contain the same terms and conditions as the convertible
term note issued to Cameron, except that the holders of these
convertible term notes may exercise their conversion feature at any
time following the closing.
The agreements described above relating to the exchange of Convertible
Preferred Stock and the issuance of convertible term notes have been
accounted for effective December 31, 1996 because substantially all of
the conditions precedent to the occurrence of these transactions had
taken place as of that date.
The line of credit advances by Rubin, Cameron's convertible term note
and the convertible term notes issued in settlement of claims are all
secured by a lien on substantially all of the tangible and intangible
assets of the Company. In the event of default, the secured parties
shall participate in the proceeds of the collateral in proportion to
their outstanding debt.
In connection with the secured financing transaction, Robert Schuster
("Schuster"), Chairman of the Board and Chief Executive Officer of the
Company, resigned as Chief Executive Officer and agreed to release the
Company from all obligations under his Employment Agreement, including
severance obligations. Schuster continued to serve as a Director until
February 13, 1997
In connection with the secured financing transaction, Mr. Peter
Feinstein resigned as Director, President and Chief Financial Officer
of the Company and released the Company from all obligations under his
Employment Agreement, including severance obligations
NOTE C - EXTRAORDINARY ITEM
During the three months ended June 30, 1997, the Company continued the
process of settling with its creditors that began in March of 1997. The
Company has settled with over 300 creditors as of June 30,1997
resulting in a gain of $1,325,986 and $1,353,478 for the three and six
months ended June 30, 1997, respectively
11
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Three months ended June 30, 1997 compared to three months ended June 30, 1996
Revenues.
Total revenues increased to $1.731 million for the three months ended June 30,
1997, compared with $1.077 million for the three months ended June 30, 1996, an
increase of $654 thousand or 61%, primarily due to the opening of Country Star
Las Vegas. Same store revenues (Hollywood) were substantially unchanged, and
Country Star Atlanta was closed during the three months ended June 30, 1997.
Costs and expenses.
Cost of revenues increased from $293 thousand for the three months ended June
30, 1996 to $586 thousand for the three months ended June 30, 1997. Cost of
revenues as a percentage of revenues increased from 27% to 34% primarily due to
the negative impact of the low revenues of the Las Vegas facility. Country Star
Atlanta was closed on February 22, 1997, and current plans call for its
reopening in the fall of 1997.
Operating expenses increased from $1.002 million for the three months ended June
30, 1996 to $1.647 million for the three months ended June 30, 1997, reflecting
the increase in the number of restaurants from one to three. As a percentage of
revenues, operating expenses were 93% and 95% for the three months ended June
30, 1996 and 1997 respectively.
General and administrative expenses decreased from $891 thousand for the three
months ended June 30, 1996 to $813 thousand for the three months ended June
30,1997. As a percentage of revenues, general and administrative expenses
decreased from 83% of revenues to 47% of revenues respectively.
Depreciation and amortization increased from $117 thousand for the three months
ended June 30, 1996 to $386 thousand for the three months ended June 30, 1997,
reflecting the increase in the number of restaurants from one to three. As a
percentage of total revenues, depreciation and amortization increased from 11%
to 22%.
Interest expense increased from $66 thousand to $128 thousand, for the three
months ended June 30, 1996 and 1997, respectively, reflecting the convertible
debt financing arrangements entered into on February 12, 1997.
(continued)
12
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
Minority interest for the three months ended June 30, 1997 reflects the
Company's controlling interest of 50.05% in Country Star Las Vegas LLC triggered
by the opening of the Las Vegas facility in July, 1996. Previously, the
Company's investment in Las Vegas was accounted for under the cost method.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities for the three months ended June 30, 1996
and June 30, 1997 increased from $1.518 million to $1.728 million due primarily
to the decrease in Accounts Payable in 1997. The company has settled with over
300 creditors during the three months ended June 30, 1997.
Net cash used in investing activities in the three months ended June 30, 1996
and 1997 was $4.125 million and $10 thousand, respectively, reflecting the
Company's development of the Las Vegas and Atlanta facilities in 1996.
Net cash provided by financing activities for the three months ended June 30,
1996 and June 30, 1997 was $2.411 million and $1.479 million, respectively, due
primarily to the net proceeds from the issuance of common stock in 1996 and
1997.
RESULTS OF OPERATIONS
Six months ended June 30, 1997 compared to six months ended June 30, 1996
Revenues.
Total revenues increased to $3.996 million for the six months ended June 30,
1997, compared with $2.081 million for the six months ended June 30, 1996, an
increase of $1.915 million or 92%, primarily due to the opening of Country Star
Las Vegas. Same store revenues (Hollywood) were substantially unchanged.
Costs and expenses.
Cost of revenues increased from $622 thousand for the six months ended June 30,
1996 to $1.506 million for the six months ended June 30, 1997. Cost of revenues
as a percentage of revenues increased from 30% to 38% primarily due to the
negative impact of the unsatisfactory operations of the Atlanta facility.
Country Star Atlanta was closed on February 22, 1997, and current plans call for
its reopening in the fall of 1997.
(continued)
13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
Operating expenses increased from $1.773 million for the six months ended June
30, 1996 to $3.740 million for the six months ended June 30, 1997, reflecting
the increase in the number of restaurants from one to three. As a percentage of
revenues, operating expenses increased from 85% to 94% for the six months ended
June 30, 1996 and 1997 respectively due primarily to operating difficulties with
Atlanta.
General and administrative expenses increased from $1.909 million for the six
months ended June 30, 1996 to $2.242 million for the six months ended June 30,
1997. As a percentage of revenues, general and administrative expenses decreased
from 92% of revenues to 56% of revenues.
Depreciation and amortization increased from $234 thousand for the six months
ended June 30, 1996 to $772 thousand for the six months ended June 30, 1997,
reflecting the increase in the number of restaurants from one to three. As a
percentage of total revenues, depreciation and amortization increased from 11%
to 19%.
Interest expense increased from $83 thousand to $198 thousand, for the six
months ended June 30, 1996 and 1997, respectively reflecting the convertible
debt financing arrangements entered into on February 12, 1997.
Minority interest for the six months ended June 30, 1997 reflects the Company's
controlling interest of 50.05% in Country Star Las Vegas LLC triggered by the
opening of the Las Vegas facility in July, 1996. Previously, the Company's
investment in Las Vegas was accounted for under the cost method.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities for the six months ended June 30, 1996 and
June 30, 1997 increased from $2.069 million to $2.724 million due primarily to
the decrease in Accounts Payable in 1997. The Company has settled with over 300
creditors during the six months ended June 30, 1997.
Net cash used in investing activities in the six months ended June 30, 1996 and
1997 was $4.631 million and $10 thousand, respectively, reflecting the Company's
development of the Las Vegas and Atlanta facilities in 1996.
(continued)
14
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
Net cash provided by financing activities for the six months ended June 30, 1996
and June 30, 1997 was $2.988 million and $1.952 million respectively due
primarily to the net proceeds from the issuance of common stock in 1996 and
1997, and convertible debt in 1997.
New management took over the Company on February 12, 1997 and determined that a
major overhaul of corporate strategy was required to deal with the Company's
financial problems. Measures taken by new management include (i) the temporary
closing and planned reopening of Country Star Atlanta in the fall of 1997, (ii)
the expansion of the "country" theme, (iii) planned expansion through joint
ventures and licensing rather than expensive construction, and (iv) settlement
with the trade creditors at 40% of the amounts owed.
Management has also made operational changes to improve revenues, control
operating costs, and limit corporate overhead. The positive impact of these
measures and changes began to be realized in the second quarter of calendar
1997. The Company will need to continue to raise additional capital before it
can obtain profitability from operations. Management believes it can raise this
capital through private placements of equity and the granting by lenders of
discretionary advances under outstanding lines of credit.
15
<PAGE>
Part II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On or about April 21, 1997, 3030 Peachtree, LLC ("Landlord"), the Landlord
of the Company's Atlanta restaurant, commenced an action in the Magistrate Court
of Fulton County, Georgia, regarding possession of the Atlanta restaurant.
Additional information concerning this litigation is set forth in the Company's
Report on Form 8-K dated April 21, 1997.
ITEM 2. CHANGES IN SECURITIES
On June 30, 1997, the Company issued warrants to acquire 1,500,000 shares
of its Common Stock at an exercise price of $.21 per share to a private
investor. The warrants were exercised immediately and the Company issued
1,500,000 shares of its Common Stock to the private investors. The Company
received net proceeds from the exercise of the warrants of $315,000. No
commissions or fees were paid by the Company.
The issuance of the warrants and of the Common Stock was exempt from
registration pursuant to Section 4 (2) of the Securities Act of 1933, as
amended.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's Annual Meeting of Stockholders held June 27, 1997, the
following members were elected to the Board of Directors:
VOTES FOR VOTES WITHHELD
--------- --------------
Dan J. Rubin 14,412,160 310,065
Robert A. Nardone 14,360,850 362,165
William A. Wei 14,355,693 366,532
Darren C. Rice 14,349,460 372,765
(continued)
16
<PAGE>
Part II
OTHER INFORMATION
(continued)
The following proposals were approved at the Company's Annual Meeting:
VOTES VOTES VOTES ABSTAINED/
FOR AGAINST NOT VOTED
--- ------- ---------
1. Ratification of 14,415,708 191,597 103,920
appointment of
Cacciamatta
Accountancy Corp.
as independent
auditors
2. Proposal to amend 13,358,183 1,132,830 135,455
the Company's
Certificate of
Incorporation to
increase the number
of authorized shares
of Common Stock
from 25,000,000
to 250,000,000
3. Proposal to amend 13,476,996 1,139,393 105,830
the Company's
Certificate of
Incorporation in
the discretion of
the Board of
Directors, to
effect a 1-for-10
reverse stock split
of the outstanding
shares of Common
Stock
(continued)
17
<PAGE>
Part II
OTHER INFORMATION
(continued)
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits None
(b) Reports on form 8-K
On April 21, 1997, the Company filed a Report on Form 8-K in connection
with the legal proceedings by the Atlanta restaurant landlord.
On May 7, 1997 the Company filed a report on Form 8-K regarding sales of
equity securities pursuant to Regulation S. The Company sold the aggregate
principal amount of $700,000 of its Convertible Debt in the transaction
described in the Report.
On May 28, 1997 the Company filed a report on Form 8-K regarding sales of
equity securities pursuant to Regulation S. The Company sold the aggregate
principal amount of $500,000 of its Convertible Debt in the transaction
described in the Report.
18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly authorized and caused the undersigned to sign this Report on
the Registrant's behalf.
COUNTRY STAR RESTAURANTS, INC.
By: /s/ Dan J. Rubin
------------------------------
Dan J. Rubin
Chief Executive Officer
Dated: August 19, 1997
19
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<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 166,699
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 324,608
<CURRENT-ASSETS> 1,104,864
<PP&E> 17,988,968
<DEPRECIATION> 742,192
<TOTAL-ASSETS> 18,602,552
<CURRENT-LIABILITIES> 1,914,051
<BONDS> 0
0
0
<COMMON> 23,619
<OTHER-SE> 8,035,807
<TOTAL-LIABILITY-AND-EQUITY> 18,602,552
<SALES> 1,731,401
<TOTAL-REVENUES> 1,731,401
<CGS> 585,709
<TOTAL-COSTS> 3,432,135
<OTHER-EXPENSES> (322,280)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 126,616
<INCOME-PRETAX> (1,505,070)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,505,070)
<DISCONTINUED> 0
<EXTRAORDINARY> 1,325,986
<CHANGES> 0
<NET-INCOME> (179,084)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
