SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 8-K/A
NUMBER 1
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 18, 1996
T.J. CINNAMONS, INC.
(Exact name of registrant as specified in charter)
Delaware 0-23026 22-3261564
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification Number)
incorporation
or organization)
135 Seaview Drive
Secaucus, New Jersey 07094
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (201)422-0910
<PAGE>
Item 2 is hereby amended as set forth below.
Item 2. Acquisition or Disposition of Assets.
Purchase Agreement Between T.J. Cinnamons, Inc. and TJ Holding Company, Inc.
The closing of the sale of certain assets to T.J. Holding Company, Inc.
pursuant to a Purchase Agreement described in Form 8-K closed on August 29,
1996.
Item 7. Financial Statements and Exhibits.
(b) Pro Forma Financial Information.
Pursuant to Section (b) of Item 7 of Form 8-K, the registrant hereby files
the Pro-Forma financial information required pursuant to Article XI of
Regulation S-X
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
T.J. Cinnamons, Inc.
(Registrant)
By:/s/ Alan S. Gottlich
Alan S. Gottlich
Chief Financial Officer
Dated: September 6, 1996
<PAGE>
UNAUDITED PRO FORMA FINANCIAL STATEMENTS
On August 29, 1996, the Company closed a Purchase Agreement with TJ Holding
Company, Inc. to sell the intellectual property representing substantially all
of the operating assets of the Company. In July, 1996, the Company closed on a
bridge loan with Gelt Financial Corporation in the amount of $125,000.
The following Unaudited Pro Forma Financial Statements are based upon the
historical statements of the Company adjusted to give effect to the Transaction
and the bridge loan.
The Unaudited Pro Forma Balance Sheet as of June 30, 1996 gives effect to the
elimination the disposed assets assuming that the disposition had taken place on
June 30, 1996 and the cash proceeds had been received at that time.
The Unaudited Pro Forma Statements of Operations for the year ended December 31,
1995 and the six months ended June 30, 1996 give effect to the elimination of
the disposed business assuming the disposition of the assets had taken place at
the beginning of the periods presented.
The pro forma adjustments are based upon available information and certain
assumptions that management believes are reasonable. The Unaudited Pro Forma
Financial Statements may not be indicative of the results of operations or
financial position that actually would have been achieved or which may be
obtained in the future.
1
<PAGE>
UNAUDITED PRO FORMA BALANCE SHEET AT JUNE 30, 1996
<TABLE>
<CAPTION>
Historical Adjustment Pro Forma
ASSETS
<S> <C> <C> <C> <C>
Current Assets:
Cash and cash equivalent $ 23,123 $ 1,455,000 (1) $ 702,498
(885,000)(2)
109,375 (3)
Accounts receivable, less allowance for doubtful accounts 220,316 (127,475)(1) 92,841
Current portion of notes receivable 0 1,400,000 (1) 1,400,000
Prepaid expenses and other current assets 16,251 16,251
----------- ----------- -----------
Total current assets 259,690 1,951,900 2,211,590
Long-term portion of notes receivable 0 350,000 (1) 350,000
Property and Equipment, less accumulated
depreciation and amortization 43,552 43,552
Excess of Cost over Fair Value of Net Assets Acquired 2,277,213 (1,750,000)(1) 527,213
Organization Costs and Trademarks, at cost, less
accumulated amortization 11,504 (11,918)(1) (414)
Deferred Income Tax Asset, net of valuation allowance -- 0
Franchise Offering Costs 81,407 (81,407)(1) 0
Deferred Transaction costs 64,389 (64,389)(1) 0
Other Assets 1,230 1,230
Total Assets $ 2,738,985 $ 394,186 $ 3,133,171
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 732,877 $ 732,877
Current maturities of long-term debt 828,409 (760,000)(2) (68,409)
Notes Payable 138,170 (125,00)(2) 138,170
125,000 (3)
Other current liabilities 105,858 105,858
----------- ----------- -----------
Total current liabilities 1,805,314 (760,000) 1,045,314
Long Term Debt, net of current maturities 0 0 0
----------- ----------- -----------
Total liabilities 1,805,314 (760,000) 1,045,314
----------- ----------- -----------
STOCKHOLDERS' EQUITY
Preferred Stock --
Common Stock 29,109 150 (3) 29,259
Additional paid-in capital 6,704,421 26,100 (3) 6,730,521
Accumulated deficit (5,799,859) 1,169,811 (1) (4,671,923)
(41,875)(3)
Stockholders' equity 933,671 1,154,186 2,087,857
Total Liabilities and Stockholders' Equity $ 2,738,985 $ 394,186 $ 3,133,171
=========== =========== ===========
</TABLE>
See Notes to Unaudited Pro Forma Financial Statements
2
<PAGE>
T.J. CINNAMONS, INC.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
Minus Pro
Forma of
Disposed
Historical Assets Pro Forma
(5)
<S> <C> <C>
Revenue:
Sales $ 448,947 $ 448,947
Royalties, licensing fees and other 276,740 (144,067)(4) 132,673
Other 33,359 (16,679)(4) 16,680
----------- ----------- -----------
Total revenue 759,046 (160,746) 598,300
Operating expenses:
Cost of goods sold 391,931 391,931
Selling, general and administrative 681,282 (164,178)(4) 532,729
15,625 (3)
Total operating expenses 1,073,213 (148,553 924,660
----------- ----------- -----------
Loss from operations (314,167) (12,193) (326,360)
----------- ----------- -----------
Other income (expense):
Interest expense, net (33,756) (26,250)(3) (60,006)
----------- ----------- -----------
Total other income (expenses) (33,756) (26,250) (60,006)
----------- ----------- -----------
Net loss ($ 347,923) ($ 38,443) ($ 386,366)
=========== =========== ===========
Net loss per common share ($ 0.12) ($ 0.13)
=========== ===========
Weighted average number of
common shares outstanding 2,910,833 2,925,833
=========== ===========
</TABLE>
See Notes to Unaudited Pro Forma Financial Statements
3
<PAGE>
T.J. CINNAMONS, INC.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
Minus Pro
Forma of
Disposed
Historical Assets Pro Forma
(5)
<S> <C> <C>
Revenue:
Sales from Company-owned stores $ 434,063 $ 434,063
Royalties, licensing fees and other 559,983 (559,983)(4) 0
Initial franchise fees 25,510 (25,510)(4) 0
Other 19,533 19,533
----------- ----------- -----------
Total revenue 1,039,089 (585,493) 453,596
Operating expenses:
Cost of goods sold 301,552 301,552
Selling, general and administrative 1,738,401 (410,824)(4) 1,343,202
15,625 (3)
Interest expense, net of interest income 65,425 26,250 (3) 91,675
----------- ----------- -----------
Total operating expenses 2,105,378 (368,949) 1,736,429
----------- ----------- -----------
Net loss ($1,066,289) ($ 216,544) ($1,282,833)
=========== =========== ===========
Net loss per common share ($ 0.37) ($ 0.44)
=========== ===========
Weighted average number of
common shares outstanding 2,910,833 2,925,833
=========== ===========
</TABLE>
See Notes to Unaudited Pro Forma Financial Statements
4
<PAGE>
NOTES TO THE UNAUDITED PRO FORMA BALANCE SHEET AT JUNE 30, 1996 AND FOR THE
UNAUDITED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1995 AND THE
SIX MONTHS ENDED JUNE 30, 1996
Balance Sheet
(1) Reflects receipt of the estimated net proceeds and related gain (net of
expenses) from the Transaction, the elimination of the assets sold, a reduction
of certain indebtedness paid at Closing, and the forgiveness of royalties owed
by franchisees.
(2) Reflects repayments of certain debts as required under the Purchase
Agreement.
(3) Reflects receipt of the bridge loan net proceeds (after placement fees) and
related charge to earnings resulting from the issuance of 15,000 shares of the
Company's common stock.
Statement of Operations
(4) Reflects the charge of earnings resulting from the placement fee and
issuance of 15,000 shares of the Company's common stock in connection with the
bridge loan.
(5) Reflects the elimination of revenue and operating expenses of the disposed
assets for the year ended December 31, 1995 and the six months ended June 30,
1996. Such expenses have been limited to direct operating expenses attributable
to such businesses, and do not include any allocation of corporate or
administrative costs. The remaining excess of cost over fair value of net assets
acquired is being amortized over a 10 year period.
(6) The Company has not recorded any estimated income from the investment of the
estimated proceeds from the Transaction. In addition, no tax liability has been
recorded resulting from the tax benefit available to the Company from the
available carry forward of operating losses.
5
