<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended September 28, 1997.
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from to
----- ----
Commission file number 0-25926
--------
WOODROAST SYSTEMS, INC.
-------------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
<TABLE>
<S><C>
Minnesota 41-1563961
------------------------------- --------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
10250 Valley View Road, Suite 145, Eden Prairie, Minnesota 55344
-----------------------------------------------------------------
(Address of Principal Executive Offices)
612-944-5113
------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
(Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report)
</TABLE>
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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
---- ----
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: At November 10, 1997 there
were 4,242,397 shares of common stock, $0.005 par value outstanding.
Page 1 of 12
<PAGE> 2
WOODROAST SYSTEMS, INC.
Form 10-QSB Index
September 28, 1997
<TABLE>
<S> <C>
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheets -
September 28, 1997 and December 29, 1996.................................. 3
Consolidated Condensed Statements of Operations -
for the thirteen and thirty-nine week periods ended
September 28, 1997 and September 29, 1996................................. 4
Consolidated Condensed Statements of Cash Flows -
for the thirteen and thirty-nine week periods ended
September 28, 1997 and September 29, 1996................................. 5
Notes to Consolidated Condensed
Financial Statements...................................................... 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations................................................................. 8
PART II: OTHER INFORMATION
Item 1: Legal Proceedings.......................................................... 11
Item 6: Exhibits and Reports on Form 8-K........................................... 11
Signatures................................................................................. 12
</TABLE>
Page 2 of 12
<PAGE> 3
WOODROAST SYSTEMS, INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
September 28, December 29,
1997 1996
------------- ------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents............................... $ 607,320 $ 1,673,663
Available-for-sale securities........................... 0 1,998,750
Inventories............................................. 254,514 181,971
Prepaid expenses and other.............................. 279,073 89,183
----------- ------------
Total current assets................................. 1,140,907 3,943,567
PROPERTY AND EQUIPMENT, NET............................... 5,611,342 4,537,418
CONSTRUCTION IN PROGRESS.................................. 140,184 0
DEPOSITS.................................................. 15,936 138,884
PATENT AND TRADEMARKS, NET................................ 25,953 9,834
----------- ------------
$ 6,934,322 $ 8,629,703
=========== ============
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<S> <C> <C>
CURRENT LIABILITIES:
Current portion of capital leases....................... $ 74,986 $ 77,936
Accounts payable........................................ 533,533 640,752
Construction in progress payable........................ 51,995 0
Accrued expenses........................................ 370,621 228,311
----------- ------------
Total current liabilities............................ 1,031,135 946,999
LONG-TERM DEBT............................................ 1,000,000 1,000,000
LESS: UNAMORTIZED DISCOUNT................................ (263,963) (299,514)
OBLIGATIONS UNDER CAPITAL LEASES, NET OF CURRENT PORTION.. 49,973 107,813
----------- ------------
Total liabilities.................................... 1,817,145 1,755,298
----------- ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.005 par value, 33,333,333 shares
authorized, 4,242,397 shares issued and outstanding.... 21,212 21,212
Additional paid-in capital.............................. 10,033,229 10,033,229
Unrealized loss on securities available-for-sale........ 0 (16,250)
Unearned compensation................................... (6,887) (9,723)
Accumulated deficit..................................... (4,930,377) (3,154,063)
----------- ------------
Total stockholders' equity........................... 5,117,177 6,874,405
----------- ------------
$ 6,934,322 $ 8,629,703
=========== ===========
</TABLE>
Page 3 of 12
<PAGE> 4
WOODROAST SYSTEMS, INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Thirteen Weeks Ended Thirty-Nine Weeks Ended
----------------------- --------------------------
<S> <C> <C> <C> <C>
Sept. 28, Sept. 29, Sept. 28, Sept. 29,
1997 1996 1997 1996
---------- ----------- ------------ ------------
NET SALES.............................. $1,462,667 $ 1,343,692 $ 4,544,898 $ 4,761,245
---------- ----------- ------------ ------------
COSTS AND EXPENSES:
Food, beverage and supply costs...... 462,465 418,990 1,410,340 1,553,055
Retail costs......................... 33,030 15,610 71,048 45,082
Restaurant operating expenses........ 975,304 830,533 2,853,740 2,885,245
Depreciation and amortization........ 190,021 126,488 428,240 317,149
General, administrative & development 536,592 305,397 1,537,420 890,114
---------- ----------- ------------ ------------
Total costs and expenses........... 2,197,412 1,697,018 6,300,788 5,690,645
---------- ----------- ------------ ------------
Loss from operations............... (734,745) (353,326) (1,755,890) (929,400)
---------- ----------- ------------ ------------
OTHER INCOME (EXPENSE):
Interest income...................... 11,321 3,534 71,767 3,599
Interest expense..................... (43,907) (62,664) (156,257) (222,472)
Other income......................... 49,474 0 64,066 61,518
---------- ----------- ------------ ------------
Total other income (expense)....... 16,888 (59,130) (20,424) (157,355)
---------- ----------- ------------ ------------
LOSS BEFORE INCOME TAXES............... (717,857) (412,456) (1,776,314) (1,086,755)
Income taxes....................... 0 0 0 0
---------- ----------- ------------ ------------
NET LOSS............................... $ (717,857) $ (412,456) $ (1,776,314) $ (1,086,755)
========== =========== ============ ============
LOSS PER COMMON SHARE.................. $ (.17) $ (.13) $ (.42) $ (.40)
========== =========== ============ ============
WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING............. 4,242,397 3,080,626 4,242,397 2,744,581
========== =========== ============ ============
</TABLE>
Page 4 of 12
<PAGE> 5
WOODROAST SYSTEMS, INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Thirteen Weeks Ended Thirty-Nine Weeks Ended
------------------------ --------------------------
Sept. 28, Sept. 29, Sept. 28, Sept.29,
1997 1996 1997 1996
---------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss................................... $ (717,857) $ (412,456) $(1,776,314) $(1,086,755)
Adjustments to reconcile net loss to
cash flows from operating activities -
Depreciation and amortization.............. 190,021 126,488 428,240 317,149
Amortization of long-term debt discount.... 11,851 27,501 35,551 82,503
Amortization of unearned compensation...... 1,215 0 2,836 0
Changes in operating assets and liabilities (94,020) (139,112) (175,346) (650,897)
----------- ---------- ----------- -----------
Cash flows from operating activities.... (608,790) (397,579) (1,485,033) (1,338,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of a-f-s securities..... 0 704 2,015,000 12,649
Purchases of property and equipment........ (116,421) (148,258) (1,501,494) (187,143)
Purchases of intangible assets............. (1,936) 0 (16,790) 0
Construction in progress................... (117,016) (30,306) (140,184) (30,306)
Deposits used (advanced) .................. 956 (1,000) 122,948 43,185
----------- --------- ---------- ----------
Cash flows from investing activities.... (234,417) (178,860) 479,480 (161,615)
---------- --------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on obligations under capital lease (18,713) (19,459) (60,790) (54,175)
Payment on note payable - stockholder...... 0 0 0 (300,000)
Net proceeds from sale of common stock..... 0 4,701,596 0 6,016,974
---------- ---------- ----------- -----------
Cash flows from financing activities.... (18,713) 4,682,137 (60,790) 5,662,799
---------- ---------- ----------- -----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (861,920) 4,105,698 (1,066,343) 4,163,184
CASH AND CASH EQUIVALENTS, BEGINNING......... 1,469,240 85,329 1,673,663 27,843
---------- ---------- ----------- -----------
CASH AND CASH EQUIVALENTS, ENDING............ $ 607,320 $4,191,027 $ 607,320 $ 4,191,027
========== ========== ========== ===========
</TABLE>
Page 5 of 12
<PAGE> 6
WOODROAST SYSTEMS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 28, 1997
(UNAUDITED)
(1) BASIS OF FINANCIAL STATEMENT PRESENTATION
The accompanying unaudited consolidated condensed financial statements have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. Although management believes that the disclosures are adequate to
make the information presented not misleading, it is suggested that these
interim consolidated condensed financial statements be read in conjunction with
the Company's most recent audited consolidated financial statements and notes
thereto included in the Company's Annual Report on Form 10-KSB for the fiscal
year ended December 29, 1996. In the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary for a fair
presentation of the financial position, results of operations and cash flows for
the interim periods presented have been made. Operating results for the periods
ended September 28, 1997 are not necessarily indicative of the results that may
be expected for the fiscal year ending December 28, 1997.
(2) LOSS PER COMMON SHARE
Primary and fully diluted loss per common share are determined by dividing net
loss by the weighted average number of common shares outstanding during each
period. Primary and fully diluted loss per share are the same.
The Company will adopt in the fiscal year ending December 28, 1997, Statement
of Financial Accounting Standards No. 128 "Earnings per Share" (SFAS No. 128),
which was issued in February 1997. SFAS No. 128 requires disclosures of the
basic earnings per share (EPS) and diluted EPS, which replaces the existing
primary EPS and fully diluted EPS, as defined by APB No. 15. Basic EPS is
computed by dividing net income by the weighted average number of shares of
Common Stock outstanding during the year. Dilutive EPS is computed similar to
EPS as previously reported provided that, when applying the treasury stock
method to common equivalent shares, the Company must use its average share
price for the period rather than the more dilutive greater of the average share
price or end-of-period share price required by APB No. 15.
(3) CONSTRUCTION IN PROGRESS
The Company maintains separate Construction in Progress and Construction in
Progress Payable accounts to reconcile all contractual agreements relating to
new site development.
(4) LONG-TERM DEBT
In November 1995, the Company completed a private placement of $1,000,000 in
principal amount of Secured Promissory Notes (the Notes) (including $700,000 to
Company stockholders) and received net proceeds of $943,252. The Notes are
secured by substantially all Company assets and bear interest at 15%, payable
quarterly. In addition, the holders of the Notes received warrants to purchase
an aggregate of 200,016 shares of the Company's common stock at $.0033 per
share, of which 170,008 were exercised in 1996. The remaining warrants are
exercisable through May 31, 2000. On the date of issuance, the Warrants had a
total value of $299,333 based on the then market price of the Company's common
stock. The discount created by the issuance costs and warrants is being
amortized over the life of the Notes using the interest method. The
approximate effective annual interest rate of the Notes is 20%. The Notes
require repayment of principal over an eight-year period beginning August 1998.
Current maturities of the Notes are $27,916 in fiscal year 1998, $74,518 in
fiscal year 1999, $86,497 in fiscal year 2000, $100,401 in fiscal year 2001 and
$710,668 thereafter.
Page 6 of 12
<PAGE> 7
WOODROAST SYSTEMS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONT.)
SEPTEMBER 28, 1997
(UNAUDITED)
(5) INCOME TAXES
The Company has adopted Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes", under which deferred income tax assets and
liabilities are recognized for the differences between financial and income tax
reporting basis of assets and liabilities based on currently enacted rates and
laws. The Company has incurred cumulative net operating losses for both
financial reporting and income tax purposes. As of September 28, 1997, the
Company had net operating loss carryforwards of approximately $4,300,000,
which, if not used, will begin to expire in 2010. Future changes in the
ownership of the Company may place limitations on the use of these net
operating loss carryforwards. The Company has recorded a full valuation
allowance against the net deferred tax asset due to the uncertainty of
realizing the related benefits.
(6) STOCK OPTIONS
STOCK OPTION PLAN - The Company has a Stock Option Plan (the "Plan"), pursuant
to which options and other awards to acquire an aggregate of 750,000 shares of
the Company's common stock may be granted. Stock options, stock appreciation
rights, restricted stock, other stock and cash awards may be granted under the
Plan. The Plan is administered by a stock option committee which has the
discretion to determine the number and purchase price of the shares subject to
stock options, which may be below the fair market value of the common stock on
the date thereof, the term of each option, and time or times during its term
when the option becomes exercisable. At September 28, 1997, 417,000 options
had been granted at exercise prices of $0.81 to $5.50 per share, none of which
had been exercised.
(7) COMMITMENTS AND CONTINGENCIES
LITIGATION - The Company is involved in legal actions in the ordinary course of
its business. While no reasonable estimates of potential liability can be
determined, management believes such legal actions will be resolved without a
material effect on the Company's financial position or results of operations.
Page 7 of 12
<PAGE> 8
WOODROAST SYSTEMS, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
The Company was organized in 1987 to develop Shelly's Original Woodroast
Restaurants. The Company has two restaurant operations, one located in St.
Louis Park, Minnesota, which opened in 1989 and the other located in Rockville,
Maryland, which opened in November 1995. The Company also opened its first
stand alone Shelly's Back Room "The American Tavern" operation in
Washington D.C. on June 10, 1997. The Back Room concept is designed to
capitalize on the popular cigar smoking trend in an upscale atmosphere featuring
exceptional food and drink. The concept is a direct result of the Company's
senior management focus to pursue other avenues to generate revenue. The
primary reasons to pursue the Back Room concept is that these are a simpler
operational structure and requires lower capital investment, which would allow
franchising of this concept. The Company has begun construction on its second
stand-alone Back Room in Chicago, Illinois, with an anticipated opening in
December 1997. Future expansion of the Shelly's Back Room by the Company will
depend on various factors, including market acceptance of the Back Room
concept, general economic conditions and additional financing. The Company
also faces all of the risks, expenses and difficulties frequently
encountered in connection with the operation, development and franchising of a
new and expanding business. Furthermore, to the extent that the Company's
expansion strategy is successful, the Company must manage the transition to
multiple site operations (both Company-owned and franchise operations), higher
volume operations, the control of overhead expenses and the addition of
necessary personnel. The Company had losses of $717,857 and $1,776,314 for the
thirteen and thirty-nine week periods ended September 28, 1997 and expects
losses to continue for the near future.
The Company uses a 52/53 week fiscal year ending on the last Sunday of December.
Fiscal year 1997 will be a 52 week year.
RESULTS OF OPERATIONS FOR THE THIRTEEN WEEKS AND THIRTY-NINE WEEKS ENDED
SEPTEMBER 28, 1997 AND SEPTEMBER 29, 1996
The restaurant located in St. Louis Park, Minnesota, had net sales for the
thirteen weeks ended September 28, 1997 and September 29, 1996 of $554,473 and
$553,226, respectively, or a 0.2% increase of $1,247. Net sales from the St.
Louis Park operation for the thirty-nine weeks ended September 28, 1997 and
September 29, 1996 were $1,829,202 and $1,784,624, respectively, or a 2.5%
increase of $44,578. The St. Louis Park restaurant continues to have guest
counts at or near seating capacity on a daily basis. The restaurant located in
Rockville, Maryland, that opened for business on November 20, 1995, had net
sales for the thirteen weeks ended September 28, 1997 and September 29, 1996 of
$720,702 and $790,466, respectively, or a 8.8% decrease of $69,764. Net sales
from the Rockville operation for the thirty-nine weeks ended September 28, 1997
and September 29, 1996 were $2,487,066 and $2,976,621, respectively, or a 16.4%
decrease of $489,555. The 16.4% decrease in net sales at the Rockville
restaurant reflects the impact of the grand opening months from early 1996. The
Company continues to implement local marketing programs to increase sales.
However, no assurance can be given that these efforts will achieve
desired results by year end, if at all. The Back Room located in Washington
D.C., that opened for business on June 10, 1997, had net sales for the thirteen
weeks ended September 28, 1997 of $187,492 and net sales for the sixteen weeks
ended September 28, 1997 of $228,630.
The food, beverage and other direct costs related to the operation of the St.
Louis Park, Minnesota, restaurant for the thirteen weeks ended September 28,
1997 and September 29, 1996 were $508,557 and $491,569 respectively, or a 3.5%
increase of $16,988. The food, beverage and other direct costs related to the
operation of the St. Louis Park restaurant for the thirty-nine weeks ended
September 28, 1997 and September 29, 1996 were $1,611,736 and $1,577,535,
respectively, or a 2.2% increase of $34,201. The food, beverage and other
direct costs related to the operation of the Rockville, Maryland, restaurant
for the thirteen weeks ended September 28, 1997 and September 29, 1996 were
$728,733 and $773,564, respectively, or a 5.7% decrease of $44,831. The food,
beverage and other direct costs related to the operation of the Rockville
restaurant for the thirty-nine weeks ended September 28, 1997 and September 29,
1996 were $2,428,696 and $2,905,847, respectively, or a 16.4% decrease of
$477,151. The Company continues to address ongoing cost and expense issues at
both restaurant locations. However, no assurance can be given that these
efforts will achieve desired results by year end, if at all. The food,
beverage and other direct costs related to the operation of the Back Room in
Washington D.C. for the thirteen weeks ended September 28, 1997 were $233,509
and for the sixteen weeks ended September 28, 1997 were $294,696. Due to this
being the first full quarter of operations, with expanded hours of operation to
include breakfast and an abundance of wait staff to cover an ongoing assessment
of what will be necessary in this downtown business district, labor costs,
fixed rent costs and public relations costs were above normal during this start
up period.
Page 8 of 12
<PAGE> 9
WOODROAST SYSTEMS, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONT.)
RESULTS OF OPERATIONS (cont.)
The Company's executive and administrative office located in Eden Prairie,
Minnesota had other expenses, consisting of general and administrative expenses,
interest income, interest expense, other income and development expenses which
were $519,704 for the thirteen weeks ended September 28, 1997 compared to
$364,527 for the thirteen weeks ended September 29, 1996. This is an increase
of $155,177 or a 42.6% increase. Other expenses for the thirty-nine weeks ended
September 28, 1997 and September 29, 1996 were $1,557,844 and $1,047,469,
respectively, or a 48.7% increase of $510,375. These increases are attributable
primarily to the Company's ongoing building of a corporate management team and
facility to lead the Company into its new focus on the Back Room concept. The
Company is seeking additional senior management personnel as well as support
staff, which will also have an associated impact on future earnings. The
Company expects to continue to incur operating losses during 1997.
LIQUIDITY AND CAPITAL RESOURCES
During the past two fiscal years, the Company's capital requirements have been
met principally through the public and private sale of debt and equity
securities. In June 1994, the Company completed an Initial Public Offering of
750,000 units consisting of 750,000 shares of Common Stock, and 750,000
Redeemable Class A Warrants at an offering price of $5.50 per unit and received
net proceeds of approximately $3,360,000 after approximately $765,000 in
offering costs and underwriting discounts. Such net proceeds had been fully
utilized by December 31, 1995, for the development and opening of the
Rockville restaurant, and for the reduction of debt and trade payables.
The Company had working capital of $109,772 at September 28, 1997, compared to
working capital of $2,996,568 at December 29, 1996. Cash, cash equivalents and
available-for-sale securities were $607,320 at September 28, 1997, representing
a decrease of $3,065,093 from $3,672,413 at December 29, 1996. This decrease
is attributable to the payments relating to the development and construction of
the Washington D.C. Shelly's Back Room, the Chicago Shelly's Back Room and the
Company's additions necessary to its management team and corporate office
facility.
In November 1995, the Company completed a private placement of Units consisting
of $1,000,000 in principal amount of 15% Secured Promissory Notes (the Notes)
and warrants (the Warrants) to purchase an aggregate 200,016 shares of Common
Stock. The Notes are secured by a senior interest in substantially all assets
owned by the Company and its subsidiary. Property leased by the Company and
its subsidiary, including real estate and certain equipment, is not included in
the security interest. A total of 170,008 of the Warrants were exercised in
1996.
In March and April 1996, the Company sold 625,000 shares of its Common Stock in
a private placement for $2.25 per share, and received net proceeds of
approximately $1,315,000. Holders of such shares have certain piggyback
registration rights. The net proceeds from the private placement of Common
Stock have been used to pay debt and trade payables and to provide working
capital for general corporate purposes.
The Company will require additional financing to implement its expansion plans.
The Company is currently in serious negations to sell the Shelly's Woodroast
Restaurant located in Rockville, Maryland. If the Company is unsuccessful in
the sale of this restaurant, it will be necessary to raise capital in the debt
or equity markets. There is no assurance that additional financing will be
available, or if available, will be on terms acceptable to the Company. The
Company believes that without the sale of the Rockville unit or additional
financing, a delay in opening the Chicago Shelly's Back Room could occur.
Page 9 of 12
<PAGE> 10
WOODROAST SYSTEMS, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONT.)
FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements. This Form 10-QSB and other materials filed or to be
filed by the Company with the Securities and Exchange Commission, as well as
other written materials or oral statements that the Company may make or publish
from time to time, contain forward-looking statements relating to such matters
as plans for future expansion, other business development activities,
anticipated financial performance, business prospects, and similar matters.
Such forward-looking statements by their nature involve substantial risks and
uncertainties, and actual results may differ materially from the anticipated
results or other expectations expressed in the forward-looking statements.
These risks and uncertainties include, but are not limited to, those relating to
the operation and development of a new and expanding business, dependence on
current management and need for additional management personnel, and the risks
and uncertainties described in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in this Form 10-QSB.
Page 10 of 12
<PAGE> 11
PART II: OTHER INFORMATION
<TABLE>
<S><C>
Item 1. Legal Proceedings
The Company is currently involved in legal proceedings arising in the
ordinary course of its business. The Company does not believe any
such legal proceedings will have a material adverse impact on the
Company.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits required by Item 601 of Regulation S-K
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarterly period ended
September 28, 1997.
Exhibit 27 - Financial Data Schedule - which is only submitted
electronically to the Securities and Exchange Commission for EDGAR
information purposes.
</TABLE>
Page 11 of 12
<PAGE> 12
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Woodroast Systems, Inc.
(Registrant)
/s/ SHELDON F. JACOBS
---------------------------
by Sheldon F. Jacobs
Chairman of Board,
Chief Executive Officer
(Principal Executive Officer)
/s/ RALPH J. GUARINO
---------------------------
by Ralph J. Guarino
President, Chief Operating
Officer, and Chief Financial
Officer (Principal Financial and
Accounting Officer)
Date: November 11, 1997
Page 12 of 12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-28-1997
<PERIOD-END> SEP-28-1997
<CASH> 607,320
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 254,514
<CURRENT-ASSETS> 1,140,907
<PP&E> 7,199,617
<DEPRECIATION> 1,588,275
<TOTAL-ASSETS> 6,934,322
<CURRENT-LIABILITIES> 1,031,135
<BONDS> 786,010
0
0
<COMMON> 21,212
<OTHER-SE> 5,095,965
<TOTAL-LIABILITY-AND-EQUITY> 6,934,322
<SALES> 4,544,898
<TOTAL-REVENUES> 4,544,898
<CGS> 1,481,388
<TOTAL-COSTS> 6,300,788
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 156,257
<INCOME-PRETAX> (1,776,314)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,776,314)
<EPS-PRIMARY> (.42)
<EPS-DILUTED> (.42)
</TABLE>
