SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
/X/ Quarterly Report Pursuant to Section 13 or 15(d) of the Security
Exchange Act of 1934
For the Quarterly period ended March 31, 1997.
/ / Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Transition Period from______ to ________.
Commission file number: 0-25334
-------
THE GREAT AMERICAN BACKRUB STORE, INC.
- --------------------------------------------------------------------------------
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN THE CHARTER)
NEW YORK 13-3729043
-------- ----------
(State of Incorporation) (I.R.S. Employer Identification No.)
425 MADISON AVENUE, SUITE 605, NEW YORK, NY 10017
-------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
Registrant's telephone number, including area code: (212) 750-7046
Check whether the issuer: (1) filed all reports required by Section 13 or
15 (d) of the Securities Exchange Act during the past 12 months (or for such
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.
CLASS OUTSTANDING AT APRIL 30 ,1997
----- -----------------------------
Common Stock, $.001 par value 2, 416,854
Transitional Small Business Disclosure Format(check one):
Yes _____ No /X/
<PAGE>
THE GREAT AMERICAN BACKRUB STORE, INC.
(A DEVELOPMENT STAGE COMPANY)
PART 1
FINANCIAL INFORMATION
ITEM 1. UNAUDITED FINANCIAL STATEMENTS
CONDENSED BALANCE SHEET 3
CONDENSED STATEMENTS OF OPERATIONS 4
STATEMENTS OF CASH FLOWS 5
NOTES TO UNAUDITED FINANCIAL STATEMENTS 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 9
PART II
OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 11
SIGNATURE PAGE 12
EXHIBIT INDEX 13
EXHIBIT 11: STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS 14
EXHIBIT 27: FINANCIAL DATA SCHEDULE 15
Page 2
<PAGE>
THE GREAT AMERICAN BACKRUB STORE, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
As of March 31, 1997
PART 1: FINANCIAL INFORMATION
ITEM1 : FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current assets:
Cash $ 325,500
Receivables - other 122,714
Prepaid expenses 17,056
Inventory 274,055
----------
Total current assets 739,325
----------
Property and equipment:
Furniture and fixtures 463,560
Leasehold improvements 963,027
Purchased lease 120,000
Computer equipment 44,836
----------
1,591,423
Less, Accumulated depreciation ( 246,782)
----------
1,344,641
----------
Other assets:
Deferred offering costs 104,300
Note receivable 50,938
Lease and equipment deposits 290,166
----------
Total other assts 445,404
----------
Total assets $2,529,370
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 307,265
Accrued expenses 357,811
Accrued payroll and related 39,463
Bridge notes 159,864
Deferred revenue 103,137
----------
Total current liabilities 967,540
----------
Deferred rent 317,640
----------
Commitments and contingencies
Stockholders' equity:
Series B convertible preferred stock, $.001 par value
15,000,000 shares authorized, none issued --
Common stock, par value $0.001 per share,
20,000,000 shares authorized, 2,416,854
shares issued and outstanding 2,417
Additional paid in capital 8,865,331
Deficit accumulated during the development stage (7,623,558)
----------
1,244,190
----------
Total liabilities and stockholders' equity $2,529,370
==========
</TABLE>
See accompanying notes to financial statements.
Page 3
<PAGE>
THE GREAT AMERICAN BACKRUB STORE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three months ended
March 31, December 18, 1992
--------- (Inception) to
1997 1996 March 31, 1997
---- ---- --------------
<S> <C> <C> <C>
Revenues:
Services $ 894,548 $ 386,234 $ 4,501,651
Products 202,456 129,283 1,572,624
Royalties, franchise fees and other 10,255 -- 94,232
------------ ------------ ------------
Total 1,107,259 515,517 6,168,507
------------ ------------ ------------
Operating expenses:
Salaries and wages 522,070 294,841 3,761,975
Cost of products sold,buying and occupancy 153,992 110,519 1,143,475
Rental expense 280,854 138,975 1,687,246
Advertising and promotion 39,075 20,337 545,501
Options granted as financial advisory fees 43,750 87,500 525,000
General and administrative 501,290 450,022 5,190,439
Depreciation 37,800 20,400 256,264
Waived salaries -- -- 350,000
------------ ------------ ------------
Total 1,578,831 1,122,594 13,459,900
------------ ------------ ------------
Net loss from operations (471,572) (607,077) (7,291,393)
------------ ------------ ------------
Other income (expense):
Interest Income 6,037 9,207 249,395
Interest expense (152,516) -- (581,560)
------------ ------------ ------------
Total (146,479) 9,207 (332,165)
------------ ------------ ------------
Net loss ($ 618,051) ($ 597,870) ($ 7,623,558)
============ ============ ============
Weighted average number of
shares outstanding during the period 2,409,021 1,785,266
========= =========
Net loss per common share and equivalents $ (0.26) $ (0.33)
============ ============
</TABLE>
See accompanying notes to financial statements.
Page 4
<PAGE>
THE GREAT AMERICAN BACKRUB STORE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three months ended
MARCH 31, December 18, 1992
--------- (Inception) to
1997 1996 March 31, 1997
---- ---- --------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss ($ 618,051) ($ 597,870) ($ 7,623,558)
------------- -------------- -------------
Adjustments to reconcile net loss to net cash used
by operating activities:
Depreciation and amortization 37,800 20,400 252,720
Salaries waived by officers - - 350,000
Warrant financing costs 152,516 - 565,016
Options granted as financial advisory fees - 525,000 631,830
Common stock issued to former franchisee and
consultant - - 98,478
(Increase) decrease in:
Accounts receivable 92,346 9,054 ( 122,714)
Prepaid expenses 33,634 ( 476,626) ( 17,056)
Inventory 55,214 15,149 ( 274,055)
Other assets ( 37,452) ( 12,931) ( 445,404)
Increase (decrease) in:
Accounts payable and accrued expenses ( 314,147) ( 221,753) 683,986
Accrued payroll and related ( 158,286) - 39,463
Deferred revenues and rent ( 148,225) ( 6,790) 420,777
Accrued officer expenses - - -
------------- -------------- -------------
Total adjustments ( 286,600) ( 148,497) 2,183,041
------------- -------------- -------------
Net cash used by operating activities ( 904,651) ( 746,367) ( 5,440,517)
------------- -------------- -------------
Cash flows from investing activities:
Purchase of certificate of deposit - - ( 1,000,000)
Maturity of certificate of deposit - - 1,000,000
Purchased lease - - ( 120,000)
Purchase of property and equipment ( 13,699) ( 37,863) ( 1,471,423)
------------- -------------- -------------
Net cash used in investing activities ( 13,699) ( 37,863) ( 1,591,423)
------------- -------------- -------------
Cash flows from financing activities:
Net proceeds from the issuance of common stock 55,812 - 7,182,516
Net proceeds from the issuance of bridge warrants - - 4,000
Proceeds from issuance of bridge notes and short-term debt - - 867,667
Payment of bridge notes and short-term debt - - ( 605,000)
Bridge financing costs - - ( 91,743)
Payment of officer loan payable - - -
------------- -------------- -------------
Net cash provided by financing activities 55,812 - 7,357,440
------------- -------------- -------------
Net increase (decrease) in cash and cash equivalents ( 862,538) ( 784,230) 325,500
Cash and cash equivalents, beginning of period 1,188,038 1,221,737 -
------------- -------------- -------------
Cash and cash equivalents, end of period $ 325,500 $ 437,507 $ 325,500
============= ============== =============
See accompanying notes to financial statements.
Page 5
</TABLE>
<PAGE>
THE GREAT AMERICAN BACKRUB STORE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
DESCRIPTION OF BUSINESS
The Great American Backrub Store, Inc. (the "Company"), formerly American
Pleasure, Inc., is an owner/operator of retail stores which provide seated,
fully clothed back rubs and sell back related products. The Company,
incorporated on December 28, 1992, began operations in August, 1993 and opened
its first store for business in October, 1993. As of March 31, 1997 the Company
has thirteen retail stores in operation and two franchised store locations.
Management believes that the Company's planned principal operations, the
establishment of Company-owned stores and franchised stores throughout the
country, have not yet commenced. The initial thirteen retail stores and two
franchised store locations have been used to continue to develop and modify the
Company's retail concept. Accordingly, the accompanying financial statements
have been presented as a development stage company, in accordance with Statement
of Financial Accounting Standards (SFAS) No. 7.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents represent all amounts held in banks and money market
accounts and short term investments such as United States Treasury Bills with
original maturities of three months or less.
EARNINGS PER SHARE
Net loss per common share for the three month period ended March 31, 1997 and
1996 is computed by dividing net loss by the weighted average common shares
outstanding during the period. The assumed exercise of common share equivalents
was not utilized since the effect was anti-dilutive.
NOTE 1 - INITIAL PUBLIC OFFERING
In an initial public offering completed on March 7, 1995, the Company sold
1,250,000 shares of common stock for approximately $6,250,000 which, after
commissions and fees, provided the Company with net proceeds of approximately
$5,000,000.
NOTE 2 - CONDENSED FINANCIAL STATEMENTS
The condensed balance sheet as of March 31, 1997 and the condensed statements of
operations and cash flows for the three month periods ended March 31, 1997 and
1996, and the period December 18, 1992 (inception) to March 31, 1997 have been
prepared by the Company without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations, and changes in
cash flows at March 31, 1997 and for all periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These condensed financial statements should be
read in conjunction with the financial statements and notes thereto of the
Company as of December 31, 1996.
The results of operations for the three month periods ending March 31, 1997 and
1996 are not necessarily indicative of the operating results for the full year.
Page 6
<PAGE>
THE GREAT AMERICAN BACKRUB STORE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 3 - OPTIONS, STOCK PLANS AND MANAGEMENT COMPENSATION
At the Company's 1994 annual meeting of shareholders held on July 18, 1994, the
Company's shareholders approved the Employee Plan. The purpose of the Employee
Plan is to promote the success of the Company by providing a method whereby
eligible employees of the Company and its subsidiaries, as defined therein, may
be awarded additional remuneration for services rendered, thereby increasing
their personal interest in the Company. The Employee Plan is also intended to
aid in attracting persons of suitable ability to become employees of the Company
and its subsidiaries. The plan covers an aggregate of 75,000 shares of the
Company's Common Stock. As of March 31, 1997, options to purchase 8,500 shares
of Common Stock were outstanding under the plan.
In December 1994, the Company granted ten year options to purchase 360,000
shares of Common Stock to executive officers of the Company. Such options are
exercisable at a price of $3.75 per share. One-third of such options became
exercisable in March, 1995, one-third became exercisable in December 1995 and
one-third became exercisable in December 1996. In July 1995, the Company granted
five-year options to purchase 100,000 shares of Common Stock to executive
officers of the Company. Such options are exercisable at a price of $1.875 per
share. All such options have been exercised. In July 1995, the Company granted
options to purchase 10,000 shares of Common Stock to an executive officer of the
Company. Such options are exercisable at a price of $2.5625 per share. Options
to purchase 5,000 shares vest and became exercisable in July 1996 and options to
purchase an additional 5,000 shares vest and become exercisable in July 1997.
All options expire on the day before the 5-year anniversary of vesting. In March
1995, the Company granted ten year options to purchase 100,000 shares of Common
Stock to a consultant to the Company. Such options are exercisable at a price of
$5.00 per share. All such options are currently exercisable. In July 1995, the
Company granted five year options to purchase 25,000 and 40,000 shares of Common
Stock to consultants to the Company. Such options are exercisable at a price of
$4.00 per share. All such options are currently exercisable. In August 1995, the
Company granted three year options to purchase 100,000 shares of Common Stock to
a consultant to the Company. Such options are exercisable at a price of $2.375
per share. All such options have been exercised.
NOTE 4 - LEASES
The Company leases retail stores and office equipment. All of the retail stores
are leased under noncancelable agreements which expire at various dates through
the year 2005. The agreements, which have been classified as operating leases,
require the Company to pay insurance, taxes and other maintenance costs.
Rent expense amounted to $280,854 and $138,975 for the three month periods ended
March 31, 1997 and 1996, respectively. Rent expense from December 18,
1992(inception) to March 31, 1997 was $1,687,246.
Page 7
<PAGE>
THE GREAT AMERICAN BACKRUB STORE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 5 - FINANCIAL ADVISORY AND CONSULTING AGREEMENT
In February 1996, the Company entered into a financial advisory and consulting
agreement with an investment banking firm to advise it on the possible sale of
additional equity securities, as well as to introduce and assist in the
evaluation of potential merger and partnering opportunities.
The agreement was for a period of one year commencing on February 1, 1996 and
included a $100,000 retainer paid on the execution of the agreement and warrants
to purchase 100,000 shares of the Company's common stock at an exercise price of
$1.00 per share exercisable from the date of the agreement to and including
January 31, 1997, all of which have been exercised and warrants to purchase
200,000 shares of common stock of the Company at an exercise price of $2.50 per
share exercisable from the date of the agreement to and including January 31,
1998, all of which have been exercised.
Such warrants resulted in a non-cash charge of $43,500 for the three month
period ended March 31, 1997.
NOTE 6 - PREFERRED STOCK OFFERING
On February 5, 1997, the Company filed a registration statement to offer 270,000
shares of Series B convertible Preferred Stock for approximately $2,700,000,
which, if successful, after commissions and fees, would provide the Company with
net proceeds of approximately $2,000,000. There is no assurance that this
offering will be successful.
Dividends on the shares of the Preferred Stock offered would accrue and be
cumulative from the date of original issue and would be payable semi-annually in
arrears on April 1 and October 1 of each year in an amount equal to $.70 per
share per annum payable at the Company's option in cash or shares of Common
Stock based on the average reported closing price of the Common Stock.
Each share of Preferred Stock would be convertible at the option of the holder
thereof at any time from and after twelve months from the date of the closing of
this offering, unless previously redeemed, into the greater of four shares of
Common Stock or a number of shares of common stock equal to $16.00 divided by
the average of the last reported sales price of the Common Stock up to a maximum
number of shares which has yet to be determined, subject to further adjustment
in certain circumstances.
The Preferred Stock would be redeemable two years from the closing of this
offering with the consent of the Underwriter or upon the closing of a public
offering of the Company or five years from the closing of this offering. The
Preferred Stock may be redeemed at the option of the Company in whole or part at
105% of the public offering price per share of Preferred Stock, plus in each
case accrued and unpaid dividends to the redemption date.
The holders of Preferred Stock would not be entitled to vote on any matter
except as required by law.
Page 8
<PAGE>
ITEM 2:
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
Company's unaudited financial statements and the related notes thereto included
elsewhere herein.
GENERAL
The Company's revenues are derived from the service of seated, fully clothed
back rubs and the sale of stress related products. The Company began operations
in August, 1993, and opened its first store for business in October, 1993. As of
March 31, 1997, the Company has thirteen retail stores in operation and two
franchised store locations.
RESULTS OF OPERATIONS
The Company is in the development stage and has not had significant revenues
since the commencement of its retail store operations in October, 1993. From
this time through March 31, 1997, the Company has generated cumulative revenue
of $6,168,507 while incurring a cumulative loss of $7,623,558. The losses to
date have been primarily associated with the Company's establishment of a
corporate and administrative infrastructure to position itself to open
additional retail stores and expand its franchise operations. For the three
month period ended March 31, 1997, retail store and franchise operations
reflected a small loss although overall stores opened more than one year were
profitable. The Company anticipates this trend to continue as existing stores
mature and new stores are opened. In addition, the Company expects to incur
additional operating losses for the next twelve months and possibly longer as it
embarks on its planned expansion.
The Company presently sells services in the form of its back rubs, and products,
in the form of a variety of massage and stress reduction products, in its retail
stores. Since inception, sales of services have accounted for 73% of total
revenue, products for 25% and the remaining 2% from other sources. Since the
Company is still a development stage enterprise, it is not clear whether these
percentages are indicative of future ratios in a larger operation.
THREE MONTH PERIOD ENDED MARCH 31, 1997 COMPARED TO THREE MONTH PERIOD ENDED
MARCH 31, 1996
For the three months ended March 31, 1997, revenues from services and products
at the company's stores increased 115% to $1,107,259 from the corresponding 1996
period. This increase was mainly attributed to increased traffic and the opening
of additional stores as compared to the corresponding 1996 period. Operating
expenses were $1,578,831 for the three month period ended March 31, 1997 as
compared to $1,122,594 for the same period in the prior year, an increase of
41%. This increase was primarily due to the development of a management team,
operational systems, marketing and design plans in the implementation of the
Company's expansion plans and non cash charges relating to the issuance of
options of approximately $43,500. Of these amounts, approximately $501,290 was
related to corporate overhead expenses and $1,077,541 to store and franchise
level operations for the three month period ended March 31, 1997. For the
period, store and franchise level losses were approximately $15,000. The Company
expects that store and franchise level profitability will improve and that its
operating losses will continue to narrow as existing stores mature, new stores
are opened and additional franchisees are put into the system. No provision for
income taxes was required during either period due to the Company's incurrence
of net operating losses.
Page 9
<PAGE>
RESULTS OF OPERATIONS- CONT'D
While general and administrative expenses are expected to increase due to the
need for additional management and administrative support for the Company's
expanding operations, these expenses as a percentage of total revenue are
expected to decline as total revenue increases. Other expense items, such as
advertising and promotion, salaries and wages, cost of products, however, are
related to retail operations themselves and their relative percentages to total
revenues are likely to remain fairly constant in the near term but should
decrease as the Company streamlines it operations.
LIQUIDITY AND CAPITAL RESOURCES
The Company had negative working capital of $228,215 as of March 31, 1997,
compared with working capital of $1,676,936 as of March 31, 1996. The decrease
is primarily due to amounts spent on property, equipment and leasehold
improvements to fund the Company's initial thirteen stores and amounts spent on
operations in the development of a corporate infrastructure in anticipation of
the Company's growth strategy.
From inception to March 31, 1997, the Company has used cash for operating
activities of $5,440,517 and spent an additional $1,591,423 for the purchase of
property, equipment, purchased leases, leasehold improvements and investments.
These expenditures have been offset by the net cash provided by financing
activities, principally from the Company's October, 1993 private placement of
common stock, aggregating $870,000, Bridge notes and short-term financing in the
principal amount of $867,667, the Company's March 1995 public offering of common
stock resulting in net proceeds of approximately $5,000,000 and the issuance of
common stock to warrant and option holders of approximately $1,200,000.
See "Statement of Cash Flows" included in the Company's unaudited financial
statements.
Inasmuch as the Company continues to have a high level of operating expenses and
will be required to make significant up-front expenditures in connection with
its proposed expansion, the Company anticipates that losses will continue for at
least the next 12 months and until such time, if ever, as the Company is able to
generate significant revenues or achieve profitable operations. As a result, in
their report of the Company's Financial Statements as of December 31, 1996, the
Company's independent certified public accountants have included an explanatory
paragraph that describes factors raising substantial doubt about the Company's
ability to continue as a going concern.
In accordance with management's plans, the Company has retained an investment
banking advisor to advise it on the possible sale of equity securities, as well
to as introduce and assist in the evaluation of potential merger and partnership
opportunities. Management expects that these efforts will result in either an
additional equity infusion or an introduction to other parties with interests
and resources which may be compatible with that of the Company. However, no
assurances can be given that the Company will be successful in raising
additional capital or entering into a business alliance. Further, there is no
assurance, assuming the Company successfully raises additional funds or enters
into a business alliance, that the Company will achieve profitability or
positive cash flow. On February 5, 1997, the Company filed a registration
statement to offer 270,000 shares of preferred stock for approximately
$2,700,000, which, if successful, after commissions and fees, would provide the
Company with net proceeds of approximately $2,000,000.
Page 10
<PAGE>
PART II
OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
On January 27, 1997, the Company issued to Harold Hochberger a
promissory note in the principal amount of $36,142.94 (the "Note") and 550,400
warrants (the "Warrants") for an aggregate purchase price of $36,693.34. The
Company believes that the sale of these securities is exempt from registration
under the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof,
as a transaction by an issuer not involving any public offering.
The Note bears interest at the rate of 10% per annum and is payable
one year from the date of issue or upon an earlier public offering of equity
securities of the Company. Each Warrant entitles the holder thereof to purchase
one share of the Company's Series A Convertible Preferred Stock (the "Series A
Preferred Stock") for a price of $5.00, subject to adjustment in certain
circumstances, at any time during the three-year period commencing on the first
anniversary of the date of issuance of the Warrants. Each share of Series A
Preferred Stock pays a cumulative dividend of $.35 per annum, has a liquidation
preference of $5.00 and is convertible on or after December 27, 1997 into the
greater of (i) two shares of Common Stock of the Company or (ii) a number of
shares of Common Stock equal to $8.00 divided by the average of the closing
prices of the Common Stock for the ten trading days ending on the third trading
day preceding the date of conversion (the "Closing Price") subject to further
adjustment under certain circumstances.
On February 5, 1997, the Company filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form SB-2
(the "Registration Statement") for the sale in an underwritten offering of
270,000 shares of Series B Convertible Preferred Stock of the Company (the
"Series B Preferred Stock") at an anticipated public offering price of $10.00
per share. The terms of the proposed offering and of the Series B Preferred
Stock are currently under discussion between the Company and the underwriter but
are expected to provide that each share of Series B Preferred Stock will have a
cumulative dividend of $.70 per annum and a liquidation preference of $10.00 and
will be convertible on and after the first anniversary of the effective date of
the Registration Statement into the greater of (i) four shares of Common Stock
or (ii) a number of shares of Common Stock equal to $16.00 divided by the
Closing Price, up to a maximum number of shares which has yet to be determined,
subject to further adjustment in certain circumstances.
Under the terms of the Warrants, upon the effectiveness of the
Registration Statement described above, each Warrant shall be automatically
converted into one-half of a warrant (a "Series B Warrant") each of which will
entitle the holder thereof to purchase one share of Series B Convertible
Preferred Stock of the Company for an initial price of $8.00 per share, subject
to adjustment in certain circumstances, at any time during the three-year period
commencing on the first anniversary of the effective date of such Registration
Statement, and the holders of the Series B Warrants are entitled to have such
Warrants and the Preferred Stock and Common Stock underlying such Warrants
registered for public sale. On February 7, 1997, the Company filed a second
registration statement with the Commission with respect to the sale by the
holders thereof of the Series B Warrants and the Preferred Stock and Common
Stock underlying such Warrants.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
Exhibit 11: Statement re: Computation of per share earnings
Exhibit 27: Financial Data Schedule
(b) Reports on Form 8-K
None
Page 11
<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.
THE GREAT AMERICAN BACKRUB STORE, INC.
--------------------------------------
Registrant
Date: May 14, 1997
/s/ Keith R. Dee
-----------------
Keith R. Dee, Chief Financial
Officer (duly authorized officer
and principal financial officer
and principal accounting officer)
and Secretary
Page 12
<PAGE>
EXHIBIT INDEX
EXHIBITS DESCRIPTION
- -------- -----------
11 Statement re: Computation of per share earnings
27 Financial Data Schedule
EXHIBIT 11
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
For the three months ended Weighting factor
MARCH (in months)
----- -----------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Issuance of common stock, June 1993 375,000 375,000 3 3
Sale of common stock, October 1993 125,000 125,000 3 3
Sale of common stock, March 1995
1,250,000 shares 1,250,000 1,250,000 3 3
Issuance of shares in conjunction with public offering(11,500) 11,500 10,500 3 3
Sale of common stock through the issuance of options and warrants
in prior periods 631,854 24,766 3 3
Shares issued upon exercise of options and warrants 15,667 -- SEE BELOW N/A
--------- ---------
Common stock and equivalents 2,409,021 1,785,266
========= =========
</TABLE>
1997
----
Computation of weighted average number of shares issued upon exercise of options
and warrants:
Three months
weighting factor
Shares (in days)
DATE ISSUED 1997
---- ------ ----
1/31/97 23,500 15,667
Total 15,667
======
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's Form 10-QSB for the three month period ended March 31, 1997 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 325,000
<SECURITIES> 0
<RECEIVABLES> 122,714
<ALLOWANCES> 0
<INVENTORY> 274,055
<CURRENT-ASSETS> 739,325
<PP&E> 1,591,423
<DEPRECIATION> 246,782
<TOTAL-ASSETS> 2,529,370
<CURRENT-LIABILITIES> 967,540
<BONDS> 0
0
0
<COMMON> 2,417
<OTHER-SE> 8,865,331
<TOTAL-LIABILITY-AND-EQUITY> 2,529,370
<SALES> 1,107,259
<TOTAL-REVENUES> 1,107,259
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</TABLE>
