SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 28, 2003 |
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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Commission File Number 0-29643 |
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GRANITE CITY FOOD & BREWERY LTD. |
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(Name of Small Business Issuer in Its Charter) |
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Minnesota |
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41-1883639 |
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(State or Other Jurisdiction of |
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(I.R.S. Employer |
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5831 Cedar Lake Road, St. Louis Park, Minnesota 55416
(Address of Principal Executive Offices, including Zip Code)
(952) 525-2070
(Issuers Telephone Number, including Area Code)
Securities registered pursuant to Section 12(b) of the Exchange Act:
None
Securities registered pursuant to Section 12(g) of the Exchange Act:
Units
(each consisting of one share of Common Stock, $0.01 par value, and one
redeemable Class A Warrant
to purchase one share of Common Stock), Common Stock ($0.01 par value) and
redeemable Class A Warrants to purchase Common Stock
(Title of Class)
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 ý No o
Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. o
The issuers revenues for its most recent fiscal year were $14,622,717.
The aggregate market value of the common equity held by non-affiliates of the issuer as of March 1, 2004 was approximately $12,507,268.
As of March 1, 2004 the issuer had outstanding 4,148,527 shares of common stock and 1,000,000 Class A Warrants. The number of outstanding shares of common stock includes the shares issuable upon separation of the units, each consisting of one share of common stock and one redeemable Class A Warrant, sold in the issuers initial public offering.
DOCUMENTS INCORPORATED BY REFERENCE
None.
ITEM 7 FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
Granite City Food & Brewery Ltd. |
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Financial Statements |
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1
Board of Directors
Granite City Food & Brewery Ltd.
St. Louis Park, Minnesota
We have audited the accompanying balance sheets of Granite City Food & Brewery Ltd. as of December 29, 2002 and December 28, 2003, and the related statements of operations, shareholders equity, and cash flows for the years then ended. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the 2002 and 2003 financial statements referred to above present fairly, in all material respects, the financial position of Granite City Food & Brewery Ltd. as of December 29, 2002 and December 28, 2003, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
The accompanying 2002 and 2003 financial statements have been restated as discussed in Note 12.
/s/ Schechter, Dokken, Kanter, Andrews & Selcer Ltd. |
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February 10, 2004 (except for Note 12 as to which the date is December 21, 2004) |
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Minneapolis, Minnesota |
2
GRANITE CITY FOOD & BREWERY LTD.
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December 29, 2002 |
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December 28, 2003 |
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ASSETS: |
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Current assets: |
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Cash |
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$ |
3,521,842 |
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$ |
1,439,960 |
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Inventory |
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102,375 |
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177,176 |
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Prepaids and other |
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106,657 |
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145,857 |
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Total current assets |
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3,730,874 |
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1,762,993 |
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Property and equipment, net |
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9,080,701 |
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15,177,392 |
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Intangible assets and other |
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335,589 |
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381,782 |
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Total assets |
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$ |
13,147,164 |
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$ |
17,322,167 |
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LIABILITIES AND SHAREHOLDERS EQUITY: |
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Current liabilities: |
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Accounts payable |
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$ |
341,968 |
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$ |
460,160 |
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Accrued expenses |
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871,384 |
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1,293,241 |
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Long-term debt, current portion |
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31,401 |
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122,584 |
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Capital lease obligations, current portion |
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265,412 |
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362,920 |
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Total current liabilities |
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1,510,165 |
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2,238,905 |
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Long-term debt, net of current portion |
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1,442,649 |
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2,056,752 |
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Capital lease obligations, net of current portion |
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3,696,324 |
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6,702,352 |
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Total liabilities |
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6,649,138 |
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10,998,009 |
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Shareholders equity: |
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38,261 |
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40,441 |
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Preferred stock, $0.01 par value, 10,000,000
authorized; |
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474 |
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555 |
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Additional paid-in capital |
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10,588,400 |
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12,029,001 |
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Stock dividends distributable |
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702 |
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Preferred stock subscription receivable |
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(683,300 |
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Accumulated deficit |
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(3,445,809 |
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(5,746,541 |
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Total shareholders equity |
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6,498,026 |
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6,324,158 |
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Total liabilities and shareholders equity |
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$ |
13,147,164 |
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$ |
17,322,167 |
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See notes to financial statements.
3
GRANITE CITY FOOD & BREWERY LTD.
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Year Ended |
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December 29, 2002 |
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December 28, 2003 |
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Restaurant revenues |
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$ |
12,286,749 |
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$ |
14,622,717 |
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Cost of sales: |
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Food, beverage and retail |
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3,520,107 |
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4,287,120 |
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Labor |
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4,192,970 |
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4,970,829 |
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Direct and occupancy |
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2,612,019 |
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3,162,007 |
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Total cost of sales |
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10,325,096 |
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12,419,956 |
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Pre-opening |
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559,413 |
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General and administrative |
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924,652 |
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1,839,281 |
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Depreciation and amortization |
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766,851 |
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817,963 |
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Operating income (loss) |
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270,150 |
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(1,013,896 |
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Interest: |
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Income |
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12,335 |
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71,468 |
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Expense |
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(531,056 |
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(560,156 |
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Other income, net |
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32,354 |
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Net other expense |
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(486,367 |
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(488,688 |
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Net loss |
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$ |
(216,217 |
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$ |
(1,502,584 |
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Loss per common share, basic and diluted |
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$ |
(0.59 |
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(0.56 |
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Weighted average shares outstanding, basic and diluted |
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3,815,364 |
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3,923,560 |
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See notes to financial statements.
4
GRANITE CITY FOOD & BREWERY LTD.
STATEMENTS OF SHAREHOLDERS EQUITY
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Common stock shares * |
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Preferred stock shares ** |
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Par value |
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Additional paid-in capital |
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Stock subscriptions receivable/dividends distributable |
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Accumulated deficit |
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Shareholders equity |
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Balance on December 30, 2001 |
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3,807,350 |
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$ |
38,074 |
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$ |
4,416,358 |
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$ |
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$ |
(1,199,021 |
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$ |
3,255,411 |
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Common shares issued upon exercise of options |
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12,000 |
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120 |
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13,180 |
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13,300 |
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Common shares issued upon exercise of warrants |
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6,750 |
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67 |
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8,370 |
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8,437 |
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Issuance of Series A Convertible Preferred Stock |
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47,434 |
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474 |
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4,191,920 |
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4,192,394 |
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Preferred stock subscription receivable |
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(683,300 |
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(683,300 |
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Preferred stock deemed dividends from beneficial conversion feature |
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1,958,572 |
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(1,958,572 |
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Preferred stock dividends payable |
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(71,999 |
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(71,999 |
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Net loss |
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(216,217 |
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(216,217 |
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Balance on December 29, 2002 Restated |
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3,826,100 |
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47,434 |
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38,735 |
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10,588,400 |
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(683,300 |
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(3,445,809 |
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6,498,026 |
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Common shares issued upon exercise of options |
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6,000 |
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60 |
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6,590 |
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6,650 |
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Common shares issued upon exercise of warrants |
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65,611 |
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656 |
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126,135 |
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(101,447 |
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25,344 |
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Common shares issued upon payment of preferred stock dividends |
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140,080 |
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1,401 |
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614,296 |
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702 |
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(616,399 |
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Common shares issued upon conversion of preferred stock |
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6,329 |
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(100 |
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62 |
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(62 |
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Issuance of Series A Convertible Preferred Stock |
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8,166 |
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82 |
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693,642 |
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693,724 |
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Preferred stock subscription receivable |
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683,300 |
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683,300 |
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Issuance of cash dividends on preferred stock |
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(96,454 |
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(96,454 |
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Compensation expense on warrants issued to third party |
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16,152 |
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16,152 |
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Net loss |
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(1,502,584 |
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(1,502,584 |
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Balance on December 28, 2003 Restated |
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4,044,120 |
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55,500 |
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$ |
40,996 |
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$ |
12,029,001 |
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$ |
702 |
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$ |
(5,746,541 |
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$ |
6,324,158 |
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* Par value: $0.01 shares authorized: 90,000,000
** Par value: $0.01 shares authorized: 10,000,000
See notes to financial statements.
5
GRANITE CITY FOOD & BREWERY LTD.
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Year Ended |
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December 29, 2002 |
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December 28, 2003 |
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Cash flows from operating activities: |
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Net loss |
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$ |
(216,217 |
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$ |
(1,502,584 |
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Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
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Depreciation and amortization |
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766,851 |
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817,963 |
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Loss on disposal of asset |
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9,400 |
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Stock option/warrant compensation |
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16,152 |
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Decrease (increase) in: |
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Inventory |
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13,603 |
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(74,801 |
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Prepaids and other |
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9,200 |
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(39,200 |
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Increase (decrease) in: |
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Accounts payable |
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(161,207 |
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145,525 |
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Accrued expenses |
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144,251 |
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493,856 |
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Net cash provided by (used in) operating activities |
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565,881 |
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(143,089 |
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Cash flows from investing activities: |
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Purchase of: |
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Property and equipment |
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(514,946 |
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(3,522,846 |
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Intangible assets and other |
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(7,820 |
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(59,220 |
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Net cash used in investing activities |
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(522,766 |
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(3,582,066 |
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Cash flows from financing activities: |
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Payment to related parties |
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(300,000 |
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Payments on capital lease obligations |
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(238,549 |
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(302,578 |
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Payments on long term-debt |
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(25,950 |
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(44,714 |
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Payment of dividends |
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(168,421 |
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Proceeds from: |
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Long-term debt |
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200,000 |
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750,000 |
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Issuance of stock |
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3,458,832 |
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1,408,986 |
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Net cash provided by financing activities |
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3,094,333 |
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1,643,273 |
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Net increase (decrease) in cash |
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3,137,448 |
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(2,081,882 |
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Cash, beginning |
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384,394 |
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3,521,842 |
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Cash, ending |
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$ |
3,521,842 |
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$ |
1,439,960 |
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Supplemental disclosure of cash flow information: |
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Cash paid for interest |
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$ |
509,162 |
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$ |
520,897 |
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Supplemental schedule of non-cash investing and financial activities: |
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Equipment and intangibles purchased and included in accounts payable |
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$ |
40,797 |
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$ |
13,486 |
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Buildings acquired under capital lease agreements |
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$ |
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$ |
3,406,114 |
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Issuance of common stock in lieu of cash dividend payments |
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$ |
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$ |
616,399 |
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Warrants tendered in lieu of payment to exercise warrants |
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$ |
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$ |
101,447 |
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See notes to financial statements.
6
GRANITE CITY FOOD & BREWERY LTD.
December 29, 2002 and December 28, 2003
1. Nature of business:
Granite City Food & Brewery Ltd. (the Company) was formed to develop and operate casual dining restaurants featuring on-premise breweries. The Company is developing these restaurant-microbreweries, known as Granite City Food & Brewery®, in selected markets throughout the United States. The theme is casual dining with a wide variety of menu items that are prepared fresh daily, combined with freshly brewed hand-crafted beers made on-premise. The Company produces its beer using a process called Fermentus Interruptus, which is intended to maintain high beer quality while enhancing overall profitability by reducing unit-level brewing costs. The first facility, located in St. Cloud, Minnesota, opened in July 1999. Subsequently, the Company opened restaurants in Sioux Falls, South Dakota; Fargo, North Dakota; and West Des Moines, Cedar Rapids and Davenport, Iowa.
The Companys current expansion strategy focuses on development of restaurants in markets where management believes the Companys concept will have broad appeal and attractive restaurant-level economics.
2. Summary of significant accounting policies:
Cash:
The Company maintains its cash at financial institutions in Minnesota and South Dakota. At times, the bank balances exceed limits insured by Federal agencies.
Inventory:
Inventory, consisting of food, beverages and retail items, is stated at the lower of cost or market and determined using the first-in, first-out (FIFO) method.
Property and equipment:
The cost of property and equipment is depreciated over the estimated useful lives of the related assets. The cost of leasehold improvements is depreciated over the length of the related lease. Depreciation is computed on the straight-line method for financial reporting purposes and accelerated methods for income tax purposes. Amortization of assets acquired under capital lease is included in depreciation expense.
The estimated useful lives are as follows:
Computer software |
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3 years |
Furniture and restaurant equipment |
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8 years |
Brewery equipment |
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20 years |
Building and leasehold improvements |
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20 years |
Intangible assets:
Intangible assets are recorded at cost and consist of liquor licenses, capitalized loan costs and trademarks. Capitalized loan costs are amortized straight-line over the term of the financing agreements while the costs related to trademarks are amortized straight-line over the expected lives of such trademarks. In accordance with the Financial Accounting Standards Boards Statements of Financial Accounting Standards No. 142, Goodwill and Intangible Assets, the Company does not amortize its liquor licenses as they have infinite lives. All intangible assets are reviewed annually for impairment. Intangible assets and related accumulated amortization is detailed in Note 4 to the financial statements.
7
Use of estimates:
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Fair value of financial instruments:
At December 29, 2002 and December 28, 2003, the fair value of cash, short-term investments, inventory and accounts payable approximate their carrying value due to the short-term nature of the instruments. The fair value of the capital lease obligations and long-term debt is estimated at its carrying value based upon current rates available to the Company.
Revenue recognition:
Revenue is derived from the sale of prepared food and beverage and select retail items. Revenue is recognized at the time of sale.
Earnings (loss) per share:
Basic earnings (loss) per common share is calculated by dividing net income (loss) less the sum of preferred stock dividends declared and the deemed-dividend from the beneficial conversion feature recorded, by the weighted average number of common shares outstanding in each year. Diluted earnings (loss) per common share assumes that outstanding common shares were increased by shares issuable upon exercise of stock options and warrants for which market price exceeds exercise price, less shares which could have been purchased by the Company with related proceeds. Calculations of the Companys net loss per common share for the years ended December 29, 2002 and December 28, 2003 are set forth in the following table:
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Year Ended |
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December 29, 2002 |
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December 28, 2003 |
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Net loss |
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$ |
(216,217 |
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$ |
(1,502,584 |
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Less preferred stock dividends |
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(2,030,571 |
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(712,854 |
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Net loss available to common shareholders |
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$ |
(2,246,788 |
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$ |
(2,215,438 |
) |
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Loss per common share, basic and diluted |
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$ |
(0.59 |
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$ |
(0.56 |
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Weighted average shares outstanding, basic and diluted |
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3,815,364 |
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3,923,560 |
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Stock options and warrants of 3,511,478 at December 29, 2002 and 4,332,831 at December 28, 2003, and common stock equivalents of Series A Convertible Preferred Stock of 3,002,152 at December 29, 2002 and 3,512,635 at December 28, 2003 were not used in the calculation of diluted earnings (loss) per share because they were anti-dilutive.
8
Advertising costs:
Advertising costs are expensed as incurred. Total amounts incurred during the years ended December 29, 2002 and December 28, 2003 were $77,559 and $258,209, respectively.
Stock compensation:
The Company accounts for its stock-based compensation awards to employees under Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and discloses the required pro forma effect on net loss as recommended by Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation, as amended by SFAS No. 148, Accounting for Stock-Based CompensationTransition and Disclosure. The fair value of each option grant for the pro forma disclosure required is estimated on the grant date using the Black-Scholes option-pricing model as detailed in Note 10 to the financial statements.
Fiscal year:
The Companys fiscal year ends on the last Sunday in December.
3. Property and equipment:
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December 29, 2002 |
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December 28, 2003 |
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Building |
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$ |
3,035,959 |
|
$ |
6,442,073 |
|
Leasehold improvements |
|
4,286,119 |
|
4,368,479 |
|
||
Equipment and furniture |
|
3,383,135 |
|
5,575,603 |
|
||
Construction in progress |
|
|
|
1,220,685 |
|
||
|
|
10,705,213 |
|
17,606,840 |
|
||
Less accumulated depreciation |
|
1,624,512 |
|
2,429,448 |
|
||
|
|
$ |
9,080,701 |
|
$ |
15,177,392 |
|
Depreciation expense of $755,090 and $804,936 is included in depreciation and amortization expense for the years ending December 29, 2002 and December 28, 2003, respectively.
4. Intangible assets and other:
|
|
December 29, 2002 |
|
December 28, 2003 |
|
||
Liquor licenses |
|
$ |
264,415 |
|
$ |
264,415 |
|
Security deposits |
|
7,400 |
|
27,801 |
|
||
Trademarks |
|
29,551 |
|
47,880 |
|
||
Capitalized loan costs |
|
53,641 |
|
74,130 |
|
||
|
|
355,007 |
|
414,226 |
|
||
Less accumulated amortization |
|
19,418 |
|
32,444 |
|
||
|
|
$ |
335,589 |
|
$ |
381,782 |
|
9
Amortization expense of $11,761 and $13,027 is included in depreciation and amortization expense for the years ending December 29, 2002 and December 28, 2003, respectively. In each of the next five years, the Company anticipates incurring the following amortization expense: $14,415 in 2004, $13,637 in 2005, $13,637 in 2006, $6,689 in 2007 and $5,298 in 2008.
5. Long-term debt:
In July 2001, the Company obtained a $1,500,000 loan from an independent financial institution, the proceeds of which were used to pay a portion of the construction and equipment costs for the Fargo location. The loan bears interest at the rate of 8.75% per annum and monthly interest and principal payments are based upon a 20-year amortization schedule with the final payment of accrued interest and principal due February 2007. As of December 29, 2002 and December 28, 2003, the balance of this promissory note was $1,474,050 and $1,443,408, respectively. The loan is secured by a leasehold mortgage, a security agreement granting to the bank a first security interest in the lease and all of the Companys receivables, as well as inventory, general intangibles, equipment, furniture, fixtures, and other personal property pertaining to the project, and an assignment of leases and rents and guaranties by three of the Companys directors. The loan agreement with the bank includes customary covenants, including a limitation on the Companys ability to incur additional indebtedness, other than ordinary trade debt, make investments in other persons or make distributions or dividends if an event of default occurs under the agreement. In August 2003, the Company obtained a $750,000 loan from the same financial institution, the proceeds of which financed the purchase of equipment for the West Des Moines location. The loan is secured by virtually all of the Companys personal property and is guaranteed by one of the Companys directors. The loan matures in August 2010 and bears interest at the rate of 6.125% per annum. As of December 28, 2003, the balance of this promissory note was $735,928.
Future maturities of long-term debt are as follows:
Year ending: |
|
|
|
|
|
|
|
|
|
2004 |
|
$ |
122,584 |
|
2005 |
|
131,873 |
|
|
2006 |
|
141,351 |
|
|
2007 |
|
1,440,248 |
|
|
2008 |
|
114,305 |
|
|
Thereafter |
|
228,975 |
|
|
|
|
|
|
|
|
|
$ |
2,179,336 |
|
During the years ended December 29, 2002 and December 28, 2003, the Company incurred $131,926 and $141,159, respectively, in interest expense related to long-term debt.
10
6. Leases:
The Company leases land and buildings under four agreements expiring in 2019, 2020, 2023 and 2023 with renewable options for additional periods, plus percentage rent based upon restaurant sales for two of such leases. The land portions of the lease agreements are classified as operating leases because the fair value of the land was more than 25% of the leased property at the inception of each lease. All scheduled rent increases for the land during the life of each lease are recognized on a straight-line basis. The building portions of the leases are classified as capital leases because their present value is greater than 90% of the estimated fair value. In addition, the Company entered into sale-leaseback agreements for the equipment and leasehold improvements at St. Cloud and Sioux Falls in June 2001 and a lease for equipment under agreements expiring in 2008. Two executive officers that are also members of the Companys board of directors, have personally guaranteed these leases. Included in property and equipment are the following assets held under capital leases:
|
|
December 29, 2002 |
|
December 28, 2003 |
|
||
|
|
|
|
|
|
||
Building |
|
$ |
3,035,959 |
|
$ |
6,442,073 |
|
Leasehold improvements and equipment |
|
1,546,657 |
|
1,546,657 |
|
||
|
|
4,582,616 |
|
7,988,730 |
|
||
Less accumulated depreciation |
|
607,747 |
|
878,088 |
|
||
|
|
$ |
3,974,869 |
|
$ |
7,110,642 |
|
Amortization expense related to the assets held under capital leases is included with depreciation expense on the Companys income statement.
In January 2001, the Company entered into a 20-year operating lease for land in Fargo, North Dakota on which the Company built its third restaurant-microbrewery. Under the lease terms, the Company is obligated to annual rent of $72,000 plus percentage rent based upon restaurant sales. Obligations under the lease began on November 20, 2001, the date the restaurant opened for business. In November 2003, the Company entered into a two-year operating lease for office space in Minneapolis, Minnesota. Obligations under the lease began on December 1, 2003. In addition to these leases, the Company has also entered into operating leases expiring through 2005 for various equipment items.
Rental expense for the years ended December 29, 2002 and December 28, 2003 was $421,968 and $487,259, respectively. Included in rent expense at December 29, 2002 and December 28, 2003, is $111,104 and $100,781, respectively, of contingency rental expense based upon restaurant sales. Contingent rent is accrued based on estimates of probable levels of revenue during the contingency period.
11
Minimum future lease payments under all leases as of December 28, 2003 are:
Year ended |
|
Capital leases |
|
Operating leases |
|
|||
|
|
|
|
|
|
|||
|
2004 |
|
$ |
964,859 |
|
$ |
552,599 |
|
|
2005 |
|
951,738 |
|
544,605 |
|
||
|
2006 |
|
885,260 |
|
512,667 |
|
||
|
2007 |
|
808,098 |
|
512,667 |
|
||
|
2008 |
|
737,502 |
|
517,701 |
|
||
Thereafter |
|
9,214,237 |
|
7,019,790 |
|
|||
|
|
|
|
|
|
|||
Total minimum lease payments |
|
13,561,694 |
|
$ |
9,660,029 |
|
||
|
|
|
|
|
|
|||
Less amount representing interest |
|
6,496,422 |
|
|
|
|||
Present value of net minimum lease payments |
|
7,065,272 |
|
|
|
|||
Less current portion |
|
362,920 |
|
|
|
|||
|
|
|
|
|
|
|||
Long-term portion of obligations |
|
$ |
6,702,352 |
|
|
|
The annual interest rates on the land and building leases are 6.8%, 8.7%, and 10.7%. The building improvements and equipment leases include interest at 9.7% with that interest rate being adjusted after five years to prime plus 2% on $750,000, interest at 9.0% with that rate being adjusted after three and one-half years to prime plus 2% on $750,000, and interest at 9.5% on $46,657. Interest expense on these leases was $386,129 and $416,570 for the years ending December 29, 2002 and December 28, 2003, respectively. Total future minimum lease payments do not include contingent rent that is based on restaurant sales.
7. Income taxes:
The income tax provision allocated to continuing operations consists of the following:
|
|
Year ended |
|
||||
|
|
December 29, 2002 |
|
December 28, 2003 |
|
||
Deferred income taxes: |
|
|
|
|
|
||
Federal |
|
$ |
26,316 |
|
$ |
166,935 |
|
State |
|
19,102 |
|
(26,496 |
) |
||
|
|
|
|
|
|
||
Deferred income tax benefits |
|
45,418 |
|
140,439 |
|
||
|
|
|
|
|
|
||
Valuation allowance |
|
(45,418 |
) |
(140,439 |
) |
||
|
|
|
|
|
|
||
Total income tax provision (expense) |
|
$ |
0 |
|
$ |
0 |
|
12
A reconciliation of the federal income tax provision at the statutory rate with actual taxes provided on (loss from) continuing operations is as follows:
|
|
2002 |
|
2003 |
|
Ordinary federal income tax statutory rate |
|
(15.00 |
)% |
(15.00 |
)% |
Limitation on tax assets |
|
15.00 |
|
15.00 |
|
Taxes provided |
|
0.00 |
% |
0.00 |
% |
Deferred income taxes arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or noncurrent, depending on the classification of the assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or noncurrent depending on the periods in which the temporary differences are expected to reverse. Temporary differences giving rise to the deferred tax asset consist primarily of the excess of amortization expense, organizational costs and pre-opening costs for financial reporting purposes over the amount for tax purposes, general business credit carryforwards and net operating loss carryforwards. Temporary differences giving rise to the deferred tax liability consist primarily of the excess of depreciation expense for tax purposes over the amount for financial reporting purposes and taxable gift certificate sales not reported as revenue for financial reporting purposes.
At December 29, 2002 and December 28, 2003, for income tax return purposes, the Company has net operating loss carryforwards of approximately $1,705,000 and $4,117,000, respectively, available to offset future taxable income. If not used, these carryforwards will begin to expire in 2020. Deferred taxes are calculated using enacted tax rates of 15% for federal and an estimate based on the mix of income and applicable rates by jurisdiction for state. In the year ended December 28, 2003, the state estimate is 4.7%.
The components of deferred tax assets and liabilities are as follows:
|
|
Year ended |
|
||||
|
|
December 29, 2002 |
|
December 28, 2003 |
|
||
Amortization |
|
$ |
52,824 |
|
$ |
12,789 |
|
Depreciation |
|
(159,597 |
) |
(304,956 |
) |
||
Net operating loss carryforwards |
|
407,030 |
|
779,585 |
|
||
General business credit carryforwards |
|
41,755 |
|
59,725 |
|
||
Gift certificate sales |
|
|
|
(68,909 |
) |
||
Other future deductible items |
|
|
|
4,216 |
|
||
Net deferred tax assets |
|
342,012 |
|
482,450 |
|
||
|
|
|
|
|
|
||
Valuation allowance |
|
(342,012 |
) |
(482,450 |
) |
||
|
|
|
|
|
|
||
Net deferred tax assets net of valuation allowance |
|
$ |
0 |
|
$ |
0 |
|
13
The Company has determined, based upon the history of the Company, that there is the probability that future taxable income may be insufficient to fully realize the deferred tax assets. The Company has determined that a full deferred tax valuation allowance is needed at this time.
8. Commitments and contingencies:
Employment agreements:
On December 14, 1999, the Company entered into an employment agreement with its President and Chief Executive Officer, who is also a director of the Company. The agreement stated that he would receive no monetary compensation during fiscal year 2000, and that a salary was to be established thereafter. In lieu of a salary, the Company issued stock options to him in 1999, 2001 and 2003 as compensation for his services through March 30, 2003. The Company believes the options issued to him represent reasonable compensation for his services, based upon a compensation survey for similar sized organizations. At a meeting held in February 2003, the Companys board of directors established a $160,000 annual salary for him effective April 1, 2003. The agreement automatically extends for six-month periods unless he or the Company provides notice of intention not to renew at least thirty days prior to the expiration of the current or any extension term. Among other provisions, the employment agreement includes change in control provisions that would entitle him to receive severance pay equal to 18 months of salary if there is a change in control of the Company and his employment terminates. Based on his current salary, the maximum contingent liability under this agreement would be $240,000. As of January 1, 2004, no notice of intention not to renew was provided and the agreement was extended for six months.
Development agreement:
In October 2002, the Company entered into a development agreement with an entity which is controlled by an affiliate of the Companys largest beneficial owner of securities (the Developer). The development agreement gives the Developer the right to develop, construct and lease up to 22 restaurants for the Company prior to December 31, 2012. The Company is not bound to authorize the construction of restaurants during that time period, but generally cannot use another developer to develop or own a restaurant as long as the development agreement is in effect. The Company can use another developer if the Developer declines to build a particular restaurant, if the agreement is terminated because of a default by the Developer, or if the Company is sold or merged into another company. In the case of a merger or sale of the Company, the development agreement may be terminated at such time as the Developer has completed seven restaurants under the agreement. Other terms and conditions apply.
The development agreement provides for a cooperative process between the Developer and the Company for the selection of restaurant sites and the development of restaurants on those sites, scheduling for the development and construction of each restaurant once a location is approved, and controls on the costs of development and construction using bidding and guaranteed maximum cost concepts. The development agreement provides that restaurants will be leased to the Company on the basis of a triple net lease. The rental rate of each lease will be calculated using a variable formula which is based on approved and specified costs of development and construction and an indexed interest rate. The term of each lease is 20 years with five five-year options to renew.
14
Davenport lease:
In April 2003, the Company entered into a 20-year net lease relating to the restaurant it opened in Davenport, Iowa under the terms specified in the development agreement with the Developer. The 9,449 square foot restaurant was constructed for the Company on an area of approximately 2.8 acres on a build-to-suit basis. The annual rent is equal to 10.5% of the construction cost including land cost. The Company is responsible for any real-estate taxes and all operating costs. The term of the lease commenced when operations began January 27, 2004 and may be extended at the Companys option for up to five additional five-year periods on the same terms and conditions, except the rent may increase based on a formula using the Consumer Price Index during any such extension.
Davenport equipment loan:
In January 2004, the Company entered into a $750,000 loan agreement with the same financial institution referred to in Note 5 above. The proceeds of this loan financed the purchase of equipment for the Davenport location. The loan is secured by virtually all of the Companys personal property and is guaranteed by one of the Companys directors. The loan matures in January 2011 and bears interest at the rate of 6.125% per annum.
Other:
As of December 28, 2003, the Developer had purchased property and commenced building restaurants for the Company in Lincoln, Nebraska and Maple Grove, Minnesota. These restaurants will be leased to the Company by the Developer under the terms and conditions set forth in the development agreement. The term of each lease will be 20 years with five five-year options to renew.
9. Common stock warrants:
In connection with its initial public offering, the Company sold 1,000,000 units, each unit consisting of one share of common stock and one redeemable Class A warrant. Each Class A warrant entitles the holder to purchase one share of common stock at an exercise price of $5.00 per share. The agreement that set forth the terms and conditions of the Class A Warrants contains certain anti-dilution provisions. Pursuant to these provisions, the number of shares purchasable upon exercise of these warrants and the related purchase price both required adjustment upon the issuance of common stock in lieu of cash dividends to the holders of the Companys Series A Convertible Preferred Stock. As a result of these adjustments, the number of shares purchasable under this agreement at December 28, 2003 was 1,037,345 and the exercise price was $4.82 per share. The warrants expire on June 6, 2005.
As part of the Companys initial public offering, the Company sold to the underwriter, for $100, a stock purchase warrant for the purchase of 100,000 units exercisable at $4.95 per unit after June 6, 2001. The agreement that set forth the terms and conditions of the Class A Warrants contains certain anti-dilution provisions. Pursuant to these provisions, the number of shares purchasable upon exercise of these warrants and the related purchase price both required adjustment due to the issuance of common stock in lieu of cash dividends to the holders of the Companys Series A Convertible Preferred Stock. As a result of this adjustment, the number of units purchasable under this agreement at December 28, 2003 was 103,774 and the exercise price was $4.77 per unit. The warrant also provides for a cashless exercise provision and expires on June 6, 2005.
15
As part of the sale of common stock in 1997 and 1998, the Company sold to its private placement agent, for $50, a stock purchase warrant for the purchase of 111,950 shares of common stock at $1 per share. As of December 29, 2002, 78,150 of such warrants remained outstanding. On February 19, 2003, affiliates of the private placement agent exercised 76,450 warrants on a cashless basis. The remaining 1,700 warrants expired February 20, 2003.
In November 2002, the Company completed a private placement of Series A Convertible Preferred Stock and warrants to purchase common stock (see Note 11). The preferred stock was sold with five-year warrants to purchase an aggregate of 1,759,473 shares of common stock at an exercise price of $1.58 per share. As of December 28, 2003, 31,644 of such warrants sold were exercised, resulting in an issuance of 21,676 shares of common stock. As part of the agreement between the Company and its private placement agents, the agents received warrants to purchase an aggregate of 288,604 shares of common stock at an exercise price of $1.58 per share. The exercise price and the number of shares purchasable pursuant to such warrants may be subject to adjustment pursuant to anti-dilution provisions. As of December 28, 2003, an affiliate of one of the Companys private placement agents had exercised 221 of such warrants.
In May 2003, the Company entered into a two-year financial advisory services agreement. As part of the agreement between the Company and the financial consultant, the consultant received five-year warrants to purchase an aggregate of 35,000 shares of common stock at exercise prices ranging from $2.85 to $5.40 per share.
A summary of the status of the Companys stock warrants is presented in the table below:
|
|
Number of common stock shares |
|
Weighted average price per share |
|
Warrants exercisable |
|
|
Outstanding December 30, 2001 |
|
1,223,150 |
|
$ |
4.60 |
|
1,223,150 |
|
Issued |
|
1,715,828 |
|
1.58 |
|
|
|
|
Exercised |
|
(6,750 |
) |
1.25 |
|
|
|
|
Expired |
|
(38,250 |
) |
1.25 |
|
|
|
|
Outstanding December 29, 2002 |
|
2,893,978 |
|
$ |
2.86 |
|
2,893,978 |
|
|
|
|
|
|
|
|
|
|
Issued |
|
367,249 |
|
$ |
1.78 |
|
|
|
Exercised |
|
(108,315 |
) |
1.17 |
|
|
|
|
Expired |
|
(1,700 |
) |
1.00 |
|
|
|
|
Adjustments pursuant to anti-dilution provision |
|
41,119 |
|
4.82 |
|
|
|
|
Outstanding December 28, 2003 |
|
3,192,331 |
|
$ |
2.76 |
|
3,192,331 |
|
16
10. Stock option plans:
In July 1997, the Company adopted the 1997 Stock Option Plan for employees and non-employees, including consultants to the Company, to purchase up to a maximum of 400,000 shares of the Companys common stock. Options are granted at 100% of fair market value, or in the case of incentive stock options granted to employees owning more than 10% of the Companys outstanding voting stock, at 110% of fair market value. Options are exercisable for no more than ten years from the date of the option, or five years in the case of incentive options granted to employees owning more than 10% percent of outstanding stock.
In addition, the Company has reserved 360,000 shares of common stock for issuance under the 1997 Director Stock Option Plan. Under this plan, the Company automatically grants an option to each outside director on the date such person becomes a director for the purchase of 15,000 shares of common stock and thereafter on each successive anniversary of the grant of the first option for the purchase of 15,000 shares. Each option is exercisable for five years from the date of the option. Options are granted at fair market value.
In August 2002, the Company adopted the 2002 Equity Incentive Plan, whereby it reserved 600,000 shares of common stock for issuance to employees, prospective employees, officers and members of the Companys board of directors, as well as consultants and advisors to the Company, to purchase shares of the Companys common stock. On January 1st of each year, the aggregate number of shares of common stock that may be awarded under this plan increases by the greater of 80,000 shares or 2.0% of the then outstanding common stock. As of December 28, 2003, 680,000 shares were reserved for such issuance. Options are granted at 100% of fair market value, or in the case of incentive stock options granted to employees owning more than 10% of the Companys outstanding voting stock, at 110% of fair market value. Options are exercisable for no more than ten years from the date of the issuance.
A summary of the status of the Companys stock options as of December 29, 2002 and December 28, 2003 and changes during the years ending on those dates is presented below:
|
|
December 29, 2002 |
|
December 28, 2003 |
|
||||||
Fixed Options |
|
Shares |
|
Weighted Average Exercise Price |
|
Shares |
|
Weighted Average Exercise Price |
|
||
Outstanding at beginning of period |
|
601,000 |
|
$ |
2.95 |
|
617,500 |
|
$ |
2.86 |
|
Granted |
|
45,000 |
|
1.49 |
|
540,000 |
|
2.99 |
|
||
Exercised |
|
(12,000 |
) |
1.11 |
|
(6,000 |
) |
1.11 |
|
||
Forfeited |
|
(16,500 |
) |
3.34 |
|
(11,000 |
) |
3.79 |
|
||
Outstanding at end of year |
|
617,500 |
|
$ |
2.86 |
|
1,140,500 |
|
$ |
2.92 |
|
|
|
|
|
|
|
|
|
|
|
||
Options exercisable at period end |
|
497,000 |
|
$ |
2.89 |
|
630,750 |
|
$ |
2.85 |
|
17
The following table summarizes information about stock options outstanding at December 28, 2003:
|
|
Options Outstanding |
|
Options Exercisable |
|
||||||||
Range of Exercise Prices |
|
Number of Options Outstanding 12/28/2003 |
|
Weighted Average Remaining Contractual Life |
|
Weighted Average Exercise Price |
|
Number of Options Exercisable 12/28/2003 |
|
Weighted Average Exercise Price |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||
$ 1.00 - $2.00 |
|
261,500 |
|
6.2 years |
|
$ |
1.52 |
|
256,500 |
|
$ |
1.52 |
|
$ 2.01 - $3.00 |
|
330,000 |
|
8.5 years |
|
$ |
2.48 |
|
56,250 |
|
$ |
2.41 |
|
$ 3.01 - $4.00 |
|
549,000 |
|
6.6 years |
|
$ |
3.86 |
|
318,000 |
|
$ |
4.00 |
|
Total |
|
1,140,500 |
|
7.1 years |
|
$ |
2.92 |
|
630,750 |
|
$ |
2.85 |
|
The Company accounts for its stock-based compensation awards using the intrinsic value method prescribed by Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees. No compensation cost has been recognized for options issued to employees when the exercise price of the options granted is at least equal to the fair value of the common stock on the date of grant. Had compensation cost been determined consistent with Statement of Financial Accounting Standard (SFAS) No. 123, Accounting for Stock-Based Compensation, as amended by SFAS No. 148, Accounting for Stock-Based CompensationTransition and Disclosure, the Companys net loss and net loss per common share would have been changed to the following pro forma amounts:
|
|
Year ended |
|
||||
|
|
December 29, 2002 |
|
December 28, 2003 |
|
||
Net income (loss): |
|
|
|
|
|
||
As reported |
|
$ |
(216,217 |
) |
$ |
(1,502,584 |
) |
Less: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects |
|
$ |
(140,593 |
) |
$ |
(427,391 |
) |
Pro forma |
|
$ |
(356,810 |
) |
$ |
(1,929,975 |
) |
|
|
|
|
|
|
||
Net income (loss) per common share |
|
|
|
|
|
||
Basic and diluted as reported |
|
$ |
(0.59 |
) |
$ |
(0.56 |
) |
Basic and diluted pro forma |
|
$ |
(0.63 |
) |
$ |
(0.67 |
) |
18
The fair value of each option grant for the pro forma disclosure required by SFAS No. 123, as amended by SFAS No. 148, is estimated on the grant date using the Black-Scholes option-pricing model with the following assumptions for the grants:
|
|
2002 |
|
2003 |
|
Dividend yield |
|
None |
|
None |
|
Expected volatility |
|
101.4% |
|
72.1% |
|
Expected life of option |
|
5 years |
|
5-10 years |
|
Risk-free interest rate |
|
3.9% |
|
4.2% |
|
The weighted average value of options granted under stock option plans, as determined using the Black-Scholes option-pricing model, was $1.14 in fiscal year 2002 and $2.29 in fiscal year 2003.
11. Preferred stock:
The Company is authorized to issue 10,000,000 shares of preferred stock at $0.01 par value.
During the fourth quarter of 2002, the Company conducted a private placement to accredited investors of Series A Convertible Preferred Stock and warrants to purchase common stock. The Company sold 55,600 shares of preferred stock, convertible into an aggregate of 3,518,964 shares of common stock at a conversion price of $1.58 per share. Aggregate gross proceeds of such sale were $5,560,000. In fiscal year 2002, the Company allocated $1,958,572 to a beneficial conversion feature resulting from this transaction. The beneficial conversion feature was recorded as a reduction of retained earnings and an increase to additional paid-in-capital. The beneficial conversion feature was treated as preferred stock dividends for earnings per share purposes in fiscal year 2002. The preferred stock pays an 8% cumulative dividend in cash or in the Companys common stock. The Company may require conversion under certain circumstances after October 1, 2004. The preferred stock was sold with five-year warrants to purchase an aggregate of 1,759,473 shares of common stock at an exercise price of $1.58 per share. In connection with such placement, the Company issued its agents warrants to purchase an aggregate of 288,604 shares of common stock at an exercise price of $1.58 per share and paid its agents cash commissions aggregating $471,000. As of December 28, 2003, 100 shares of preferred stock had been converted resulting in the issuance of 6,329 shares of the Companys common stock.
Holders of the Series A Convertible Preferred shares vote on an as-if-converted basis as a single class with the common shareholders, except on matters adversely affecting them as a class.
On December 31, 2002, the Company paid an aggregate of $71,999 in cash dividends to the preferred shareholders of record on December 23, 2002. Such amount was included as a liability on the Companys balance sheet at December 29, 2002.
On March 21, 2003, the Company authorized payment of dividends to holders of its preferred stock as of that date. Such dividends aggregated $96,349 and were paid in cash on March 31, 2003.
On June 23, 2003, the Company authorized payment of dividends to holders of its preferred stock as of that date. Such dividends were paid on June 30, 2003 through the issuance of an aggregate of 69,724 shares of common stock valued at $1.58 per share. The closing price of the stock on June 23, 2003 was $2.42 per share. Additionally, $36 cash in lieu of fractional shares was distributed.
19
On September 22, 2003, the Company authorized payment of dividends to holders of its preferred stock as of that date. Such dividends were paid on September 30, 2003 through the issuance of an aggregate of 70,356 shares of common stock valued at $1.58 per share. The closing price of the stock on September 22, 2003 was $2.40 per share. Additionally, $38 cash in lieu of fractional shares was distributed.
On December 10, 2003, the Company authorized payment of dividends to holders of its preferred stock as of December 23, 2003. Such dividends were paid on December 31, 2003 through the issuance of an aggregate of 70,230 shares of common stock valued at $1.58 per share. The closing price of the stock on December 23, 2003 was $3.97 per share. Additionally, $37 cash in lieu of fractional shares was distributed. Such amounts were included as a liability on the Companys balance sheet at December 28, 2003.
12. Restatement of financial statements:
Subsequent to the issuance of the Companys consolidated financial statements as of and for the year ended December 29, 2002, the Company determined that the accounting treatment for the sale of Series A Convertible Preferred Stock and warrants to purchase common stock was not in accordance with guidance established under EITF 00-27 Application of Issue No. 98-5 to Certain Convertible Instruments. Pursuant to EITF 00-27, the Company has allocated the proceeds from the sale between the preferred stock and the detachable warrants based on a relative fair value basis. An effective conversion price was then calculated for the preferred stock and was used to measure the beneficial conversion feature. The Company has calculated the beneficial conversion feature at $1,958,572 and has recognized it as a reduction in retained earnings and an addition to paid-in capital. Additionally, such amount has been recorded as preferred stock dividends for the purpose of calculating earnings per share in 2002 because the preferred stock was convertible upon issuance.
A summary of the significant effects of the restatement on the Companys statement of financial position for the years ended December 29, 2002 and December 28, 2003 follows:
|
|
Year Ended December 29, 2002 |
|
Year Ended December 28, 2003 |
|
||||||||
|
|
As previously reported |
|
As restated |
|
As previously reported |
|
As restated |
|
||||
Shareholders equity: |
|
|
|
|
|
|
|
|
|
||||
Common stock |
|
$ |
38,261 |
|
$ |
38,261 |
|
$ |
40,441 |
|
$ |
40,441 |
|
Preferred stock |
|
474 |
|
474 |
|
555 |
|
555 |
|
||||
Additional paid-in-capital |
|
8,629,828 |
|
10,588,400 |
|
10,070,429 |
|
12,029,001 |
|
||||
Stock dividends distributable |
|
|
|
|
|
702 |
|
702 |
|
||||
Preferred stock subscription receivable |
|
(683,300 |
) |
(683,300 |
) |
|
|
|
|
||||
Accumulated deficit |
|
(1,487,237 |
) |
(3,445,809 |
) |
(3,787,969 |
) |
(5,746,541 |
) |
||||
Total shareholders equity |
|
$ |
6,498,026 |
|
$ |
6,498,026 |
|
$ |
6,324,158 |
|
$ |
6,324,158 |
|
A summary of the significant effects of the restatement on the Companys earnings per share for the years ended December 29, 2002 and December 28, 2003 follows:
|
|
Year Ended December 29, 2002 |
|
Year Ended December 28, 2003 |
|
||||||||
|
|
As previously reported |
|
As restated |
|
As previously reported |
|
As restated |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Net loss |
|
$ |
(216,217 |
) |
$ |
(216,217 |
) |
$ |
(1,502,584 |
) |
$ |
(1,502,584 |
) |
Less dividends to preferred shareholders |
|
(71,999 |
) |
(2,030,571 |
) |
(712,854 |
) |
(712,854 |
) |
||||
Net loss available to common shareholders |
|
(288,216 |
) |
(2,246,788 |
) |
(2,215,438 |
) |
(2,215,438 |
) |
||||
|
|
|
|
|
|
|
|
|
|
||||
Loss per common share, basic and diluted |
|
$ |
(0.08 |
) |
$ |
(0.59 |
) |
$ |
(0.56 |
) |
$ |
(0.56 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding, basic and diluted |
|
3,815,364 |
|
3,815,364 |
|
3,923,560 |
|
3,923,560 |
|
Unless otherwise expressly stated, these financial statements are presented inclusive of these revisions.
20
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Louis Park, State of Minnesota on December 21, 2004.
|
GRANITE CITY FOOD & BREWERY LTD. |
||
|
|
|
|
|
By |
/s/ Steven J. Wagenheim |
|
|
|
Steven J. Wagenheim |
|
|
|
President and Chief Executive Officer |
|
|
|
(Principal Executive Officer) |
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant, and in the capacities and on the date indicated.
Signature |
|
Title |
|
Date |
|
|
|
|
|
/s/ Steven J. Wagenheim |
|
President, Chief Executive Officer |
|
December 21, 2004. |
Steven J. Wagenheim |
|
and Director (Principal Executive |
|
|
|
|
Officer) |
|
|
|
|
|
|
|
/s/ Monica A. Underwood |
|
Interim Chief Financial Officer and |
|
December 21, 2004. |
Monica A. Underwood |
|
Corporate Controller (Principal Financial |
|
|
|
|
Officer and Principal Accounting Officer) |
|
|
|
|
|
|
|
* |
|
Chairman of the Board, Brewmaster |
|
|
William E. Burdick |
|
and Director |
|
|
|
|
|
|
|
* |
|
Director |
|
|
Arthur E. Pew III |
|
|
|
|
|
|
|
|
|
* |
|
Director |
|
|
James G. Gilbertson |
|
|
|
|
|
|
|
|
|
* |
|
Director |
|
|
Bruce H. Senske |
|
|
|
|
|
|
|
|
|
* |
|
Director |
|
|
Eugene E. McGowan |
|
|
|
|
|
|
|
|
|
|
|
Director |
|
|
Dermot F. Rowland |
|
|
|
|
* |
By |
/s/ Steven J. Wagenheim |
|
|
|
|
December 21, 2004. |
|
|
Steven J. Wagenheim |
|
|
|
|
|
|
|
Attorney-in-fact |
|
|
|
|
21
Exhibit |
|
Description |
|
|
|
3.1 |
|
Articles of Incorporation of the Registrant, as amended (incorporated by reference to our Quarterly Report on Form 10-QSB, filed on November 13, 2002 (File No. 0-29643)). |
3.2 |
|
By-laws of the Registrant (incorporated by reference to our Registration Statement on Form SB-2, filed on December 22, 1999 (File No. 333-93459)). |
4.1 |
|
Reference is made to Exhibits 3.1 and 3.2. |
4.2 |
|
Specimen common stock certificate (incorporated by reference to our Current Report on Form 8-K, filed on September 20, 2002 (File No. 0-29643)). |
4.3 |
|
Form of Warrant Agreement (incorporated by reference to our Current Report on Form 8-K, filed on September 20, 2002 (File No. 0-29643)). |
4.4 |
|
Specimen unit certificate (incorporated by reference to our Current Report on Form 8-K, filed on September 20, 2002 (File No. 0-29643)). |
4.5 |
|
Amendment No. 1 to Warrant Agreement (including specimen Class A Warrant certificate) (incorporated by reference to our Current Report on Form 8-K, filed on September 20, 2002 (File No. 000-29643)). |
10.1 |
|
1997 Stock Option Plan (incorporated by reference to our Registration Statement on Form SB-2, filed on December 22, 1999 (File No. 333-93459)). |
10.2 |
|
1997 Director Stock Option Plan, as amended and restated effective September 26, 2001 (incorporated by reference to our Definitive Schedule 14A (Proxy Statement), filed on October 5, 2001 (File No. 0-29643)). |
10.3 |
|
2002 Equity Incentive Plan (incorporated by reference to our Definitive Schedule 14A (Proxy Statement), filed on August 2, 2002 (File No. 0-29643)). |
10.4 |
|
Employment Agreement between the Registrant and Steven J. Wagenheim, dated December 14, 1999 (incorporated by reference to our Registration Statement on Form SB-2, filed on December 22, 1999 (File No. 333-93459)). |
10.5 |
|
Employment Agreement between the Registrant and William E. Burdick, dated December 14, 1999 (incorporated by reference to our Registration Statement on Form SB-2, filed on December 22, 1999 (File No. 333-93459)). |
10.6 |
|
Lease by and between the Registrant and St. Cloud Investments L.L.P., dated July 29, 1998 (including Addendum to Lease and Guaranty) (incorporated by reference to our Registration Statement on Form SB-2, filed on December 22, 1999 (File No. 333-93459)). |
10.7 |
|
Lease by and between the Registrant and GCI Capital, Inc., dated May 19, 1999 (incorporated by reference to our Registration Statement on Form SB-2, filed on December 22, 1999 (File No. 333-93459)). |
10.8 |
|
Agreement to Lease between the Registrant and Barclay, Ltd., effective November 14, 1999 (incorporated by reference to our Registration Statement on Form SB-2, filed on December 22, 1999 (File No. 333-93459)). |
10.9 |
|
License Purchase Agreement by and between the Registrant and CNJ Distributing Corp., dated December 20, 1999 (incorporated by reference to our Registration Statement on Form SB-2, filed on December 22, 1999 (File No. 333-93459)). |
10.10 |
|
Amendment to License Purchase Agreement by and between the Registrant and CNJ Distributing Corp., dated January 18, 2000 (incorporated by reference to Amendment No. 2 of our Registration Statement on Form SB-2, filed on February 22, 2000 (File No. 333-93459)). |
10.11 |
|
Lease by and between the Registrant and Sioux Falls Investments, L.L.P., dated June 14, 2000 (including Guaranty) (incorporated by reference to our Quarterly Report on Form 10-QSB, filed on August 4, 2000 (File No. 0-29643)). |
10.12 |
|
Ground Lease by and between the Registrant and West Acres Development, LLP, dated January 18, 2001 (incorporated by reference to our Annual Report on Form 10-KSB, filed on April 2, 2001 (File No. 0-29643)). |
10.13 |
|
Capital Equipment Lease by and between the Registrant and the GCI Capital, Inc., dated June 15, 2001 (incorporated by reference to our Quarterly Report on Form 10-QSB, filed on August 9, 2001 (File No. 0-29643)). |
10.14 |
|
Loan Agreement by and between the Registrant and First National Bank, Pierre, South Dakota, dated July 19, 2001 (incorporated by reference to our Quarterly Report on Form 10-QSB, filed on August 9, 2001 (File No. 0-29643)). |
22
10.15 |
|
Agreement Concerning Guaranty by and between the Registrant and Steven Wagenheim, Arthur E. Pew III and William Burdick, dated July 17, 2001 (incorporated by reference to our Quarterly Report on Form 10-QSB, filed on August 9, 2001 (File No. 0-29643)). |
10.16 |
|
Promissory Note in the principal amount of $100,000.00, issued by the Registrant, Maker, to New Brighton Ventures, Inc., Payee, dated February 27, 2002 (incorporated by reference to our Annual Report on Form 10-KSB, filed on March 28, 2003 (File No. 0-29643)). |
10.17 |
|
Promissory Note in the principal amount of $100,000.00, issued by the Registrant, Maker, to New Brighton Ventures, Inc., Payee, dated May 1, 2002 (incorporated by reference to our Annual Report on Form 10-KSB, filed on March 28, 2003 (File No. 0-29643)). |
10.18 |
|
Subscription Agreement and Letter of Investment Intent between the Registrant and Bluestem Capital Partners III Limited Partnership, dated July 25, 2002 (incorporated by reference to our Quarterly Report on Form 10-QSB, filed on November 13, 2002 (File No. 0-29643)). |
10.19 |
|
Subscription Agreement and Letter of Investment Intent between the Registrant and Brew Buddies, L.L.C., dated October 1, 2002 (incorporated by reference to our Quarterly Report on Form 10-QSB, filed on November 13, 2002 (File No. 0-29643)). |
10.20 |
|
Subscription Agreement and Letter of Investment Intent between the Registrant and Andrew J. Redleaf, dated September 27, 2002 (incorporated by reference to our Quarterly Report on Form 10-QSB, filed on November 13, 2002 (File No. 0-29643)). |
10.21 |
|
Form of Common Stock Purchase Warrant issued to Purchasers of Series A Convertible Preferred Stock (incorporated by reference to our Quarterly Report on Form 10-QSB, filed on November 13, 2002 (File No. 0-29643)). |
10.22 |
|
Form of Common Stock Purchase Warrant issued to Aethlon Capital, LLC and NDX Financial Services (incorporated by reference to our Quarterly Report on Form 10-QSB, filed on November 13, 2002 (File No. 0-29643)). |
10.23 |
|
Development Agreement between Donald A. Dunham, Jr. and the Registrant, dated October 22, 2002 (incorporated by reference to our Annual Report on Form 10-KSB, filed on March 28, 2003 (File No. 0-29643)). |
10.24 |
|
Assignment Agreement among Donald A. Dunham, Jr., Dunham Capital Management, L.L.C. and the Registrant, dated October 22, 2002 (incorporated by reference to our Annual Report on Form 10-KSB, filed on March 28, 2003 (File No. 0-29643)). |
10.25 |
|
Correspondence from Dunham Capital Management, L.L.C., dated March 17, 2003 (incorporated by reference to our Annual Report on Form 10-KSB, filed on March 28, 2003 (File No. 0-29643)). |
10.26 |
|
Form of Common Stock Purchase Warrant issued to R.J. Steichen & Company (incorporated by reference to our Registration Statement on Form SB-2/A, filed on May 15, 2000 (File No. 333-93459)). |
10.27 |
|
Form of Non-Qualified Stock Option Agreement between the Registrant and certain employees of the Registrant, dated December 27, 2001 (incorporated by reference to our Annual Report on Form 10-KSB, filed on March 28, 2003 (File No. 0-29643)). |
10.28 |
|
Loan Agreement between Granite City Food & Brewery Ltd. and First National Bank, dated August 28, 2003 (incorporated by reference to our Quarterly Report on Form 10-QSB, filed on November 12, 2003 (File No. 0-29643)). |
10.29 |
|
Term Note for the principal sum of $750,000 issued by Granite City Food & Brewery Ltd., Maker, to First National Bank, Payee, dated August 28, 2003 (incorporated by reference to our Quarterly Report on Form 10-QSB, filed on November 12, 2003 (File No. 0-29643)). |
10.30 |
|
Security Agreement between Granite City Food & Brewery Ltd. and First National Bank, dated August 28, 2003 (incorporated by reference to our Quarterly Report on Form 10-QSB, filed on November 12, 2003 (File No. 0-29643)). |
23 |
|
Consent of Independent Auditors. |
24 |
|
Powers of Attorney (included on signature page to Form 10-KSB). * |
31.1 |
|
Certification by Steven J. Wagenheim, President and Chief Executive Officer of the Company, pursuant to Exchange Act Rule 13a-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2 |
|
Certification by Monica A. Underwood, Interim Chief Financial Officer and Corporate Controller of the Company, pursuant to Exchange Act Rule 13a-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
23
32.1 |
|
Certification by Steven J. Wagenheim, President and Chief Executive Officer of the Company, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2 |
|
Certification by Monica A. Underwood, Interim Chief Financial Officer and Corporate Controller of the Company, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
* Previously filed.
24