SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
[ X ] Quarterly report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended November 8, 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 0-21598
OLD AMERICA STORES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3487813
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
811 NORTH COLLINS FREEWAY
Highway 75 North
PO BOX 370
HOWE, TEXAS 75459
(Address of principal executive offices)
(903)532-3000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months (or such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past ninety days.
Yes [ ] No [X]
At December 12, 1997, an aggregate of 3,530,727 shares of the registrant's
Common Stock, value of $ .01 each (the "Common Stock"), and 1,012,842 shares of
registrant's Nonvoting Common Stock, value of $ .01 each (the "Nonvoting Common
Stock"), were outstanding.
OLD AMERICA STORES, INC. AND SUBSIDIARIES
(DEBTOR-IN-POSSESSION)
Table of Contents
Page
- - --------------------------------------------------------------------------------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets -
November 8, 1997 and January 31, 1997 3
Condensed Consolidated Statements of Operations -
Sixteen weeks and year-to-date ended
November 8, 1997 and November 2, 1996 4
Condensed Consolidated Statements of Cash Flows -
Year-to-date ended November 8, 1997 and November 2, 1996 5
Notes to Condensed Consolidated Financial Statements 6-10
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities (no response required)
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders (no response
required)
Item 5. Other Information (no response required)
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES 13
2
OLD AMERICA STORES, INC.
(DEBTOR-IN-POSSESSION)
CONDENSED CONSOLIDATED BALANCE SHEETS
- - --------------------------------------------------------------------------------
November 8, 1997 January 31, 1997
----------------------------------
ASSETS (Unaudited)
CURRENT ASSETS:
Receivables, net of allowance $ 3,110,159 $ 5,947,955
Merchandise inventories 42,592,587 56,906,255
Prepaid expenses and other 2,433,662 1,891,893
------------ -----------
Total current assets 48,136,408 64,746,103
------------ -----------
Property and equipment, at cost, net 14,482,731 17,755,770
Intangible assets and deferred charges, net 52,141 13,639,227
Other assets 421,148 482,916
------------ -----------
$ 63,092,428 $96,624,016
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current debt $ 26,876,872 $ -
Accounts payable 3,678,047 21,813,553
Accrued salaries and wages 945,931 1,190,131
Other accrued liabilities 2,400,660 3,510,308
Current obligations under capital leases 7,229 29,043
Deferred income taxes - 65,000
------------ -----------
Total current liabilities 33,908,739 26,608,035
------------ -----------
Liabilities subject to compromise 20,095,175 -
------------ -----------
Long-term debt - 23,570,850
Deferred income taxes - 947,000
------------ -----------
Total long-term liabilities - 24,517,850
------------ -----------
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Common stock, par value $.01; 6,000,000
shares authorized, 3,530,727 and 3,514,500
shares issued and outstanding 35,307 35,145
Nonvoting common stock, par value $.01;
1,500,000 shares authorized; 1,012,842
shares issued and outstanding 10,128 10,128
Additional paid-in capital 42,385,939 42,350,728
Retained earnings (deficit) (33,342,860) 3,102,130
------------ -----------
Total stockholders' equity 9,088,514 45,498,131
------------ -----------
$ 63,092,428 $96,624,016
============ ===========
See notes to condensed consolidated financial statements.
3
OLD AMERICA STORES, INC.
(DEBTOR-IN-POSSESSION)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
- - --------------------------------------------------------------------------------
QUARTER ENDED YEAR-TO-DATE ENDED
--------------------------- ---------------------------
NOVEMBER 8, NOVEMBER 2, NOVEMBER 8, NOVEMBER 2,
1997 1996 1997 1996
--------------------------- ---------------------------
Net sales $25,128,577 $37,900,615 $ 75,648,212 $89,984,471
----------- ----------- ------------ -----------
Cost of goods sold (including
occupancy costs) 18,716,637 24,136,350 59,483,234 56,632,045
----------- ----------- ------------ -----------
Gross profit 6,411,940 13,764,265 16,164,978 33,352,426
----------- ----------- ------------ -----------
Selling, general and
administrative expenses 10,932,575 13,272,305 30,300,930 31,036,490
Depreciation expense 916,839 805,726 2,462,349 2,007,613
Amortization expense 938,685 159,031 1,153,940 400,340
Restructuring charges 1,015,580 - 18,598,293 -
----------- ----------- ------------ -----------
Loss before interest and taxes (7,391,739) (472,797) (36,350,534) (92,017)
Interest expense, net 696,905 569,876 1,633,707 1,268,139
----------- ----------- ------------ -----------
Loss before income taxes (8,088,644) (1,042,673) (37,984,241) (1,360,156)
Income taxes - (430,000) (1,539,252) (553,000)
----------- ----------- ------------ -----------
Net loss $(8,088,644) $ (612,673) $(36,444,989) $ (807,156)
=========== =========== ============ ===========
Weighted average shares
outstanding 4,542,558 4,526,815 4,542,892 4,521,558
=========== =========== ============ ===========
Earnings per share:
Net loss per share $ (1.78) $ (0.14) $ (8.02) $ (0.18)
=========== =========== ============ ===========
See notes to condensed consolidated financial statements.
4
OLD AMERICA STORES, INC.
(DEBTOR-IN-POSSESSION)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
- - --------------------------------------------------------------------------------
YEAR-TO-DATE ENDED
------------------------------------
NOVEMBER 8, 1997 NOVEMBER 2, 1996
------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(36,444,989) $ (807,156)
Adjustments to reconcile net loss to net
cash used for operating activities:
Depreciation and amortization 2,749,622 2,407,953
Provision for deferred taxes (1,012,000) (416,323)
Gain on sale of equipment - (198,841)
Restructuring charges 17,304,562 -
Cash used for restructuring items:
Professional fees 736,759 -
Payroll expenses 385,005 -
Other 171,967 -
Changes in assets and liabilities:
Decrease (increase) in receivables 2,485,740 (2,005,456)
Decrease (increase) in merchandise inventories 13,502,153 (13,654,055)
Increase in prepaid expenses and other (744,969) (187,446)
Increase in other assets (239,204) (367,309)
Increase (decrease) in accounts payable (1,046,225) 10,193,279
Decrease (increase) in other accrued liabilities (757,751) 8,554
------------ ------------
Net cash used for operating activities (2,909,330) (5,026,800)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (410,251) (3,747,902)
Proceeds from sale of equipment - 300,000
------------ ------------
Net cash used for investing activities (410,251) (3,447,902)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving loan, net 3,306,022 8,792,199
Proceeds from sale of equity securities 35,373 91,934
Payments under capital leases (21,814) (19,409)
------------ ------------
Net cash provided by financing activities 3,319,581 8,864,724
------------ ------------
Net increase (decrease) in cash - 390,022
Cash, beginning of period - 1,239,117
------------ ------------
Cash, end of period - $ 1,629,139
============ ============
See notes to condensed consolidated financial statements.
5
OLD AMERICA STORES, INC.
(DEBTOR-IN-POSSESSION)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- - --------------------------------------------------------------------------------
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements include the accounts of OLD
AMERICA STORES, INC., a Delaware corporation ("Old America"), and its wholly-
owned subsidiaries, OLD AMERICA STORE, INC., a Texas corporation ("Store"), and
OLD AMERICA WHOLESALE, INC., a Delaware corporation ("Wholesale") (Old America,
Store and Wholesale, collectively, the "Company"). All material intercompany
balances and transactions have been eliminated. The Company is a specialty
retailer of home decorating products and arts and crafts items with 83 operating
retail locations in 22 states throughout the United States as of the end of its
third quarter, November 8, 1997.
In the opinion of the Company's management, the accompanying unaudited
condensed consolidated financial statements include all adjustments (consisting
of normal, recurring adjustments except as discussed in note 4) that the Company
considers necessary for a fair presentation, in accordance with generally
accepted accounting principles, of the consolidated financial position of the
Company and its subsidiaries at November 8, 1997, and the results of their
operations for the quarter and year-to-date and cash flows for the year-to-date
ended November 8, 1997, and November 2, 1996. These results are not necessarily
indicative of the results to be expected for the current fiscal year.
The consolidated financial information presented herein should be read
in conjunction with the audited consolidated financial statements and the notes
thereto for the fiscal years ended January 31, 1997 and 1996, included in the
Company's Annual Report on Form 10-K (File No. 0-21598) dated May 1, 1997.
The Company reports its financial results on the basis of thirteen
periods. The third quarter began on July 20, 1997 and ended on November 8, 1997.
The first, second and fourth quarters each year include three periods. The third
quarter includes four periods. The actual number of selling days in each period
may vary from year to year.
2. BANKRUPTCY FILING
On August 11, 1997, the Company filed a voluntary petition for
reorganization under Chapter 11 of the United States Bankruptcy Code (the
"Bankruptcy Code") in the United States Bankruptcy Court for the District of
Delaware, (the "Bankruptcy Court"). Prior to the sale transaction discussed in
Note 8 below, the Company had been operating its business as a debtor-in-
possession under the supervision of the Bankruptcy Court.
As of the Petition Date, actions to collect pre-petition indebtedness
are stayed and other contractual obligations may not be enforced against the
Company. In addition, under the Bankruptcy Code, the Company may reject leases
and executory contracts. Parties affected by these rejections may file claims
with the Bankruptcy Court in accordance with the reorganization process.
6
OLD AMERICA STORES, INC.
(DEBTOR-IN-POSSESSION)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
- - --------------------------------------------------------------------------------
The Company's Bankruptcy filing was precipitated by a number of
factors. Deep discounting in the fourth quarter of 1996 eroded margins and
reduced liquidity. The reduction in cash flow greatly increased the level of
vendor payables at 1996 year-end and resulted in higher than normal past due
invoices. Vendors responded to the past due situation by reducing shipments in
the first and second quarters of 1997, which slowed sales and further decreased
liquidity. In addition, the Company recorded an inventory shrink estimate of
$2.9 million at the end of the first quarter based on physical inventory results
at twenty-one of the Company's retail locations. This accrual reduced the
Company's borrowing base and further limited the Company's ability to pay
vendors. In late June, management unsuccessfully attempted to convince trade
creditors to ship goods under a proposal which required vendors to defer payment
on past due balances until September through December, 1997. Finally, the
Company was in default with respect to its bank line throughout a significant
portion of the second quarter and operated under a forbearance agreement until
it filed for Chapter 11 bankruptcy on August 11, 1997.
3. GOING CONCERN
The Company incurred net losses without regard to the restructuring
charges (discussed in note 4) of $7,073,000 for the quarter ended November 8,
1997 and $17,752,000 for the year-to-date ended November 8, 1997. The Company
closed sixteen stores and sold the inventory at three stores to an outside group
conducting going-out-of-business sales. The Company's Chapter 11 filing,
liquidity issues, continuing operating losses and the Company present non-
compliance with bank covenants which have remained uncured raise substantial
doubt about the Company's ability to continue as a going concern. In addition,
effective October 10, 1997 the Company was notified by NASDAQ that it no longer
qualifies for inclusion in the national market system .
In November 1997, the Company engaged an investment banking firm to
assist the Company in identifying a buyer for the Company. As discussed in Note
8, the assets of the company were sold on January 21, 1998.
The Company's financial statements for the quarter ended November 8,
1997 have been prepared on a going concern basis which contemplates the
realization of assets and the settlement of liabilities and commitments in the
normal course of business with the exception of the restructuring charges
discussed in note 4 and financing cost as discussed in note 7. The financial
statements do not reflect any adjustments that might result from the outcome of
this uncertainty.
4. RESTRUCTURING CHARGES
As a result of the Company's continuing evaluation of the carrying
value of its long-lived tangible and intangible assets, additional losses from
operations in the second quarter and other factors discussed in note 3, the
Company recorded restructuring charges of $17,583,000 in the second quarter and
$1,016,000 in the third quarter of 1997.
7
OLD AMERICA STORES, INC.
(DEBTOR-IN-POSSESSION)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
- - --------------------------------------------------------------------------------
These charges are summarized as follows:
Write-off of goodwill $13,160,000
Write-off of net book value of assets for closed stores 3,855,000
Other restructuring charges 1,583,000
-----------
Total restructuring charges $18,598,000
===========
As a result of recent significant losses recorded by the Company and
the attendant uncertainty regarding the Company's reorganization proceedings,
management of the Company and the Board of Directors concluded that goodwill
previously recorded had been permanently impaired and, therefore, should be
written off. The net book value of goodwill charged to operations was
$13,160,000.
As part of the Company's restructuring program, management closed
sixteen unprofitable stores in June and July 1997 and an additional three stores
in October 1997. The inventory at these stores was sold to the NASSI Group, LLC
at 31% of retail value. For the closed and GOB stores, the Company has recorded
a charge to earnings as part of its restructuring costs equal to the sum of 1)
the net book value of fixtures and equipment, 2) all remaining unpaid lease
payments through the remaining term of the lease, and 3) the write off of all
other assets which have no future value subsequent to the store closure date.
Such amounts aggregated $3,855,000.
5. INVENTORIES
As a result of inventory shrink experienced at the end of the first
quarter in twenty-one retail locations, management accrued inventory shrink
equal to 2% of sales for all stores not inventoried at quarter one. Management
also made the decision to take physical inventories at all remaining stores in
quarter two. The results of those physical counts disclosed an average shrink
of 2.4% of sales since each store's last count. In December 1997, the Company
took physical inventories at 33 stores which resulted in an aggregate gain of
1.5% of sales since the last inventories.
6. INCOME TAXES
While the Company has recorded significant operating losses year-to-
date, the Company is unable to recognize the tax benefits from such losses in
the accompanying financial statements since there is no assurance of future
realization of such benefits. Therefore, income tax expense has not been
recorded in the third quarter.
8
OLD AMERICA STORES, INC.
(DEBTOR-IN-POSSESSION)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
- - --------------------------------------------------------------------------------
7. LONG-TERM DEBT
On August 12, 1997, the Company obtained Debtor-in-Possession (DIP)
financing from GBFC/BankBoston. The proceeds from this financing were used to
pay off the Company's existing lenders and provide working capital to the
Company. The financing consisted of a $30 million revolving credit facility (the
"Revolver") and $5 million in term loans (the "Term Loans"). The Revolver
provided for advances equal to 65% of eligible inventory, as defined. The Term
Loans require no principal payment until January 1, 1998 at which time monthly
installments of $211,111 were due and payable. Both the Revolver and Term Loans
bear interest equal to GBFC/BankBoston Base Rate (8.59% on August 11, 1997) plus
.625%. These facilities were scheduled to become due and payable at the earlier
of 1) August 11, 1999, 2) emergence from Chapter 11 Bankruptcy or 3) any default
under the financing agreement.
In order to obtain the DIP financing, the Company agreed to pay a
$700,000 commitment fee of which $500,000 was paid upon closing of the facility
with the balance payable in one year. In addition, a facility fee of $200,000
(payable in monthly installments of $8,333.33 each) and a yearly fee of 25 basis
points (.25%) on the unused portion of the Revolver were incurred. All amounts
borrowed under the Revolver and Term Loans are secured by the assets of the
Company. At the end of the third quarter the Company was not in compliance with
certain loan covenants. Accordingly, the revolving and term loans are classified
as current liabilities on the Balance Sheet as of November 8,1997. In addition,
the loan commitment fee ($700,000) and facility fee ($200,000) were recorded as
financing costs in the Company's Statement of Operations in the third quarter.
Although, GBFC/BankBoston has continued to fund the Company's cash flow needs
for operating expenses, the Company was forced to suspend payments to its
vendors commencing in early December 1997. Consequently, the Company received
almost no inventory since that time. GBFC/BankBoston substantially reduced the
Company's loan availability by: (I) reducing the borrowing base for an
additional shrink reserve of $500,000, (ii) requiring a 1998 Ad Valorem tax
reserve of $437,000 during the month of December 1997 as a reduction in the
borrowing base, and (iii) phase in a reduction in the advance rate to 50% in
December 1997.
Effective December 1, 1997, GBFC/BankBoston had also increased its
interest rate on the revolver and term facilities to 12.125%, the default rate
provided in its agreement.
8. SUBSEQUENT EVENTS
On January 16, 1998, the bankruptcy court approved the sale of all assets of the
Company and its subsidiaries to Old America Stores, LP and KOB, LP in exchange
for cash, used primarily to pay off all secured indebtedness, and the assumption
of substantially all post petition liabilities of the Company and its
subsidiaries. The purchase price was determined through arms-length negotiations
between the parties. The purchase price did not provide for any payment to pre-
petition creditors or stockholders. Accordingly, there will be no value for the
stockholders of the Company. As a result of
9
OLD AMERICA STORES, INC.
(DEBTOR-IN-POSSESSION)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
- - --------------------------------------------------------------------------------
the sale, the Company and its subsidiaries have terminated operations and is in
the process of liquidating and winding up their affairs. The transaction closed
on January 21, 1998.
As discussed in the Company's 1996 Annual Report on Form 10-K, the
Company and a former officer and director are named defendants in a lawsuit
which alleges breach of contract and fraud. The Company is a party to a
settlement agreement between the Company, the plaintiff and the Company's
insurance carrier whereby the Company has agreed to pay $50,000 in exchange for
full release of all claims against the Company and its former officer. The
settlement has been approved by the Company's bankruptcy court and is pending
approval of the plaintiff's bankruptcy court.
10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Third Quarter 1997 Compared to Third Quarter 1996
- - -------------------------------------------------
Net Sales. Net sales for the third quarter ended November 8, 1997, decreased by
$12,772,000 or 33.7% to $25,129,000 from $37,901,000 for the quarter ended
November 2, 1996. Comparable store sales for the quarter were down 28.8% over
the third quarter in the prior year. Comparable store sales have continued to
deteriorate as a result of higher out-of-stock positions and reduced advertising
as compared to the prior year.
Gross Profit. Gross profit for the third quarter decreased 53.4% or $7,352,000
to $6,412,000 or 25.5% of net sales, from $13,764,000 or 36.3% of net sales in
1996. The 11.2% decrease in gross profit as a percent of net sales is primarily
attributable to (i) an increase in the accrual for inventory shrinkage which
reflects actual results achieved during the first half of the year, (ii) a
significant decline in the amount of expenses that can be capitalized into
inventory due to a reduction in purchasing from the prior year, (iii) an
increase in rent expense as a percent to sales (although the dollar amount
declined, the percentage increase is due to reduction in leverage from lower
sales) and (iv) a loss on sale of inventory to an outside liquidation company in
three stores to be closed ($435,000).
Selling, General and Administrative Expenses. Selling, general and
administrative expenses for the third quarter of 1997 decreased $2,339,000 or
17.6% to $10,933,000 or 43.5% of net sales from $13,272,000 or 35.0% of net
sales in 1996. This 8.5% of net sales increase is primarily attributable to an
increase in salaries and wages (5.7%) due to lost leverage from lower sales.
Depreciation Expense. Depreciation expense increased from $806,000 in the third
quarter of 1996, to $917,000 in 1997. This increase is primarily associated
with capitalized costs of new stores incurred since the third quarter of 1996.
Restructuring Charges. Restructuring charges resulting from the bankruptcy
filing during the quarter were recorded. The restructuring charges amounted to
$1,016,000 which represented professional fees ($630,000) and a reserve for
bonuses to certain key employees for remaining through the bankruptcy process
($385,000).
Interest Expense. Interest expense increased from $570,000 in the third quarter
of 1996, to $697,000 in the third quarter of 1997. The growth in interest
expense is due to increased borrowings under the revolving loan facility to
finance the nine new stores in 1996.
Net Income. Net income for the third quarter decreased from a net loss of
$613,000 in the third quarter of 1996 to a loss of $8,089,000 for 1997. This
net loss equates to $1.78 loss per share based on 4,542,558 weighted average
shares outstanding for the third quarter of 1997, as compared to $0.14 loss per
share for the third quarter of 1996 based on 4,526,815 weighted average shares
outstanding.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Capital expenditures for property and equipment amounted to $410,000
for the forty weeks ended November 8, 1997. Such expenditures are related to
normal replacement of store equipment. The Company's inventory has decreased
$14,313,000 from $56,906,000 at January 31, 1997 to
11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
$42,593,000 on November 8, 1997. This decrease reflects the reduction in the
total number of stores, 102 stores at January 31, 1997, down to 83 stores at the
end of the third quarter. In addition, per store inventory has declined from an
average of $558,000 per store at January 31, 1997, to an average of $513,000 per
store at November 8, 1997. This per store decrease reflects a significant
reduction in vendor shipments resulting from higher-than-normal past due
balances for the Company's vendors payable.
At November 8, 1997, long-term and short-term bank debt was $26,877,000, an
increase of $3,306,000 from January 31, 1997. On August 11, 1997, the Company
filed a voluntary petition for reorganization under Chapter 11 of the United
States Bankruptcy Code (the "Bankruptcy Code") in the United States Bankruptcy
Court for the District of Delaware, (the "Bankruptcy Court"). The Company is
currently operating its business as a debtor-in-possession under the supervision
of the Bankruptcy Court. In conjunction with the Chapter 11 filing the Company
obtained debtor-in-possession (DIP) financing from GBFC/BankBoston which
allowed the Company to repay its existing indebtedness and have cash
availability to purchase regular and seasonal merchandise. At the end of the
third quarter the Company was not in compliance on certain loan covenants.
Accordingly, the revolving and term loans are classified as current liabilities
on the Balance Sheet as of November 8,1997. GBFC/BankBoston has agreed to
continue to fund the DIP financing on a discretionary basis (see note 7 to the
financial statements).
On January 16, 1998, the bankruptcy court approved the sale of all
assets of the Company and its subsidiaries to Old America Stores, LP and KOB, LP
in exchange for cash, used primarily to pay off all secured indebtedness, and
the assumption of substantially all post petition liabilities of the Company and
its subsidiaries. The purchase price was determined through arms-length
negotiations between the parties. The purchase price did not provide for any
payment to pre-petition creditors or stockholders. Accordingly, there will be no
value for the stockholders of the Company. As a result of the sale, the Company
and its subsidiaries have terminated operations and are in the process of
liquidating and winding up their affairs. The transaction closed on January 21,
1998.
12
PART II. OTHER INFORMATION
- - ---------------------------
ITEMS 1 AND 3. LEGAL PROCEEDINGS AND DEFAULTS UPON SENIOR SECURITIES
See Part I. Item 2. Management's Discussion and Analysis for a discussion
of these matters.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(2.1) Asset Purchase Agreement between Old America Stores, Inc., and its
subsidiaries and Old America Stores, LP and KOB, LP
(99) Press Release dated January 26, 1998
13
SIGNATURES
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.
OLD AMERICA STORES, INC.
Date: January 29, 1998 By: /s/ Jim D. Schultz
------------------
Jim D. Schultz
Senior Vice President, Secretary,
Treasurer and Chief Financial
Officer (Principal Financial
and Accounting Officer)
14