UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 12, 2008
MONARCH SERVICES, INC.
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(Exact name of registrant as specified in its charter)
Maryland 000-08512 52-1073628
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(State or other jurisdiction (Commission file number) (IRS Employer
of incorporation or organization) Identification No.)
4517 Harford Road, Baltimore, Maryland 21214
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (410) 254-9200
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligations of the registrant under any
of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 7.01 Regulation FD Disclosure
The Company is filing this Current Report on 8-K to update the public of the
registrant's plans for the near future.
In 2005, Monarch Services, Inc. (the "Company") began experiencing declining
sales, dwindling cash reserves and increasing expenses, all at an escalating
rate. The Board of Directors determined that the Company should close and
sell its restaurant operations and adjoining properties and sell its magazine
publishing business. However, due to the slowing economy, the declining real
estate market and delays inherent in dealing with local government, completing
these sales has taken a great deal of time and involved a great deal of
expense.
On June 27, 2006, the Company closed its restaurant business, Peerce's
Plantation, a 350 seat fine dining restaurant, catering facility and bar with
liquor license permitting off premise sales, because the restaurant incurred
losses in each quarter since its opening and had never been profitable.
On August 18, 2006, the Company, through it's wholly owned subsidiary, TNK,
Inc., formerly known as Girls Life, Inc. ("TNK"), sold the assets used in
connection with the business of publishing, promoting and distributing Girls'
Life magazine (the "Magazine") to Girls' Life Acquisition Corp. ("GLAC"), a
corporation owned by Karen Bokram, an employee of the Magazine who was the
Magazine's editor since its inception. The purchase price for the assets was
$900,000, which was paid in the form of a promissory note (the "Note"), plus
the assumption of certain liabilities. The outstanding balance on the Note
is $600,000, plus $58,000 in interest. On October 18, 2007, the Note became
due and payable. As of September 12, 2008, TNK has not received any payments
owed by GLAC under the Note. Ms. Bokram and the Company have been in
discussions, and she has advised the Company that she is continuing to work
toward refinancing GLAC. TNK is considering the best course of action,
balancing enforcing its rights under the Note , including a possible sale of
the Note, versus a payment arrangement in the event GLAC obtains additional
equity or debt financing, or a joint arrangement with GLAC's senior lender.
The Company has had no business operations since the sale of the Magazine in
2006. After several years of searching for a buyer in a declining real estate
market, on February 14, 2008, the Company finally was able to sell 100% of the
Company's membership interest in (i) Peerce's Plantation GL, LLC, and (ii)
Peerce's Plantation Liquor License, LLC (the "Membership Interests"). Peerce's
Plantation GL, LLC owned the parcel of land on which Peerce's Plantation
restaurant formerly operated its business, and Peerce's Plantation Liquor
License, LLC owned the liquor license used in connection with the restaurant
business. The gross sales price for the Membership Interests was $1,600,000.
Net of closing costs, the Company received $1,522,789 in cash from the sale
of the membership interests.
The Company's remaining asset is the land and home properties adjoining the
Peerce's Plantation property. The Company has been in negotiations with
potential buyers for over two years in an effort to sell these properties.
Currently, the most likely buyer is ordering third appraisals on the
properties. The Company is hopeful that the sale of these properties could
be completed before the end of the calendar year, however, the Company cannot
offer any guarantees as to when the sale will occur, if at all, and any sale
is still subject to entering into an acceptable sales agreement.
The Company plans to distribute all proceeds from the sales of the Company's
assets, less expenses, to its shareholders.
The Company also is not current in its filings with the Securities and Exchange
Commission. The Company has not filed an Annual Report on Form 10-KSB for any
year subsequent to the year ending April 30, 2006, nor quarterly reports on
Form 10-QSB for any period subsequent to the quarter ending January 31, 2007.
The Company became delinquent in its filings with the SEC primarily because of
the lack of the financial resources to pay past due audit invoices to the
Company's independent registered public accounting firm, which was prohibited
under ethics rules from performing subsequent audits until all unpaid invoices
were paid. Following the sale of Peerce's Plantation, the Company paid all of
its outstanding invoices to the accounting firm. The Company has estimated that
to bring its delinquent filings current may cost the Company approximately
$250,000 in accounting, legal and other fees. Because the Company plans to
liquidate the Company's assets, the Company does not believe it is in the
best interests of its shareholders to bring its filings current.
The following unaudited consolidated financial statements sets forth the
Company's Statement of Financial Condition as of April 30, 2008 and the
Statement of Operations for the fiscal years ending April 30, 2008 and 2007,
respectively.
Monarch Services, Inc.
Consolidated Statement of Financial Condition (unaudited)
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At April 30, 2008
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(In thousands, except shares outstanding data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 698
Other prepaid expenses 33
Note receivable from GLAC - net of
allowance for doubtful account
of $600,000 0
Assets held for sale 941
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TOTAL CURRENT ASSETS 1,672
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PROPERTY AND EQUIPMENT
Machinery, equipment, furniture and
fixtures 48
Leasehold improvements 324
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372
Less accumulated depreciation (335)
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TOTAL PROPERTY AND EQUIPMENT - NET 37
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TOTAL ASSETS $ 1,709
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 11
Accrued expenses 25
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TOTAL CURRENT LIABILITIES 36
STOCKHOLDERS' EQUITY
Common Stock-par value $.001 per share:
Authorized - 10,000,000 shares;
shares outstanding 1,619,620 2
Capital surplus 3,781
Retained deficit (2,110)
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TOTAL STOCKHOLDERS' EQUITY 1,673
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,709
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Monarch Services, Inc.
Consolidated Statements of Operations (unaudited)
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Years Ended April 30, 2008 2007
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(In thousands, except shares outstanding data)
Net Sales $ 0 $ 0
Cost of goods sold 0 0
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Gross profit from continuing
operations 0 0
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Selling, general and administrative
expenses 479 618
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Loss before other income and
income taxes (479) (618)
Other income:
Investment and interest income 42 35
Other 13 0
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55 35
Gain on disposal of assets from
"Monarch Services, Inc." (net
of income tax benefit of $0)
for the year ended April 30,
2008 and 2007, respectively 1 50
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1 50
Loss from continuing operations
before income tax benefit (423) (533)
Income tax expense 0 0
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Net loss from continuing operations (423) (533)
Discontinued Operations:
Operating loss from Peerce's
Plantation (net of income tax
of $0 and $0) for the year
ended April 30, 2008 and
2007, respectively (61) (106)
Operating loss from Girls' Life
(net of income tax of $0 and $0)
for the year ended April 30,
2007 0 (89)
Gain on sale of Girls' Life magazine
(net of income tax expense of
$140) for the year ended April
30, 2007 0 2,346
Gain on disposal of assets from
Peerce's Plantation (net of
income tax benefit of $0) for
for the year ended April 30,
2007 0 10
Loss on sale of Peerce's Plantation
(net of income tax benefit of
$0) for the year ended April
30, 2008 (534) 0
Bad debt expenses recognized on write
off of GLAC note receivable and
accrued interest (658) 0
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(Loss) Gain from discontinued operations (1,253) 2,161
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Net loss $ (1,676) $ 1,628
Other comprehensive income
net of tax 0 0
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Comprehensive (loss) Income $ (1,676) $ 1,628
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Net loss per common share -
basic and diluted:
Loss from continuing operations
per share $ (.26) $ (.33)
(loss) Gain from discontinued operations (.77) 1.34
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(Loss) Gain per common share -
basic and diluted $ (1.03) $ 1.01
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Dividends per share $ .00 $ .00
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Weighted average number of shares
outstanding - basic and diluted 1,619,620 1,619,620
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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 hereunto duly authorized.
MONARCH SERVICES, INC.
Date: September 12, 2008 by: /s/ Jackson Y. Dott
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Jackson Y. Dott
President and CEO