-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LAsEZv9AeFJYXSRMz9ja1XS5QVr1hwR8EMVzSdkpR8dEUn9eYuxCGgdgtU6WqTXX wuq6VTx1bdOVd+lVHWiDPA== 0001010549-01-500013.txt : 20010418 0001010549-01-500013.hdr.sgml : 20010418 ACCESSION NUMBER: 0001010549-01-500013 CONFORMED SUBMISSION TYPE: 10KSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010417 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RESTAURANT TEAMS INTERNATIONAL INC CENTRAL INDEX KEY: 0000921066 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 752337102 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10KSB SEC ACT: SEC FILE NUMBER: 001-13559 FILM NUMBER: 1604359 BUSINESS ADDRESS: STREET 1: 911 N.W. LOOP 281 STREET 2: SUITE 111 CITY: LONGVIEW STATE: TX ZIP: 75604 BUSINESS PHONE: 903.758.28 MAIL ADDRESS: STREET 1: 911 N.W. LOOP 281 STREET 2: SUITE 111 CITY: LONGVIEW STATE: TX ZIP: 75604 FORMER COMPANY: FORMER CONFORMED NAME: FRESH N LITE INC DATE OF NAME CHANGE: 19971030 10KSB 1 rti10k123100.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-KSB [x] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2000 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission file number 001-13559 --------- Restaurant Teams International, Inc. (Name of small business issuer in its charter) Texas 75-2337102 (State of other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 911 N.W. Loop 281, Suite 111, Longview, Texas 75604 (Address of principal executive offices) (Zip Code) Issuer's telephone number: (903) 295-6800 Securities registered under Section 12(b) of the Exchange Act: Title of each class Name of each exchange on which registered None Securities registered under Section 12(g) of the Exchange Act: Common Stock, par value $.01 (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 [X] No[ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrant's 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. [X] The Issuer's revenues for the most recent fiscal year: $5,911,971. Part III, Items 9 through 12, of Form 10KSB will be incorporated by reference to the Issuer's definitive proxy statement for its annual meeting of shareholders to be held in July 2001. The aggregate market value of common stock held by non-affiliates of the registrant based on the sale trade price of the common stock as reported on the OTC-BB on April 12, 2000 was $2,333,379. For purposes of this computation, all officers, directors, and 10% beneficial owners of registrant are deemed to be affiliates. Such determination should not be deemed an admission that such officers, directors or 10% beneficial owners are, in fact, affiliates of the registrant. Number of shares outstanding of each of the Issuer's classes of common stock, as of April 12, 2000: 38,889,663 shares of common stock, par value $.01. Transitional Small Business Disclosure Format: Yes [ ] No [X] PART I Item 1. DESCRIPTION OF BUSINESS History Restaurant Teams International, Inc. (the "Company") is a Texas corporation. The Company originally was incorporated as a Delaware corporation on May 9, 1990, under the name "Bosko's, Inc. On November 9, 1992, the Bosko's, Inc. name was changed to Fresh'n Lite, Inc. and on September 15, 1998 the Company changed its name to Restaurant Teams International, Inc. in order to more properly reflect management's desire to position the Company as a restaurant holding company. In October 1995, the Delaware corporation merged into its wholly-owned subsidiary, FNL, Inc., a Texas corporation. FNL, Inc. was the surviving corporation in the merger. FNL, Inc. then changed its name to Fresh'n Lite, Inc. The purpose of the merger was to convert the Delaware corporation into a Texas corporation. The Company was formed in connection with the creation of a restaurant in Marshall, Texas, which was named Bosko's 3 N 1 D-Lite. In the past, the Company has operated restaurants in the Texas cities of Marshall, Tyler, Longview, Nacogdoches and Texarkana. Each of these restaurants has been closed or sold as the Company has developed its restaurant concept and as the Company has focused on middle class urban markets in the Dallas/Fort Worth metropolitan area. On February 9, 2000 the Company acquired substantially all of the assets of Hartan, Inc. and it's subsidiaries out of chapter 11 bankruptcy for $325,000 in cash and a $125,000 indemnity agreement. The assets consisted of 8 Tanner's restaurants in the Atlanta, GA market. The company subsequently sold one of the units to the chains founder, Rick Tanner, under a licensing agreement and the remaining stores where sold to three buyers for an aggregate purchase price of $575,000. The Company no longer holds rights to the Tanner's franchises or company owned stores. On March 16, 2000 the Company acquired Regulatory Solutions, Inc. (RSI) in an equity transaction for $3,100,000. RSI is a workplace safety and governmental regulation compliance specialty firm with expertise in the restaurant, manufacturing, oil & gas, and construction industries. The principals of RSI subsequently filed a lawsuit against the Company seeking a rescission of the aforementioned transaction. This lawsuit is still pending in Dallas District Court. The Company believes that this lawsuit is without merit. Company Business - Restaurant Segment The Company currently operates one full-service restaurant located in the Texas city of The Colony under the name Street Talk Cafe. The Company's restaurant offers a variety of food items, including a wide selection of sandwiches, salads, pizzas, steaks, seafood, Tex-Mex and other food items and desserts. The majority of the Company's food items are prepared to order using fresh meats, cheeses, and vegetables. While the restaurant offers full-service casual dining, the menus are designed to permit quick food preparation. The restaurant offers take-out service. The key strategic elements of the Street Talk Cafe concept are: o Providing guests a broad menu with 50% of the "tie breakers" of each segment in low fat, yet good tasting versions to enhance frequency; o Pricing menu offerings at levels comparable to other casual dining restaurants while providing more wholesome and consistent selections; o Selecting, training and motivating cast members to enhance customer dining experiences by delivering a level of service that is a product unto itself; o Reinforcing perceived value through unique concept elements to provide guests with a superior "total dining" experience in a fun and entertaining atmosphere. 2 Menu The menu features a wide variety of entrees including chicken, ribs, sandwiches, salads, pizzas, steaks, seafood, Tex-Mex and special dinner items and desserts that have nonfat or low-fat content. The Company targets urban white-collar markets and focuses on increasing customer value by providing more wholesome and consistent offerings than other casual dining restaurants at comparable prices in a relaxed and entertaining atmosphere. The Company's strategy is to continually deliver broad menu appeal by offering patrons selections from all dining segments in good tasting versions. In addition, the Company's efforts to assure the broad appeal of its menu, combined with its emphasis on affordability and food quality, promotes frequent return visits by restaurant guests. To accomplish these objectives, the Company identifies the "tie" breaking and "forerunner" products in each restaurant segment. Management feels these "best sellers" are the single most important reason guests select a casual dining restaurant. The Company offers about 50% of its selections in low-fat versions. Dinner entrees presently range in price from $6.95 to $10.95. An assortment of sandwiches, baked potatoes, salads, burgers, soups and pizza round out the menu. The concept uses the same menu for lunch and supper. Competition The Company's restaurants operate in the casual dining segment of the foodservice industry. This segment is estimated to be $36 billion per year with another $10 billion estimated in the Bar and Grill segment. Brinker International operates more brands in the casual dining segment than any other company with a total of seven different concepts. Casual operators agree that continued expansion of core concepts and a more aggressive pursuit of acquisitions are the two prevailing trends that will characterize the casual-theme segment in the near term. Despite the category's maturation, wide spread labor shortages and competitive saturation in dozens of suburban markets, leading casual-theme operators are confident there is plenty of room for domestic expansion. Fragmentation is happening in the casual segment. Casual Diners have historically tried to be all things to all people by carrying Tex-Mex, steaks, ribs, and a bar. Today, if people want steak, they will go to operators in the steak house niche like Outback or Lone Star. If they want Mexican, they will go to El Chico or Rio Bravo. PENDING ACQUISITION The Company is in the process of acquiring Kelly's Coffee and Fudge, a California based franchisor of gourmet coffee and fudge outlets. This acquisition is being made through a Chapter 11 bankruptcy reorganization and is subject to court approval. The Company hopes to complete this acquisition by the end of April or early May 2001. Additionally, the Company is targeting a number of additional acquisitions within the restaurant industry. Management is currently seeking the capital necessary to proceed forward with one or more of it's targeted acquisitions. Terminated Acquisition Over the course of the year 2000, the Company terminated it's efforts to acquire the Fatburger chain of restaurants. This termination resulted in a charge to earnings of $4,156,632, which were costs that had previously been capitalized as acquisition costs. Employees Registrant employed 46 persons as of April 11, 2001, including 4 executive and office personnel and 42 restaurant operational managers and staff. 3 Item 2: DESCRIPTION OF PROPERTY Restaurant Locations The following table provides information with respect to each of the Company's restaurant properties. The Dallas, Texarkana, The Colony, and Richardson buildings are owned, with a lease on the land. Location Square Feet Lease Expiration Date -------- ------------- --------------------- Dallas, Texas............... 4,500 sq. ft. February 21, 2015 Longview, 2,500 sq. ft. October 31, 2001 Texas....................... The Colony, Texas........... 4,700 sq. ft. October 15, 2017 Richardson, Texas .......... 4,700 sq. ft. December 15, 2017 Texarkana, Texas............ 3,600 sq. ft. November 30, 2006 The Company no longer operates restaurants in the Dallas, Richardson, and Texarkana locations. The Dallas and Richardson facilities are leased to other operators. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None 4 PART II Item 5: MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. The Company's Common Stock began trading on the OTC Bulletin Board under the symbol FLTT on May 9, 1997. Such symbol was changed to RTIN in September 1998. The following table sets forth for the quarters indicated the high and low bid prices of the Company's Common Stock as reported by the National Quotation Bureau, Inc. The prices reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not represent actual transactions. 1999 High Low --------------------------------------- ------- ------- First Quarter.......................... $ 3.19 $ 1.50 Second Quarter......................... 2.59 1.13 Third Quarter.......................... 1.68 .74 Fourth Quarter......................... 1.00 .26 2000 High Low --------------------------------------- ------- ------- First Quarter ......................... $ 1.16 $ .34 Second Quarter ........................ .84 .34 Third Quarter........................ .46 .095 Fourth Quarter...................... .28 .03 As of December 31, 2000, the Company estimates that there were approximately 1000 beneficial owners of the Company's Common Stock, and approximately 250 holders of record. Item 6: MANAGEMENT'S DISCUSSION AND ANALYSIS ON PLAN OF OPERATION Forward-Looking Statements This Annual Report on Form 10-KSB includes forward-looking statements within the meaning of Section 27A of The Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), which can be identified by the use of forward-looking terminology such as may, believe, expect, intend, anticipate, estimate or continue or the negative thereof or other variations thereon or comparable terminology. All statements other than statements of historical fact included in this Form 10-KSB, are forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such statements, including certain risks and uncertainties that could cause actual results to differ materially from the Company's expectations (Cautionary Statements) are disclosed in this Form 10-KSB. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein include, but are not limited to, the newness of the Company, the need for additional capital and additional financing, the Company's limited restaurant base, lack of geographic diversification, the risks associated with expansion, a lack of marketing experience and activities, risks of franchising, seasonability, the choice of site locations, development and construction delays, need for additional personnel, increases in operating and food costs and availability of supplies, significant industry competition, government regulation, insurance claims and the ability of the Company to meet its stated business goals. All subsequent written and oral forward-looking ___ statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the Cautionary Statements. The following discussion of the results of operations and financial condition should be the Financial Statements and related Notes thereto included herein. 5 Overview The Company was organized in June 1990 as Bosko's, Inc. under the laws of the State of Delaware. In November 1992 the Company changed its name to Fresh'n Lite, Inc., and in November 1995 the Company merged into a Texas corporation also bearing the name Fresh'n Lite, Inc. On September 15, 1998 the Company changed its name to Restaurant Teams International, Inc. to more accurately reflect the direction management is taking with respect to positioning the Company as a multi-concept holding company. The Company currently owns and operates one Street Talk Cafe restaurant in The Colony, Texas, and Regulatory Solutions, Inc. of Dallas, Texas. Results of Operations Comparison of Year Ended December 31, 1999 and December 31, 2000. Revenues. Operating revenues for fiscal year ended December 31, 1999 were $2,438,537, with an operating loss of $694,792. Operating revenues for fiscal year ended December 31, 2000 were $5,911,971, a 242% increase from 1999, with an operating loss of $5,587,997. The 242% increase in revenues over 1999 is attributed to the Company's acquisition and operation of the Tanner's restaurant chain during the majority of 2000. Costs and Expenses. Costs and expenses for the fiscal year ended December 31, 2000 increased by $8,366,639 or 367% to $11,499,968 as compared to $3,133,329 for the corresponding period ended December 31, 1999. This was primarily due to the costs associated with operating the Tanner's restaurants in Atlanta, GA and the write off of the Fatburger and Regulatory Solutions acquisition and other costs. General and Administrative Costs in 2000 decreased by 214% to $476,742 as compared to $1,019,247 in 1999. This decrease was primarily due to the previous years development of infrastructure in anticipation of the future growth and acquisitions. Interest expense in 2000 decreased by $108,035 to $698,677 from $806,712 in 1999. Net Income. The Company had a net loss for the fiscal year ended December 31, 2000 of $8,783,018 compared to net loss of $694,792 for fiscal year ended December 31, 1999, representing ($.24) and ($.30) per share, respectively. The net loss in 1999 was primarily due to the closing of the Company's Street Talk Cafe operations and the loss on sale of assets associated with the sale of the Company's Addison restaurant. The net loss in 2000 is attributed greatly to the charge off of the expenses associated with the Fatburger acquisition and the write off of the Regulatory Solutions acquisition costs and bad debt. Liquidity and Capital Resources Historically, the Company has required capital to fund the operations and capital expenditure requirements of its Company-owned restaurants. The Company is currently operating out of cash flow from operations however, management has determined that an immediate infusion of capital will be required for the Company to maintain it's operations and to be in a position to make the acquisitions which have been targeted. The Company's principal capital requirements are the funding of acquisitions. 6 Item 7. FINANCIAL STATEMENTS Restaurant Teams International, Inc. Financial Statements As of December 31, 2000 and Years Ended December 31, 1999 Without the Report of Independent Auditors Restaurant Teams International, Inc. Financial Statements As of December 31, 2000 and Years Ended December 31, 1999 Contents Financial Statements Balance Sheet ...............................................................F-2 Statements of Operations ....................................................F-4
Restaurant Teams International, Inc. Condensed Balance Sheets Dec. 31, Dec. 31, 2000 1999 Unauditted ASSETS CURRENT ASSETS Cash $ 49,431 $ 2,521 Trade accounts receivable 1,970 0 Inventories 32,676 13,690 Prepaid Expenses 0 18,657 Marketable Securities 33,659 0 Federal Income Tax Receivable 38,030 38,030 ----------- ----------- Total Current Assets 155,766 72,898 PROPERTY AND EQUIPMENT, net 2,849,016 3,608,114 GOODWILL, net 145,617 0 OTHER ASSETS Assets Held for Sale, net 497,842 1,844,586 Acquisition Cost of Fatburger (Pending) 0 3,861,632 Debenture Issuance Costs, net 24,970 62,150 TOTAL ASSETS 3,673,211 9,449,380 F-2 Restaurant Teams International, Inc. Condensed Balance Sheets - Continued LIABILITIES AND SHAREHOLDERS EQUITY CURRENT LIABILITIES Accounts Payable 349,814 76,324 Accrued Expenses and Other Liabilities 982,848 430,997 Income Taxes Payable 0 10,000 Current Portion of Long Term Debt 719,380 719,380 ----------- ----------- Total current liabilities 2,052,042 1,236,701 LONG TERM DEBT, net of current portion 1,103,038 1,328,276 DEFERRED LIABILITIES 24,819 24,819 SHAREHOLDERS EQUITY Preferred Stock 0 0 Preferred Stock Series A 1,999,920 0 Common Stock 218,424 149,416 Additional Paid In Capital 12,096,407 8,921,535 Treasury Stock (761,150) (761,150) Dividend Distribution (966,341) 0 Accumulated Deficit (12,093,948) (3,311,120) Notes Receivable - Related Parties 0 (366,743) ----------- ----------- Total Stockholders Equity 493,312 4,631,738 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 3,673,211 9,449,380
F-3
Restaurant Teams International, Inc. Condensed Statement of Operations Dec. 31, 2000 Dec. 31, 1999 Unauditted REVENUES Restaurant Sales 4,998,395 2,323,537 Regulatory Services 629,246 0 Rental Income 284,330 115,000 ----------- ----------- Total Revenues 5,911,971 2,438,537 OPERATING COSTS AND EXPENSES Cost of sales 1,483,679 674,209 Labor and benefits 2,440,321 612,605 Other operating expenses 1,019,529 388,191 General & Administrative Expenses 476,742 1,019,247 Bad Debt Expense 498,070 0 Depreciation & Amortization Expenses 403,347 298,139 Write-down and impairment of assets 0 140,938 Acquisition Costs 4,156,632 0 Inventory write-down 80,000 0 Goodwill impairment 743,256 0 Write-off cash advanced 198,392 0 ----------- ----------- Total Operating Costs & Expenses 11,499,968 3,133,329 Operating Income (Loss) (5,587,997) (694,792) NON-OPERATING (INCOME) EXPENSE Interest Expense 698,677 806,712 Loss on sale of assets 2,491,890 502,202 Other income 4,454 0 Acquisition costs 0 288,288 ----------- ----------- Total Non-Operating Income (Expense) 3,195,021 1,597,202 LOSS BEFORE INCOME TAXES (8,783,018) (2,291,994) INCOME TAX BENEFIT 0 46,790 NET LOSS (8,783,018) (2,245,204) NET LOSS PER COMMON SHARE, basic & diluted (0.24) (0.30)
F-4 Part III. EXHIBITS Items 9 through 12. To be set forth in Registrant's definitive proxy statement for its annual meeting to be held in July 2001. Item 13. ExhibitsPart III. EXHIBITS (a) Hereafter set forth as exhibits to the Form 10-KSB of Restaurant Teams International, Inc and incorporated by reference are the following exhibits: - ------------------------- ------------------------------------------------------ No. as per Part III of Form 1A Description of Exhibit - ------------------------- ------------------------------------------------------ 2.1* Articles of Incorporation 2.21+ Amendment to Articles of Incorporation 2.22+ Articles of Amendment 2.3* By-Laws 3.1 Warrant Agreement filed as an exhibit to the Company's Form 10-KSB dated February 28, 1997 6.1** Primary Distribution Agreement dated as of February 17, 1995, by and between Consolidated Companies, Inc. on the one hand and Fresh'n Lite Inc. on the other 6.3CE** Restaurant Lease dated as of September 15, 1997 by and between USRP (Midon), LLC on the one hand and Fresh'n Lite, Inc. on the other 6.4CE** Ground Lease dated as of February 21, 1995 by and between Peter D. Fonberg Investments on the one hand and Fresh'n Lite, Inc. on the other 6.6CE** Ground Lease Agreement dated as of April 11, 1997 by and between Robert M. Farrell Development, Ltd. on the one hand and Fresh'n Lite, Inc. on the other 6.8CE** 1997 Incentive Stock Option Plan 6.9** Franchise Agreement dated as of October 1, 1995 by and between Fresh'n Lite, Inc. on the one hand and F'NL Investments, LLC on the other 6.10CE** Lease with Option to Purchase dated as of October 15, 1993 by and between Connor Patman and Steve and Ann M. Raffaelli on the one hand and Fresh'n Lite, Inc. on the other 6.11CE+ Sub-Lease dated as of November 2, 1998 by and between Restaurant Teams International, Inc. and the one hand and Zeke's Grill, Inc. on the other * Previously filed as an exhibit to the Company's Registration Statement on Form 10-SB (File No. 001-13559) filed with the Securities and Exchange Commission on November 10, 1997. ** Filed as a paper exhibit to the Company's Form 10-SB filed October 23, 1997 and filed in electronic format as exhibits to Amendment No. 1 to Form 10-SB filed June 25, 1998 and incorporated herein by reference. + Filed herewith 7 SIGNATURES The undersigned registrant hereby amends and restates its Annual Report on Form 10-KSB for the fiscal year ended December 31, 2000. In accordance with Section 13 or 15(d) of the Securities Exchange Act, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized, this 16th day of April, 2001. Registrant By: /s/ Stanley L. Swanson ---------------------------------- Stanley L. Swanson Chairman of the Board of Directors and Chief Executive Officer In accordance with the Exchange Act, this amendment has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.In accordance with the Exchange Act, this amendment has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. April 16, 2001 By: /s/ Curtis A. Swanson -------------------------- Curtis A. Swanson, Director Vice President and Chief Financial Officer 8 -----END PRIVACY-ENHANCED MESSAGE-----