UNITED STATES
SECURITIES EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
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[X] Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended September 30, 1999
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FLORIDINO'S INTERNATIONAL HOLDINGS INC.
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(Exact name of registrant as specified in its charter)
FLORIDA 59-3479186
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3560 Cypress Gardens Road
Winter Haven, Florida 33884
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number (941) 326-1006
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Check here whether the issuer (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 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
As of September 30, 1999, the following shares of the
Registrant's common stock were issued and outstanding:
25,000,000 shares authorized, $0.01 par value
7,657,000 issued and outstanding
<PAGE>
<PAGE>
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . . .3
CONDENSED CONSOLIDATED BALANCE SHEET . . . . . . . . .3
CONDENSED CONSOLIDATED INCOME STATEMENT. . . . . . . .4
STATEMENT OF CASH FLOWS. . . . . . . . . . . . . . . .5
Note 1. NATURE OF BUSINESS AND SIGNIFICANT
ACCOUNTING POLICIES. . . . . . . . . . . . .7
Note 2. USE OF OFFICE SPACE. . . . . . . . . . . . .8
Note 3. Liquidity. . . . . . . . . . . . . . . . . .8
Item 2. Management's Discussion And Analysis or Plan of
Operations. . . . . . . . . . . . . . . . . . . . . .10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . 13
Item 2. Changes in Securities. . . . . . . . . . . . . . . . 13
Item 3. Defaults upon Senior Securities. . . . . . . . . . . 13
Item 4. Submission of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . . . . . 13
Item 5. Other information. . . . . . . . . . . . . . . . . . 13
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . 13
SIGNATURE . . . . . . . . . . . . . . . . . . . . . . . . . . .14
<PAGE>
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The Shareholders,
Floridino's International Holdings, Inc.
We have compiled the accompanying balance sheet and changes
in owners' equity of Floridino's International Holdings,
Inc. as of September 30, 1999. In addition, we have
prepared the related statements of operations and cash flows
for the nine months ending September 30, 1999 and September
30, 1998. We have prepared these financial statements in
accordance with Statements on Standards for Accounting and
Review Services issued by the American Institute of
Certified Public Accountants.
A compilation is limited to presenting in the form of
financial statement information that is the representation
of management. We have not audited or reviewed the
accompanying financial statements and, accordingly, do not
express an opinion or any form of assurance on them.
Donohue Associates, Inc.
Chatham, New Jersey
November 8, 1999
<PAGE>
<PAGE>
FLORIDINO'S INTERNATIONAL HOLDINGS INC.
CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
<TABLE>
<CAPTION>
<S> <C> <C>
9/30/99 12/31/98
ASSETS
Current Assets
Cash $187,480 $15,502
Investment in marketable securities 259,429 0
Royalties receivable 16,304 11,826
Inventory 12,535 15,083
---------- ----------
Total Current Assets $475,748 $42,411
Property and Equipment:
Equipment 1,403,748 402,191
Leasehold Improvements 735,116 323,077
Less accumulated Depreciation (348,691) (213,246)
Land 320,000 0
Organization costs (net of
amortization) 3,215 6,859
Other Assets 74,814 79,906
---------- ----------
TOTAL ASSETS $2,663,950 $641,198
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Bank overdrafts $ 0 $19,903
Accounts payable and accrued expenses 380,113 310,555
Accrued Payroll and related expenses 10,931 93,989
Loans payable - stockholder 0 152,799
Convertible Debentures payable 300,000 0
Current portion of lease obligations 93,917 6,490
Current portion of long term debt 268,920 313,728
---------- ----------
Total Current Liabilities $1,053,881 $897,464
Long term debt:
Lease Obligations 139,498 42,710
Long term notes and mortgages 606,374 71,584
STOCKHOLDERS' EQUITY
Common stock, par value $.001;
25,000,000 shares authorized,
7,657,000 shares issued and outstanding
at September 30, 1999 and 4,259,000 at
December 31, 1998 $ 7,657 $4,959
Preferred stock, 50,000 shares issued
and outstanding, convertible to 50,000
shares of common stock at $5 per share,
no par, no dividend, non-cumulative 250,000 0
Additional Paid in Capital 2,436,513 802,711
Accumulated Deficit (1,829,973) (1,178,230)
------------ ----------
Total Stockholders' Equity 864,197 (370,560)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $2,663,950 $641,198
========== ========
The accompanying notes are an integral part of these financial
statements.
</TABLE>
<PAGE>
<PAGE>
FLORIDINO'S INTERNATIONAL HOLDINGS INC.
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
NINE MONTHS ENDING SEPTEMBER 30,1999 & 1998
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30
1999 1998
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<S> <C> <C>
REVENUES
Food/Beverage Sales $ 819,022 $1,277,397
Franchise Fees 24,122 59,500
Royalty Fees 28,943 27,154
---------- -----------
Total Revenues 872,087 1,364,051
Costs of goods sold (540,243) (819,128)
---------- ----------
Gross Profits 331,844 544,923
OPERATING EXPENSES:
Selling, general
and administrative (1,165,236) (1,026,926)
Depreciation
and amortization (26,089) (22,203)
---------- ----------
Loss from continuing
Operations (859,481) (504,206)
OTHER INCOME(EXPENSE):
Unrealized gain on
short term invest. 160,929 0
Interest Expense (16,826) (11,926)
---------- ----------
Net loss before
Extraordinary item and
Income tax provision (715,378) (516,132)
EXTRAORDINARY ITEM:
Gain or early
extinguishment of debt 96,415 0
Less tax effect (32,781) 0
-------- --------
Loss before provision
For income taxes (651,743) (516,132)
Provision for Income taxes 0 0
---------- ----------
NET LOSS $(651,743) $(516,132)
========== ==========
NET LOSS PER SHARE:
Basic:
Loss from
continuing operations $ (.11) $ (0.20)
Gain from
extraordinary items 0.01 0.00
Net loss per share (.10) (0.20)
Weighted average shares
outstanding 5,799,974 2,618,000
=========== ==========
The accompanying notes are an integral part of these financial
statements.
</TABLE>
<PAGE>
FLORIDINO'S INTERNATIONAL HOLDINGS INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
NINE MONTHS ENDING SEPTEMBER 30TH
<TABLE>
<CAPTION>
September 30
1999 1998
--------------------------------
<S> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net Loss $ (651,743) $(516,132)
Adjustments to Reconcile Net
Income Items not requiring the
Use of Cash:
Depreciation and amortization 139,089 72,203
Compensation expense paid by
Issuing Common Stock 90,000 0
Unrealized gain on Short
Term investment (160,929) 0
Changes in Other Assets and
Liabilities:
Royalties Receivable (4,478) 7,595
Inventory 2,548 18,536
Short Term Investments ( 98,500) 0
Other Assets 5,093 (7,409)
Deferred franchise fee revenue 0 (59,500)
Accounts payable and accrued exp. 69,557 5,850
Accrued payroll and related exp. (83,059) 38,033
Current portion of lease obligations (184,713) (329,364)
------------ ------------
Net cash provided by (used by)
Operations (877,135) (770,188)
CASH FLOW FROM
INVESTING ACTIVITIES:
Purchase of land (320,000) 0
Purchase and acquisition of property
and Equipment (55,153) (26,174)
------------ ------------
Net Cash provided by (used by)
Investing Activities (375,153) (26,174)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from issuance of convertible
Debentures 300,000 0
Proceeds from debentures attributed
To the conversion feature 200,000
Increase (decrease) in loans payable
To stockholders (152,799) 44,861
Payment of Bank Overdrafts (19,903) (1,144)
Increase of common stock upon exercise
of warrants 346,500 200,000
Issuance of common stock through
Secondary offering 1,000,000 0
Long Term Debt (pay) receive (249,532) 572,191
------------ ------------
Net Cash Provided by (Used By)
Investing Activities 1,424,266 815,908
NET INCREASE/(DECREASE) CASH 171,978 19,546
CASH AT BEGINNING OF YEAR 15,502 0
------------ ------------
CASH AT END OF THE PERIOD $ 187,480 $19,546
============ ============
SUPPLEMENTAL DISCLOSURES:
Interest paid during the period $ 14,951 $11,926
Income taxes paid during the period 0 0
The accompanying notes are an integral part of these financial
statements.
</TABLE>
<PAGE>
<PAGE>
FLORIDINO'S INTERNATIONAL HOLDINGS INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FROM DECEMBER 31, 1998 THROUGH SEPTEMBER 30, 1999
Common Paid in Retained
Shares Amount Preferred Capital Deficit
Bal 12/31/98 4,959,000 $4,959 $0 $802,711 ($1,178,230)
Issuance of
Stock upon
Exercise of
Warrants 558,000 558 345,942
Issuance of
Stock for
Compensation 140,000 140 89,860
Issuance of
Common Stock 2,000,000 2,000 998,000
Issuance of
Preferred stock 250,000
Proceeds of
Debentures
Attributable
To conversion
Feature 200,000
Net loss (651,743)
---------- ------ -------- ------- ---------
Bal. 9/30/99 7,657,000 $7,657 $250,000 $2,436,513 $(1,829,973)
========= ====== ======== ========= ==========
Total stockholders' equity is $864,197.
<PAGE>
<PAGE>
FLORIDINO'S INTERNATIONAL HOLDINGS, INC.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDING SEPTEMBER 30, 1999
Note 1 - Nature of Operations
Floridino's International Holdings, Inc. (the Company) was
incorporated on June 25, 1997 in the State of Florida to
develop, own, operate, and franchise family style Italian
restaurants. The consolidated statements of the Company include
the following subsidiary companies:
Floridino's Pizza Etc., Inc.- a restaurant located in
Winterhaven, Florida that was closed in September 1999.
Hard Ball Cafe, Inc.- a restaurant located in Winterhaven,
Florida that was closed in April 1999.
Floridino's Home of the Calzone, Inc.- a restaurant located in
Lakeland, Florida that was closed in May 1999.
Floridino's International, Inc.- a restaurant franchiser
located in Winterhaven, Florida.
Floridino's of Bartow, Inc.- a restaurant located in Bartow,
Florida that was closed in December 1998.
Floridino's Specialties Distributions, Inc.- a food
manufacturing plant located in Lakeland, Florida.
Floridino's Express, Inc.- a restaurant incorporated in 1999
located in Lake Wales, Florida.
Toho Holdings, Inc.- a company incorporated in 1999 to hold
title to the real estate and lease agreements of the consolidated
companies.
Floridino's, Inc.- a restaurant located in New York, New York,
formerly Zoop Soups Inc. This restaurant was reopened in 1999
after a period of reconstruction.
Floridino's of Lakeland, Inc. - a restaurant located in Lake
Wales, Florida incorporated in September 1997. This restaurant
was closed in late 1998 and reopened after construction in 1999.
Note 2- Summary of Significant Accounting Policies
Consolidation- The accompanying consolidated financial
statements include the accounts of the company and all of its
wholly owned and majority owned subsidiaries. All significant
inter-company balances have been eliminated.
Revenue and Cost Recognition- The Company recognizes revenue
from food and beverage sales as the service is provided. Revenue
from franchise sales is recognized, net of allowance of
uncollectible amounts, when substantially all significant
services provided by the Company have been performed.
Expenditures are recorded on the accrual basis whereby expenses
are recorded when incurred, rather than when paid.
Use of Estimates- The preparation of the financial statements
in conformity with generally accepted accounting principles
requires management to make reasonable estimates and assumptions
that affect the reported amounts of the assets and liabilities
and disclosure of contingent assets and liabilities and the
reported amounts of revenues and expenses at the date of the
financial statements and for the period they include. Actual
results may differ from these estimates.
Investment in Marketable Securities- Investment in marketable
securities represents the purchase of shares of a NASDAQ listed
stock valued at the market at September 30, 1999. The unrealized
gain on this investment is recorded in "Other Income" in the
statement of operations.
Inventory - Inventory is stated at the lower of cost (first-in,
first-out method) or market and primarily consists of food and
beverage products.
Property and Equipment- Property and equipment are stated at
cost. Depreciation of property and equipment is provided using
the straight-line method over the estimated useful life of the
asset. Improvements made to leased property are depreciated on a
straight-line basis over the estimated useful life of the
improvement or the period of the lease remaining, whichever is
less.
Expenditures for major repairs and renewals that extend the
useful life of the asset are capitalized. Minor repair
expenditures are charged to expense as incurred.
Income Taxes- The Company accounts for income taxes under the
accrual method established by Statement of Financial Accounting
Standards No. 109, which requires recognition of deferred tax
assets and liabilities for the expected futures tax consequences
and events that have been included in the financial statements or
tax returns. Under this method, deferred tax assets and
liabilities are determined based on the difference between the
financial statements and tax bases of assets and liabilities
using enacted rates for the year in which the differences are
expected to reverse.
Management believes that based upon earnings through September
30, 1999, the realization of a tax-deferred asset through future
earning offsets of current losses cannot be determined.
Therefore, a deferred asset has not been reflected in the
accompanying financial statements as of September 30, 1999.
Extraordinary items- During the nine months ending September
30, 1999, the Company extinguished certain long term debt. The
difference between the carrying value of this debt and the
settlement amount of the debt at the date of extinguishment is
recognized as an extraordinary item in the consolidated statement
of operations as a "gain on early extinguishment of debt".
Fair Values of Financial Instruments- The carrying amounts of
all cash, accounts receivables, short term investments,
inventories, accounts payable, and other obligations reported in
the statement of financial position are estimated by management
to approximate fair value.
Organization Costs - Organization costs consist of costs
that were incurred during the formation of the Company and are
being amortized of a period of sixty months.
Note 3- Going Concern Considerations
The accompanying consolidated financial statements have been
presented in accordance with generally accepted accounting
principals, which assumes the continuity of the Company as a
going concern. However, during the nine months ending September
30, 1999 and September 30, 1998, the Company experienced, and
continues to experience, certain going concern and liquidity
problems. The Company has incurred net losses of $651,743 and
$516,132 for the nine months ending September 30, 1999 and
September 30, 1998. This condition raises substantial doubt to
the ability of the Company to continue as a going concern.
Management's plans with regard to this matter is as follows:
The Company through a plan formalized in fiscal year 1998,
closed the restaurant segment that had proven to be unprofitable.
The Company had planned to develop a new restaurant segment under
new management with more emphasis on a "fast food/self-service"
theme.
In addition during the nine months ending September 30, 1999, the
Company raised proceeds of approximately $1.85 million dollars
through a Regulation D 505 offering, the exercise of common stock
warrants, and a convertible debenture offering. These funds were
and are being used to satisfy the Company's debt, reconstruct and
improve current restaurant space and to complete the construction
of its food manufacturing plant.
The eventual outcome of the success of management's plans
cannot be ascertained with any degree of certainty. The
accompanying consolidated financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
Note 4- Closed restaurants
Through September 30, 1999, the Company has completed its plans
to close the operations of unprofitable restaurants. The
restaurants that were closed by management through September 30,
1999 are as follows:
Floridino's Pizza Etc., Inc.
Hard Ball Cafe, Inc.
Floridino's Home of the Calzone, Inc
Floridino's of Bartow, Inc.
Note 5- Litigation
The Company and its subsidiaries are defendants in various
lawsuits filed by various suppliers for services rendered. The
Company has accrued the amounts of the proposed settlements in
the accompanying consolidated financial statements, as well as
the amounts of potential outstanding claims disclosed by the
Company's outside counsel. Management believes that the eventual
disposition of these lawsuits will not have a material impact on
the consolidated financial statements.
Note 6- Commitments and Contingencies:
The Company leases office space under operating leases. At
September 30, 1999, total future minimum lease payments under
operating is as follows:
September 30th,
2000 $109,058
2001 $ 90,278
2002 $ 58,200
2003 $ 30,000
2004 $ 32,500
Thereafter $165,000
Total future minimum
lease payments $485,036
========
Note 7- Common Stock Transactions
During the nine months ending September 30, 1999, the balance
of warrants outstanding from an offering completed in July 1997
were exercised or expired. During the period, 558,000 warrants
were exercised resulting in net proceeds to the Company of
$346,500 and the issuance of 558,000 shares of common stock. The
balance of the outstanding warrants (63,000) expired on March 31,
1999.
In August 1999, the Company issued 140,000 shares of common
stock in return for services rendered by two consultants.
Management has valued these services at $90,000.
In May 1999, the Company completed a Regulation D 505 offering
resulting in net proceeds to the Company of $1,000,0000 and
the issuance of 2,000,000 shares of common stock.
Note 8- Convertible Debentures
In September 1999, the Company received net proceeds of
$500,000 of a $750,000 debenture offering resulting in the
issuance of convertible debentures. Each debenture is
convertible into common stock within one year of purchase at a
40% discount from the preceding five day average of the
prevailing market price of the stock at conversion. As a result,
$200,000 of the offering has been allocated to additional paid in
capital. The debentures are payable within one year of purchase
with interest computed at 9.00% payable semi-annually.
Note 9- Convertible Preferred Stock
In May 1999, the Company issued 50,000 of preferred stock to an
officer of the Company in exchange for real estate transferred to
the Company. The fair market value of the real estate at the
date of the transaction was $639,000 and mortgages and liens on
the properties assumed were $389,000 $440,000. The preferred
stock is convertible into 50,000 shares of common stock at $5 per
share beginning in May 2000.
Note 10- Long Term Debt
The Company has signed promissory notes in connection with
certain reconstruction costs and lease termination agreements
incurred in 1999 and in addition has assumed certain long
term real estate mortgages associated with the transfer of
preferred stock discussed in Note 9. There are no sinking fund
requirements associated with the long term debt. The following
is a listing of long term debt as of September 30, 1999.
Monthly
Rate Amount Maturity Payment
Capital Leases 9.50% $139,499 2002-2009 $4,306
Notes Payable 8.25% 473,025 10/31/00 0
Mortgages 9.00% 133,349 2007 2,773
Totals 745,873 7,079
The notes payable were entered into on August 31, 1999 and a
balloon payment for principle and interest is due in October
2000. Notes payable of $238,020 are due to the Company's
majority shareholder and chairman of the board and are more fully
disclosed in Note 11.
Note 11- Related Parties
The Company is indebted to its majority shareholder and
chairman of the board for the cost of certain reconstruction and
lease agreements associated with the New York restaurant incurred
during 1999. The notes payable were entered into on August 31,
1999 and carry an interest rate of 8.25%. At September 30, 1999,
the Company had notes payable to the majority shareholder and
chairman of the board of $238,020 due on 10/31/00 for the
reconstruction costs. This debt is included in "Long term notes
and mortgages" on the statement of financial position. In
addition, the Company had notes payable to the majority
shareholder and chairman of the board of $65,388 due in fiscal
2000 for eight months of unpaid lease payments on the restaurant
located in New York City. These notes payable are included in
"current portion of long term debt" on the statement of financial
position and in general administrative expenses in the statement
of operations. The notes payable are due by a "balloon payment"
of principle and interest at the maturity date.
Note 12- Subsequent Events
In October 1999, the Company completed its debenture offering
initiated in September 1999 resulting in additional proceeds to
the Company of $250,000. The debentures contain the same terms
and provisions discussed in Note 8.
Note 13 - Segments
The following is a summary of the Company's segment information
for the nine months ended September 30TH:
9/30/99 9/30/98
Gross sales:
Restaurants $840,441 $1,364,051
Food processing $ 31,606 $ 0
Total sales $872,047 $1,364,051
======== ==========
Gross profit:
Restaurants $324,259 $ 544,923
Food processing $ 7,585 $ 0
Total gross profit $331,844 $ 544,923
======== ==========
Loss from continuing
Operations:
Restaurants ($262,495) ($ 362,227)
Food processing ($360,061) 0
Corporate ($236,925) ($ 141,979)
Total loss ($859,481) ($ 504,206)
========== ===========
Total assets:
Restaurants $511,470 $ 353,397
Food processing $431,680 $ 0
Corporate $1,720,800 $ 127,801
Total assets $2,663,950 $ 481,198
========== =========
Note 14 - Other Comprehensive Income
The Company has no other comprehensive income for the nine months
ending September 30, 1999.
Note 15 - Earnings Per Share
The Company applies SFAS No. 128, Earnings per share. In
accordance with SFAS No. 128, basic net income per share has been
computed based on the weighted average of common shares
outstanding.
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
FLORIDINO'S INTERNATIONAL HOLDINGS INC., (the "Company") designs,
develops, owns and operates family style neighborhood Italian
food restaurants featuring freshly prepared, moderately priced
pizza and pasta dishes. Its operations encompass three segments
from which the Company seeks to generate revenue: operation of
restaurants, production and sale of frozen foods and franchising
of the Company's restaurant concept.
During the past two years, the Company's operations failed to
realize net income due to a decrease in revenue and reduction in
patrons to its restaurants. The Company also experienced a
decrease in franchising fees and royalties as the franchise
stores operating under the Company's concept were also
experiencing decreased revenue. This led the Company to believe
that it required a new approach to its operations. The Company's
management was replaced in March 1999 and new management has
sought an aggressive approach to develop and market the Company's
product which management believes is of very high quality. New
management determined that the Company's restaurants required a
fresher, more-upscale image and ambiance to attract customers.
The Company in the past year has raised funding of approximately
$2.2 million which has been used to revamp and reconstruct the
Company's operations. These funds have been used to modernize
the Company's frozen foods development plant by acquiring
equipment to streamline the operation of this segment and also to
construct and develop its New York restaurant. Management's goal
is to have a state of the art processing plant producing the
Company's line of frozen foods. The Company has also expended
the funds it has raised to revamp its restaurant concept. New
management determined that the Company should create restaurants
which were more upscale and esthetically pleasing to customers
than those previously operated. As a result the Company shut all
but one of its restaurants. It then implemented its new concept
at its only full service restaurant in Florida. The Company at
this time intends on opening at least two additional restaurants
in the Florida area and has entered into two (2) leases at
separate sites for the construction of new establishments.
Funding of the Company's reconstruction and revamping has been
undertaken primarily through the private sale of equity in the
Company. The funds were used to repay previous debts of the
Company, acquire new plant and equipment and machinery for the
development of the Company's frozen food concept and for the
allocation of costs associated with the development of the
Company's new restaurants. The Company believes that it has the
capacity to raise additional funds if and when they are required.
Additional funds may be raised through the sale of the parcel of
real estate held by the Company. Additionally, the Company
believes that its newly developed concept and operations will
attract investors in placing additional funds with the Company.
At this time, the Company has no line of credit with any
financial institution. However, the Company believes that its
new operations and developed concept will generate sufficient
revenue during the next twelve months which will enable the
Company to secure a line of credit with a financial institution.
Also, the Company's newly acquired plant, equipment and machinery
enable the Company to utilize these assets as collateral in
securing loans or funding in the event the Company requires
funding.
During the next year, the main source of revenue for the Company
is expected to be that generated through the restaurant segment
and frozen food segment as it is these segments that the Company
has primarily focused on during its revamping and reconstruction
of operations. The primary expenses which the Company has
incurred during the reconstruction of its operations have been
associated with the purchase of new equipment and machinery for
its frozen food segment and for the development of its production
plant in Lakeland, Florida.
The Company intends to raise additional funds through the sale of
its real estate properties located at 300 Cypress Gardens Road,
Winter Haven, Florida and 1810 Third Street SE, Winter Haven,
Florida. The sale of both these parcels of land is expected to
provide the Company with approximately $250,000 in funding after
encumbrances and mortgages on these properties are extinguished.
The company has entered into a Contract of Sale for the purchase
of these properties at a total price of $400,000.
In the opinion of management, inflation at this time has not and
will not have a material effect on the operations of the Company.
Management focuses on the long term growth of the Company and
therefore any increase in inflation or jump in the price of raw
goods purchased by the Company will not result in an immediate
increase in prices to the consumer. Management believes that a
increase in its prices may lead to a loss of customers and
therefore hinder the Company's long term growth. At any course
however, management will evaluate the possible effects of
inflation on the Company as it relates to its business and
operations and proceed accordingly.
The Company would consider raising its prices in the event there
is a significant increase in the cost of labor. As of September
30, 1999, there were approximately 65 employees of the Company.
Within the next year, and as the Company opens additional
restaurants and expands its frozen food segment, the Company will
hire additional employees. As the number of employees increases,
any rise in the cost of labor will have a more significant impact
on the Company which may in turn cause the Company to increase
its prices.
In August 1999, the Company acquired for a period of five (5)
years a license for the use and display of the name "Chippery" to
be utilized by the Company on a specialized machine which
produces potato chips from raw potatoes. The consideration to be
paid to the licensor under this licensing arrangement will be ten
(10%) percent of all gross sales, or the sum of $1,000.00
whichever is greater, per month resulting from the sale of potato
chips produced by the "Chippery" machine. The use of the
"Chippery" name will enable the Company to further develop its
new upscale image and attract consumer interest. The rights
granted to the Company permit it to solely utilize the name at
the Company's New York restaurant located at 950 Broadway, New
York, New York.
Also in August 1999, the Company terminated its lease at 494
LaGuardia Place in New York and discontinued the operations of
its test store. The Company then reopened its New York City
store at the central location of 23rd Street and Broadway which
has benefitted the Company's image and sales in New York City.
As part of the termination of the lease, the Company owed to the
landlord the sum of $60,000.00 and relinquished to the landlord
the assets of the Company existing at the store as satisfaction
of the outstanding sum due to the landlord. The landlord of the
premises is Toho Partners, LLC., which is controlled by the
Company's CEO, Nick Pirgousis.
In September 1999, the Company undertook to raise $750,000.00
pursuant to the issuance of convertible securities in a private
placement in accordance with Rule 505 of Regulation D of the
Securities Act of 1933. The funds raised under this private
placement were used for shall be utilized for continuing working
capital, the payment of long term and revolving lines of debt and
for accounts payable.
The Company's viability to generate revenue and income is
dependent on the successful implementation of its new upscale
restaurant concept and the ability to produce quality frozen food
products at its production plant. The Company's operating
history, including its losses and revenues, primarily reflect its
operations for the past year. The increase in its cash balance
is reflective of the funds raised by the company through its
private placement of common stock during the past year. The
increase in debt and liabilities of the Company is reflective of
the additional costs and liabilities incurred during the
Company's expansion, re-opening of its restaurants and the
development of its frozen foods plant.
YEAR 2000 DISCLOSURE
The Company is actively addressing the issues related to the date
change in year 2000. This is necessary because many computer
systems were programmed using only two digits to contain the year
in the date fields. On January 1, 2000, many of these programs
will fail to perform date calculations correctly and produce
erroneous results. This could temporarily prevent the Company
from processing business transactions. The Company began efforts
to address this issue.
Currently, all computer systems including both IT and non-IT
systems and work is underway to remedy those systems deemed to be
year 2000 non-compliant. The non-IT systems are primarily
systems with embedded processors such as telephones and security
systems. The remediation of the IT and non-IT systems is
expected to be completed by the end of 1999. The Company has
obtained letters of certification from its mission critical
computer systems and software vendors.
The costs associated with the remediation efforts have been
internally generated. Any external costs, projected to be
incurred, to achieve compliance will be funded from the Company's
existing working capital and are not expected to be material in
nature.
There are significant risks associated with the year 2000 issues.
Many of these risks such as those associated with electrical
power or telecommunications are outside the reasonable control of
the Company. Although the Company believes its remediation and
contingency planning efforts adequately identify and address the
year 2000 issues that are within the Company's reasonable
control, there can be no assurance that the Company's efforts
will be fully effective. Due to the significant risks, the
Company's management is monitoring these efforts very closely.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are currently no pending legal proceedings against the
company.
Item 2. Changes in Securities
The instruments defining the rights of the holders of any class
of registered securities have not ben modified.
Item 3. Defaults upon Senior Securities
There has been no default in the payment of principal, interest,
sinking or purchase fund installment.
Item 4. Submission of Matters to a Vote of Security Holders
No matter has been submitted to a vote of security holders during
the period covered by this report.
Item 5. Other information
There is no other information to report which is material to the
company's financial condition not previously reported.
Item 6. Exhibits and Reports on Form 8-K
There are no exhibits attached and no reports on Form 8-K were
filed during the quarter for which this report is filed.
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
FLORIDINO'S INTERNATIONAL HOLDINGS INC.
----------------------
(Registrant)
Date: April 7, 2000
By: /s/ Nick Pirgousis
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CEO
