U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB(Mark One)
[X] Quarterly report under Section 13 or 15 (d) of the Securities Exchange Act
of 1934 For the quarterly period ended MARCH 29, 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 0-23757
----------
TAM RESTAURANTS, INC.
-----------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
DELAWARE 13-3905598
- -------------------------------- --------------------
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1163 FOREST AVENUE, STATEN ISLAND, NY 10310
---------------------------------------------
(Address of Principal Executive Offices)
(718) 720-5959
---------------------------
(Issuer's Telephone Number)
(Former Name, Former Address and Former Fiscal Year,
If Changed Since Last Report)
-
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
---
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 4,503,000 shares of common stock as
of March 29, 2000.
Transitional Small Business Disclosure Format (check one):
Yes No X
--- ---
<PAGE>
TAM RESTAURANTS, INC. AND SUBSIDIARIES
QUARTER ENDED MARCH 29, 2000
FORM 10-QSB
INDEX
PART I. FINANCIAL STATEMENTS PAGE(S)
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheet 1 as of March 29, 2000
(unaudited). 1
Condensed Consolidated Statements of Operations
For the Thirteen weeks and Twenty-Six weeks
ended March 29, 2000 and March 31, 1999 (unaudited). 2
Condensed Consolidated Statements of Cash flow
For the Thirteen weeks and Twenty-Six weeks
ended March 29, 2000 and March 31, 1999 (unaudited). 3
Notes to unaudited Condensed Consolidated
Financial Statements 4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION 6
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 11
SIGNATURE PAGE 12
<PAGE>
<TABLE>
<CAPTION>
TAM RESTAURANTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
ASSETS
MARCH 29, 2000
--------------
Current Assets
<S> <C>
Cash and cash equivalents $ 3,072,991
Accounts receivable (net of allowance for doubtful
accounts of $15,000) 730,272
Inventory 300,793
Prepaid and other expenses 503,993
------------
Total Current Assets 4,608,049
Property and Equipment-Net 5,556,200
Other Assets 410,617
------------
TOTAL ASSETS $ 10,574,866
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Note payable bank $ 700,000
Current portion of long-term debt 142,813
Current portion of loans payable, related parties 92,456
Current portion of capitalized lease obligations 136,372
Accounts payable 796,351
Due to affiliates 94,808
Contract deposits payable 492,025
Accrued expenses and other 1,535,288
------------
Total Current Liabilities 3,990,113
------------
Long-term Liabilities
Deferred rent expense 379,301
Long-term debt - net of current portion 2,519,681
Loans payable-related parties - net of current portion 194,521
Capitalized lease obligations-net of current portion 273,761
Barter advances - net of current portion 557,170
------------
Total Long-term Liabilities 3,924,434
------------
TOTAL LIABILITIES 7,914,547
------------
Commitments and Contingencies
STOCKHOLDERS' EQUITY
Stockholders' Equity
Preferred stock; $.0001 par value; 1,000,000
shares authorized, 144,081 shares
issued and outstanding 14
Common stock; $.0001 par value, 19,000,000
shares authorized; 4,503,000 shares
issued and outstanding 450
Additional paid-in capital 9,997,523
Accumulated deficit (7,317,668)
------------
TOTAL STOCKHOLDERS' EQUITY 2,660,319
------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 10,574,866
============
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
1
<PAGE>
<TABLE>
<CAPTION>
TAM RESTAURANTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Thirteen Weeks Ended Twenty-six Weeks Ended
March 31, March 29, March 31, March 29,
1999 2000 1999 2000
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales $ 2,145,607 $ 2,341,944 $ 6,100,158 $ 6,988,094
Cost of Sales 1,530,544 2,210,585 3,855,370 4,950,331
----------- ----------- ----------- -----------
Gross Profit 615,063 131,359 2,244,788 2,037,763
Operating and Administrative Expenses 1,105,842 1,680,115 2,611,945 3,404,497
----------- ----------- ----------- -----------
Loss from Operations (490,779) (1,548,756) (367,157) (1,366,734)
----------- ----------- ----------- -----------
Other Expense
Interest expense 145,664 66,510 303,272 124,427
Sales Tax Audit Assessment 140,000 140,000
Barter Expense 72,006 110,515 152,475 213,768
----------- ----------- ----------- -----------
Total Other Expense 217,670 317,025 455,747 478,195
----------- ----------- ----------- -----------
NET LOSS $ (708,449) $(1,865,781) $ (822,904) $(1,844,929)
=========== =========== =========== ===========
Net loss per share:
Basic and Diluted $ (.20) $ (.46) $ (.23) $ (.50)
=========== =========== =========== ===========
Weighted average number of common
shares outstanding - basic and diluted 3,503,000 4,073,000 3,503,000 3,791,000
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
TAM RESTAURANTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
TWENTY-SIX WEEKS ENDED
MARCH 31, 1999 MARCH 29, 2000
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net loss $ (822,904) $(1,844,929)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Depreciation and amortization expense 574,958 435,156
Deferred rent expense 6,724 27,000
Amortization of original issue discount 154,170 --
Deferred income (6,000) --
(Increase) decrease in:
Accounts receivable 165,866 1,090
Inventory (18,931) 138
Prepaid and other expenses (111,618) (194,201)
Other assets (6,450) 192,409
Increase (decrease) in:
Accounts payable 245,869 (755,409)
Contract deposits payable 169,290 70,959
Accrued expenses (467,621) 125,843
----------- -----------
NET CASH USED IN OPERATING ACTIVITIES (116,647) (1,941,944)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment (309,302) (90,414)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends Paid -- (36,024)
Proceeds from bank line of credit -- 700,000
Proceeds from long-term debt -- 2,500,000
Sale of common stock -- 2,000,000
Repayment of related party loan -- (1,000,000)
Proceeds from barter advances 650,000 139,290
Principal payments on long-term
and capitalized lease obligations (395,277) (74,381)
Net repayments (advances) of affiliates and others 63,150 544,417
Proceeds from equipment refinancing loans -- (271,320)
Repayment of long term debt -- (22,087)
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 317,873 5,022,535
----------- -----------
Net increase (decrease) in cash (108,076) 2,990,177
Cash, Beginning of year 221,484 82,814
----------- -----------
Cash, End of period $ 113,408 $ 3,072,991
=========== ===========
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements
3
<PAGE>
TAM RESTAURANTS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
---------------------
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-QSB
and Item 310(b) of Regulation S-B. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of only normal recurring accruals) considered
necessary for a fair presentation have been included. It is suggested that
the financial statements be read in conjunction with the Company's
consolidated audited financial statements and footnotes thereto contained
in the Company's Form 10-KSB for the fiscal year ended September 29, 1999.
Operating results for the thirteen and twenty-six week periods ended March
29, 2000 are not necessarily indicative of the results that may be expected
for the full fiscal year ended September 27, 2000.
2. ACCOUNTING PERIOD
-----------------
The Company reports on a 52/53 year.
3. LONG-TERM DEBT
--------------
In February 2000, the Company received $2,500,000 in financing. Repayment
of the principal will be paid out of the free cash of a new Lundy's
location in Times Square as defined, in the agreement. The financing bears
interest at prime plus 1%.
In October 1997, the Company obtained $1,000,000 in a secured loan from two
entities. The loan bears interest at 10% per annum, payable quarterly and
matures September 30, 1999. On January 11, 2000, the Company and Kayne
Anderson agreed to provide for a refinancing, thus waiving the effect of
default, of the existing loans into new long-term loans aggregating an
equal or larger amount. The loan is guaranteed by a principal stockholder
of the Company and the guarantee is secured by a pledge of 200,000 shares
of common stock held by such stockholder.
Additionally, as partial consideration for the loan, the Company granted to
the entities warrants to purchase 200,000 shares of common stock at an
exercise price of $5.00 per share expiring in October 2002. As of December
29, 1999 the original issue discount was fully amortized. In February 2000
the Company repaid this loan.
In October 1997, the Company issued to Mr. Cretella a promissory note in
the original principal amount of $720,405 which bears interest at the rate
of 10% per annum. Interest is payable in monthly installments of $6,003,
with the outstanding principal balance payable in November 2002 upon
maturity of the note. On December 30, 1998, Mr. Cretella converted the
$720,405 of indebtedness owed to him by the Company into 144,081 shares of
Series A Preferred Stock. As further inducement to Mr. Cretella to convert
the debt to equity the Company also issued to Mr. Cretella 72,040 warrants
to purchase the Company's Common Stock at $6.00 per share. The Company
received a fairness opinion with respect to this transaction.
5
<PAGE>
4. LOSS PER SHARE
--------------
For the calculation of the loss per share for the twenty-six weeks ended
fiscal 2000 and 1999, all of the Company options and warrants are excluded
for basic and diluted loss per share as they are anti-dilutive. The net
loss for the thirteen and twenty-six weeks ended March 29, 2000 has been
adjusted for th preferred stock dividend of $18,010 and $36,024,
respectively.
5. SALE OF COMMON STOCK
--------------------
In February 2000, the Company, in a private placement, sold 1 million
shares of common stock at $2.00 per share for net proceeds of $2,000,000.
6. PREFERRED STOCK
---------------
The Company's Board of Directors authorized the designation of 150,000
shares of preferred stock, of the 1,000,000 previously authorized and
unallocated, to be a series of preferred stock ("Series A Preferred Stock")
bearing a 10% cumulative dividend payable quarterly in cash, convertible
into Common Stock at anytime after issuance, at the holder's option, at the
rate of one share of Common Stock for each share of Series A Preferred
Stock, subject to adjustment under certain circumstances. The Series A
Preferred Stock is senior in rights and preferences to any subsequently
designated series and/or class of preferred stock and is entitled to one
vote per share of Common Stock into which the issued and outstanding shares
of Series A Preferred Stock is then convertible, on all matters submitted
to a vote of the Company's stockholders. Outstanding shares of Series A
Preferred Stock are redeemable at any time by the Company, at its option,
at the redemption price of $5.00 per share, upon timely notice of its
intent to redeem.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995: The statements which are not historical facts contained in the
Management's Discussion and Analysis of Financial Condition and Results of
Operations and elsewhere in this report on Form 10-QSB are forward-looking
statements that involve a number of known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
the Company to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, but are not limited to, the risks related to the opening of new
restaurants, including capital requirements, continued popularity of existing
and new restaurants, seasonality and other risks detailed in the Company's
filings with the Securities and Exchange Commission. The words "believe",
"expect", "anticipate", "intend" and "plan" and similar expressions identify
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date the statement
was made.
OVERVIEW
The Company operates LUNDY BROS. RESTAURANT ("LUNDY'S"), a high-volume,
casual, upscale seafood restaurant located in Brooklyn, New York, THE BOATHOUSE
IN CENTRAL PARK ("THE BOATHOUSE"), a multi-use facility featuring an upscale
restaurant and catering pavilion, located on the lake in New York City's Central
Park, and AMERICAN PARK AT THE BATTERY ("AMERICAN PARK"), a multi-use facility
featuring an upscale restaurant, catering floor, two outside patios and a fast
food kiosk, located at the water's edge in Battery Park, a New York City
landmark.
RESULTS OF OPERATIONS
Sales for the twenty-six weeks ended March 29, 2000 were $6,988,094, an
increase of $887,936 or 14.6%, as compared to $6,100,158 for the twenty-six
weeks ended March 31, 1999. The Company's sales for the thirteen weeks ended
March 31, 1999 were $2,341,944, an increase of $196,337 or 9.2%, as compared to
$2,145,607 for the thirteen weeks ended March 31, 1999. The increase in sales
for both the thirteen week period and twenty-six week period was primarily due
to an increase in sales at the AMERICAN PARK and LUNDY'S locations.
Cost of sales for the twenty-six weeks ended March 29, 2000 were $4,950,331
or 70.8% of sales as compared to $3,855,370 or 63.2% of sales for the twenty-six
weeks ended March 31, 1999. Cost of sales for the thirteen weeks ended March 29,
2000 were $2,210,585 or 94.4% of sales as compared to $1,530,544 or 71.3% of
sales for the thirteen weeks ended March 31, 1999. The increase in the cost of
sales relative to overall sales can be attributed to significant increases in
payroll expenses at THE BOATHOUSE and AMERICAN PARK, in addition to an unusually
short supply of lobsters during the winter months that caused a dramatic
increase in the cost of goods at LUNDYS.
As a result of the foregoing, gross profit for the twenty-six weeks ended
March 29, 2000 was $2,037,763 or 29.2% of sales as compared to $2,244,788 or
36.8% of sales for the twenty-six weeks ended March 31, 1999, an decrease of
$207,025 or 9.2%. Gross profit for the thirteen weeks ended March 29, 2000 was
$131,359 or 5.6% of sales as compared to $615,063 or 28.7% of sales for the
thirteen weeks ended March 31, 1999.
7
<PAGE>
Operating and administrative expenses for the twenty-six weeks ended March
29, 2000 were $3,404,497 or 48.7% of sales as compared to $2,611,945 or 42.8% of
sales for the twenty-six weeks ended March 31, 1999. Operating and
administrative expenses for the thirteen weeks ended March 29, 2000 were
$1,680,115 or 71.7% of sales as compared with $1,105,842 or 51.5% of sales for
the thirteen weeks ended March 31, 1999. The increase in operating and
administrative expenses was a result of the Company's gearing up for expansion
relative to the opening of a new LUNDYS location in Times Square and the efforts
related to the renewal of THE BOATHOUSE license agreement with the New York City
Department of Parks.
Other expenses for the twenty-six weeks ended March 29, 2000 were $478,195,
an increase of $22,448 or 4.9%, as compared to $455,747 for the twenty-six weeks
ended March 31, 1999. Other expenses for the thirteen weeks ended March 29, 2000
were $317,025, an increase of $99,355 or 45.6%, as compared to $217,670 for the
thirteen weeks ended March 31, 1999. Other expenses for the twenty-six weeks
ended March 29, 2000 consisted of $213,768 of barter expense as compared to
$152,475 in fiscal 1999. The Company also completed a sales tax audit for the
period ended September 1994, the results of the audit was a charge to
earnings of approximately $140,000 in underpaid taxes, penalties and interest.
These increases were offset by a decrease in interest expense related to a
charge of $154,170 for an original issue discount resulting from the issuance of
the Kayne Anderson warrants.
As a result of the foregoing, net loss amounted to $1,844,929 or $.50 per
share for the twenty-six weeks ended March 29, 2000, as compared to a net loss
of $822,904 or $.23 per share for the twenty-six weeks ended March 31, 1999. For
the thirteen weeks ended March 29, 2000, net loss amounted to $1,865,781 or $.46
per share, as compared to a net loss of $708,449 or $.20 per share for the
thirteen weeks ended March 31, 1999.
LIQUIDITY AND CAPITAL RESOURCES
The Company's capital requirements have been and will continue to be
significant and its cash requirements have been exceeding its cash flow from
operations (at March 29, 2000, the Company had a working capital surplus of
$617,936), due to, among other things, costs associated with development,
opening and start-up costs of AMERICAN PARK and PARK VIEW at THE BOATHOUSE and
building a corporate infrastructure sufficient to support the Company's
operations. As a result, the Company has been substantially dependent upon sales
of its equity securities, loans from financial institutions and the Company's
officers, directors and stockholders and bartering transactions with member
dining clubs to finance a portion of its working capital requirements.
During the twenty-six weeks ended March 29, 2000, net cash increased by
$2,990,177. Net cash used in operating activities was $1,941,944. Net cash used
in investing activities was $90,414, relating relating primarily to the
finalization of the Company's year 2000 preparation. The net increase in cash
from financing activities was $5,022,535.
The Company enters into bartering agreements with member dining clubs
whereby member dining clubs advance cash to the Company in exchange for the
Company's agreement to provide to the clubs' members food and beverages at a
designated Company restaurant. The restaurant must permit the clubs' members to
purchase food and beverages at rates between 160% and 200% of the amount
advanced. Upon entering into the agreement, the Company records its obligation
to provide food and beverages at the amount of the advance it receives. Upon a
guest purchasing food or beverages, the Company records revenue for the amount
of food and beverage purchased by the guest, and the barter discount as a barter
expense.
8
<PAGE>
In October 1997, Kayne Anderson Non-Traditional Investments, L.P. and ARBCO
Associates, L.P., affiliates of Kayne Anderson Investment Management, Inc.
(collectively, "Kayne Anderson"), loaned the Company an aggregate of $1,000,000.
The loans bear interest at the rate of 10% per annum, payable quarterly, and
were originally due May 31, 1999. Upon an event of default under the loans, the
interest rate increases to 15% per annum and the Company would be required to
pay to Kayne Anderson 50% of the operating profits from AMERICAN PARK on a
monthly basis until the loan is fully repaid. The loan is guaranteed by Frank
Cretella, President, Chief Executive Officer, a director and a principal
stockholder of the Company, and the guarantee is secured by a pledge of 200,000
shares of Common Stock owned by Frank Cretella and Jeanne Cretella, Vice
President, a director and principal stockholder of the Company. As partial
consideration for the loans, the Company issued to Kayne Anderson warrants (the
"KA Warrants") to purchase 200,000 shares of Common Stock. The KA Warrants are
exercisable at a price of $5.00 per share (subject to adjustment under certain
circumstances) and are exercisable at any time until October 31, 2002. The
Company incurred a non-cash interest charge of $482,000 representing the
original issue discount relating to the promissory notes issued to Kayne
Anderson. In February 2000 the Company repaid this loan in full.
In February 2000, the Company, in a private placement, sold 1 million
shares of common stock at $2.00 per share for net proceeds of $2,000,000. In
exchange for services rendered the Company has agreed to issue 45,417 shares of
its common stock to certain individuals in relation to the private placement.
Also in February the Company received $2,500,000 in financing. Repayment of the
principal will be paid out of the free cash of a new Lundy's location in Times
Square as defined in the Agreement. The financing bears interest at prime plus
1%.
The Company will need to raise additional capital to implement its
expansion plans. Other than the ability to enter into bartering transactions
with member dining clubs, the Company has no current arrangements with respect
to, or potential sources of, additional financing, and it is not anticipated
that any officers, directors or stockholders will provide any additional loans
to the Company.
SEASONALITY AND FLUCTUATIONS IN QUARTERLY OPERATING RESULTS.
The Company's business is seasonal. The bicycle, rowboat rentals and
outdoor dining at THE BOATHOUSE are open only March through November. The
catering facilities, indoor section of the PARK VIEW restaurant and the fast
food operation are opened year round, but at a substantially reduced sales
volume during the winter due to the BOATHOUSE'S location in the middle of
Central Park.
The two outdoor patios at AMERICAN PARK and the fast food kiosk are only
open March through November and its location in Battery Park also restricts
winter sales potential. The indoor restaurant and catering level are open year
round.
9
<PAGE>
LUNDY'S is a waterside location and attracts more guests during warmer
months. As a result, the Company's average weekly restaurant sales and operating
cash flow generally increases from April through October and decreases from
November through March.
The license agreement with the New York City Department of Parks (PARKS) is
due to expire on June 30, 2000. In response to a Request for Proposal issued by
PARKS, the Company submitted its proposal for a new fifteen year license
agreement. In January 2000, the Company was informed by PARKS that it had made
the first cut and was included as one of the three (3) finalists for the license
award. In March 2000, the Company was informed that PARKS had recommended
another proposer be awarded THE BOATHOUSE license agreement. After a thorough
review of all the proposals the Company, believed that the award by PARKS was
made as a result of a technical error. In April 2000, the Company presented its
findings to the New York City Franchise Concession and Review Committee, the
governing body charged with awarding all such license agreements. As a result of
its testimony, the Company was asked to provide additional written information
to Committee for further review by the 24th of April 2000. The Company intends
to vigorously pursue all of its legal remedies with respect to its renewal of
THE BOATHOUSE license agreement.
The Company also expects that future quarterly operating results will
fluctuate as a result of the timing of and expenses related to the openings of
new restaurants (as the Company will incur significant expenses during the
months preceding the opening of a restaurant), as well as due to various
factors, including the seasonal nature of its business, weather conditions in
New York City, the health of New York City's economy in general and its tourism
industry in particular. Accordingly, the Company's sales and earnings may
fluctuate significantly from quarter to quarter and operating results for any
quarter will not necessarily be indicative of the results that may be achieved
for a full year.
10
<PAGE>
YEAR 2000
To date the Company has not experienced any Year 2000 issues.
INFLATION
The effect of inflation on the Company has not been significant during the
last two fiscal years.
11
<PAGE>
PART II
OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
(a) On November 19, 1998 the Company's Board of Directors authorized the
designation of 150,000 shares of a series of preferred stock ("Series A
Preferred Stock") bearing a 10% cumulative dividend payable quarterly
in cash, convertible into Common Stock at anytime after issuance, at
the holder's option, at the rate of one share of Common Stock for each
share of Series A Preferred Stock, subject to adjustment under certain
circumstances. The Series A Preferred Stock is senior in rights and
preferences to any subsequently designated series and/or class of
preferred stock and is entitled to one vote per share of Common Stock
into which the issued and outstanding shares of Series A Preferred
Stock is then convertible, on all matters submitted to a vote of the
Company's stockholders. Outstanding shares of Series A Preferred Stock
are redeemable at any time by the Company, at its option, at the
redemption price of $5.00 per share, upon timely notice of its intent
to redeem.
(b) In December 1998, Frank Cretella converted $720,405 of indebtedness
owed by the Company to him into shares of Series A Preferred Stock at
the ratio of one share of Series A Preferred Stock for each $5.00 of
indebtedness outstanding. As an inducement to Mr. Cretella to convert
the debt to equity, the Company also issued Mr. Cretella 72,040
warrants to purchase the Company's Common Stock at $6.00 per share.
(c) On February 7, 2000, and February 9, 2000, the Registrant issued and
sold an aggregate of 1,000,000 shares of its Common Stock to three
accredited investors for a total purchase price of $2,000,000 under a
Common Stock Purchase Agreement dated as of February 1, 2000.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
27 Financial Data Schedule
(b) Reports on Form 8-K
During the period covered by this Report the Company filed a Form 8-K
on February 15, 2000 reporting the issuance of 1,000,000 shares of its
Common Stock to three accredited investors for a total purchase price
of $2,000,000.
12
<PAGE>
TAM RESTAURANTS, INC. AND SUBSIDIARIES
Signatures
In accordance with the requirements of the Exchange Act , the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
TAM RESTAURANTS, INC.
---------------------
(Registrant)
Dated: May 22, 2000 /S/ FRANK CRETELLA
------------------
Frank Cretella
President and
Chief Executive Officer
Dated: May 22, 2000 /S/ ANTHONY B. GOLIO
--------------------
Anthony B. Golio
Vice President
13
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-27-2000
<PERIOD-START> SEP-30-1999
<PERIOD-END> MAR-29-2000
<CASH> 3,072,991
<SECURITIES> 0
<RECEIVABLES> 745,272
<ALLOWANCES> (15,000)
<INVENTORY> 300,793
<CURRENT-ASSETS> 4,608,049
<PP&E> 9,428,244
<DEPRECIATION> 3,872,044
<TOTAL-ASSETS> 10,574,866
<CURRENT-LIABILITIES> 3,990,113
<BONDS> 0
14
0
<COMMON> 450
<OTHER-SE> 2,679,855
<TOTAL-LIABILITY-AND-EQUITY> 10,574,866
<SALES> 6,988,094
<TOTAL-REVENUES> 6,988,094
<CGS> 4,950,331
<TOTAL-COSTS> 4,950,331
<OTHER-EXPENSES> 353,768
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 124,427
<INCOME-PRETAX> (1,844,929)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,844,929)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,844,929)
<EPS-BASIC> .50
<EPS-DILUTED> .50
</TABLE>
