[As adopted in Release No. 34-32231, April 28, 1993, 58 F.R. 26509]
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: September 30, 1998
-----------------------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from to
Commission file number 33-20111
Eat at Joe's Ltd.
(Exact name of small business issuer as
specified in its charter)
Delaware 75-2636283
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
P.O. Box 500, Yonkers, New York, 10704
(Address of principal executive offices)
(914) 725-2700
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
<PAGE>
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes 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 practical date: September 30, 1998 13,046,742
Transitional Small Business Disclosure Format (check one). Yes ; No X
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
EAT AT JOE'S LTD., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
1998 1997
----------- -----------
ASSETS:
Current Assets:
Cash and Cash Equivalents ................. $ 494,374 $ 232,601
Inventory ................................. 88,246 7,488
Other ..................................... 104,045 400
Prepaid Expense ........................... 8,333 30,993
Deposits .................................. 43,551 12,701
----------- -----------
Total Current Assets ................... 738,549 284,183
----------- -----------
Property and Equipment:
Equipment ................................. 1,349,268 279,667
Office Furniture .......................... 9,426 1,000
Leasehold Improvements .................... 4,252,115 1,527,099
----------- -----------
5,610,809 1,807,766
Less Accumulated Depreciation ............. (141,110) (11,546)
----------- -----------
5,469,699 1,796,220
----------- -----------
Other Assets:
Intangible and Other Assets, Net .......... 138,588 234,569
----------- -----------
Total Assets ........................... $ 6,346,836 $ 2,314,972
=========== ===========
<PAGE>
EAT AT JOE'S LTD., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Continued)
(Unaudited)
September 30, December 31,
1998 1997
----------- ------------
LIABILITIES:
Current Liabilities:
Accounts Payable and Accrued Liabilities ........ $ 441,263 $ 474,795
Short-Term Notes Payable ........................ 2,124,940 264,940
Shareholder Loans ............................... 452,455 702,922
----------- -----------
Total Current Liabilities ................... 3,018,658 1,442,657
----------- -----------
Convertible Debenture, net of issue costs ........ 1,343,449 --
----------- -----------
Total Liabilities ............................ 4,362,107 1,442,657
----------- -----------
Stockholders' Equity:
Preferred Stock - $.0001 par value,
10,000,000 shares authorized; Series A
Convertible, 51 issued and outstanding
September 30, 1998, Series B Convertible,
38 shares issued and outstanding, Series
C Convertible, 14 shares issued and
outstanding, Series D Convertible, 20
shares issued and outstanding September
30, 1998, none issued and outstanding
December 31, 1997 ........................... -- --
Common Stock - $.0001 par value, 50,000,000
shares authorized, 13,046,742 issued and
outstanding .................................. 1,305 1,273
Additional Paid-In Capital ...................... 5,026,307 2,244,299
Retained Deficit ................................ (3,042,883) (1,373,257)
----------- -----------
Total Stockholders' Equity ................... 1,984,729 872,315
----------- -----------
Total Liabilities and Stockholders' Equity ... $ 6,346,836 $ 2,314,972
=========== ===========
The accompanying notes are an integral part of these financial statements.
<PAGE>
EAT AT JOE'S LTD., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1998 1997 1998 1997
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Revenues .......................... $ 817,129 $ -- $ 1,280,873 $ --
Cost of Revenues .................. 534,769 -- 865,871 --
------------ ------------ ------------ ------------
Gross Margin ...................... 282,360 -- 415,002 --
Expenses
General and Administrative ..... 330,218 217,208 1,186,487 386,237
------------ ------------ ------------ ------------
Net loss from Continuing Operations (47,858) (217,208) (771,485) (386,237)
Other Income (Expense) Net ..... (78,235) 1,075 (92,107) 3,007
------------ ------------ ------------ ------------
Net Loss Before Income Taxes ...... (126,093) (216,133) (863,592) (383,230)
Income Tax Expense (Benefit) ...... -- -- -- --
------------ ------------ ------------ ------------
Net Loss Before Cumulative effects
of Accounting Change .............. (126,093) (216,133) (863,592) (383,230)
Cumulative effect of Accounting
Change on Years Prior to
1998, Net of Taxes ................ -- -- (84,732) --
Net Loss .......................... (126,093) (216,133) (948,324) (383,230)
------------ ------------ ------------ ------------
Less: Preferred Dividends ......... (129,647) -- (721,302) --
------------ ------------ ------------ ------------
Net Loss To Common Stockholders ... $ (255,740) $ (216,133) $ (1,669,626) $ (383,230)
============ ============ ============ ============
Net Loss Per Common Share Before
Cumulative effects of Accounting
Change ............................ (0.02) (0.01) (0.12) (0.02)
Cumulative effect of Accounting
Change ............................ -- -- (0.01) --
------------ ------------ ------------ ------------
Net Loss Per Common Share- Basic
and Diluted ....................... $ (0.02) $ (0.01) $ (0.13) $ (0.02)
============ ============ ============ ============
Weighted Average Number of
Common Shares ..................... 12,823,854 12,478,428 12,766,448 10,475,680
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
EAT AT JOE'S LTD., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1998 1997 1998 1997
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Cash Flows from Operating Activities:
Net loss for the period before cumulative
effects of accounting change .............. $ (126,093) $ (216,133) $ (863,592) $ (383,230)
Adjustments to Reconcile net loss to net cash
provided by operating activities
Depreciation and amortization .......... 79,304 -- 140,814 --
Stock issued for services .............. 65,275 -- 87,025 --
Payment of organization costs .......... -- -- -- (8,657)
(Increase) decrease in:
Inventory ........................... (79,489) -- (80,758) --
Prepaid expense ..................... (8,333) -- 22,660 (11,825)
Deposits ............................ (4,267) -- (30,850) 14,009
Other ............................... (103,645) (30,000) (103,645) (30,000)
Increase (decrease) in:
Accounts payable and accrued expenses 160,267 -- (33,532) 17,609
----------- ----------- ----------- -----------
Net Cash Used in Operating Activities: ......... (16,981) (246,133) (861,878) (402,094)
----------- ----------- ----------- -----------
Cash Flows From Investing Activities:
Purchase of property and equipment .......... (1,511,092) (531,482) (3,775,168) (646,246)
----------- ----------- ----------- -----------
Net Cash Used by Investing Activities: ......... (1,511,092) (531,482) (3,775,168) (646,246)
----------- ----------- ----------- -----------
Cash Flows From Financing Activities:
Issuance of convertible preferred stock ...... 589,460 -- 2,395,837 --
Purchase of convertible preferred stock ...... (450,000) -- (450,000) --
Issuance of common stock ..................... -- 149,965 -- 700,000
Proceeds from short-term notes payable ....... 110,000 -- 1,860,000 149,965
Proceeds from convertible debenture .......... 1,343,449 -- 1,343,449 --
Advances to majority stockholder ............. -- -- (364,292) --
Advances from majority stockholder ........... -- 176,800 113,825 190,800
----------- ----------- ----------- -----------
Net Cash Provided by Financing Activities ...... 1,592,909 326,765 4,898,819 1,040,765
----------- ----------- ----------- -----------
Increase in Cash ............................... 64,836 450,850 261,773 (7,575)
Cash at Beginning of Period .................... 429,538 478,247 232,601 34,972
----------- ----------- ----------- -----------
Cash at End of Period .......................... $ 494,374 $ 27,397 $ 494,374 $ 27,397
=========== =========== =========== ===========
</TABLE>
<PAGE>
EAT AT JOE'S LTD., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Continued)
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1998 1997 1998 1997
--------- ------------- --------- ---------
<S> <C> <C> <C> <C>
Supplemental Disclosure of
Interest and Income Taxes Paid
Interest paid for the period ... $ -- $ -- $ -- $ --
Income taxes paid for the period $ -- $ -- $ -- $ --
Supplemental Disclosure of
Non-cash Investing and
Financing Activities
Leasehold Improvements
acquired with issuance of
common stock ................. $ 18,794 $ -- $ 27,875 $149,837
Organization costs acquired
with issuance of common
Stock ........................ $ -- $ -- $ -- $ 200
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
EAT AT JOE'S LTD., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED September 30, 1998
(Unaudited)
1. Interim Reporting
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles and with Form 10-QSB
requirements. 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 considered
necessary for a fair presentation have been included. Operating results for the
nine month period ended September 30, 1998, are not necessarily indicative of
the results that may be expected for the year ended December 31, 1998. For
further information, refer to the financial statements and footnotes thereto
included in the Company's annual report on Form 10-KSB for the year ended
December 31, 1997.
2. Earnings (Loss) Per Share
In 1997, the Financial Accounting Standards Board issued SFAS No. 128,
"Earnings per Share" (EPS). SFAS No. 128 replaced the calculation of primary and
fully diluted earnings per share with basic and diluted earnings per share. The
application of SFAS No. 128 had no effect of the earnings per share for the nine
months ended September 30, 1996 as previously reported.
The effect of outstanding common stock equivalents, including warrants and
convertible debentures are antidilutive for the three and nine months ended
September 30, 1998 and 1997 and are thus not considered.
The reconciliations of the numerators and denominators of the basic
earnings per share computations are as follows:
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1998 1997 1998 1997
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
NUMERATOR
Net Loss Before Cumulative effects
of Accounting Change .......... (126,093) (216,133) (863,592) (383,230)
Less: Preferred Dividends ........ (129,647) -- (721,302) --
Cumulative effect of Accounting
Change on Years Prior to 1998,
Net of Taxes .................. -- -- (84,732) --
----------- ----------- ----------- -----------
Net Loss To Common Stockholders .. $ (255,740) $ (216,133) $(1,669,626) $ (383,230)
=========== =========== =========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
DENOMINATOR
Weighted Average Number of
Common Shares ................... 12,823,854 12,478,428 12,766,448 10,475,680
=========== ============ ============ ===========
</TABLE>
3. Adoption of New Accounting Principle
During 1998, the Company changed its method of accounting for costs of
start up activities to conform with new requirements of Statement of Position
98-5 "Reporting on the Costs of Start-Up Activities" (SOP 98-5). The effect of
this change was to increase net loss for the nine months ended September 30,
1998 by $84,732 ($0.01 per share). Financial Statements for 1997 have not been
restated in accordance with the provisions of SOP 98-5.
4. Convertible Preferred Stock
On March 2, 1998 the Company, through J.P. Carey, Inc as underwriters,
issued 51 shares (the "shares") of Series A Convertible Preferred Stock for a
total offering price of $1,018,315 less underwriting fees of $120,800. The
shares were issued pursuant to a private placement under Regulation D under the
Securities Act of 1933, as amended.
In May, 1998 the Company, through J.P. Carey, Inc as underwriters, issued
64 shares (the "shares") of Series B Convertible Preferred Stock for a total
offering price of $1,279,980 less underwriting fees of $254,742.
In September, 1998, the Company sold 14 shares of its Series C Convertible
Preferred Stock The Company received proceeds of approximately $239,000 from the
sale of the securities. As of the date of this prospectus the shares are
convertible and warrants (issued in connection with the offering) into 395,733
shares of Common Stock of the Company.
In September, 1998, the Company sold 20 shares of its Series D Convertible
Preferred Stock to an accredited investors pursuant to an exemption from
registration under the Section 4(2) and/or Regulation D. The Company received
proceeds of approximately $350,000 from the sale of the securities. As of the
date of this prospectus the shares are convertible and warrants (issued in
connection with the issuance of the shares) into 539,000 shares of Common Stock
of the Company.
The shares were issued pursuant to a private placement under the Section
4(2) and/or Regulation D under the Securities Act of 1933, as amended.
Dividends - The shares will pay a dividend of 3% per annum, payable in
arrears. The Company may at its option, pay interest in shares of common stock
or in cash on a quarterly basis. The number of shares of common stock issued
shall be determined by dividing the cash amount of interest then owed by the
conversion price (as defined herein) then in effect. Cash interest shall be
calculated based upon the actual number of days elapsed during any interest
period in a year of 360 days.
<PAGE>
Conversion - The shares are convertible into common stock at a price
("conversion price") equal to the lower of 120% of the five trading day average
closing bid price of the common stock previous to the closing of the transaction
or the discounted average stock price on the date of conversion. The discounted
average stock price is defined as 75% of the average of the daily closing bid
prices of the common stock for the five consecutive trading days immediately
preceding the date of conversion notice. The Company may require conversion of
the entire balance of unconverted shares after two years from the closing date.
Registration - The Company will be required to file a registration
statement covering the resale of shares of common stock received upon conversion
of the shares to permit the holder(s) thereof to resell the shares without
restrictions. The company will be required to file the registration statement,
with the Securities Exchange Commission ("SEC"), using all reasonable efforts to
file within 45 days of the closing date of the transaction. In addition, the
Company shall use its best efforts to have the registration statement declared
effective at the earlier of (a) ninety (90) days from the closing of the
transaction or (b) five (5) days after receiving a "No-Review" status from the
SEC. Such registration statement shall be kept current and effective for a
period through twelve (12) months from the date of the closing of transaction.
Right to Redeem - The Company also maintains the right to redeem, in cash
and in whole or in part, all unconverted shares or shares that have not been
submitted to the company for conversion, at a rate of 120% of the principal
amount. The Company must give investors a 30 day notice of such a redemption.
5. Convertible Debenture
On July 31, and September 2, 1998, the Company sold its 3 year maturity, 8%
convertible debenture in the aggregate principal amount of $1,500,000 to an
accredited investor pursuant to an exemption from registration under Section
4(2) and/or Regulation D. The Company retained proceeds of approximately
$933,000 from the sale of the securities and $450,000 was applied to the
repurchase of 19 shares of Series B Convertible Preferred Stock sold to an
investor on May 21, 1998. As of the date of this prospectus, the debentures are
convertible and warrants (issued in connection with the offering) exercisable
into 2,064,000 shares of Common Stock of the Company.
6. Warrants
In connection with the private placement by J.P. Carey Securities, Inc.
("Carey") of 51 shares of the Company's Series A Convertible Preferred Stock on
March 20, 1998, Carey received warrants to purchase 102,000 shares of the
Company's Common Stock, subject to adjustment. The warrants are exercisable at
$1.49 per share and expire on March 20, 2003.
In connection with the private placements by Carey of 64 shares of the
Company's Series B Convertible Preferred Stock in May, 1998, Carey received
warrants to purchase 28,000 shares of the Company's Common Stock, and its
designees, 126,000 warrants, subject to adjustment The warrants are exercisable
at $1.79 per share; 120,000 warrants expire on May 5, 2003 and 34,000 on
<PAGE>
May 22, 2003. 19 shares of Series B Convertible Preferred Stock were
subsequently redeemed and 19,000 Warrants expiring On May 22, 2003 will be
canceled.
In connection with the private placements by Sovereign Capital Advisers
("Sovereign") of 14 shares of the Company's Series C Convertible Preferred Stock
in September, 1998, Sovereign received warrants to purchase 19,600 shares of the
Company's Common Stock, and its designees, 2,800 warrants, subject to
adjustment. 16,000 of the warrants are exercisable at $1.15 per share and 6,400
at $1.01. The warrants expire 5 years after their issuance.
In connection with the private placement by Sovereign of 20 shares of the
Company's Series D Convertible Preferred Stock in September, 1998, Excalibur
Limited Partnership received warrants to purchase 40,000 shares and Sovereign's
designee warrants to purchase 4,000 shares of the Company's Common Stock subject
to adjustment. 40,000 warrants are exercisable at $1.45 per share and 4,000 at
$1.65 per share. The Warrants expire 5 years after their issuance.
In connection with the private placements by Sovereign of $1,500,000
principal amount of the Company's convertible debentures on July 31 and
September 2, 1998, Sovereign received warrants to purchase 56,000 shares of the
Company's Common Stock, and its designees_8,000_warrants, subject to adjustment.
36,000 warrants are exercisable at $1.38 per share and 28,000 warrants are
exercisable at $1.05 per share. The warrants expire 5 years after their
issuance.
The Warrant Agreement provides for adjustment of the exercise price and the
number of shares of Common Stock purchasable upon exercise of the Warrants to
protect Warrant holders against dilution in certain events, including stock
dividends, stock splits, reclassification, and any combination of Common Stock,
or the merger, consolidation, or disposition of substantially all the assets of
the Company.
The Company has agreed to "piggy-back" registration rights for the
securities underlying the Warrants at the Company's expense during the during
the five years following the issuance of the Warrants. In addition, at any time
commencing 90 days after the issuance of the warrants, the Company has agreed to
register the securities underlying the Warrants at the Company's expense upon
notice from the holders.
Wall Street Management Group, Inc. holds 5 year options to acquire 61,350
restricted shares of the Company's Common Stock at a price of $1.63 per share.
See "Certain Transactions."
In connection with a Regulation D 504 offering completed in November, 1996,
the Company sold 6,000,000 shares of Common Stock and Warrants to purchase an
additional 2,000,000 shares at $1.00 per share. As of the date of this
Prospectus 1,100,000 Warrants remain unexercised.
7. Certain Transactions
During March 1998, the Company entered into a 12 month agreement with the
Wall Street Group, Inc. ("Wall Street") calling for Wall Street to act as a
financial public relations counsel to the
<PAGE>
Company. The agreement calls for monthly payments of $5,000 for services
rendered and grants a five year option to Wall Street to acquire 61,350 shares
of the Company's common stock at $1.63 per share.
Item 2. Management's Discussion and Analysis or Plan of Operation.
Plan of Operations - Eat at Joe's Ltd. Intends to open and operate theme
restaurants styled in an "American Diner" atmosphere where families can eat
wholesome, home cooked food in a safe friendly atmosphere. Eat at Joe's, the
classic American grill, is a restaurant concept that takes you back to eating in
the era when favorite old rockers were playing on chrome-spangled jukeboxes and
neon signs reflected on shiny tabletops of the 1950's. Eat at Joe's fulfills the
diner dream with homey ambiance that's affordable while providing food whose
quality and variety is such you can eat there over and over, meal after meal. To
build on the diner experience, a retail section in each Eat at Joe's would allow
customers to take the good feelings home with them, in the form of 50's
memorabilia.
The Company's expansion strategy is to open restaurants either through
Joint Venture agreements or Company owned units. Units may consist of a
combination of full service restaurants or food court locations. Restaurant
construction will take from 90-150 days to complete on a leased site.
In considering site locations, the Company concentrates on trade
demographics, such as traffic volume, accessibility and visibility. High
Visibility Malls and Strip Malls in densely populated suburbs are the preferred
locations. The Company also scrutinizes the potential competition and the
profitability of national restaurant chains in the target market area. As part
of the expansion program, the Company will inspect and approve each site before
approval of any joint venture or partnership.
A typical food court unit is approximately 500 square feet, whereas for a
full service operation it is approximately 3,500 square feet. Food court
operation consists of a limited menu. A full service restaurant consists of
30-35 tables seating about 140- 150 people. The bar area will hold 6-8 tables
and seats 30-35 people.
The restaurant industry is an intensely competitive one, where price,
service, location, and food quality are critical factors. The Company has many
established competitors, ranging from similar casual-style chains to local
single unit operations. Some of these competitors have substantially greater
financial resources and may be established or indeed become established in areas
where the Eat at Joe's Company operates. The restaurant industry may be affected
by changes in customer tastes, economic, demographic trends, and traffic
patterns. Factors such as inflation, increased supplies costs and the
availability of suitable employees may adversely affect the restaurant industry
in general and the Eat at Joe's Company Restaurant in particular. Significant
numbers of the Eat at Joe's personnel are paid at rates related to the federal
minimum wage and accordingly, any changes in this would affect the Company's
labor costs.
Results of Operations - From March 1, 1990 to December 12, 1995 the Company was
an inactive corporation. From December 12, 1995 to November 1997 the Company was
a development stage company and had not begun principal operations. During
November and December 1997 two restaurants were opened, during May 1998 two
additional restaurants were opened, and during third
<PAGE>
quarter 1998 four additional restaurants were opened and began operations.
LIQUIDITY AND CAPITAL RESOURCES
The Company has generated minimal revenues from product sales. Revenues are
not yet sufficient to support the Company's operating expenses, however, the
Company is cautiously optimistic that operating revenues will be adequate to
meet operating expenses during the next year. Since the Company's formation, it
has funded its operations and capital expenditures primarily through private
placements of debt and equity securities and has borrowed approximately
$2,100,000 from unrelated entities as of September 30, 1998. The notes are
payable one year from the date of issuance together with interest at 6.50%
A.P.R. The Company will be required to seek additional financing in the future.
There can be no assurance that such financing will be available at all or
available on terms acceptable to the Company.
The increase in capital resources for 1998 and 1997 is attributable to the
private placement of Preferred and Common Stock and the issuance of debt.
Government Regulations - The Company is subject to all pertinent Federal, State,
and Local laws governing its business. Each Eat at Joe's is subject to licensing
and regulation by a number of authorities in its State or municipality. These
may include health, safety, and fire regulations. The Company's operations are
also subject to Federal and State minimum wage laws governing such matters as
working conditions, overtime and tip credits.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not party to any material litigation and is not aware of any
threatened litigation that would have a material adverse effect on its business.
Item 2. Changes in Securities
In November 1996, the Company raised $60,000 through the issuance 600,000
shares of its Common Stock and warrants to acquire 2,000,000 shares at an excise
price of $1.00 per share. The offering was exempt from registration pursuant to
Regulation D Section 504. In 1997, 900,000 warrants were exercised against
payment of $900,000.
In January, 1997 the shareholders of the Company adopted an agreement
whereby 5,505,000 shares of the Company's Common Stock was exchanged for a 100%
interest in E.A.J. Holding Corporation, Inc. Messrs. Joseph Fiore and Andrew
Cosenza, Jr., the Company's Chairman and President, were the owners of all the
outstanding shares of E.A.J. Holding Corporation, Inc. The Company issued its
shares upon an exemption from registration under Section 4(2) of the Securities
Act.
In March, 1998, the Company sold 51 shares of its Series A Convertible
Preferred Stock to a total of 8 accredited investors pursuant to an exemption
from registration under the Section 4(2) and/or Regulation D or as an
alternative, Regulation S of the Act. The Company received proceeds of
approximately $797,000 from the sale of the securities. As of the date of this
prospectus the shares are convertible and warrants (issued in connection with
the offering) exercisable into 1,700,725 shares of Common Stock of the Company.
On May 5 1998, the Company sold 30 shares of its Series B Convertible
Preferred Stock to a total of 3 accredited investors pursuant to an exemption
from registration under the Section 4(2) and/or Regulation D. The Company
received proceeds of approximately $484,,000 from the sale of the securities. As
of the date of this prospectus the shares are convertible and warrants (issued
in connection with the offering) exercisable into 990,064 shares of Common Stock
of the Company.
On May 21, 1998, the Company sold 34 shares of its Series B Convertible
Preferred Stock to a total of 2 accredited investors pursuant to an exemption
from registration under the Section 4(2) and/or Regulation D. The Company
received proceeds of approximately $549,,000 from the sale of the securities. As
of the date of this prospectus the shares are convertible and warrants (issued
in connection with the offering) excersisable into 433,916 shares of Common
Stock of the Company.
In September, 1998, the Company sold 14 shares of its Series C Convertible
Preferred Stock to 2 accredited investors pursuant to an exemption from
registration under the Section 4(2)
<PAGE>
and/or Regulation D. The Company received proceeds of approximately $239,000
from the sale of the securities. As of the date of this prospectus the shares
are convertible and warrants (issued in connection with the offering) into
395,733 shares of Common Stock of the Company.
On July 31, and September 2, 1998, the Company sold its 8% convertible
debenture in the aggregate principal amount of $1,500,000 to an accredited
investor pursuant to an exemption from registration under Section 4(2) and/or
Regulation D. The Company retained proceeds of approximately $933,000 from the
sale of the securities and $450,000 was applied to the repurchase of 19 shares
of Series B Convertible Preferred Stock sold to an investor on May 21, 1998. As
of the date of this prospectus, the debentures are convertible and warrants
(issued in connection with the offering) exercisable into 2,064,000 shares of
Common Stock of the Company.
In September, 1998, the Company sold 20 shares of its Series D Convertible
Preferred Stock to an accredited investors pursuant to an exemption from
registration under the Section 4(2) and/or Regulation D. The Company received
proceeds of approximately $350,000 from the sale of the securities. As of the
date of this prospectus the shares are convertible and warrants (issued in
connection with the issuance of the shares) into 539,000 shares of Common Stock
of the Company.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
The Company did not file a report on Form 8-K during the three months ended
September 30, 1998.
<PAGE>
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.
EAT AT JOE'S LTD.
(Registrant)
DATE: November 13, 1998 By: /s/ Joseph Fiore
--------------------- -------------------
Joseph Fiore
C.E.O., Chairman, Secretary, Director
(Principal financial and Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET OF EAT AT JOE'S, LTD. AS OF SEPTEMBER 30, 1998 AND THE RELATED
STATEMENTS OF OPERATIONS AND CASH FLOWS FOR THE NINE MONTHS THEN ENDED AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 494
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 88
<CURRENT-ASSETS> 739
<PP&E> 5611
<DEPRECIATION> 141
<TOTAL-ASSETS> 6347
<CURRENT-LIABILITIES> 3019
<BONDS> 1343
0
0
<COMMON> 1
<OTHER-SE> 1984
<TOTAL-LIABILITY-AND-EQUITY> 6347
<SALES> 1281
<TOTAL-REVENUES> 1281
<CGS> 866
<TOTAL-COSTS> 866
<OTHER-EXPENSES> 1186
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 92
<INCOME-PRETAX> (864)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (85)
<NET-INCOME> (948)
<EPS-PRIMARY> (0.13)
<EPS-DILUTED> (0.13)
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