United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
(Mark One)
[ ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended
or
[X] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from September 1, 1995 to December 31, 1995
Commission File Number: 0-23278
Brazil Fast Food Corp.
(Exact name of registrant as specified in its charter)
Delaware 13-3688737
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Praia do Flamengo, 200-22o. Andar, CEP 22210-030, Rio de Janeiro, Brazil
(Address of principal executive offices)
011-55-21-285-2424
(Registrant's telephone number, including area code)
Former Fiscal Year - August 31st
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 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. [X] Yes [ ] No
Applicable Only to Issuers Involved in Bankruptcy
Proceeding During the Preceding Five Years:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. [ ] Yes [ ] No
Applicable Only to Corporate Issuers:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
7,126,984 shares of Common Stock at March 31, 1996
<PAGE>
Part I - Financial Information
Item 1. Financial Statements
The condensed financial statements included herein have been prepared
by Brazil Fast Food Corp., formerly Trinity Americas Inc., (the "Company"),
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. While certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations, the Company believes that the disclosures made herein are
adequate to make the information presented not misleading.
2
<PAGE>
BRAZIL FAST FOOD CORP.
(FORMERLY TRINITY AMERICAS INC.)
(A Development Stage Entity)
Balance Sheets
============================================================================
ASSETS
------
December 31, 1995 August 31, 1995
----------------- ---------------
(Unaudited)
Cash and cash equivalents $ 26,682 $ 240,555
Restricted cash and investments 9,746,545 9,524,015
Deferred acquisition costs 554,513 -
Prepaid and other assets 12,847 22,847
----------- ----------
TOTAL ASSETS $10,340,587 $9,787,417
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
LIABILITIES:
Accrued expenses and taxes $ 583,020 $ 132,303
----------- ---------
TOTAL LIABILITIES 583,020 132,303
----------- ----------
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value,
5,000 shares authorized; no
shares issued - -
Common stock, $.0001 par value,
20,000,000 shares authorized;
2,964,861 shares issued and
outstanding 296 296
Additional paid-in capital 9,567,175 9,567,175
Retained earnings accumulated during
the development stage 190,096 87,643
----------- ----------
TOTAL SHAREHOLDERS' EQUITY 9,757,567 9,655,114
----------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $10,340,587 $9,787,417
=========== ==========
See Selected Notes to Financial Statements
3
<PAGE>
BRAZIL FAST FOOD CORP.
(FORMERLY TRINITY AMERICAS INC.)
(A Development Stage Entity)
Statements of Operations
(Unaudited)
=============================================================================
For The For The
Four Months Three Months
Ended Ended Cumulative
December 31, November 30, Amounts from
1995 1994 Inception
------------ ------------ ------------
REVENUES $ - $ - $ -
------------ ------------ ------------
COSTS AND EXPENSES:
General and administration 63,801 61,165 605,310
------------ ------------ ------------
OTHER INCOME:
Interest and dividend income 224,254 111,844 920,106
------------ ----------- ------------
TOTAL OTHER INCOME 224,254 111,844 920,106
------------ ----------- -----------
INCOME BEFORE PROVISION FOR
INCOME TAXES 160,453 50,679 314,796
------------ ----------- -----------
PROVISION FOR INCOME TAXES 58,000 21,000 124,700
------------ ----------- -----------
NET INCOME $ 102,453 $ 29,679 $ 190,096
============ =========== ===========
NET INCOME PER COMMON SHARE $ .03 $ .01
============ ===========
WEIGHTED AVERAGE SHARES
OUTSTANDING 2,964,861 2,964,861
============ ===========
See Selected Notes to Financial Statements
4
<PAGE>
BRAZIL FAST FOOD CORP.
(FORMERLY TRINITY AMERICAS INC.)
(A Development Stage Entity)
Statements of Cash Flows
(Unaudited)
<TABLE><CAPTION>
=========================================================================================================
For The For The
Four Months Three Months
Ended Ended Cumulative
December 31, November 30, Amounts from
1995 1994 Inception
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 102,453 $ 29,679 $ 190,096
Changes in Certain Assets and Liabilities:
(Increase) decrease in prepaid expenses 10,000 - (12,847)
Increase in accrued expenses 100,717 17,854 233,020
----------- ------------ ------------
Net cash provided by (used in)
operating activities 213,170 47,533 410,269
----------- ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) in restricted cash and investments (222,530) (99,645) (9,746,545)
Deferred acquisition costs (204,513) - (204,513)
----------- ------------ ------------
Net cash (used in) investing activities (427,043) (99,645) (9,951,058)
----------- ----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock - - 9,567,471
Advances from affiliate - - 36,688
Repayment to affiliate - - (36,688)
------------ ------------ ------------
Net cash provided by financing activities - - 9,567,471
------------ ------------ -------------
Net increase (decrease) in cash and cash equivalents (213,873) (52,112) 26,682
Cash and cash equivalents, beginning of period 240,555 508,711 -
------------ ------------ -------------
Cash and cash equivalents, end of period $ 26,682 $ 456,599 $ 26,682
============ ============ ============
</TABLE>
See Selected Notes to Financial Statements
5
<PAGE>
<TABLE><CAPTION>
BRAZIL FAST FOOD CORP.
(FORMERLY TRINITY AMERICAS INC.)
(A Development Stage Entity)
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE PERIOD SEPTEMBER 16, 1992 (INCEPTION) TO
AUGUST 31, 1995 (Audited)
AND THE FOUR MONTHS ENDED DECEMBER 31, 1995 (UNAUDITED)
==============================================================================================================================
Retained
Earnings
(Deficit)
Accumulated
Additional During the
Common Stock Paid-In Development
-------------------
Shares Par Value Capital Stage Total
--------- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Issuance of stock to
original founders for
cash, at par value 2,000,000 $ 200 $ - $ - $ 200
.55555555-for-one reverse
stock split (888,889) (89) 89 - -
Issuance of units to public 1,850,000 185 9,567,069 - 9,567,254
Sale of warrants to
underwriter - - 17 - 17
Issuance of shares for legal
services 3,750 - - - -
Net loss for the period
(September 16, 1992)
(inception) through
August 31, 1994 - - - (51,095) (51,095)
--------- ----- ---------- -------- ----------
Balance, August 31, 1994 2,964,861 296 9,567,175 (51,095) 9,516,376
Net income for the year
ended August 31, 1995 - - - 138,738 138,738
--------- ----- ---------- -------- ----------
Balance, August 31, 1995 2,964,861 296 9,567,175 87,643 9,655,114
Net income for the four
months ended December 31,
1995 (unaudited) - - - 102,453 102,453
--------- ----- ---------- -------- ----------
Balance, December 31, 1995
(unaudited) 2,964,861 $ 296 $9,567,175 $190,096 $9,757,567
========= ===== ========== ======== ==========
</TABLE>
See Selected Notes to Financial Statements
6
<PAGE>
BRAZIL FAST FOOD CORP.
(FORMERLY TRINITY AMERICAS INC.)
(A Development Stage Entity)
SELECTED NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
================================================================================
NOTE 1 - FINANCIAL STATEMENTS
- -----------------------------
The financial statements have been prepared by Brazil Fast Food Corp. (formerly
Trinity Americas Inc.) ("the Company"), without audit. In the opinion of
management, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of operations and
cash flows at December 31, 1995 and for all periods presented have been made.
The results of operations for the period ended December 31, 1995 are not
necessarily indicative of the operating results for a full year.
Certain information and footnote disclosures prepared in accordance with general
accepted accounting principles and normally included in the financial statements
have been condensed or omitted. It is suggested that these financial statements
be read in conjunction with the financial statements and notes included in the
Company's Annual Report on Form 10-K for the year ended August 31, 1995.
NOTE 2 - ORGANIZATION AND OPERATIONS
- ------------------------------------
The Company was incorporated in the State of Delaware on September 16, 1992 to
serve as a vehicle to effect a merger, exchange of capital stock, assets
acquisition or other similar business combination (a "Business Combination").
The Company is currently in the development stage. All activity of the Company
to date relates to its formation, fund-raising and search to effect a Business
Combination (see Note 4).
NOTE 3 - RESTRICTED CASH AND CASH EQUIVALENTS
- ---------------------------------------------
The Company, pursuant to the terms of its initial public offering ("the
Offering"), placed $9,746,545 as of December 31, 1995, which includes interest
income, in a trust account which was primarily invested in a short term U.S.
Government Security. These funds are subject to release upon the earlier of (i)
the consummation of a Business Combination or (ii) the liquidation of the
Company.
7
<PAGE>
BRAZIL FAST FOOD CORP.
(FORMERLY TRINITY AMERICAS INC.)
(A Development Stage Entity)
SELECTED NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
================================================================================
NOTE 4 - SUBSEQUENT EVENT
- -------------------------
On March 19, 1996 (the "Closing"), the Company acquired all of the outstanding
quotas (shares of capital stock) of Venbo Comercio de Alimentos Ltda. ("Venbo")
from Bob's Industria e Comercio Ltda. ("BIEC") and Arnaldo Bisoni ("Bisoni" and
with BIEC, collectively, the "Sellers") for $19,200,000 (the "Purchase Price"),
of which $16,700,000 was paid in cash at the Closing (inclusive of $100,000
which had been previously paid in October 1995 upon the parties' execution of
the Heads of Agreement), with the balance of $2,500,000 payable with interest at
the rate of 1- 1/8% per annum over LIBOR due 720 days from the Closing. In
addition, the Company acquired all of the trademarks relating to Venbo's
business from Vendex International N.V., an affiliate of the Sellers, for
$1,800,000, payable to BIEC with interest at the rate of 6- 7/8% per annum in
monthly installments equal to 4% of Venbo's net sales for each immediately
preceding month. The Company's acquisition of the quotas and trademarks is
hereinafter referred to as the "Acquisition".
Venbo, a Brazilian limited liability company which conducts business under the
tradename "Bob's", owns and, directly and through franchisees, operates the
second largest chain of hamburger fast food restaurants in Brazil, including 46
units in the State of Rio de Janeiro, 22 units in the State of Sao Paulo and 10
units in the capital cities of other States of Brazil.
In order to raise sufficient cash to complete the Acquisition and to fund the
Company's subsequent expansion strategy, the Company sold 3,115,701 shares of
its Common Stock to new investors in a private transaction (the "Private
Placement") at $3.20 per share, resulting in net proceeds to the Company of
approximately $10,000,000.
Funding of the cash portion of the Purchase Price was derived from the following
sources: (i) approximately $9,900,000 from the Company's own funds; (ii)
$4,000,000 from a Brazilian subsidiary of Coca-Cola, which was paid to the
Company concurrently with the consummation of the Acquisition, in consideration
for Coca-Cola products being designated the exclusive soft drink products for
all of the Company's restaurants for a ten-year term and for the Company's
agreement to participate at its own expense in joint promotions and marketing
programs with Coca-Cola during such term; and (iii) the balance of $2,800,000
from the proceeds of the Private Placement.
8
<PAGE>
BRAZIL FAST FOOD CORP.
(FORMERLY TRINITY AMERICAS INC.)
(A Development Stage Entity)
SELECTED NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
================================================================================
NOTE 4 - SUBSEQUENT EVENT (cont'd)
- ----------------------------------
At the Closing, the Company issued 1,046,422 shares of its Common Stock to
Shampi Investments A.E.C. ("Shampi") in exchange for the assignment by Shampi to
the Company of Shampi's right to acquire the outstanding quotas of Venbo.
As a result of the Acquisition and the Private Placement: (i) Venbo became a
wholly-owned subsidiary of the Company, (ii) Shampi and the investors in the
Private Placement, collectively, acquired approximately 58.4% of the outstanding
Common Stock of the Company, (iii) designees of Shampi, being respectively,
Peter van Voorst Vader, Omar Carneiro da Cunha and Bisoni, became three of the
five members of the Company's Board of Directors, and (iv) the Company's name
was changed to "Brazil Fast Food Corp." Reference is made to the Company's
proxy statement dated February 12, 1996, for a discussion of Venbo's business
and the background of the Acquisition.
9
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Brazil Fast Food Corp. (formerly Trinity Americas Inc.) (the
"Company") was incorporated in September 1992 for the purpose of raising money
to fund a vehicle to effect a Business Combination with an operating business.
On February 9, 1994 the Company's Registration Statement covering 1,700,000
Units was declared effective by the Securities and Exchange Commission. Each
Unit consists of one share of the Company's Common Stock, one Class A Redeemable
Warrant and one Class B Redeemable Warrant (hereafter the "Units").
The Company, after the offering and the exercise of the over-allotment
option (150,000 Units), had net proceeds of approximately $9,567,271.
Approximately $8,891,100 was invested at The Chase Manhattan Bank, N.A. pursuant
to a Trust Agreement and the balance at the Bank of New York in checking and
money market accounts.
For the four months ended December 31, 1995 the Company had net income
of $102,453 primarily attributable to interest and dividend income offset by
general and administrative expenses and income taxes.
On March 19, 1996 (the "Closing"), the Company acquired all of the
outstanding quotas (shares of capital stock) of Venbo Comercio de Alimentos
Ltda. ("Venbo") from Bob's Industria e Comercio Ltda. ("BIEC") and Arnaldo
Bisoni ("Bisoni" and with BIEC, collectively, the "Sellers") for $19,200,000
(the "Purchase Price"), of which $16,700,000 was paid in cash at the Closing
(inclusive of $100,000 which had been previously paid in October 1995 upon the
parties' execution of the Heads of Agreement), with the balance of $2,500,000
payable with interest at the rate of 1- 1/8% per annum over LIBOR due 720 days
from the Closing. In addition, the Company acquired all of the trademarks
relating to Venbo's business from Vendex International N.V., an affiliate of
the Sellers, for $1,800,000, payable to BIEC with interest at the rate of
6-7/8% per annum in monthly installments equal to 4% of Venbo's net sales for
each immediately preceding month. The Company's acquisition of the quotas and
trademarks is hereinafter referred to as the "Acquisition".
Venbo, a Brazilian limited liability company which conducts business
under the tradename "Bob's", owns and, directly and through franchisees,
operates the second largest chain of hamburger fast food restaurants in Brazil,
including 46 units in the State of Rio de Janeiro, 22 units in the State of Sao
Paulo and 10 units in the capital cities of other States of Brazil.
In order to raise sufficient cash to complete the Acquisition and to
fund the Company's subsequent expansion strategy, the Company sold 3,115,701
shares of its Common Stock to new investors in a private transaction (the
"Private Placement") at $3.20 per share, resulting in net proceeds to the
Company of approximately $10,000,000.
10
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (cont'd)
Funding of the cash portion of the Purchase Price was derived from the
following sources: (i) approximately $9,900,000 from the Company's own funds;
(ii) $4,000,000 from a Brazilian subsidiary of Coca-Cola, which was paid to the
Company concurrently with the consummation of the Acquisition, in consideration
for Coca-Cola products being designated the exclusive soft drink products for
all of the Company's restaurants for a ten-year term and for the Company's
agreement to participate at its own expense in joint promotions and marketing
programs with Coca-Cola during such term; and (iii) the balance of $2,800,000
from the proceeds of the Private Placement.
At the Closing, the Company issued 1,046,422 shares of its Common
Stock to Shampi Investments A.E.C. ("Shampi") in exchange for the assignment by
Shampi to the Company of Shampi's right to acquire the outstanding quotas of
Venbo.
As a result of the Acquisition and the Private Placement: (i) Venbo
became a wholly-owned subsidiary of the Company, (ii) Shampi and the investors
in the Private Placement, collectively, acquired approximately 58.4% of the
outstanding Common Stock of the Company, (iii) designees of Shampi, being
respectively, Peter van Voorst Vader, Omar Carneiro da Cunha and Bisoni, became
three of the five members of the Company's Board of Directors, and (iv) the
Company's name was changed to "Brazil Fast Food Corp." Reference is made to the
Company's proxy statement dated February 12, 1996, for a discussion of Venbo's
business and the background of the Acquisition.
11
<PAGE>
Part II - Other Information
Not Applicable
12
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Brazil Fast Food Corp.
(registrant)
Dated: June 10, 1996
By:/s/ Peter van Voorst Vader
Peter van Voorst Vader
Chief Executive Officer
By:/s/ Marcos Bastos Rocha
Marcos Bastos Rocha
Chief Financial Officer
13
