As Filed with the Securities and Exchange Commission on July 3, 1996
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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
55-21-285-2424
(Address, including zip code, and
telephone number, including area code, of
Registrant's principal executive offices)
PETER van VOORST VADER
Chief Executive Officer
Brazil Fast Food Corp.
Praia do Flamengo
200-22o. Andar
CEP 22210-030
Rio de Janeiro, Brazil
55-21-285-2424
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all communications and notices to:
IRA I. ROXLAND, Esq.
Parker Duryee Rosoff & Haft
529 Fifth Avenue
New York, New York 10017
Tel: (212) 599-0500
Fax: (212) 972-9487
Approximate date of commencement of proposed sale to the public: At such
time after the effective date of this Registration Statement as the Selling
Stockholders shall determine.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.|_|
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box.|X|
<PAGE>
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.|_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
<TABLE>
<CAPTION>
======================================================================================================
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------
Title of Each Class Proposed Maximum Proposed Maximum
of Securities to be Amount to be Offering Price Aggregate Offering Amount of
Registered Registered Per Share* Price* Registration Fee
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.0001
par value........... 520,000 shs. $5.25 $2,730,000.00 $941.38
======================================================================================================
</TABLE>
* Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c).
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
BRAZIL FAST FOOD CORP.
(Cross Reference Sheet Pursuant to Item 501 of Regulation S-K)
Items in Form S-3 Location in Registration Statement
or Heading in Prospectus
1. Forepart of the Registration Facing Page of the Registration
Statement and Outside Front Statement; Cross-Reference Sheet;
Cover Page of Prospectus Outside Front Cover Page
2. Inside Front and Outside Back Table of Contents; Available
Cover Pages of Prospectus Information; Incorporation of
Certain Documents by Reference
3. Summary Information, Risk The Company
Factors and Ratio of Earnings
to Fixed Charges
4. Use of Proceeds Cover Page; Selling Stockholders
5. Determination of Offering Price Cover Page; Selling Stockholders
6. Dilution *
7. Selling Security Holders Selling Stockholders
8. Plan of Distribution Cover Page; Selling Stockholders
9. Description of Securities to be Incorporation of Certain Documents
Registered by Reference
10. Interests of Named Experts Legal Opinion; Experts
11. Material Changes *
12. Incorporation of Certain Incorporation of Certain Information
Information by Reference by Reference
13. Disclosure of Commission *
Position on Indemnification for
Securities Act Liabilities
- ----------------------
* Not Applicable
<PAGE>
Prospectus
520,000 Shares
BRAZIL FAST FOOD CORP.
Common Stock
------------------------
This Prospectus relates to 520,000 shares of common stock, par value
$0.0001 per share (the "Common Stock"), of Brazil Fast Food Corp. (the
"Company"), which shares are being offered for sale by the persons named herein
under the caption "Selling Stockholders" (the "Selling Stockholders"). The
Company will not receive any of the proceeds from the sale of shares by the
Selling Stockholders. See "Selling Stockholders."
The Common Stock is quoted on The Nasdaq SmallCap Market (the "NASDAQ-SCM")
under the symbol "BOBS." On July , 1996, the closing last sale price of the
Common Stock as reported by the NASDAQ-SCM was $ . per share.
------------------------
The Common Stock offered hereby involves a high degree of risk. See "Risk
Factors" commencing on p. 4 of this Prospectus.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The Selling Stockholders, or their pledgees, donees, transferees or other
successors, may sell the Common Stock in any of three ways: (i) through
broker-dealers; (ii) through agents or (iii) directly to one or more purchasers.
The distribution of the Common Stock may be effected from time to time in one or
more transactions (which may involve crosses or block transactions) (A) in the
over-the-counter market, or (B) in transactions otherwise than in the
over-the-counter market. Any of such transactions may be effected at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices, at negotiated prices or at fixed prices. The Selling Stockholders
may effect such transactions by selling the Common Stock to or through
broker-dealers, and such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Stockholders and/or
commissions from purchasers of the Common Stock
<PAGE>
for whom they may act as agent (which discounts, concessions or commissions will
not exceed those customary in the types of transactions involved). The Selling
Stockholders and any broker-dealers or agents that participate in the
distribution of the Common Stock might be deemed to be underwriters, and any
profit on the sale of the Common Stock by them and any discounts, commissions or
concessions received by any such broker-dealers or agents might be deemed to be
underwriting discounts and commissions under the Securities Act of 1933, as
amended (the "Securities Act").
The Company has agreed to bear all expenses (other than selling discounts,
concessions and commissions) in connection with the registration and sale of the
Common Stock being offered by the Selling Stockholders. The Company has agreed
to indemnify the Selling Stockholders against certain liabilities, including
liabilities under the Securities Act.
The Common Stock being offered hereby by the Selling Stockholders has not
been registered for sale under the securities laws of any state or jurisdiction
as of the date of this Prospectus. Brokers or dealers effecting transactions in
the Common Stock should confirm the registration thereof under the securities
law of the state in which such transactions occur, or the existence of any
exemption from registration.
------------------------
The date of this Prospectus is July ___, 1996
<PAGE>
TABLE OF CONTENTS
The Company ..................................................... 1
Risk Factors..................................................... 4
Available Information........................................... 11
Incorporation of Certain Documents by Reference ................ 12
Selling Stockholders ........................................... 13
Legal Opinion................................................... 14
Experts......................................................... 14
No dealer, salesperson or other person has been authorized to give any
information or to make any representations not contained in this Prospectus or
incorporated by reference to this Prospectus, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, the securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. The delivery of this Prospectus at any time
does not imply that the information contained herein is correct as of any time
subsequent to its date.
<PAGE>
THE COMPANY
Unless otherwise specified, all references in this Prospectus to (i)
"reais," the "real" or "R$" are to the Brazilian real (singular), or to the
Brazilian reais (plural), the legal currency of Brazil, and (ii) "U.S. dollars"
or "$" are to United States dollars. All amounts in Brazilian currencies which
existed prior to the adoption of the real as the Brazilian national currency on
July 1, 1994 have been restated in reais in this Prospectus. Unless otherwise
specified, all financial statements and other financial information either
presented herein or incorporated herein by reference are in accordance with
generally accepted accounting principles in the United States ("U.S. GAAP").
General
Brazil Fast Food Corp. (the "Company"), through its wholly-owned
subsidiary, Venbo Comercio de Alimentos Ltda. ("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 47 units in the State of Rio de
Janeiro, 29 units in the State of Sao Paulo and 13 units in the capital cities
of other Brazilian States.
The Company, formerly Trinity Americas Inc. ("Trinity"), was incorporated
in the State of Delaware in April 1991. The executive offices of the Company are
located at Praia do Flamengo, 200-22o. Andar, CEP 22210-030, Rio de Janeiro,
Brazil; its telephone number is 55 21 285-2424.
The Acquisition
Trinity was formed in September 1992 to serve as a vehicle to effect a
merger, exchange of capital stock, asset acquisition or other similar business
combination (a "Business Combination") with an operating business (an "Acquired
Business") located in Latin America, primarily in Argentina, Brazil, Chile or
Mexico (the "Target Countries").
In February 1994, Trinity successfully consummated an initial public
offering of its equity securities (the "IPO") from which it derived net proceeds
of approximately $9,600,000. Of such proceeds, approximately $8,800,000, was
deposited in a trust account (the "Trust Account") pending the consummation of a
Business Combination, which occurred on March 19, 1996 as described below, at
which time such proceeds, including interest earned thereon (approximately
$9,900,000), were released to Trinity. The balance of such net proceeds, which
were not required to be deposited in the Trust Account, were used to pay
Trinity's IPO offering expenses, to pay Trinity's operating expenses subsequent
<PAGE>
to the IPO, including expenses attendant to the evaluation of prospective
Acquired Businesses, and to partially defray professional fees and other
expenses incurred by Trinity in connection with the Acquisition described below.
On March 19, 1996 (the "Closing"), Trinity acquired all the outstanding
quotas (shares of capital stock) of Venbo from Bob's Industria e Comercio Ltda.
("BIEC") and Arnaldo Bisoni ("Bisoni") for $19,200,000 (the "Purchase Price"),
of which $16,700,000 was paid in cash at the Closing (inclusive of a $100,000
prepayment in October 1995), 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, with payment to be assured by a guarantee of Banco Bradesco S.A. In
addition, Trinity acquired all of the trademarks relating to Venbo's business
from Vendex International N.V., an affiliate of both BIEC and Bisoni, for
$1,800,000 (the "Trademarks Purchase Price"), 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. Trinity's acquisition of the quotas
and trademarks is hereinafter referred to as the "Acquisition."
At the Closing, Trinity issued 1,046,422 shares of its Common Stock to
Shampi Investments A.E.C. ("Shampi) in exchange for the assignment by Shampi to
Trinity of Shampi's right to acquire the outstanding quotas of Venbo. These
shares have been pledged as collateral security for Trinity's payment of the
Trademarks Purchase Price.
In order to raise sufficient cash to complete the Acquisition and to fund
Trinity's subsequent expansion strategy, Trinity 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 Trinity of approximately
$10,000,000. The participants in the Private Placement were domestic, European
and Latin American financial institutions and private investors, all of whom
were "accredited" (as such term is defined in the Securities Act of 1933, as
amended (the "Securities Act"), and in the rules promulgated thereunder).
Funding of the cash portion of the Purchase Price was derived from the
following sources: (i) approximately $9,900,000 from the funds held in the Trust
Account; (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.
2
<PAGE>
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 an approximately 58.4% equity interest
in the Company, (iii) designees of Shampi, being, respectively, Peter van Voorst
Vader, Omar Carneiro de Cunha and Arnaldo 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."
Recent Developments
On June 10, 1996, the Company acquired all of the outstanding capital
shares (quotas) of, respectively, Bigburger Sao Paulo Lanchonetes Ltda. and
Bigburger Goiania Lanchonetes Ltda., each a Brazilian corporation (collectively,
the "Acquired Companies"), from Rucker Holdings Corporation, a non-affiliated
British Virgin Islands corporation ("Rucker"), for (i) $250,000 (paid in
Brazilian reais) and (ii) 510,000 shares of the Company's Common Stock.
The Acquired Companies owned and operated 7 "Mr. Theo" hamburger fast food
restaurants in Sao Paulo and Goiania, Brazil. All of these have been rebranded
and are now operating under the Company's "Bob's" tradename.
On May 14, 1996, the Company entered into a letter of intent with a
non-affiliated person to acquire the "Big Burger" hamburger fast food restaurant
chain, consisting of 27 retail outlets (inclusive of outlets operated by
franchisees) in nine Brazilian States for 1,520,000 shares of the Company's
Common Stock. There can be no assurances given that this acquisition, which is
subject to the preparation and execution of a definitive purchase agreement and
the completion of customary "due diligence" investigations, will be consummated.
3
<PAGE>
RISK FACTORS
An investment in the securities offered hereby involves certain risks.
Prospective investors should carefully consider the following factors, in
addition to the other information contained in this Prospectus, before making an
investment decision.
Risks Relating to Operations
Operating Losses
Venbo incurred losses from operations of R$162,000, R$6,626,000,
R$9,959,000 and R$8,179,000 for the three month period ended March 31, 1996 and
the years ended December 31, 1995, 1994 and 1993, respectively. Venbo's losses
for the year ended December 31, 1993 were primarily attributable to low sales
volume, as well as higher than average costs resulting in substantial part from
purchases of goods from affiliated companies. Although sales volume increased in
1994, Venbo incurred significant non-recurring expenses in connection with the
reorganization of the corporate structure of Venbo and its affiliates. In 1995,
Venbo eliminated inter-company purchasing, but its increased sales volume was
offset by a royalty fee paid to BIEC, its parent, for the use of certain
trademarks and servicemarks and certain product formulas and manufacturing
processes and the write-down of an investment in an affiliated company. There
can be no assurance that the Company's future operations will be profitable.
Competition
The restaurant industry, and particularly the fast food segment, is highly
competitive with respect to price, service, food quality (including taste,
freshness, healthfulness and nutritional value) and location. The Company and
its franchisees face competition from a broad range of other restaurants and
food service establishments. These competitors include international, national
and local fast food chains. The Company's most significant competitor is
McDonald's, whose restaurants offer food products similar to those offered by
Bob's restaurants, at comparable prices. Several international and local
competitors have also recently entered the Brazilian fast food market, including
Arby's and Subway, as well as Pepsico Food Service International ("Pepsico")
which is rapidly expanding the number of its Pizza Hut stores. In addition,
Pepsico has announced expansion plans for its Kentucky Fried Chicken chain. A
significant Brazilian fast food competitor is Habbib's, which offers Middle
Eastern food at its 60 stores, all in Sao Paulo. McDonald's and Pepsico have
vastly greater over-all financial and other resources than the Company.
4
<PAGE>
The fast food industry is characterized by the frequent introduction of new
products, accompanied by substantial promotional campaigns. In recent years,
numerous companies in the fast food industry have introduced products positioned
to capitalize on growing consumer preference for food products that are, or are
perceived to be, healthful, nutritious, low in calories and low in fat content.
It can be expected that the Company will be subject to increasing competition
from companies whose products or marketing strategies address these consumer
preferences. There can be no assurance that consumers will continue to regard
Bob's products as sufficiently distinguishable from competitive products, that
substantially equivalent products will not be introduced by the Company's other
competitors or that the Company will be able to compete successfully.
Certain Factors Affecting the
Fast Food Restaurant Industry
In order to remain competitive, the Company is required to respond to
various consumer preferences, tastes and eating habits; demographic trends and
traffic patterns; increases in food and labor costs; and national, regional and
local economic conditions. Many companies internationally have adopted "value
pricing" strategies. Such strategies could have the effect of drawing customers
away from companies that do not engage in discount pricing and could also
negatively impact the operating margins of competitors that do attempt to match
competitors' price reductions. Continuing or sustained price discounting in the
fast food industry could have an adverse effect on the Company. In addition,
after investing resources in the training of its employees, the Company faces
pressure from competitors who may try to hire such employees after they have
been trained by the Company.
Franchise Expansion
In the opinion of management, the Company's growth strategy is
substantially dependent upon its ability to attract, retain and contract with
qualified franchisees and the ability of these franchisees to open and operate
their restaurants successfully. In addition, the Company's continued growth will
depend in part on the ability of existing and future franchisees to obtain
sufficient financing or investment capital to meet their market development
obligations. If the Company experiences difficulty in contracting with qualified
franchisees, if franchisees are unable to meet their development obligations or
if franchisees are unable to operate their restaurants profitably, then the
Company's future operating results could be adversely affected.
5
<PAGE>
Government Regulation
The Company and its franchisees are subject to regulatory provisions
relating to the wholesomeness of food, sanitation, health, safety, fire, land
use and environmental standards. Suspension of certain licenses or approvals due
to failure to comply with applicable regulations or otherwise, could interrupt
the operations of the affected restaurant. The Company and its franchisees are
also subject to Brazilian federal labor codes establishing minimum wages and
regulating overtime and working conditions. Changes in such codes could result
in increased labor costs that could adversely impact future operating results. A
Brazilian federal franchising law, enacted in December 1994, requires a
franchisor to furnish a written offering statement to each perspective
franchisee prior to consummation of the sale of a franchise, containing (i) the
franchisor's background; (ii) the duties and responsibilities of each of the
franchisor and franchisee; (iii) all fees payable by the franchisee to the
franchisor; and (iv) information with respect to the operations and
profitability of prior franchisees of the franchisor. Such offering statement is
not required to be reviewed by, or filed with any governmental agency. The
franchise law also delineates the respective legal rights, primarily rights of
action, of the franchisor and franchisee. Should any further laws applicable to
franchise relationships and operations be enacted, the Company is unable to
predict their effect on its operations.
Dependence on Key Personnel
Management believes that the Company's future success will depend in
significant part upon the continued service of certain key personnel
(principally Peter van Voorst Vader and Rogerio Carlos Lamin Braz, the Chief
Executive Officer and the President, respectively, of both the Company and
Venbo), and upon the Company's ability to attract and retain highly qualified
managerial personnel. Competition for such personnel is intense, and there can
be no assurance that the Company can retain its existing key managerial
personnel or that it can attract and retain such employees in the future. The
loss of key personnel or the inability to hire or retain qualified personnel in
the future could have a material adverse effect upon the Company's results of
operations. The Company has entered into three year employment agreements with
each of Messrs. van Voorst Vader and Braz.
Seasonality
The Company's revenues are subject to seasonality as approximately 30% of
its sales are generated during the Brazilian summer months of December and
January as well as July due to higher than normal tourist traffic.
6
<PAGE>
Risks Relating to Brazil
Change of Economic Environment
In March 1994 the Brazilian government commenced a new economic
stabilization plan, known as the "Real Plan". Pursuant to the Real Plan, the
government (a) implemented a tax and public spending reform program designed to
reduce public expenditures and to improve the collection of tax revenues, (b)
announced the continuation of a privatization program and (c) on July 1, 1994,
introduced a new currency, known as the real, to replace the cruzeiro real.
The Real Plan has resulted in substantial reduction in Brazil's rate of
inflation, which has declined from 2,489.11% per annum in 1993 to 929.32% per
annum in 1994 to 22.5% per annum in 1995, respectively.
Despite the success to date of the Real Plan in reducing substantially
prevailing inflation levels in Brazil, there can be no assurance that this
economic program will be any more successful than previous programs in reducing
inflation over the long term. Accordingly, periods of substantial inflation may
in the future once again have significant adverse effects on the Brazilian
economy, on the value of the real and on the Company's financial condition,
results of operations and business prospects.
Currency Fluctuations
Fluctuations in the exchange rates between the Brazilian currency and the
U.S. Dollar will affect the Company's operations. Brazil has historically
experienced generally unpredictable currency devaluations for many years.
Although the exchange rate between the real and the U.S. Dollar has been
relatively stable since July 1994, compared to prior periods, the potential for
future devaluation or volatility continues to persist.
Political and Constitutional Uncertainty
The Brazilian political scene has been marked by high levels of uncertainty
since the country returned to civilian rule in 1985 after 20 years of military
government. The death of a President- elect and the impeachment of another
President, as well as frequent turnovers at and immediately below the cabinet
level, particularly in the economic area, have contributed to the absence of a
coherent and consistent policy to confront Brazil's economic problems. While the
free market and liberalization measures of recent years have enjoyed broad
political and public support, some important political factions remain opposed
to significant elements of the reform program, including, in particular, the
Workers' Party,
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<PAGE>
headed by Mr. Luiz Inacio Lula da Silva, the runner-up in the 1989 Presidential
elections and a candidate in the Presidential elections held on October 3, 1994.
Mr. Fernando Henrique Cardoso, the former Finance Minister, was elected as the
new President and took office on January 1, 1995 for a four year term. Mr.
Cardoso is expected to continue to pursue the adoption of free market and
economic liberalization measures similar to those undertaken in recent years,
although there can be no assurance that such measures will be adopted or, if
adopted, that they will be successful.
Controls on Foreign Investments
Brazil generally requires governmental approval for the repatriation of
capital and income by foreign investors. Although such approvals are usually
given, there can be no assurance that such approvals will be forthcoming in the
future. In addition, the government may impose temporary restrictions on foreign
capital remittances abroad, if there is a deterioration in the balance of
payments or for other reasons. The Company could be adversely affected by delays
in, or a refusal to grant, any required governmental approval for repatriation
of capital from Venbo. There can be no assurance that additional or different
restrictions or adverse policies applicable to Venbo will not be imposed in the
future, or as to the duration or impact of any such restrictions or policies.
Accounting Reporting Standards
Companies in Brazil are subject to accounting, auditing and financial
standards and requirements that differ, in some cases significantly, from those
applicable to companies in the United States. In particular, inflation
accounting rules may require for both tax and accounting purposes that certain
assets and liabilities be restated using an index established by the government
in order to express such items in terms of currency of constant purchasing
power. However, the official index for price level restatement varies from year
to year and may more accurately reflect actual inflation rates in one year than
in another year. Consequently, the financial statements of Venbo included in
this Prospectus, expressed in reais although prepared in accordance with U.S.
GAAP, may not accurately reflect all inflationary distortions in such financial
statements.
8
<PAGE>
Risks Relating to the Company Generally
Impact on Market Price Resulting from
Substantial Number of Shares Eligible for Future Sale
There are currently 1,114,861 shares of the Company's Common Stock eligible
for sale by certain stockholders under Rule 144, promulgated under the
Securities Act. Of such 1,114,861 shares, 618,677 shares are owned by the
directors and executive officers of the Company prior to the Acquisition and
their respective affiliates (the "Affiliated Trinity Stockholders"). Of the
618,677 shares of the Company's Common Stock owned by the Affiliated Trinity
Stockholders, 369,691 shares will be eligible for sale following the expiration
of three months from consummation of the Acquisition. The remainder of such
shares (248,986), owned by Lawrence Burstein who remained as a director of the
Company subsequent to the Acquisition, will be subject to the limitations upon
sales by affiliates, discussed below. Under Rule 144, promulgated under the
Securities Act, an affiliate of an issuer may, every three months, sell, in
ordinary brokerage transactions or in transactions directly with a market maker,
an amount equal to the greater of one percent of the issuer's outstanding common
stock or the average weekly trading volume during the four calendar weeks prior
to the sale.
An additional 4,704,123 shares of the Company's Common Stock, being,
respectively, 1,046,422 shares issued to Shampi in connection with the
Acquisition (the "Shampi Shares"), 3,115,701 shares sold in the Private
Placement (the "Private Placement Shares"), 510,000 shares issued in exchange
for the quotas of each of the Acquired Companies (the "Acquired Companies'
Shares") and 32,000 shares issued to a fast food restaurant consultant (the
"Consultant's Shares"), are outstanding. The Company, pursuant to contractual
obligations, has registered both the Shampi Shares and the Private Placement
Shares under the Securities Act. As a consequence of the effectiveness of such
registration on April 29, 1996, the Private Placement Shares are currently
eligible for sale and the Shampi Shares, by contractual restrictions discussed
below, will become eligible for sale no earlier than September 19, 1996. The
Acquired Companies' Shares and the Consultant's Shares, pursuant to contractual
obligations, have been included in a registration statement under the Securities
Act of which this Prospectus is a part, and will become eligible for sale as of
the date of this Prospectus.
In addition, there are also outstanding warrants to purchase 4,657,780
shares (inclusive of 510,000 shares issuable upon exercise of warrants held by
the underwriters of the IPO).
Shampi has agreed with the Company that it will not sell, pledge, transfer
or otherwise dispose of the Shampi Shares until September 19, 1996. Thereafter,
Shampi may sell the Shampi Shares,
9
<PAGE>
or any portion thereof, at any time, subject, however, to the Company's prior
repayment of the Trademarks Purchase Price.
The sale of any of these shares could have an adverse effect on the future
market price of the Company's Common Stock.
Control by Certain Stockholders
Shampi and the Private Placement purchasers, collectively, own
approximately 58.5% of the currently outstanding shares of the Company's Common
Stock. Shampi (which is wholly-owned by Peter van Voorst Vader, a citizen of
Holland), with its direct ownership of approximately 13.7% of such outstanding
shares, will be able to influence the election of the Company's Board and
thereby influence or direct the policies of the Company. Simultaneously with the
consummation of the Acquisition, the Affiliated Trinity Stockholders entered
into a voting agreement with Shampi. Subject to certain exceptions, the voting
agreement provides that there shall be not less than five directors of the
Company and Shampi shall have the right to designate three of such directors and
the Affiliated Trinity Stockholders shall have the right to designate two of
such directors. All parties to the voting agreement agreed to vote all of their
shares of the Company's Common Stock in favor of the nominees for director
designated in accordance with the foregoing provisions. The Company is not aware
of any agreements, understandings or other arrangements that may have been
entered into among the several participants in the Private Placement with
respect to their representation upon the Company's Board or to otherwise seek to
influence the conduct of the Company's affairs subsequent to the consummation of
the Acquisition.
No Dividends
The Company has never paid cash dividends on its Common Stock, and the
Company does not anticipate paying cash dividends in the foreseeable future. The
Company intends to reinvest any funds that might otherwise be available for the
payment of dividends in further development of its business.
Possible Volatility of Stock Price
The fast food market is highly competitive. Announcements by competitors of
their commencement or intention to commence operations or to open additional
stores in Brazil could cause the market price of the Company's Common Stock to
fluctuate substantially. Broad market fluctuations, earnings and other
announcements of other companies, general economic conditions or other matters
unrelated to the Company and outside its control also could affect the market
price of the Company's Common Stock.
10
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). In accordance therewith,
the Company files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed by the Company can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the Regional Offices of the
Commission at 7 World Trade Center, New York, New York 10048 and Northwestern
Atrium Center, 500 West Madison Street, Chicago, Illinois 60621. Copies of such
material may be obtained from the Public Reference Section of the Commission at
prescribed rates by writing to the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act with respect to the Common Stock offered hereby.
This Prospectus does not contain all the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is made to the Registration Statement, copies of which can be obtained from the
Public Reference Section of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, upon payment of the fees prescribed by the Commission.
11
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Incorporated herein by reference are the following documents filed by the
Company with the Commission (File No. 0-23278) under the Exchange Act:
(a) The Company's Annual Report on Form 10-K/A-1 for its fiscal year ended
August 31, 1995 (the "Trinity 10-K Report");
(b) The Company's Transition Report on Form 10-Q/A for the four month
period ended December 31, 1995;
(c) The Company's Quarterly Report on 10-Q/A for the three months ended
March 31, 1996;
(d) The Company's definitive Proxy Statement dated February 12, 1996,
relating to the Acquisition (the "Trinity Acquisition from Proxy
Statement");
(e) The Company's Current Report on Form 8-K dated June 21, 1996, relating
to its acquisition of the Acquired Companies; and
(f) The Company's Registration Statement on Form 8-A for a description of
the Common Stock.
All documents filed by the Company with the Commission pursuant to Sections
13, 14 and 15(d) of the Exchange Act subsequent hereto, but prior to the
termination of this offering, shall be deemed to be incorporated herein by
reference and to be a part hereof from their respective dates of filing.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of any such
person, a copy of any or all of the documents referred to above which have been
incorporated into this Prospectus by reference (other than the exhibits to such
documents). Requests or such copies should be directed to Marcos Bastos Rocha,
Chief Financial Officer, Brazil Fast Food Corp., Praia do Flamengo, 200- 22o.
Andar, CEP 22210-030, Rio de Janeiro, Brazil; telephone number 55 21 285-2424.
12
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to the
Selling Stockholders. Rucker acquired its shares in exchange for all of the
outstanding capital shares (quotas) of each of Bigburger Sao Paulo Lanchonetes
Ltda. and Bigburger Goiania Lanchonetes Ltda. (hereinabove referred to,
collectively, as the Acquired Companies). Mr. Bibicoff acquired his shares in
exchange for non-financial consulting services. These shares were acquired by
the Selling Stockholders absent registration under the Securities Act, in each
instance by reason of the exemption from such registration afforded by the
provisions of Section 4(2) thereof and Regulation D promulgated thereunder. The
Company will receive no proceeds from the sale of the Shares by the Selling
Stockholders.
<TABLE>
<CAPTION>
Beneficial
Beneficial Number of Shares Ownership
Ownership of of Shares of Percentage of
of Shares of Common Stock Common Common
Name of Selling Common Stock at Offered Stock After the Stock After the
Stockholder June 30, 1996 for Sale Offering Offering
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Rucker Holdings 510,000 510,000 - -
Corporation
Harvey Bibicoff 10,000 10,000 - -
</TABLE>
The Selling Stockholders, or their pledgees, donees, transferees or other
successors, may sell the Common Stock in any of three ways: (i) through
broker-dealers; (ii) through agents or (iii) directly to one or more purchasers.
The distribution of the Common Stock may be effected from time to time in one or
more transactions (which may involve crosses or block transactions) (A) in the
over-the-counter market, or (B) in transactions otherwise than in the
over-the-counter market. Any of such transactions may be effected at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices, at negotiated prices or at fixed prices. The Selling Stockholders
may effect such transactions by selling the Common Stock to or through
broker-dealers, and such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Stockholders and/or
commissions from purchasers of the Common Stock for whom they may act as agent
(which discounts, concessions or commissions will not exceed those customary in
the types of transactions involved). The Selling Stockholders and any
broker-dealers or agents that participate in the distribution of the Common
Stock might be deemed to be underwriters, and any profit on the sale of the
Common Stock by them and any discounts, commissions or concessions received by
any such broker-dealers or agents might be deemed to be underwriting discounts
and commissions under the Securities Act.
13
<PAGE>
LEGAL OPINION
The legality of the Common Stock offered hereby will be passed upon for the
Company by Parker Duryee Rosoff & Haft A Professional Corporation, 529 Fifth
Avenue, New York, New York 10017. Members of Parker Duryee Rosoff & Haft,
beneficially own shares of the Company's Common Stock, as well as certain of its
Class A and Class B Redeemable Common Stock Purchase Warrants (aggregating less
than 17% of any thereof).
EXPERTS
The financial statements of Trinity as of August 31, 1995 and 1994, and for
the years ended August 31, 1995 and 1994, and for the periods from inception
(September 16, 1992) to August 31, 1993 incorporated by reference in this
Prospectus from the Trinity 1995 10-K Report have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports with
respect thereto, which are incorporated herein by reference and have been so
incorporated in reliance upon the authority of said firm as experts in giving
said reports.
The financial statements of Venbo as of December 31,1995 and December 31,
1994 and for each of the years in the three year period ended December 31, 1995
incorporated by reference in this Prospectus have been audited by KPMG Peat
Marwick, independent public accountants, as indicated in their reports with
respect thereto from the Trinity Acquisition Transaction Proxy Statement, which
are incorporated herein by reference and have been so incorporated and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing. The reports of KPMG Peat Marwick covering the
aforementioned financial statements contain an explanatory paragraph which cites
Venbo's dependence on past and continuing financial support of its then sole
shareholder.
14
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the estimated expenses in connection with
the offering described in the Registration Statement:
Registration Fee............................................ $ 941.38
Accounting Fees and Expenses................................ 3,000.00
Legal Fees and Expenses..................................... 4,500.00
Printing and Reproduction .................................. 500.00
Miscellaneous .............................................. 58.62
----------
Total Expenses..................... $ 9,000.00
==========
Item 15. Indemnification of Directors and Officers
Article SEVENTH of the Certificate of Incorporation of Brazil Fast Food
Corp. (the "Registrant") provides with respect to the indemnification of
directors and officers that the Registrant shall indemnify to the fullest extent
permitted by Section 145 of the Delaware General Corporation Law, as amended
from time to time, each person that such Section grants the Registrant power to
indemnify. Article TENTH of the Certificate of Incorporation of the Registrant
also provides that no director shall be liable to the corporation or any of its
stockholders for monetary damages for breach of fiduciary duty as a director,
except with respect to (1) a breach of the director's duty of loyalty to the
corporation or its stockholders, (2), acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (3)
liability under Section 174 of the Delaware General Corporation Law or (4) a
transactions from which the director derived an improper personal benefit, it
being the intention of the foregoing provision to eliminate the ability of the
corporation's directors to the corporation or its stockholders to the fullest
extent permitted by Section 102(b)(7) of Delaware General Corporation Law, as
amended from time to time.
Section 145 of Delaware Corporation Law provides, inter alia, that to the
extent a director, officer, employee or agent of a corporation has been
successful on the merits or otherwise in defense of any action, suit or
proceeding, whether civil, criminal, administrative or investigative or in
defense of any claim, issue, or matter therein (hereinafter, a "Proceeding"), by
reason of the fact that he is or was a director, officer, employee or agent of a
corporation or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise (collectively an "Agent" of the
corporation), he shall be
II-1
<PAGE>
indemnified against expenses (including attorney's fees) actually and reasonably
incurred by him in connection therewith.
Section 145 also provides that a corporation may indemnify any person who
was or is a party or is threatened to be made a party to any threatened
Proceeding by reason of the fact that he is or was an Agent of the corporation,
against expenses (including attorney's fees) judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful; provided, however, that in
an action by or in the right of the corporation, the corporation may not
indemnify such person in respect of any claim, issue, or matter as to which he
is adjudged to be liable to the corporation unless, and only to the extent that,
the Court of Chancery or the court in which such proceeding was brought
determines that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is reasonably entitled to indemnity.
Item 16. Exhibits
5 Opinion of Parker Duryee Rosoff & Haft
13(a) Annual Report on Form 10-K for Registrant's fiscal
year ended August 31, 1995
13(b) Annual Report on Form 10-K/A-1 for Registrant's
fiscal year ended August 31, 1995
23(a) Consent of KPMG Peat Marwick
23(b) Consent of Arthur Andersen LLP
23(c) Consent of Parker Duryee Rosoff &
Haft (included in Exhibit 5 hereof)
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(1) That for the purpose of determining any liability under the Securities
Act of 1933, as amended (the "Securities Act"), each post-effective amendment
that contains a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(2) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement to include any material
information with respect to the plan of distribution not previously disclosed in
the Registration
II-2
<PAGE>
Statement or any material change to such information in the Registration
Statement.
(3) To remove from registration any means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of Registrant's annual report pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
that is incorporated by reference in the Registration Statement, shall be deemed
to be a new registration statement relating to the securities offered herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of Registrant
pursuant to Item 15 of this Part II to the Registration Statement, or otherwise,
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by Registrant
of expenses incurred or paid by a director, officer or controlling person of
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against the public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City and State of Rio de Janeiro, Country of Brazil, on the
3rd day of July, 1996.
BRAZIL FAST FOOD CORP.
By: /s/Peter van Voorst Vader
Peter van Voorst Vader
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Peter van Voorst Vader and Lawrence Burstein, and
each of them, with full power to act without the other, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
Chief Executive Officer
(Principal Executive
/s/Peter van Voorst Vader Officer) and Officer
Peter van Voorst Vader and Principal Director July 3, 1996
Chief Financial Officer
(Principal Financial
/s/Marcos Bastos Rocha and Accounting Officer) July 3, 1996
Marcos Bastos Rocha
II-4
<PAGE>
Omar Carneiro de Cunha Chairman of the Board
Arnaldo Bisoni Director
/s/Ian S. Barnett Director July 3, 1996
Ian S. Barnett
/s/Lawrence Burstein Director July 3, 1996
Lawrence Burstein
II-5
EXHIBIT 5
July 2, 1996
Brazil Fast Food Corp.
Praia do Flamengo
200-22o. Andar
CEP 22210-030 Rio de Janeiro
Brasil
Re: Registration Statement on Form S-3
Under the Securities Act of 1933
Ladies and Gentlemen:
In our capacity as counsel to Brazil Fast Food Corp., a Delaware
corporation (the "Company"), we have been asked to render this opinion in
connection with a Registration Statement on Form S- 3, being filed
contemporaneously herewith by the Company with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Registration
Statement"), covering an aggregate of 542,000 shares of common stock, $.0001 par
value, of the Company which are being offered for resale by the several persons
whose respective names are set forth under the caption "Selling Stockholders" in
the prospectus comprising a portion of the Registration Statement (collectively,
the "Stock").
In that connection, we have examined the Certificate of Incorporation, as
amended, and the By-Laws of the Company, the Registration Statement, corporate
proceedings of the Company relating to the issuance of the Stock and such other
instruments and documents as we have deemed relevant under the circumstances.
In making the aforesaid examinations, we have assumed the genuineness of
all signatures and the conformity to original documents of all copies furnished
to us as original or photostatic copies. We have also assumed that the corporate
records furnished to us by the Company include all corporate proceedings taken
by the Company to date.
Based upon and subject to the foregoing, we are of the opinion that:
(1) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws
<PAGE>
Brazil Fast Food Corp.
July 2, 1996
Page 2
of the State of Delaware.
(2) The Stock has been duly and validly authorized and is validly issued,
fully paid and non-assessable.
We hereby consent to the use of our opinions as herein set forth as an
exhibit to the Registration Statement and to the use of our name under the
caption "Legal Opinion" in the prospectus forming a part of the Registration
Statement.
Very truly yours,
PARKER DURYEE ROSOFF & HAFT
By:/s/Ira Roxland
---------------------------
A Member of the Firm
Exhibit 13(a)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
|X| ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended August 31, 1995
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-23278
TRINITY AMERICAS INC.
(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.)
950 Third Avenue (27th Floor), New York, New York 10022
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 888-5563
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, Class A Redeemable Common Stock Purchase Warrants,
Class B Redeemable Common Stock Purchase Warrants
(Title of Class)
(Title of Class)
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. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |X|
<PAGE>
APPLICABLE ONLY TO REGISTRANTS 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_________
The number of shares outstanding of the Registrant's common stock is
2,964,861 (as of November 15, 1995).
The aggregate market value of the voting stock held by non-affiliates of
the Registrant is $11,474,306 (as of November 15, 1995).
DOCUMENTS INCORPORATED BY REFERENCE
Registration Statement on Form S-1 (File No. 33-71368)
<PAGE>
PART I
Item 1. Business
(a) General Development of Business
Trinity Americas Inc. ("Trinity") was formed in September 1992 to serve as
a vehicle to effect a merger, exchange of capital stock, asset acquisition or
other similar business combination ("Business Combination") with an operating
business (an "Acquired Business").
In February 1994, Trinity successfully consummated an initial public
offering of its equity securities (the "IPO") from which it derived net proceeds
of approximately $9,567,000. Reference is made to Trinity's Registration
Statement on Form S-1 (File No. 33-71368), declared effective on February 9,
1994, for more detailed information in these regards.
On October 30, 1995, Trinity entered into an agreement to acquire all of
the outstanding capital shares of a Brazilian casual dining chain for $21.0
million, as previously contemplated by a letter of intent dated August 7, 1995.
The closing of the acquisition transaction, which is scheduled to occur during
the first quarter of 1996, is subject, among other things, to the completion of
documentation and to approval by Trinity's public stockholders.
Trinity was incorporated as a Delaware corporation on September 16, 1992.
Trinity's executive offices are located at 950 Third Avenue, New York, New York
10022; its telephone number is (212) 888-5563.
(b) Financial Information About Industry's Segments
Not applicable.
(c) Narrative Description of Business
See Item 1(a) above.
(d) Financial Information about Foreign and Domestic Operations and Export
Sales
Not applicable.
Item 2. Properties
Trinity's executive offices are located at 950 Third Avenue, New York, New
York where it uses approximately 300 square feet of office space and premises
occupied by Trinity Capital Corporation ("Trinity Capital"), a concern which is
an affiliate of certain of Trinity's officers and directors. See Item 13 hereof.
<PAGE>
Item 3. Legal Proceedings
Trinity is not a party to any legal proceedings which may have a material
adverse effect upon Trinity, its assets or its properties.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders during the
fourth quarter of the fiscal year ended August 31, 1995.
PART II
Item 5. Market for Registrant's Common Stock and Related Stockholder Matters
(a) Trinity's Common Stock, Class A Redeemable Common Stock Purchase
Warrants ("Class A Warrants") and Class B Redeemable Common Stock Purchase
Warrants ("Class B Warrants") are each quoted on the OTC Bulletin Board under
the respective symbols "TLAT", "TLATA" and "TLATB". The following table sets
forth the range of the high and low bid quotations on the OTC Bulletin Board for
the periods indicated:
Class A Class B
Three Months Common Stock Warrants Warrants
Ended High Low High Low High Low
February 28, 1994* 4-1/4 4-1/4 7/8 3/4 5/8 1/2
May 31, 1994 4-1/4 4 15/16 3/4 3/4 1/2
August 31, 1994 4-1/4 4 7/8 3/4 5/8 1/2
November 30, 1994 4-3/4 4-1/4 1-1/4 7/8 7/8 5/8
February 28, 1995 4-1/2 4-1/8 1-1/4 3/4 7/8 5/8
May 31, 1995 4-3/4 4-1/4 7/8 3/8 1 3/8
August 31, 1995 5 4-9/16 3/4 1/4 3/4 1/8
* Trinity's securities began separate trading on February 18, 1994.
The above quotations represent prices between dealers and do not include retail
mark up, markdown or commission. Such quotations do not necessarily represent
actual transactions as there was no established public trading market for
Trinity's securities.
2
<PAGE>
(b) As of November 15, 1995, there were 55, 7 and 7 record holders of the
Common Stock, Class A Redeemable Warrants and Class B Redeemable Warrants,
respectively.
(c) Trinity has not declared any cash dividends on its Common Stock and has
no intention to pay cash dividends in the foreseeable future.
Item 6. Selected Financial Data
The following tables should be read in conjunction with the financial
statements of Trinity and the notes thereto appearing elsewhere in this Annual
Report on Form 10-K. The selected financial data of Trinity has been derived
from the financial statements of Trinity, which have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their report
included elsewhere herein.
Statements of Operations Data:
<TABLE>
<CAPTION>
Period from Period From
September 16, 1992 September 16, 1992
(date of inception) (date of inception)
Year Ended August 31 to to
1995 1994 August 31, 1993 August 31, 1995
<S> <C> <C> <C> <C>
Revenues $ -- $ -- $ -- $ --
Net income (loss) 138,738 (50,929) (166) 87,643
Income (loss) per
common share .05 (.02) --
Weighted average
common shares 2,964,861 2,125,525 1,111,111
</TABLE>
Balance Sheet Data:
August 31
1995 1994 1993
Total assets $9,787,417 $9,573,799 $217,534
Total liabilities $ 132,303 $ 57,423 $217,500
Working capital $9,655,114 $9,516,376 $ 34
Shareholders' equity $9,655,114 $9,516,376 $ 34
3
<PAGE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Trinity was incorporated in September 1992 for the purpose of raising money
to fund a vehicle to effect a Business Combination with an Acquired Business. On
February 9, 1994, Trinity's registration statement under the Securities Act of
1933, as amended, covering 1,700,000 units, each unit consisting of one share of
Trinity's Common Stock, one Class A Redeemable Warrant and one Class B
Redeemable Warrant at an initial public offering price of $6.00 per unit, was
declared effective by the Securities and Exchange Commission. Trinity derived
$11,100,000 from the IPO, inclusive of proceeds from the exercise of the
underwriters' over-allotment option to acquire an additional 150,000 units,
prior to underwriting commissions of $888,000 and expenses of approximately
$645,000, respectively.
For the years ended August 31, 1995 and 1994 and the period ended August
31, 1993, Trinity had a net income (loss) of $138,738, ($50,929) and ($166),
respectively. These results of operations were attributable to interest and
dividend income offset by general and administrative expenses.
Item 8. Financial Statements and Supplementary Data
Reference is made to pps. F-1 through F-10 comprising a portion of this
Annual Report on Form 10-K.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
Not Applicable.
4
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
The current directors and executive officers of Trinity are as follows:
Name Age Position
Barry Goldin 57 Chairman of the Board
Lawrence Burstein 53 President, Treasurer and Director
John Cattier 62 Director
Barry Ridings 43 Director
Barry Goldin has been Chairman of the Board of Trinity since its inception.
Since October 1982, Mr. Goldin has been President and a director and a principal
shareholder of Trinity Capital, which is engaged principally in making
investments in privately held companies. From 1978 to 1982, Mr. Goldin was
Senior Vice-President, Corporate Finance, at Muller & Company, Inc., investment
bankers. Mr. Goldin is a director of Alliance Entertainment Corp., a company
engaged in the sale and distribution of pre-recorded music, music accessories
and other music and entertainment-related products. Mr. Goldin received a B.S.
from the Wharton School of Finance at the University of Pennsylvania.
Lawrence Burstein has been President, Treasurer and a director of Trinity
since its inception. Since October 1982, Mr. Burstein has been Chairman of the
Board and a principal shareholder of Trinity Capital. Mr. Burstein is a director
of four other public companies, being, respectively, CAS Medical Systems, Inc.
engaged in the manufacture and marketing of blood pressure monitors and other
medical products principally for the neonatal market, The MNI Group Inc.,
engaged in the marketing of specially formulated medical foods, ToHQ, Inc., a
Nintendo game and children's toy company, and USCI, Inc., engaged in centralized
automated computer-based cellular telephone activation services on a nationwide
basis to mass merchandisers and direct response marketing companies. Mr.
Burstein received an LL.B. from Columbia Law School.
John Cattier has been a director of Trinity since its inception. Mr.
Cattier has been an independent consultant since January 1985 and an advisor and
shareholder of Trinity Capital since 1982. From 1957 to December 1984, Mr.
Cattier was associated with White Weld & Co., investment bankers, serving as a
general partner, and with Credit Suisse White Weld (which subsequently became
Credit Suisse
5
<PAGE>
First Boston), investment bankers, in various capacities. Mr. Cattier is a
director of Pacific Assets Trust PLC, a United Kingdom investment trust, and
Vice Chairman of Laredo National Bancshares, Inc. of Laredo, Texas, a one bank
holding company. Mr. Cattier received a B.A. from Yale University.
Barry Ridings has been a director of Trinity since its inception. Since
March 1990, Mr. Ridings has been a Managing Director of Alex. Brown & Sons,
investment bankers. From June 1986 to March 1990, Mr. Ridings was a Managing
Director of Drexel Burnham Lambert, investment bankers. From 1979 to June 1986,
Mr. Ridings served as Associate Director of Bear Stearns & Co., Inc., investment
bankers. Mr. Ridings is also a director of Tiger Direct, a computer software
company engaged in the development and marketing of software, SubMicron Systems
Corporation, a company engaged in the design, manufacture and marketing of
advanced processing systems sold primarily to manufacturers of semiconductor
chips, Transcor Waste Services Corp., a waste management company, Leaseway
Transportation Corp., a trucking company, Rax Restaurants Inc., a restaurant
chain, and Norex America Inc., a shipping company. Mr. Ridings received an
M.B.A. from Cornell University.
All directors hold office until the next annual meeting of stockholders and
the election and qualification of their successors. Directors receive no
compensation for serving on the Board of Directors other than reimbursement of
reasonable expenses incurred in attending meetings. Officers are elected
annually by the Board of Directors and serve at the discretion of the Board.
Messrs. Burstein and Goldin, the current executive officers of Trinity, devote
approximately 25% of their time to the affairs of Trinity. Trinity has not
entered into employment agreements with either of its officers.
Item 11. Executive Compensation
(a) Cash Compensation
Trinity's officers receive no compensation for serving as officers other
than accountable reimbursement for any reasonable business expenses incurred in
connection with activities undertaken on Trinity's behalf.
(b) Compensation Pursuant to Plans
Trinity's 1992 Stock Option Plan (the "1992 Plan") was adopted by Trinity's
Board of Directors on September 18, 1992 and by a majority in interest of
Trinity's stockholders on September 18, 1992. The 1992 Plan provides for the
granting of 277,778 options which are intended to qualify either as incentive
stock options ("Incentive Stock Options") within the meaning of Section 422 of
the Internal Revenue Code of 1986 or as options which are not intended to meet
the
6
<PAGE>
requirements of such section ("Nonstatutory Stock Options"). The total number of
shares of Common Stock reserved for issuance under the 1992 Plan is 277,778.
Options to purchase shares may be granted under the 1992 Plan to persons who, in
the case of Incentive Stock Options, are employees (including officers) of
Trinity, or, in the case of Nonstatutory Stock Options, are employees (including
officers) or non-employee directors of the Company. The exercise price of all
Incentive Stock Options granted under the 1992 Plan must be at least equal to
the fair market value of such shares on the date of the grant or, in the case of
Incentive Stock Options granted to the holder of ten percent or more of the
Company's Common Stock, at least 110% of the fair market value of such shares on
the date of grant. The maximum exercise period for which Incentive Stock Options
may be granted is ten years from the date of grant (five years in the case of an
individual owning more than 10% of Trinity's Common Stock).
To date, no options have been granted under the 1992 Plan.
(c) Other Compensation
None.
(d) Compensation of Directors
Trinity's directors presently receive no compensation for their services as
such.
(e) Termination of Employment and Change of Control Arrangements
None.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information as of November 15, 1995, based
on information obtained from the persons named below, with respect to the
beneficial ownership of shares of Trinity's Common Stock by (i) each person
known by Trinity to be the owner of more than 5% of its outstanding shares of
Common Stock, (ii) each director and (iii) all officers and directors as a
group. Except as indicated in the footnotes to the table, the persons named in
the table have sole voting and investment power with respect to all shares of
Common Stock shown as beneficially owned by them.
7
<PAGE>
Amount and
Nature of
Name and Address of Beneficial Percentage of Outstanding
Beneficial Owner Ownership(1) Shares Owned
Barry Goldin 223,985(2)(3) 7.6%
950 Third Avenue
New York, NY 10022
Lawrence Burstein 260,097(2)(4) 8.8%
950 Third Avenue
New York, NY 10022
John Cattier 131,817(5) 4.4%
Achlain Invermoriston
Invernesshire
IV3 6YN, United Kingdom
Barry Ridings 13,889 0.5%
16 Erwin Park
Montclair, NJ 07902
All officers and 618,677(2)-(5) 20.9%
directors as a group
(4 persons)
(1) Does not include shares issuable upon exercise of Warrants which are
beneficially owned by each of the persons named below but which are not
exercisable until the consummation of a Business Combination.
(2) Includes 11,111 shares of Common Stock owned by Trinity Capital, over
which shares Messrs. Burstein and Goldin have voting and investment
power.
(3) Includes 24,999 shares owned by members of Mr. Goldin's family, of
which shares Mr. Goldin disclaims any voting or investment power.
Does not include 25,001 shares owned by members of Mr. Goldin's
family who do not reside at his home.
(4) Includes 44,444 shares owned by members of Mr. Burstein's family,
of which shares Mr. Burstein disclaims any voting or investment
power.
(5) Includes (i) 104,039 shares of Common Stock held by Rio Bravo
Inversiones, Ltd., which shares are owned by a trust of which Mr.
Cattier and his family are the sole beneficiaries but not the
trustees, over which shares Mr. Cattier disclaims voting or
investment power. Excludes 27,228 shares held by Heptagon
Investments. Mr. Cattier is Chairman of Heptagon Investment's
board of directors and exercises voting and dispositive control
over approximately 4.5% of Heptagon Investments' shares of capital
stock. Mr. Cattier disclaims any voting or dispositive power over
8
<PAGE>
the 27,228 shares of Trinity's Common Stock which are held by
Heptagon Investments.
Item 13. Certain Relationships and Related Transactions
In September 1992, Trinity issued an aggregate of 1,055,556 shares of
Common Stock for an aggregate purchase price of $190, or approximately $.0002
per share, as follows: 11,111 shares to Trinity Capital, a corporation in which
Barry Goldin, the Chairman of the Board of Trinity, and Lawrence Burstein, the
President and a director of Trinity, are officers, directors and principal
shareholders and John Cattier, a director of Trinity, is an advisor and
shareholder; 187,875 shares to Mr. Goldin; 204,542 shares to Mr. Burstein;
50,000 shares to Mr. Goldin's family; 44,444 shares to Mr. Burstein's family;
13,889 shares to Barry Ridings, a director of Trinity; 27,778 shares to Mr.
Cattier; 104,039 shares to Rio Bravo Inversiones, Ltd.; 27,778 shares to
Heptagon Investments; and 384,100 to other persons. In September 1992, Trinity
also issued to each of Messrs. Goldin, Burstein, Cattier and Ridings 50,000,
50,000, 19,445 and 19,445 Class A and Class B Warrants, respectively, in
consideration for future services to be rendered by such persons on behalf of
Trinity. Such warrants are identical to the Redeemable Warrants but are not
redeemable by the Company and may not be exercised until the consummation of a
Business Combination.
In July 1993, the Company issued 11,111 shares of Common Stock at
approximately $.0002 per share to each member of Trinity's Advisory Board, or an
aggregate of 55,555 shares.
Trinity has been obligated to pay Trinity Capital, since September 1, 1993,
a monthly fee of $10,000 for general and administrative services pursuant to an
agreement which may be cancelled by either party upon 30 days' written notice.
Such fee includes the use of approximately 300 square feet of office space in
premises occupied by Trinity Capital. As unaffiliated third party affords
Trinity Capital the use of such space at no charge. Messrs. Burstein and Goldin,
officers and directors of Trinity, are officers, directors and principal
stockholders of Trinity Capital and Mr. Cattier, a director of Trinity, is an
advisor and stockholder of Trinity Capital.
Trinity Capital made non-interest bearing demand loans aggregating
approximately $37,000 to Trinity to cover expenses related to the IPO, which
loans were paid out of the proceeds thereof. No further loans from Trinity
Capital to Trinity are presently contemplated.
9
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) Financial Statements and Financial Statement Schedules:
(i) Financial Statements
Report of Independent Public Accountants Balance
Sheets - August 31, 1995 and 1994 Statements of
Operations for the years ended
August 31, 1995 and 1994, the period
September 16, 1992 (date of inception) to
August 31, 1993 and the cumulative amounts
from inception
Statementof Changes in Shareholders' Equity for the
years ended August 31, 1995 and 1994, the
period September 16, 1992 (date of
inception) to August 31, 1993 and the
cumulative amounts from inception
Statements of Cash Flows for the years ended August
31, 1995 and 1994, the period September 16,
1992 (date of inception) to August 31, 1993
and the cumulative amounts from inception
Notes to Financial Statements
(ii) Financial Statement Schedules
All financial statement schedules are omitted because the conditions
requiring their filing do not exist or the information required thereby is
included in the financial statements filed, including the notes thereto.
(b) Reports on Form 8-K
None.
(c) Exhibits
3.1 Certificate of Incorporation and amendments thereto(1)
3.2 By-Laws(1)
4.1 Form of certificate evidencing shares of Common Stock(1)
4.2 Form of certificate evidencing Class A Redeemable Warrants(1)
10
<PAGE>
4.3 Form of certificate evidencing Class B Redeemable Warrants(1)
4.4 Warrant Agreement dated as of February 9, 1994 between
Registrant and GKN Securities Corp.(1)
4.5 Redeemable Warrant Agreement dated as of February 9, 1994
between Registrant and American Stock Transfer & Trust
Company(1)
10.1 Stock Option Plan(1)
10.2 Trust Agreement dated February 17, 1994 between Registrant
and The Chase Manhattan Bank N.A.(1)
10.3 Form of Escrow Agreement dated as of February 9, 1994 by and
among Registrant, Barry Goldin, Lawrence Burstein, John
Cattier, Barry Ridings, Rio Bravo Inversiones, Ltd., Trinity
Capital Corp. and American Stock Transfer & Trust Company(1)
10.7 General and Administrative Services Agreement dated September
1, 1993 by and between Registrant and Trinity Capital
Corp.(1)
(1) Incorporated by reference to an exhibit of like number filed as part of
Registrant's Registration Statement on Form S-1, File No. 33-71368),
declared effective on February 9, 1994.
11
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Trinity Americas Inc.:
We have audited the accompanying balance sheets of Trinity Americas Inc. (a
Delaware corporation in the development stage) as of August 31, 1995 and 1994,
and the related statements of operations, changes in shareholders' equity and
cash flows for the years ended August 31, 1995 and 1994, for the period from
inception (September 16, 1992) through August 31, 1993, and for the period from
inception through August 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As discussed in Note 1, the Company is required to consummate a Business
Combination prior to May 7, 1996 or it will be required to liquidate the
proceeds of its Trust Account in accordance with its Articles of Incorporation.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Trinity Americas Inc. as of
August 31, 1995 and 1994, and the results of its operations and its cash flows
for the years ended August 31, 1995 and 1994, for the period from inception
through August 31, 1993, and for the period from inception through August 31,
1995, in conformity with generally accepted accounting principles.
/s/ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
New York, New York
November 20, 1995
F-1
<PAGE>
TRINITY AMERICAS INC.
(a development stage entity)
BALANCE SHEETS
AUGUST 31, 1995 AND 1994
<TABLE>
<CAPTION>
ASSETS 1995 1994
----------- -----------
<S> <C> <C>
CASH AND CASH EQUIVALENTS $ 240,555 $ 508,711
RESTRICTED CASH AND INVESTMENTS 9,524,015 9,065,088
PREPAID EXPENSES AND OTHER ASSETS 22,847 --
----------- -----------
Total assets $ 9,787,417 $ 9,573,799
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Accrued expenses and taxes $ 132,303 $ 57,423
COMMITMENTS AND CONTINGENCIES
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 (deficit) accumulated during the
development stage 87,643 (51,095)
----------- -----------
Total shareholders' equity 9,655,114 9,516,376
----------- -----------
Total liabilities and shareholders' equity $ 9,787,417 $ 9,573,799
=========== ===========
</TABLE>
The accompanying notes are an integral part of these balance sheets.
F-2
<PAGE>
TRINITY AMERICAS INC.
(a development stage entity)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Period
from Inception
For the Years Ended (September 16, Cumulative
August 31 1992) to Amounts
------------------------------- August 31, from
1995 1994 1993 Inception
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES $ -- $ -- $ -- $ --
COSTS AND EXPENSES:
General and administration 300,673 240,670 166 541,509
----------- ----------- ----------- -----------
OTHER INCOME:
Interest and dividend income 506,111 189,741 -- 695,852
----------- ----------- ----------- -----------
Income (loss) before
income taxes 205,438 (50,929) (166) 154,343
PROVISION FOR INCOME TAXES 66,700 -- -- 66,700
----------- ----------- ----------- -----------
Net income (loss) $ 138,738 $ (50,929) $ (166) $ 87,643
----------- ----------- ----------- -----------
NET INCOME (LOSS) PER
COMMON SHARE $ .05 $ (.02) $ --
=========== =========== ===========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 2,964,861 2,125,525 1,111,111
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these tatements.
F-3
<PAGE>
TRINITY AMERICAS INC.
(a development stage entity)
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED AUGUST 31, 1995 AND 1994 AND
FOR THE PERIOD FROM INCEPTION (SEPTEMBER 16, 1992) TO
AUGUST 31, 1993 AND CUMULATIVE AMOUNTS FROM INCEPTION
<TABLE>
<CAPTION>
Retained
Earnings
(Deficit)
Common Stock Additional Accumulated During
-------------------------- Paid-in the Development
Shares Par Value Capital Stage Totals
----------- ----------- ----------- ----------- -----------
<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 -- --
Net loss for the period from inception
(September 16, 1992) to August 31, 1993 -- -- -- (166) (166)
----------- ----------- ----------- ----------- -----------
BALANCE, August 31, 1993 1,111,111 111 89 (166) 34
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 year ended August 31, 1994 -- -- -- (50,929) (50,929)
----------- ----------- ----------- ----------- -----------
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
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
F-4
<PAGE>
TRINITY AMERICAS INC.
(a development stage entity)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Period
For the Years Ended from Inception Cumulative
August 31 (September 16, Amounts
--------------------------- 1992) to from
1995 1994 August 31, 1993 Inception
----------- ----------- --------------- -----------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 138,738 $ (50,929) $ (166) $ 87,643
Changes in operating assets and liabilities-
Prepaid expenses and other assets (22,847) -- -- (22,847)
Accrued expenses and taxes 74,880 (157,577) 215,000 132,303
----------- ----------- ----------- -----------
Net cash provided by (used in) operating activities 190,771 (208,506) 214,834 197,099
----------- ----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in restricted cash and investments (458,927) (9,065,088) -- (9,524,015)
----------- ----------- ----------- -----------
Net cash used in investing activities (458,927) (9,065,088) -- (9,524,015)
----------- ----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock and warrants -- 9,784,771 (217,300) 9,567,471
Advances from affiliate -- 34,188 2,500 36,688
Repayment to affiliate -- (36,688) -- (36,688)
----------- ----------- ----------- -----------
Net cash provided by (used in) financing activities -- 9,782,271 (214,800) 9,567,471
----------- ----------- ----------- -----------
Net (decrease) increase in cash and cash equivalents (268,156) 508,677 34 240,555
CASH AND CASH EQUIVALENTS, beginning of period 508,711 34 -- --
----------- ----------- ----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 240,555 $ 508,711 $ 34 $ --
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
F-5
<PAGE>
TRINITY AMERICAS INC.
(a development stage entity)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1995 AND 1994
1. ORGANIZATION AND OPERATIONS
Trinity Americas Inc. (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, asset acquisition or other similar business combination (a
"Business Combination") with an operating business. The Company is currently in
the development stage. All activity of the Company through August 31, 1995 has
been related to its formation, fund-raising and search to effect a Business
Combination.
On February 9, 1994 ( the "Effective Date"), the Company's Registration
Statement covering 1,700,000 units (the "Units") became effective. In addition,
the underwriter exercised a portion of its overallotment, and acquired an
additional 150,000 units, for a total of 1,850,000 units sold in the offering.
See Note 2 to the financial statements discussing the details of the Company's
Public Offering (the "Offering").
On August 7, 1995, the Company entered into a letter of intent for a Business
Combination to acquire all of the outstanding capital shares of a Brazilian
casual dining chain, for approximately $21,000,000 (the "Acquisition"). The
final Heads of Agreement was executed on October 30, 1995. Management believes
that it will be able to raise the additional financing required in excess of the
Company's current restricted cash and investments necessary to complete the
transaction, although there can be no assurance that this will occur. It is
anticipated that this transaction will be accounted for as a purchase.
The Company can be considered a "blind pool." Blind pool companies are
characterized by an absence of disclosures related to the use of the proceeds of
the Offering. Consequently, although substantially all of the proceeds of the
Offering are intended to be utilized to effect a Business Combination, the
proceeds are not specifically designated for this purpose. Upon completion of
the Offering, 90% of the proceeds, after payment of underwriting discounts and
the underwriter's nonaccountable expense allowance, were deposited in an
interest-bearing trust account ("Trust Account") until the earlier of (1) the
consummation of a Business Combination or (2) the liquidation of the Company, no
more than twenty seven months from the date of the consummation of the Offering
(the "Liquidation Date"). (In the event that the Company does not consummate a
Business Combination within eighteen months from the date of the Offering, the
Company will liquidate. If the Company enters into a letter of intent, an
agreement in principle or a definitive agreement to effectuate a Business
Combination prior to the expiration of the eighteen-month period, the Company
will be afforded up to an additional nine months following the expiration of the
eighteen-month period.)
F-6
<PAGE>
As a result of its limited resources, the Company will, in all likelihood, have
the ability to effect only a single Business Combination. Accordingly, the
prospects for the Company's success will be entirely dependent upon the future
performance of a single business.
The Company will not effect a Business Combination unless the fair market value
of the acquisition target, as determined by the Board of Directors of the
Company in its sole discretion, based upon valuation standards generally
accepted by the financial community including, among others, book value, cash
flow, and both actual and potential earnings, is at least equal to 80% of the
net assets (assets less liabilities) of the Company at the time of such
acquisition.
There can be no assurance that the Company will be able to successfully effect a
Business Combination. If the Company is unable to effect a Business Combination
by May 7, 1996, the Company's Certificate of Incorporation provides for the
Company's automatic liquidation. In the event of liquidation, the per share
value of the residual assets remaining available for distribution may be less
than the initial public offering price per share in the Offering. In no event,
however, will the Company's liquidation value be less than the amount in the
Trust Account, inclusive of any net interest and dividend income thereon.
Moreover, all the Company's founding stockholders have agreed to waive their
respective rights to participate in any such liquidation distribution on shares
owned prior to the Offering.
If the Company is unable to acquire control of an operating business or
businesses, it may be required to register as an investment company under the
Investment Company Act of 1940, as amended (the "Act"). The Company is unable to
predict what effect registration under such Act would have, but it believes that
its ability to pursue its current business plan could be adversely affected as a
result. The most significant difference with respect to financial statement
presenta- tion and disclosure requirements for companies registered under the
Act would require the investments held by the Company to be adjusted to market
value at the balance sheet date. The Company believes that its anticipated
principal activities, which will involve acquiring control of an operating
company, will not subject the Company to regulation under the Act.
2. PUBLIC OFFERING OF SECURITIES
In February 1994, the Company's Offering for public sale of up to 1,700,000
units, exclusive of the Underwriter's overallotment at an offering price of
$6.00 per unit, closed. The underwriter exercised a portion of its overallotment
to acquire an additional 150,000 units, for a total of 1,850,000 units sold in
the Offering. The Company received net proceeds of approximately $9,567,000
(after deduction of underwriting and offering expenses of approximately
$1,533,000).
Each Unit sold in the Offering consists of one share of the Company's Common
Stock, $.0001 par value, one Class A Redeemable Warrant and one Class B
Redeemable Warrant. Each Class A Redeemable Warrant and Class B Redeemable
Warrant entitles the holder to purchase from the Company one share of Common
Stock at an exercise price of $5.50 and $6.00, respectively, commencing on the
later of (i) the consummation of a Business Combination or (ii) one year from
the date of the prospectus (February 9, 1995) and ending five years after the
Effective Date of the Offering (February 8, 1999). The Class A Redeemable
Warrants and Class B Redeemable Warrants may be redeemable by the Company, each
as a class, in whole and not in part, upon 30 days' notice provided the reported
high bid price of the Common Stock is at least $8.50 per share for 20
consecutive trading days immediately prior to notice of redemption, at a price
of $.05 per Class A Redeemable Warrant or Class B Redeemable Warrant. The
warrants will become separable and transferable on February 28, 1994.
F-7
<PAGE>
In connection with the Offering, the Company sold to the managing Underwriter
and its designees, for $17, warrants (the "Underwriter's Warrants") to purchase
up to 170,000 Units at an exercise price of $7.92 per Unit. The Underwriter's
Warrants will be exercisable for a period of four years commencing February 9,
1995. The Underwriter's Warrants are not redeemable by the Company.
The Company has granted its executive officers and directors 277,780 warrants
(50% Class A Warrants and 50% Class B Warrants, collectively the "Warrants") to
purchase Common Stock at $5.50 and $6.00 per share in consideration of future
services to be rendered on behalf of the Company. The Warrants are not
exercisable until the consummation by the Company of a Business Combination and
are not redeemable by the Company.
All of the Company's founding stockholders have agreed to vote their respective
shares of Common Stock in accordance with the vote of the majority of all
nonaffiliated stockholders of the Company with respect to a Business
Combination.
The Common Stock owned by all of the executive officers and directors of the
Company, their affiliates and by all persons owning 5% or more of the shares
immediately prior to the Offering will be placed in escrow until the earlier of
(i) the occurrence of a Business Combination or (ii) the Liquidation Date.
During the escrow period, such stockholders will not be able to sell or
otherwise transfer their respective shares of Common Stock, but retain all other
rights as stockholders of the Company, including, without limitation, the right
to vote such shares of Common Stock.
Upon consummation of a Business Combination and upon the release of such shares
from escrow, the Company will record as a nonrecurring cost of the Business
Combination an amount equal to the fair value of the escrowed shares.
3. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Cash Equivalents
For purposes of the Statement of Cash Flows, the Company considers all highly
liquid investments with original maturities of three months or less to be cash
equivalents.
Restricted Cash and Investments
The Company, pursuant to the terms of the Offering, placed $9,524,015 as of
August 31, 1995, which includes interest and dividend income earned from the
period from the closing date (February 17, 1994) through August 31, 1995, in an
escrow account which is primarily invested in money market funds, and is stated
at cost which approximates market. These proceeds are subject to release upon
the earlier of (i) the consummation of Business Combination or (ii) the
Liquidation Date.
As of September 1, 1994, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and
Equity Securities." The effect of adoption was not material.
F-8
<PAGE>
Net Income (Loss) Per Common Share
Net income (loss) per common share is computed based on the weighted average
number of common shares outstanding and common stock equivalents, if not
anti-dilutive.
4. CAPITAL STOCK
The Company's Certificate of Incorporation authorizes the issuance of 20,000,000
shares of Common Stock. There are currently 12,829,582 authorized but unissued
shares of Common Stock available for issuance (after appropriate reserves for
the issuance of Common Stock in connection with the Class A Redeemable Warrants
and Class B Redeemable Warrants, the Underwriter's Warrants, the executive
officers' and directors' Class A Warrants and Class B Warrants, and future
grants under the Company's 1992 Stock Option Plan). The Company's Board of
Directors has the power to issue any or all of the authorized but unissued
Common Stock without stockholder approval. The Company currently has no
commitments to issue any shares of Common Stock other than as described in Note
2.
To the extent that additional shares of Common Stock are issued, dilution to the
interests of the Company's stockholders will occur.
In October 1993, the Company effected a reverse stock split of approximately .56
shares for each share outstanding prior to the split. All per share amounts
referred to herein have been retroactively adjusted to reflect the reverse stock
split that occurred subsequent to year-end.
The Board of Directors of the Company is empowered, without stockholder
approval, to issue up to 5,000 shares of "blank check" preferred stock (the
"Preferred Stock") with dividend, liquidation, conversion, voting or other
rights which could adversely affect the voting power or other rights of the
holders of the Company's Common Stock. As of August 31, 1995, no preferred stock
has been issued.
5. RELATED PARTY TRANSACTIONS
The Chairman of the Board of Directors and the President of the Company are
principal shareholders, officers and directors of Trinity Capital Corporation
("Trinity") who own shares in the Company. Included in general and
administrative expenses for the years ended August 31, 1995 and 1994 and for the
period from inception (September 16, 1992) to August 31, 1993, respectively, are
$120,000, $120,000 and $0 of monthly fees charged to the Company by Trinity for
general and administrative services, including the use of office space in
premises occupied by Trinity. Such charges began on September 1, 1993,
commensurate with the increased activities primarily related to the Offering.
Through August 31, 1993, the Company obtained advances of $2,500 from Trinity.
During fiscal 1994, advances increased to approximately $37,000. Such advances
were due on demand, noninterest bearing and were repaid in full by August 31,
1994.
The Company issued 3,750 shares of Common Stock valued at $22,500 to its legal
counsel in partial consideration for services rendered in connection with the
Offering.
6. STOCK OPTION PLAN
On September 18, 1992, the Company's Board of Directors and a majority in
interest of the shareholders of the Company approved a stock option plan (the
"Plan"). The Plan provides
F-9
<PAGE>
for issuance of up to 277,778 options (the "Options") to acquire shares of the
Company's Common Stock.
The Options are intended to qualify either as incentive stock options
("Incentive Stock Options"), within the meaning of Section 422 of the Internal
Revenue Code of 1986, or as options which are not intended to meet the
requirements of such section ("Nonstatutory Stock Options"). The Options may be
granted under the Plan to persons who, in the case of Incentive Stock Options,
are key employees (including officers) of the Company, or, in the case of
Nonstatutory Stock Options, are key employees (including officers) and
nonemployee directors of the Company, except that Nonstatutory Stock Options may
not be granted to a holder of more than 10% of the total voting power of the
Company.
The exercise price of all Incentive Stock Options granted under the Plan must be
at least equal to the fair market value of such shares on the date of grant or,
in the case of Incentive Stock Options granted to the holder of 10% or more of
the Company's Common Stock, at least 110% of the fair market value of such
shares on the date of grant. The exercise price of all Nonstatutory Stock
Options granted under the Plan shall be determined by the Board of Directors of
the Company at the time of grant. The maximum exercise period for which the
Options may be granted is ten years from the date of grant (five years in the
case of Incentive Stock Options granted to an individual owning more than 10% of
the Company's Common Stock). The aggregate fair market value (determined at the
date of the option grant) of such shares with respect to which Incentive Stock
Options are exercisable for the first time by the holder of the option during
any calendar year shall not exceed $100,000. To date, no options have been
granted under the Plan.
7. INCOME TAXES
The Company adopted Statement of Financial Accounting Standards ("SFAS") No.
109, "Accounting for Income Taxes," as of September 16, 1992 (date of
inception). There was no material effect on the Company's financial position and
results of operations of adopting SFAS No. 109.
Income taxes accrued for the year ended August 31, 1995 are all current and
relate to federal income taxes $(66,000) and state and local income taxes
$(700). The Company has paid no income taxes through August 31, 1995 and has net
operating loss carryforwards of approximately $51,000 available to reduce
taxable income in future years. The net operating loss carryforwards expire
through 2009 and may be subject to certain limitations due to the ownership
change that occurred as a result of the Company's initial public offering. A
valuation allowance has been recorded to offset the full effect of the deferred
tax benefits attributable to these net operating loss carryforwards due to the
uncertainty as to their ultimate realizability.
F-10
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, in the City of New
York, State of New York, on the 28th day of November, 1995.
TRINITY AMERICAS INC.
By: /s/Lawrence Burstein
Lawrence Burstein
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signatures Capacity Date
/s/Barry Goldin Chairman of the November 28, 1995
Barry Goldin Board of Directors
/s/Lawrence Burstein President and November 28, 1995
Lawrence Burstein Director (Principal
Executive, Financial
and Accounting Officer)
Director
John Cattier
/s/Barry Ridings Director November 28, 1995
Barry Ridings
Exhibit 13(b)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A-1
(Mark One)
|X| ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended August 31, 1995
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-23278
TRINITY AMERICAS INC.
(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.)
950 Third Avenue (27th Floor), New York, New York 10022
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 888-5563
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, Class A Redeemable Common Stock Purchase Warrants,
Class B Redeemable Common Stock Purchase Warrants
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. Yes |X| No | |
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |X|
APPLICABLE ONLY TO REGISTRANTS 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 | |
<PAGE>
The number of shares outstanding of the Registrant's common stock is
2,964,861 (as of November 15, 1995).
The aggregate market value of the voting stock held by non-affiliates of
the Registrant is $11,474,306 (as of November 15, 1995).
DOCUMENTS INCORPORATED BY REFERENCE
Registration Statement on Form S-1 (File No. 33-71368)
Proxy Statement dated February 12, 1996
<PAGE>
PART I
Item 1. Business
(a) General Development of Business
Trinity Americas Inc. ("Trinity") was formed in September 1992 to serve as
a vehicle to effect a merger, exchange of capital stock, asset acquisition or
other similar business combination ("Business Combination") with an operating
business (an "Acquired Business").
In February 1994, Trinity successfully consummated an initial public
offering of its equity securities (the "IPO") from which it derived net proceeds
of approximately $9,567,000. Reference is made to Trinity's Registration
Statement on Form S-1 (File No. 33-71368), declared effective on February 9,
1994, for more detailed information in these regards.
On October 30, 1995, Trinity entered into an agreement to acquire all of
the outstanding capital shares of a Brazilian casual dining chain for $21.0
million, as previously contemplated by a letter of intent dated August 7, 1995.
The closing of the acquisition transaction, which is scheduled to occur during
the first quarter of 1996, is subject, among other things, to the completion of
documentation and to approval by Trinity's public stockholders. Reference is
made to Trinity's definitive Proxy Statement, dated February 12, 1996, for more
detailed information in these regards.
Trinity was incorporated as a Delaware corporation on September 16, 1992.
Trinity's executive offices are located at 950 Third Avenue, New York, New York
10022; its telephone number is (212) 888-5563.
(b) Financial Information About Industry's Segments
Not applicable.
(c) Narrative Description of Business
See Item 1(a) above.
(d) Financial Information about Foreign and Domestic Operations and Export
Sales
Not applicable.
<PAGE>
PART II
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Trinity was incorporated in September 1992 for the purpose of raising money
to fund a vehicle to effect a Business Combination with an Acquired Business. On
February 9, 1994, Trinity's registration statement under the Securities Act of
1933, as amended, covering 1,700,000 units, each unit consisting of one share of
Trinity's Common Stock, one Class A Redeemable Warrant and one Class B
Redeemable Warrant at an initial public offering price of $6.00 per unit, was
declared effective by the Securities and Exchange Commission. Trinity derived
$11,100,000 from the IPO, inclusive of proceeds from the exercise of the
underwriters' over-allotment option to acquire an additional 150,000 units,
prior to underwriting commissions of $888,000 and expenses of approximately
$645,000, respectively. 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 years ended August 31, 1995 and 1994 and the period ended August
31, 1993, Trinity had a net income (loss) of $138,738, ($50,929) and ($166),
respectively. These results of operations were attributable to interest and
dividend income offset by general and administrative expenses.
On August 7, 1995, the Company entered into a letter of intent for a
Business Combination to acquire all of the outstanding capital shares of a
Brazilian casual dining chain for approximately $21,000,000 (the "Acquisition")
of which $16,000,000 is payable at the closing with the balance of $5,000,000
payable in two equal installments, with interest, due 360 and 720 days
respectively, from the closing. The final Heads of Agreement was executed on
October 30, 1995. Funding of the cash portion of the purchase price is expected
to be derived from the following sources: (i) approximately $9,500,000 from
Trinity's currently restricted cash assets; (ii) $4,000,000 from a Brazilian
subsidiary of Coca-Cola, to be paid to Venbo concurrently with the consummation
of the Acquisition, in consideration for Coca-Cola products being designated the
exclusive soft drink products for all of Venbo's restaurants for a ten-year term
and for Venbo'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
$2,500,000 from the proceeds of a private placement of up to 2,964,861
additional shares of Trinity Common Stock at approximately $3.20 per share. If
sufficient shares of Trinity Common Stock are sold in the private placement,
Trinity, at its discretion, may use the proceeds of such sales to pay the
balance
2
<PAGE>
of the purchase price in whole or in part. However, there can be no assurance
that these transactions will occur.
In accordance with the terms of its Certificate of Incorporation, in the
event that the Company does not consummate a Business Combination prior to May
17, 1996, it will be required to liquidate the balance of its trust account to
its stockholders, excluding the Company's founding stockholders who agreed to
waive their respective rights to participate in any such liquidation
distribution on shares owned prior to the Company's initial public offering.
3
<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.
TRINITY AMERICAS INC.
(registrant)
Dated: February 20, 1996
By: /s/Lawrence Burstein
Lawrence Burstein
President
(Principal Executive, Financial and
Accounting Officer)
Exhibit 23(a)
Consent of Independent Public Accountants
To the Directors and Shareholders of
Venbo Comercio de Alimentos Ltda.:
We consent to the incorporation by reference in the registration statement on
Form S-3 of Brazil Fast Food Corp. of our report dated March 12, 1996, except
for Note 20 which is as of March 26, 1996, with respect to the balance sheets of
Venbo Comercio de Alimentos Ltda. as of December 31, 1995 and 1994 and the
related statements of operations, cash flows and changes in shareholders' equity
for each of the years in the three-year period ended December 31, 1995 and to
the reference to our firm under the heading "Experts" in the prospectus.
Such report contains an explanatory paragraph which cites Venbo's dependence on
past and continuing financial support of its then sole shareholder.
/s/KPMG Peat Marwick
KPMG Peat Marwick
Sao Paulo, Brazil
July 3, 1996
Exhibit 23(b)
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the use of our report
(and all references to our Firm) included in or made a part of this Registration
Statement.
/s/Arthur Andersen LLP
Arthur Andersen LLP
New York, New York
July 2, 1996
