SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended September 30, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _____ to _____
Commission file number 001-13559
Restaurant Teams International, Inc.
------------------------------------
(Name of small business issuer in its charter)
Texas 75-2337102
(State of other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization
1705 E. Whaley, Longview, Texas 75605
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (903) 758-2811
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No[ ]
Number of shares outstanding of each of the issuer's classes of common stock, as
of November 17, 1998: 6,515,414 shares of common stock, par value $.01.
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RESTAURANT TEAMS INTERNATIONAL, INC.
Page No.
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PART I FINANCIAL INFORMATION.......................................................... 2
Item 1. Financial Statements........................................................... 2
--------------------
Condensed Balance Sheet for the Nine Month Period
Ended September 30, 1998....................................................... 2
Condensed Income Statement For Three Month and
Nine Month Periods Ended September 30, 1997 and September 30, 1998............. 4
Condensed Statement of Cash Flows for the Nine Month
Periods Ended September 30, 1997 and September 30, 1998........................ 5
Notes to Interim Condensed Financial Statements (Unaudited).................... 6
Item 2. Management's Discussion and Analysis of
---------------------------------------
Financial Condition and Results of Operations.................................. 7
---------------------------------------------
PART II OTHER INFORMATION.............................................................. 10
Item 1. Legal Proceedings.............................................................. 10
-----------------
Item 6. Exhibits and Reports on Form 8-K............................................... 10
--------------------------------
Signatures ............................................................................... 11
Exhibit Index ............................................................................... 12
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PART I - FINANCIAL INFORMATION
Item 1: FINANCIAL STATEMENTS
Restaurant Teams International, Inc.
Condensed Balance Sheet
For the Nine Month Period Ended
September 30, 1998
------------- -------------
December 31, September 30,
1997 1998
(Restated
Unaudited) (Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash........................................................................... $ 20,373 $ 787,610
------------ ------------
Inventory...................................................................... 26,571 60,601
------------ ------------
Total Current Assets...................................................... 46,944 848,211
PROPERTY AND EQUIPMENT (Pledged)
Buildings...................................................................... 3,774,141 5,829,058
Land........................................................................... 135,000 385,000
Leasehold Improvements......................................................... 30,113 30,113
------------ ------------
Vehicles and Equipment......................................................... 1,250,302 2,568,697
Total Property and Equipment.............................................. 5,189,556 8,812,868
------------ ------------
Accumulated Depreciation....................................................... (430,325) (539,893)
------------ ------------
Property and Equipment - Net.............................................. 4,759,231 8,272,975
OTHER ASSETS
Assets Held for Sale, Net of Accumulated Depreciation.......................... 909,835 0
Corporate Organization Costs and Other Assets, 32,651 58,950
Net of Accumulated Amortization...............................................
Notes Receivable - Related Parties............................................. 164,543 75,000
------------ ------------
Total Other Assets........................................................ 1,107,029 133,950
============ ============
TOTAL ASSETS.............................................................. $5,913,204 $9,255,136
2
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Restaurant Teams International, Inc.
Condensed Balance Sheet
for the Nine Month Period Ended
September 30, 1998
(Continued)
------------ -------------
December 31, Septebmer 30,
1997 1998
(Restated (Unaudited)
Unaudited)
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES
Accrued Expenses............................................................... $ 340,635 $ 45,236
Accounts Payable............................................................... 52,864 56,891
Bank Overdraft................................................................. 48,104 --
Note Payable - Short Term...................................................... 10,249 --
Income Tax Payable............................................................. 8,800 8,800
Current Portion of Capital Lease Obligations................................... 6,175 0
------------ ------------
Current Portion of Notes Payable - Long Term................................... 465,015 292,604
Total Current Liabilities................................................. 931,842 403,531
OTHER LIABILITIES
Capital Lease Obligations, Net of Current Portion.............................. 165,504 0
Notes Payable - Long Term, Net of Current Portion.............................. 1,101,437 2,126,874
Deferred Income Tax Liability.................................................. 121,200 121,200
------------ ------------
Total Other Liabilities................................................... 1,388,141 2,248,074
------------ ------------
Total Liabilities......................................................... 2,319,983 2,651,605
SHAREHOLDERS EQUITY
Common Stock, $.01 Par Value; 50,000,000 Shares Authorized;
6,515,414 Shares Issued and Outstanding...................................... 61,585 65,154
Additional Paid In Capital..................................................... 3,278,499 6,244,071
Retained Earnings - Prior...................................................... 135,001 254,387
Retained Earnings - Current.................................................... 119,386 603,861
------------ ------------
Less Treasury Stock, at Cost................................................... (1,250) (563,942)
------------ ------------
Total Shareholders Equity................................................. 3,593,221 6,603,531
============ ============
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY................................. $5,913,204 $9,255,136
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3
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Restaurant Teams International, Inc.
Condensed Income Statement
For the Three Month and Nine Month Periods Ended
September 30, 1997 and September 30, 1998
Three Months Ended Nine Months Ended
September 30, September 30,
---------- ---------- ---------- ----------
1997 1998 1997 1998
(Restated (Unaudited) (Restated (Unaudited)
Unaudited) Unaudited)
<S> <C> <C> <C> <C>
SALES............................................... $ 827,288 $ 1,076,110 $ 2,351,110 $ 2,816,946
EXPENSES
Food and Beverage Costs............................. 225,244 303,374 651,621 776,985
Salaries and Contract Labor......................... 203,529 306,993 622,101 743,872
Payroll and other Taxes............................. 24,113 50,822 88,803 125,093
Professional Fees................................... 4,182 12,590 86,001 40,105
Advertising and Promotional......................... 10,806 37,166 49,512 79,606
Rent................................................ 39,162 65,623 109,114 174,186
Insurance........................................... 15,382 21,691 38,149 56,400
Telephone........................................... 10,818 13,932 28,638 25,224
Travel.............................................. 2,482 2,165 10,557 9,053
Utilities........................................... 19,863 27,437 66,116 74,386
Depreciation........................................ 51,515 38,800 141,680 109,568
Amortization........................................ 18,650 18,000 230,416 49,417
Interest............................................ 26,416 55,877 83,001 133,611
Linen and Laundry................................... 6,649 12,008 22,879 35,625
Repairs and Maintenance............................. 16,312 10,924 50,795 46,578
Supplies............................................ 6,356 7,823 19,707 28,665
---------- ---------- ---------- ----------
Miscellaneous....................................... 1,003 806 9,878 6,886
---------- ---------- ---------- ----------
Total Expenses................................. 682,482 986,031 2,308,968 2,515,260
OPERATING INCOME (LOSS)........................ 145,806 90,061 42,142 301,686
OTHER INCOME/(EXPENSE)
Profit/(Loss) on Sale of Assets..................... 11 1,763 11 263,330
Rental Income....................................... - 10,758 - 38,844
Income Tax (Expense) Benefit:
Current........................................ - - - -
---------- ---------- ---------- ----------
Deferred....................................... - - - -
---------- ---------- ---------- ----------
NET INCOME..................................... $145,817 $102,557 $42,153 $603,861
Basic Earnings Per Share............................ $ .023 $ .016 $ .007 $ .093
Diluted Earnings Per Share.......................... $ .021 $ .013 $ .006 $ .074
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4
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Restaurant Teams International, Inc.
Condensed Statement of Cash Flows
For the Nine Month Periods Ended
September 30, 1997 and September 30, 1998
September September
30,1997 30, 1998
---------- ----------
(Restated
(Unaudited) (Unaudited)
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income (Loss)............................................ $ 42,153 $ 603,861
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation................................................. 141,680 109,568
Amortization................................................. 230,416 49,417
Net Change in Assets and Liabilities:
Decrease / (Increase) in Inventory....................... (46,769) (34,030)
(Decrease) / Increase in Accounts Payable................ 4,956 4,027
---------- ----------
(Decrease) / Increase in Accrued Expenses................ (31,011) (295,399)
---------- ----------
Total Adjustments............................................ 299,272 (166,417)
---------- ----------
Net Cash Provided by Operating Activities................ 341,425 437,444
Cash Flows from Investing Activities:
Capital Expenditures......................................... (1,140,747) (3,623,312)
Expenditures for Preopening/Remodel Costs (88,099) 0
and other Assets...........................................
(Increase) / Decrease in Notes Receivable.................... (25,521) 89,543
Increase in Deferred Franchise System Costs.................. (39,969) 0
---------- ----------
Net Proceeds from Sale of Assets............................. 11 605,673
---------- ----------
Net Cash Used in Investing Activities.................... (1,294,3251) (2,928,096)
Cash Flows from Financing Activities:
Repurchase of Common Stock 0
Sale of Common Stock......................................... 959,500
Borrowing on Notes Payable................................... 223,663 1,433,026
---------- ----------
Principal Payments on Notes Payable.......................... (166,585) (580,000)
Net Cash Provided by Financing Activities................ 1,016,578 3,257,889
NET INCREASE / (DECREASE) IN CASH............................ 63,678 767,237
CASH AT BEGINNING OF YEAR.................................... 18,967 20,373
========== ==========
CASH AT END OF PERIOD........................................ $82,645 $787,610
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5
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Restaurant Teams Internatioanl, Inc.
Notes To Interim Condensed Financial Statements
For the Nine Month Period Ended
September 30, 1998
(Unaudited)
Note 1. Basis of Presentation
The condensed financial statements of Restaurant Teams International,
Inc. (the ACompany@) as of September 30, 1997 and September 30, 1998
have been prepared by the Company, pursuant to the rules and
regulations of the Securities and Exchange Commission. The Company
owns and operates four restaurants under the names of AFresh=n Lite
Cafe & Grill@ and AStreet Talk Cafe.@
The information furnished herein reflects all adjustments (consisting
of normal recurring accruals and adjustments) which are, in the
opinion of management, necessary to fairly state the operating
results for the respective periods. However, these operating results
are not necessarily indicative of the results expected for the full
fiscal year. Certain information and footnote disclosures normally
included in annual financial statements prepared in accordance with
generally accepted accounting principals have been omitted pursuant
to such rules and regulations. The notes to the condensed financial
statements should be read in conjunction with the notes to the
financial statements contained in the Form 10-SB/A-3 filed on August
14, 1998. Company management believes that the disclosures are
sufficient for interim financial reporting purposes.
Note 2. Sale of Restaurant Facility
On March 17, 1998, the Company sold its facility in Nacogdoches,
Texas. The Company realized a gain of $111,593 on the sale of this
facility which was previously classified as Aassets held for sale.@
On June 29, 1998, the Company sold its facility in Texarkana, Texas.
The Company realized a gain of $150,000 on the sale of this facility
which was previously classified as Aassets held for sale.@
On August 4, 1998, the Company sold its facility in Longview, Texas.
The Company realized a gain of $1,763 on the sale of this facility
which was previously classified as "assets held for sale."
Note 3. Other Events
On November 9, 1998 the Company filed suit in Federal Court against
its debenture holders claiming among other things misrepresentation
by the debenture holders and their agents in the promotion of the
debenture to the Company and violation of certain state and federal
securities laws. The Company is seeking a recision of the debentures
and damages.
On November 11, 1997 the Company's board of directors approved a
stock repurchase program for up to 250,000 shares of the Company's
common stock.
Note 4. Explanation of Restated Financial Statements
The december 31, 1997 and the September 30, 1997 financial statements
are represented as restated due to the reclassification of
capitalized leases as oprating leases.
6
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Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
This Quarterly Report on Form 10-QSB includes Aforward-looking
statements@ within the meaning of Section 27A of the Securities Act of 1933, as
amended (the ASecurities Act@), and Section 21E of the Securities Exchange Act
of 1934, as amended (the AExchange Act@), which can be identified by the use of
forward-looking terminology such as, Amay,@ Abelieve,@ Aexpect,@ Aintend,@
Aanticipate,@ Aestimate@ or Acontinue@ or the negative thereof or other
variations thereon or comparable terminology. All statements other than
statements of historical fact included in this Form 10-QSB, are forward-looking
statements. Although the Company believes that the expectations reflected in
such forward-looking statements are reasonable, it can give no assurance that
such expectations will prove to have been correct. Important factors with
respect to any such forward-looking statements, including certain risks and
uncertainties that could cause actual results to differ materially from the
Company's expectations (ACautionary Statements@) are disclosed in this Form
10-QSB, including, without limitation, in conjunction with the forward-looking
statements included in this Form 10-QSB, and in the Company's Annual Report on
Form 10-KSB/A-1 for the year ended December 31, 1997. Important factors that
could cause actual results to differ materially from those in the
forward-looking statements herein include, but are not limited to, the newness
of the Company, the need for additional capital and additional financing, the
Company's limited restaurant base, lack of geographic diversification, the risks
associated with expansion, a lack of marketing experience and activities, risks
of franchising, seasonability, the choice of site locations, development and
construction delays, need for additional personnel, increases in operating and
food costs and availability of supplies, significant industry competition,
government regulation, insurance claims and the ability of the Company to meet
its stated business goals. All subsequent written and oral forward-looking
statements attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by the Cautionary Statements.
The following discussion of the results of operations and financial
condition should be read in conjunction with the Financial Statements and
related Notes thereto included herein.
Overview
The Company was organized in June 1990 as Bosko's, Inc. under the laws
of the State of Delaware. In November 1992 the Company changed its name to
Fresh=n Lite, Inc., and in November 1995 the Company merged into a Texas
corporation also bearing the name Fresh=n Lite, Inc. On September 18, 1998 the
Company changed it's name to Restaurant Teams International, Inc. to more
accurately reflect the direction management is taking with respect to
positioning the Company as a multi-concept holding company. The Company
currently owns and operates one Fresh=n Lite Cafe & Grill restaurant, in Irving
(Valley Ranch) and three Street Talk Cafe restaurants in Dallas, Richardson, and
The Colony, Texas. The Company plans to expand by opening additional Street Talk
Cafe restaurants on a Company-owned basis in the Dallas/Ft. Worth demographic
market area. Additionally, on October 15, 1998 the Company, through its wholly
owned subsidiary RTOSF, Inc. entered into definitive agreements to purchase 100%
7
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of the assets of the Old San Francisco Steak House chain which operates four
company-owned units in Dallas, Austin, San Antonio, and Houston, Texas and has
licensees in Las Vegas, NV, Oklahoma City, OK, and Atlanta, GA.
Results of Operations
Comparison of Three Months Ended September 30, 1997 and 1998
Revenues. For the three months ended September 30, 1998, the Company's
revenues increased 30% from $827,285 in the same period of 1997 to $1,076,110.
The increase in revenues was due to the fact that the Valley Ranch location only
operated for 72 months of the same period in 1997 and The Colony facility was
not operating during the same period of 1997. The Company attributes the further
increase to increased promotion associated with Chad Hennings= involvement with
the Company. The Fresh=n Lite restaurant at Preston and Frankford, which would
have been able to demonstrate same store sales, was closed for 15 days during
the period in order to convert it to a Street Talk Cafe concept.
Costs and Expenses. Costs and expenses for the three month period ended
September 30, 1998 increased 44.5% from $682,482 to $986,031 from the
corresponding period of 1997. This was primarily due to an increase in general
and administrative expenses in preparation for the acquisition of the Old San
Francisco Steak House chain, increased interest expense, and increased
advertising costs. Other variances between the costs and expenses for the three
month periods are minimal.
Net Income. The Company had net income for the three months ended
September 30, 1998 of $90,061 compared to net income of $145,086 for the
corresponding three months of 1997, representing $.016 and $.023 per share,
respectively. Earnings per share figures are based on basic earnings per share.
Comparison of Nine Months Ended September 30, 1997 and 1998
Revenues. For the nine months ended September 30, 1998, revenues
increased 19.8% from $2,351,110 in the same period of 1997 to $2,810,946. The
increase in revenues was due to the fact that the Valley Ranch location only
operated for 72 months of the same period in 1997 and The Colony facility was
not operating during the same period of 1997. The Company further attributes the
increase to increased promotion associated with Chad Hennings= involvement with
the Company.
Costs and Expenses. Costs and expenses for the nine month period ended
September 30, 1998 increased 8.9% from $2,308,968 to $2,515,260 from the
corresponding period of 1997. This was primarily due to an increase in general
and administrative expenses in preparation for the acquisition of the Old San
Francisco Steak House chain, increased interest expense, and increased
advertising costs. Other variances between the costs and expenses for the three
month periods are minimal.
Net Income. The Company had a net income for the nine months ended
September 30, 1998 of $603,861 compared to a net income of $42,153 for the
8
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corresponding period of 1997, a 1433% gain, representing $.093 and $.007 per
share, respectively. Earnings per share figures are based on basic earnings per
share.
Liquidity and Capital Resources
Historically, the Company has required capital to fund the operations
and capital expenditure requirements of its Company-owned restaurants.
From January 4, 1995 through December 12, 1997, the Company received
gross proceeds from an intra-state offering of $2,219,500. Approximately
$287,600 of the proceeds were used to cover offering- related costs, including
underwriting discounts and commissions. The net proceeds were used primarily for
the acquisition of the Company's corporate offices. The remaining proceeds were
used to develop additional restaurants and for general corporate purposes.
The Company met fiscal 1997 capital requirements with cash generated by
operations, the proceeds from the intra-state offering and borrowing on notes
payable. In fiscal 1997 the Company's operations generated approximately
$644,352 in cash, as compared to $551,804 in fiscal 1996 and $461,811 in fiscal
1995. The Company's restaurant operations are labor intensive and do not have
significant receivables or inventory. The Company receives trade credit based
upon negotiated terms in purchasing food and supplies and ordinarily operates
with a relatively small level of working capital.
The Company's principal capital requirements are the funding of new
restaurant development or acquisitions and remodeling of existing units. During
fiscal 1997, the Company constructed and opened one unit in The Colony, Texas,
and began construction of a second unit in Richardson, Texas, and purchased its
corporate offices facility. The total capital outlay for the year was
$2,288,392. Opening additional Company-owned restaurants is a key component of
its expansion strategy.
The Company is currently operating out of cash flow from operations.
The Company completed two private placements of A Debentures and B Debentures on
May 29, 1998 and June 29, 1998, respectively, providing net proceeds to the
Company of $2,670,000. The proceeds were used to fund the Company's expansion
strategy of opening additional Street Talk Cafe restaurants in the Dallas market
area. The Company is currently seeking a recision of said debentures through a
law suit filed in Federal court on November 9, 1998.
Plan of Operations
The Company has planned the following operations for the 1998 calendar
year, including:
(i) Open one additional Street Talk Cafe restaurant at location in
Addison, Texas
(ii) Begin the conversion of an additional Street Talk Cafe restaurant in
Plano, Texas.
(iii) Complete the acquisition of the Old San Francisco Steak House chain.
Employees
The Company expects to hire three full time management personnel and
thirty part time hourly personnel with the opening of each new restaurant
9
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operation. The cost of these personnel should be 25% of the annual operating
revenue to be generated by each operation. The initial cost of hiring and
training of all personnel is covered in the store start up costs.
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Registrant filed a lawsuit on November 6, 1998 in the U.S. District
Court for the Eastern District of Texas, Tyler Division, Cause No. 6:98-CV-679,
styled Restaurant Teams International, Inc. v Dominion Capital Fund, Ltd.,
Canadian Advantage Limited Partnership, Sovereign Partners Limited Partnership,
Corporate Capital Management, Thomson Kernaghan & Co., Ltd., Steve Hicks, Mark
Valentine, and Mark Savage. Registrant alleges that the Defendants engaged in
fraudulent activities in connection with the issuance and sale of Registrant's
6% Convertible Debentures in violation of Texas law, and in particular a breach
of the representations that they would not engage in short sales of the
Registrant's common stock. Registrant seeks recision of the debentures and other
costs and damages in the action. Pending the outcome of the suit Registrant has
tendered recision of the debentures and will cease further payments thereon and
refuse to honor any request for conversion of such debentures.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Hereafter set forth as an exhibit to the Form 10-QSB of
Restaurant Teams International, Inc. is the following exhibit:
No. Description of Exhibit
--- ----------------------
27 Financial Data Schedule
-- -----------------------
(b) Current Reports on Form 8-K:
1. Current Reports on Form 8-K dated November 4, 1998 and
September 10, 1998 pursuant to Item 5.
10
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
RESTAURANT TEAMS INTERNATIONAL, INC.
(Registrant)
Date: November 18, 1998 By: /s/ Stanley L. Swanson
-------------------------------------------
Stanley L. Swanson, Chief Executive Officer
(Duly Authorized Signatory)
Date: November 18, 1998 By: /s/ Curtis A. Swanson
-------------------------------------------
Curtis A. Swanson, Chief Financial Officer
and Executive Vice President
(Duly Authorized Signatory)
11
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EXHIBIT INDEX
No. Description of Exhibit
16.1 Current Report on Form 8-K dated November 4, 1998
99 Current Report on Form 8-K dated September 10, 1998.
27 Financial Data Schedule
12
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest event reported): November 4, 1998
Restaurant Teams International, Inc.
(Exact name of registrant as specified in its charter)
State of Texas 001-13559 75-2337102
(State of incorporation) (Commission File No.) (IRS Employer
Identification No.)
1705 E. Whaley
Longview, Texas 75605
(Address of principal executive offices) (Zip code)
No change
(Former name of address, if changed since last report).
Item 4. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT.
On Ocotober 19, 1998, the Registrant ended its relationship with its
independent auditors, T.G. Prothro & Company, effective as of that date.
There have been no disagreements with T.G. Prothro & Company on any
matter of accounting principles, practices, financial statement disclosure, or
auditing scop or procedure or any reportable event. The change is being made in
order to comply with the American Stock Exchange listing requirements.
The registrant's audit committee has now engaged Lane, Gorman, Trubitt,
LLP, effective November 3, 1998. The registrant has not consulted Lane, Gorman,
Trubitt, LLP prior to such appointment with respect to any matter of accounting
principles or practices, financial statement disclosure, auditing scope or
procedure, or any disagreement with T.G. Prothro & Company.
The registrant has authorized T.G. Prothro & Company to respond fully
to the inquires of Lane, Gorman, Trubitt, LLP. Attached as an exhibit with this
filing report is the T.G. Prothro & Company letter addressed to the SEC, as
required by Item 304 (a) (3) of Regulation S-K.
ITEM 7. FINANCIAL STATEMENT, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
None
(b) Pro Forma Financial Information
None
(c) Exhibits
16.1 Letter re change in Certifying Accountant.
<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 hereunto duly authorized.
Restaurant Teams International, Inc.
Date: November 4, 1998 By: /s/ Stanley L. Swanson
-------------------
Stanley L. Swanson
Chief Executive Officer
(Signature)
Date: November 4, 1998 By: /s/ Curtis A. Swanson
------------------
Curtis A. Swanson
Chief Financial Officer
(Signature)
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
16.1 Letter re change in Certifying Accountant
<PAGE>
EXIBIT 16.1
T. G. PROTHRO & COMPANY, P.L.L.C.
-----------------------------------
CERTIFIED PUBLIC ACCOUNTANTS
100 INDEPENDENCE PLACE, SUITE 213 PHONE: 903.534.8811
POST OFFICE BOX 7337 FAX: 903.534.8891
TYLER, TEXAS 75711-7337 EMAIL: [email protected]
October 19, 1998
Mr. Curtis Swanson, CFO
Restaurant Teams International, Inc.
(formerly Fresh n' Lite, Inc.)
1705 Whaley
Longview, TX 75601
Dear Curtis:
This is to confirm that the client-auditor relationship between Restaurant Teams
International, Inc. (Commission File Number 001-13559) and T. G. Prothro &
Company, PLLC has ceased. We have certainly enjoyed our long relationship with
your Corporation and wish you every success in the future.
Sincerely Yours,
T. G. PROTHRO & COMPANY, PLLC
/s/Thomas Prothro
- -----------------
Thomas G. Prothro, CPA
President
Cc: Office of the Chief Accountant
SECPS Letter File
Securities and Exchange Commission
Mail Stop 9-5
450 Fifth Street, N.W.
Washington, D.C. 20549
Members, American Institute of Certified Public Accountants
Members, Texas Society of Certified Public Accountants
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest event reported): September 10, 1998
Fresh'n Lite, Inc.
(Exact name of registrant as specified in its charter)
State of Texas 001-13559 75-2337102
(State of incorporation) (Commission File No.) (IRS Employer
Identification No.)
1705 E. Whaley
Longview, Texas 75605
(Address of principal executive offices) (Zip code)
No change
(Former name of address, if changed since last report).
<PAGE>
EXHIBIT 99
Fresh'n Lite, Inc. issued the following press release on
September 9, 1998.
For Immediate Release
Fresh'n Lite, Inc.
1705 E. Whaley
Longview, Texas 75601
800-259-2675
903-758-1666 facsimile
Contact: Curtis A. Swanson, Chief Financial Officer
Press Release
-------------
Fresh'n Lite, Inc. announces name change and mandatory certificate recall
Longview, Texas -Fresh'n Lite, Inc. (FLTT) announced today that as part of its
positioning as a multi concept restaurant holding company, it is changing its
name to "Restaurant Teams International, Inc.". The Company is requesting the
new symbol of RTIN to coincide with its new name.
The change of the name was selected to reflect the new focus of the Company. As
stated in a release yesterday, the Company's management, along with its new
consultant is currently exploring several possible acquisitions both for the
growth of the Company's Street Talk Cafe concept as well as additional concepts
with potential for expansion and development.
The terms of the conversion will be as follows: The record date for the
conversion will be September 18th, 1998. Each shareholder of record of Fresh'n
Lite, Inc. as of that date will receive one (1) share of Restaurant Teams
International, Inc. (RTIN) in exchange for each one (1) share of Fresh'n Lite,
Inc. (FLTT). Additionally, each shareholder as of the record date will receive
one (1) warrant to purchase an additional share of RTIN for a period of 24
months following the record date with a strike price of $5.00 per share for each
ten (10) shares of Fresh'n Lite, Inc. (FLTT) held as of the record date. The
shares must be returned to the transfer agent and exchanged for new certificates
in order to receive the warrant and receive valid shares of Restaurant Teams
International, Inc. (RTIN). Official notice will be sent to each shareholder of
record as well as all brokers, market makers, and the Depository Trust Company
by the company's transfer agent.
The Company will continue to trade under the symbol FLTT until the name and
symbol change are completed at which time an announcement will be released
reflecting the new trading status.
Curtis A. Swanson, Chief Financial Officer of the Company stated: "The name
change is instrumental in the positioning of our company. We believe changing
the Company's name will heighten public awareness and increase our visibility.
In the eye's of the public, positioning the Company for the growth of the Street
Talk Cafe concept as well as preparing for the acquisitions we are exploring are
better served through the name Restaurant Teams International, Inc."
Henry Leonard, President and Chief Operating Officer stated: "With a strong
management team in place and the expansion avenues available, we recognize the
need for a name that would reflect our growth strategy both through internal
development and acquisitions. The name Restaurant Teams International, Inc.
better represents the direction of our Company and the excitement we feel about
our future."
<PAGE>
Fresh'n Lite, Inc. is the developer and operator of the Street Talk Cafe and
Fresh'n Lite Cafe & Grill concepts, full service casual dining concepts
featuring over 100 choices of low fat and non-fat menu items without
compromising taste, service, or atmosphere.
This press release contains forward looking statements, which are generally
preceded by words such as "believes", "expects", "anticipates", or "intends".
Such statements are subject to risks and uncertainties, including but not
limited to competitive conditions, weather, real estate zoning and permitting
complications, and general conditions in the restaurant market.
For further information contact: Curtis A. Swanson, Chief Financial Officer at
1-800-259-2675.
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 hereunto duly authorized.
Fresh'n Lite, Inc.
Date: September 10, 1998 By: /s/ Stanley L. Swanson
-------------------
Stanley L. Swanson
Chief Executive Officer
(Signature)
Date: September 10, 1998 By: /s/ Curtis A. Swanson
------------------
Curtis A. Swanson
Chief Financial Officer
(Signature)
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