UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the thirteen weeks ended March 28, 1999 Commission File Number 33-86166
RED HOT CONCEPTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-1887105
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6701 Democracy Boulevard
Suite 300
Bethesda, Maryland 20817
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (301) 493-4553
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 of 15(d) of the Securities and 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
-------- --------
As of May 1, 1999, 3,420,782 shares of common stock par value, $.01 per share
were outstanding.
<PAGE>
RED HOT CONCEPTS, INC. AND SUBSIDIARY
FORM 10-QSB
QUARTERLY REPORT
For the Period Ended March 28, 1999
INDEX
<TABLE>
<CAPTION>
Part I: FINANCIAL INFORMATION
Item 1: Financial Statements
<S> <C>
Condensed Consolidated Balance Sheet as of March 28, 1999 [Unaudited] and December 27, 1998 3-4
Condensed Consolidated Statements of Operation for the thirteen week periods
December 28, 1998 to March 28, 1999 and December 29, 1997 to March 29, 1998
[Unaudited]
5
Condensed Consolidated Statement of Stockholders' Equity for the thirteen week period December
27, 1998 to March 28, 1999 6
Condensed Consolidated Statements of Cash Flows for the thirteen week periods
December 27, 1998 to March 28, 1999 and December 29, 1997 to March 29, 1998
[Unaudited]
7
Notes to Condensed Consolidated Financial Statements 8-10
Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations
11-12
Part II: OTHER INFORMATION 13
SIGNATURES 14
o o o o o o o o o o
</TABLE>
2
<PAGE>
RED HOT CONCEPTS, INC. AND SUBSIDIARIES (RHC)
- -------------------------------------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 28, 1999 [UNAUDITED]
- -------------------------------------------------------------------------------
March 28, 1999 December 27, 1998
[Audited]
Assets:
Cash and Cash Equivalents $ 296 $ 12,293
Restricted Cash 30,000 30,000
Due From Celebrated Group 26,400 26,400
Prepaid Expenses 0 0
Accrued Interest Receivable 0 0
---------- ----------
Total Current Assets 56,696 68,693
========== ==========
Furniture and Equipment - Net 4,316 4,697
========== ==========
Other Assets:
Officer Loan Receivable 31,149 31,149
Investment in Celebrated Group 3,072,416 3,257,096
---------- ----------
Total Other Assets 3,103,565 3,288,245
========== ==========
Total Assets $3,164,577 $3,361,635
========== ==========
3
<PAGE>
RED HOT CONCEPTS, INC. AND SUBSIDIARIES (RHC)
- -------------------------------------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 28, 1999 [UNAUDITED]
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
March 28, 1999 December 27, 1998
[Audited]
Liabilities and Stockholders' Equity:
Current Liabilities:
<S> <C> <C>
Accounts Payable and Accrued Expenses $ 229,487 $ 215,066
Accrued Interest Payable - Related Party 0 0
----------- -----------
Total Current Liabilities 229,487 215,066
=========== ===========
Long Term Liabilities:
Due to Related Party 117,500 55,500
=========== ===========
Total Liabilities 346,987 270,566
Commitments and Contingencies -- --
Stockholders' Equity:
Series A Preferred Stock, $1.00 Par Value,
100,000 Shares Authorized,
100,000 Issued and Outstanding 1,500,000 1,500,000
Series B Preferred Stock, $2.00 Par Value,
725,000 Shares Authorized,
725,000 Shares Issued and Outstanding 1,450,000 1,450,000
Common Stock, $.01 Par Value,
20,000,000 Shares Authorized,
3,420,782 Shares Issued and Outstanding 34,207 34,207
Additional Paid-in Capital 8,443,416 8,443,416
Accumulated Deficit (8,486,838) (8,213,359)
Accumulated Other Comprehensive Income (123,195) (123,195)
----------- -----------
Total Stockholders' Equity
2,817,590 3,091,069
=========== ===========
Total Liabilities and Stockholders' Equity $ 3,164,577 $ 3,361,635
=========== ===========
</TABLE>
4
<PAGE>
RED HOT CONCEPTS, INC. AND SUBSIDIARIES (RHC)
- -------------------------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
[UNAUDITED]
- -------------------------------------------------------------------------------
For the Thirteen Week Period
December 28, December 29,
1998 to March 1997 to
28, 1999 March 29, 1998
Revenues $-0- $-0-
Cost of Revenues
Cost of Revenues -- --
Restaurant Expenses -- --
---------- ----------
Total Cost of Revenues -- --
---------- ----------
Gross Margin -- --
---------- ----------
General and Administrative Expenses 87,717 155,409
Depreciation and Amortization 381 --
Equity Portion of Celebrated Group Loss 184,680 179,482
---------- ----------
Operating Income (Loss) (272,778) (334,891)
Other Income (Expense):
Interest Income 19 --
Interest Expense - Related Party (720) (18,470)
---------- ----------
Net Loss (273,479) (353,361)
---------- ----------
Net (Loss) Per Share $ (0.08) $ (0.10)
---------- ----------
Weighted Average Shares Outstanding 3,420,782 3,420,782
---------- ----------
5
<PAGE>
RED HOT CONCEPTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
Series B Series A
Non- Convertible
Convertible Preferred
Common Stock [11E] Additional Preferred Stock Stock
Number of Paid-in Number of Number of
Stockholders'
Shares Amount Capital Shares Amount Shares Amount
<S> <C> <C> <C> <C> <C> <C> <C>
Balance - December 29, 1996 3,087,449 30,874 8,945,789 -- -- -- --
Issuances of Common Stock [9C] 333,333 3,333 (3,333) -- -- -- --
Convertible Debt to
Preferred Stock [9D] -- -- -- 725,000 1,450,000 -- --
Adjustment for Unamortized
Value of Warrants
Cancelled [7] -- -- (499,040) -- -- -- --
Comprehensive Income;
Net Income for the
fifty-two week period
ended December 28, 1997 -- -- -- -- -- -- --
Other Comprehensive Income;
Foreign Currency Translation
Adjustment -- -- -- -- -- -- --
Comprehensive Income -- -- -- -- -- -- --
--------- -------- ---------- ------- ---------- ------- ----------
Balance - December 28, 1997 3,420,782 $ 34,207 $8,443,416 725,000 $1,450,000 -- --
Notes Payable Converted
to Convertible -- -- -- -- -- 100,000 1,500,000
Preferred Stock [9D]
Comprehensive income;
Net [Loss] for the
fifty-two week period
ended December 27, 1998 -- -- -- -- -- -- --
--------- -------- ---------- ------- ---------- ------- ----------
Balance - December 27, 1998 3,420,782 $ 34,207 $8,443,416 725,000 $1,450,000 100,000 $1,500,000
Comprehensive Income -- -- -- -- -- -- --
For the thirteen week ended
March 28, 1999 -- -- -- -- -- -- --
--------- -------- ---------- ------- ---------- ------- ----------
Balance - March 28, 1999 3,420,782 $ 34,207 $8,443,416 725,000 $1,450,000 100,000 $1,500,000
========= ======== ========== ======= ========== ======= ==========
Accumulated
Compre- Other Total
hensive Accumulated Comprehensive
Income [Deficit] Income Equity
Balance - December 29, 1996 -- (7,693,155) (57,170) 1,226,338
Issuances of Common Stock [9C] -- -- -- --
Convertible Debt to
Preferred Stock [9D] -- -- -- 1,450,000
Adjustment for Unamortized
Value of Warrants
Cancelled [7] -- -- -- (499,040)
Comprehensive Income;
Net Income for the
fifty-two week period
ended December 28, 1997 -- 2,121,893 -- 2,121,893
Other Comprehensive Income;
Foreign Currency Translation
Adjustment -- -- (66,025) (66,025)
Comprehensive Income 2,055,868 -- -- --
=========== ----------- --------- ----------
Balance - December 28, 1997 -- $(5,571,262) $(123,195) $4,233,166
Notes Payable Converted
to Convertible -- -- -- 1,500,000
Preferred Stock [9D]
Comprehensive income;
Net [Loss] for the
fifty-two week period
ended December 27, 1998 (2,642,097) (2,642,097) -- (2,642,097)
=========== ----------- --------- ----------
Balance - December 27, 1998 -- $(8,213,359) $(123,195) $3,091,069
Comprehensive Income -- -- -- --
For the thirteen week ended
March 28, 1999 (273,479) (273,479) -- (273,479)
----------- ----------- --------- ----------
Balance - March 28, 1999 -- $(8,486,838) $(123,195) $2,817,590
=========== =========== ========= ==========
</TABLE>
Foreign Currency Translation:
Prior to December 28, 1997, the functional currency for the Company's United
Kingdom subsidiary and Australian subsidiary was the British pound sterling and
Australian dollar, respectively. The translation from British pound sterling and
Australian dollars into U.S. dollars was performed for balance sheet accounts
using current exchange rates in effect at the balance sheet date and for revenue
and expense accounts using a weighted average exchange rate during the period.
The gains or losses resulting from such translation are included in
stockholders' equity. For the period December 27, 1998 the translation from
British pound sterling into U.S. dollars for the investment in the Celebrated
group was done using current exchange rates in effect at year end.
The Accompanying Notes are an Integral Part of these
Consolidated Financial Statements.
6
<PAGE>
RED HOT CONCEPTS INC. AND SUBSIDIARIES
- -------------------------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
[UNAUDITED]
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Thirteen For the Thirteen
Week Period Week Period December
December 27, 1998 29, 1997 to March
to March 28, 1999 29, 1998
Operating Activities:
<S> <C> <C>
Net Cash - Operating Activities $ (73,997) $(268,226)
--------- ---------
Investing Activities:
Purchase of Furniture, Fixtures and Leasehold Improvements -- --
Store Development and Unit Preopening Costs -- --
--------- ---------
Net Cash - Investing Activities -- --
========= =========
Financing Activities:
Proceeds from Loan from Related Party 62,000 285,100
Repayment of Debt -- --
--------- ---------
Net Cash - Financing Activities 62,000 285,100
========= =========
Effect of Exchange Rate Changes on Cash -- --
========= =========
Net [Decrease]/Increase in Cash and Cash Equivalents (11,997) 16,874
Cash and Cash Equivalents - Beginning of Periods 12,293 109,255
--------- ---------
Cash and Cash Equivalents - End of Periods $ 296 $ 126,129
========= =========
Supplemental Disclosures of Cash Flow Information:
Cash paid during the periods for:
Interest Paid
Taxes Paid
Supplemental Disclosures of Cash Flow Information:
Cash Paid During the Period for:
Interest Paid $ -- $ 27,143
Taxes Paid -- --
</TABLE>
The Accompanying Notes are an Integral Part of these Condensed
Consolidated Financial Statements.
7
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
[UNAUDITED]
- ------------------------------------------------------------------------------
[A] Significant Accounting Policies
Significant accounting policies of RED HOT CONCEPTS, INC. and
subsidiary (the "Company") are set forth in the Company's Form 10-KSB
for the year ended December 27, 1998, as filed with the Securities and
Exchange Commission.
[B] Basis of Reporting
The balance sheet as of March 28, 1999, the statements of operations
for the period December 28, 1998 to March 28, 1999, and for the period
December 29, 1997 to March 29, 1998, the statement of stockholders'
equity for the period December 29, 1996 to March 28, 1999, and the
statements of cash flows for the period December 28, 1998 to March 28,
1999 and for the period December 28, 1997 to March 28, 1998 have been
prepared by the Company without audit. The accompanying interim
condensed unaudited financial have been prepared in accordance with
generally accepted accounting principles for interim financial
statements information and with the instructions of Form 10-QSB and
Regulation SB. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of the management of the
Company, such statements include all adjustments [consisting only of
normal recurring items] which are considered necessary for a fair
presentation of the financial position of the Company at March 28,
1999, and the results of its operations and cash flows for the thirteen
weeks then ended. It is suggested that these unaudited financial
statements be read in conjunction with the financial statements and
notes contained in the Company's Form 10-KSB for the year ended
December 27, 1998.
[C] Due To Related Parties
Woodland Limited Partnership ["Woodland"] is a partnership controlled
by members of Mr. Colin Halpern's family. Mr. Halpern is the President
and Chairman of the Board of the Company. As of December 27, 1998,
there is no balance due to Woodland. As of December 28, 1997 the
balance due to Woodland for funds advanced to the Company was
$1,011,317, which includes accrued interest payable of $230,065. This
obligation was originally due in May 1998 and was extended by Woodland
to January 1999. This loan was exchanged for convertible preferred
stock discussed below on December 27, 1998.
In June 1996, as partial consideration for the conversion of short-term
advances to a note payable loan, the Company issued a common stock
purchase warrant entitling Woodland to purchase 166,667 shares of the
Company's common stock at $7.50 per share for a period of 24 months
commencing on the date of the loan. The warrants will be redeemable at
$.01 per share if the closing bid price of the Company's common stock
exceeds $30 for 10 consecutive trading days ending within five days of
the notice of redemption. In December 1996, Woodland agreed to extend
the note due until June 1998 and, the Company issued a common stock
purchase warrant entitling Woodland to purchase an additional 166,667
shares of the Company's stock at $5.25 per share for a term expiring
December 31, 1999. As of December 29, 1996, the note was recorded net
of the fair value of these stock warrants at $694,556. The warrants
were cancelled upon conversion of the notes to equity.
In March 1997, the Company agreed with Woodland Limited Partnership to
convert $750,000 of long-term debt to 100,000 shares of $1.00 par value
Series A convertible preferred shares. On September 25, 1997, Woodland
agreed to exchange its $1.00 par value Series A convertible preferred
shares to 375,000 $2.00 par value Series B non-convertible preferred
shares.
On September 25, 1997, Woodland agreed to convert an additional
$700,000 of notes payable into 350,000 $2.00 par value Series B
non-convertible preferred shares. The agreed dividend is 8% and is
cumulative. The preferred shares hold the same voting rights as the
common shares. Warrants issued in connection with notes payable were
valued at $145,522 and was accounted for as a discount to the notes
payable to Woodland. At December 28, 1997, the Company amortized
$116,000 as interest expense. At December 27, 1998, no additional
amortization was charged to operations, as the warrants were cancelled
upon conversion to preferred shares.
On December 27, 1998 Woodland agreed to convert $1,500,000 of loans and
accrued interest into 100,000 shares of Series A Convertible 8%
Preferred Stock. The Company's Board of Directors approved this
agreement.
At December 27, 1998 dividends in arrears on the Series B
non-convertible preferred stock amounted to $174,000 or $.24 per share.
At December 27, 1998, Woodland owns approximately 36% of the Company's
outstanding common stock. Woodland also owns 100 % of the Class A
Convertible Preferred Stock, as well as, 100% of Class B
Non-Convertible Preferred Stock. Upon amendment and restatement of the
Series A Convertible Preferred Stock and exchange of the Class B
Preferred Stock into Class A Preferred Stock Woodland would own
1,475,000 shares of Series A Convertible Preferred Stock. Upon
Conversion of the Series A Convertible Preferred Shares Woodland would
own approximately 57% of the Company's outstanding common stock.
8
<PAGE>
Mr. Halpern also is the Chairman of the Board of International
Franchise Systems, Inc. ["IFS"]. IFS charged a management fee to the
Company for administration services of $45,000 for the year end of
December 28, 1997. There were no amounts charged for services in the
year end of December 27, 1998. IFS and one of its wholly-owned
subsidiaries subleased a facility to the Company in the United Kingdom.
For the year ended December 28, 1997, the Company paid $133,449 for
this facility. No amounts were charged to the company for the year
ended December 27, 1998.
The Company has advanced funds to and paid various expenses on behalf
of Mr. Halpern. At December 27, 1998 and December 28, 1997 the total
amount due to the Company is $31,149.
Mr. Halpern's son is an attorney with a law firm that provides legal
services to the Company. Legal expense incurred with this firm for the
fifty-two weeks ended December 27, 1998 was $32,000. At December 27,
1998 there was a $94,500 balance due and owing by the Company to this
firm.
The Chief Financial Officer of the Company is also the Chief Financial
Officer of IFS. On February 11, 1998 the Chief Financial Officer of the
company became the Chief Financial Officer and Chief Executive Officer
of the Celebrated Group, Plc. No amount was allocated to IFS or
Celebrated of his salary of $37,333 for 1998.
[D] Divestitures
On December 19, 1997, the Company sold its rights to Chili's
Restaurants in Australia and New Zealand to Brinker International, Inc.
("Brinker"). The $2.68 million purchase price was before the payment of
liabilities of the Australian operation which are estimated to be
approximately $700,000. The Company agreed to use the remaining
proceeds to repay the Brinker short term loan.
On December 16, 1997, the Company merged its UK subsidiary, Restaurant
House Ltd. with the Celebrated Group Plc.
[E] Stock Transactions
On January 23, 1997, the Company issued 1,000,000 shares of the 1.6
million unissued shares of stock sold under a Reg S share offering. As
of March 28, 1999, the Company had not issued the remaining 600,000
shares of stock. The Company is in dispute with the stock subscriber
regarding the price to be paid. For financial reporting purposes, the
Company has calculated the earnings per share with the assumption that
the shares had been issued.
In March 1997, the Company agreed with Woodland Limited Partnership to
convert $750,000 of long-term debt to 100,000 shares of $1.00 par value
Series A convertible preferred shares. On September 25, 1997, Woodland
agreed to exchange its $1.00 par value convertible preferred shares to
375,000 $2.00 par value Series B non-convertible preferred shares.
On September 25, 1997, Woodland agreed to convert an additional
$700,000 of notes payable into 350,000 $2.00 par value Series B
non-convertible preferred shares. The agreed dividend is 8% and is
cumulative. The preferred shares hold the same voting rights as the
common shares. Warrants issued in connection with notes payable were
valued at $145,522 and was accounted for as a discount to the notes
payable to Woodland. At December 28, 1997, the Company amortized
$116,000 as interest expense. For the year ended December 27, 1998, no
amounts have been amortized, as the warrants were canceled after
conversion to preferred stock.
On December 27, 1998 Woodland agreed to convert $1,500,000 of loans and
accrued interest into 100,000 shares of Series A Convertible 8%
Preferred Stock. The Company's Board of Directors approved this
agreement.
The company intends to amend and restate the Series A Preferred Stock
terms. The company will authorize an additional 1,900,000 shares. The
then total of 2,000,000 shares will be changed to $2.00 par value. The
agreed dividend will be 8% and will be cumulative. The shares will have
a liquidation preference of $2.00 plus an amount equal to an imputed
dividend of 8% per annum. In addition, the shares will be convertible
into 1.1 common shares for each preferred share.
After amendment of the Series A Preferred Stocks, Woodland has agreed
to exchange its 725,000 shares of Series B Non-Convertible Preferred
Stocks for 725,000 shares of Series A Preferred Stocks. In addition,
100,000 shares of Series A Convertible Preferred Stocks will be amended
to 750,000 shares of $2.00 par value Series A Preferred Stocks.
At December 27, 1998 dividends in arrears on the Series B
non-convertible preferred stock amounted to $174,000 or $.24 per share.
9
<PAGE>
Stock Transactions of Subsidiary
In September 1996, Red Hot Pacific issued 53 shares of common stock to
Brinker in connection with a guaranty agreement valued at $1.00.
The above issuance reduced Red Hot ownership of Red Hot Pacific from
100% to 95%. As a result of this stock transaction and related
liability for the guaranty agreement Red Hot reduced its additional
paid-in-capital by $2,497 in consolidation.
o o o o o o o o o o
10
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Result
of Operations
Overview -
Red Hot Concepts was incorporated in the state of Delaware on June 14, 1994. Red
Hot Concepts and its wholly owned subsidiaries (collectively, the "Company") are
owned 36% by Woodland Partnership Ltd. and the remaining shares are publicly
held. The Company was formed to establish and develop the Chili's Grill & Bar
restaurant concept franchised by Brinker International Inc. ("Brinker") outside
the United States.
At December 31, 1997, the Company no longer had the exclusive rights to operate
Chili's restaurants in the United Kingdom or Australia. From November 1995 until
December 18, 1997, the Company owned the Chili's concept development rights for
Australia and New Zealand. During 1997, the Company operated three Chili's
restaurants in Australia (two in suburban Sydney and one in suburban Melbourne).
However, on December 18, 1997, the Company sold its Australian and New Zealand
operations back to Chili's franchisor, Brinker International, for $2.68 million.
From July 1994 until December 15, 1997, the Company owned the UK rights to the
Chili's concept. During 1997, the Company operated two Chili's restaurants in
the UK (one in Canary Wharf and one in Cambridge). On December 15, 1997, the
Company merged its UK operations into the Celebrated Group Plc ("Celebrated").
The Company's exclusive development rights for Chili's restaurants in the UK
transferred to Celebrated in the merger.
Celebrated is publicly traded on the Alternative Index Market (AIM) of the
London Stock Exchange. As part of the merger, Red Hot Concepts acquired 46% of
Celebrated's outstanding stock and an option to acquire a 50% ownership
interest. In early 1998, a principal officer and a director of the Company
assumed comparable roles at Celebrated, in addition to retaining their positions
with the Company.
Results of Operations -
The Company realized a net loss of $273,479 for the thirteen weeks ending March
28, 1999 which compares to a net loss of $353,361 for the same period in 1997.
The net loss from 1997 to 1998 was reduced significantly reflecting the
Company's effort to minimize expenses. The Company included its share of the net
loss experienced by Celebrated for the thirteen week periods ended March 28,
1999 and March 29, 1998 in the amounts of $189,680 and $179,482, respectively.
Liquidity and Capital Resources
The Company's negative working capital as of March 28, 1999 was approximately
$173,000 as compared to a negative working capital of approximately $147,000 as
of December 27, 1998. Total current assets decreased by approximately $12,000
from December 27, 1998 to $56,696. Current liabilities increased by
approximately $14,000 from December 27, 1998 to $229,487.
The following chart represents the net funds raised and/or used in operating,
financing and investment activities for both periods.
<TABLE>
<CAPTION>
December 28, 1998 December 29, 1997
To To
March 28, 1999 March 29, 1998
------------------ ----------------------
In Thousands In Thousands
<S> <C> <C>
Net cash (used) in operating activities $(73,997) $(268,226)
Cash (used) in investing -- --
Cash provided by financing 62,000 285,100
</TABLE>
During the thirteen week period ended March 29, 1998, the Company used $73,997
for operating activities. The Company had a net loss of approximately $274,000.
11
<PAGE>
Cash generated by financing activities for the thirteen week period was
approximately $62,000, which include the proceeds from a loan from related
parties of $62,000.
The Company has improved short term liquidity through a number of different
steps including the reduction of administrative expenses and the conversion of
loans and accrued interest from Woodland Limited Partnership into preferred
stock. The Company believes that additional capital or borrowing will be
necessary to finance working capital in the short-term. The Company does not
anticipate that Celebrated will pay dividends in 1999. The Company does not
currently have any commitments to secure financing and there is no assurance
that the Company will be able to secure financing in the future and that even if
the Company is able to obtain financing, such financing will be available on
terms acceptable to the Company. If the Company's plans change, or if the
assumptions or estimates prove to be inaccurate, of if the Company is unable to
raise more funds, the Company will reduce its holdings in Celebrated.
Impact of Inflation
Inflation is not expected to have a material effect on the company's operations.
12
<PAGE>
Part II OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not a party to any litigation or
governmental proceedings that management believes
would result in judgements or fines that would have a
material adverse effect on the Company.
Item 2. Changes in Securities
Not Applicable.
Item 3. Defaults Upon Senior Securities
Not Applicable.
Item 4. Other Information
Not Applicable.
Item 5. Exhibits
(a) Exhibits
None.
(b) Reports on Form 8-K
During the thirteen week period ended March 29, 1998
Form 8-K's were filed by the Company on:
(i) August 28, 1997
13
<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.
RED HOT CONCEPTS, INC.
Date: May 17, 1999 By: /s/ Colin Halpern
Colin Halpern, President
14
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000932623
<NAME> Red Hot Concepts, Inc.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-26-1999
<PERIOD-START> DEC-28-1998
<PERIOD-END> MAR-28-1999
<CASH> 30,286
<SECURITIES> 0
<RECEIVABLES> 26,400
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 56,696
<PP&E> 4,316
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,164,577
<CURRENT-LIABILITIES> 229,487
<BONDS> 0
<COMMON> 34,207
0
2,950,000
<OTHER-SE> (116,617)
<TOTAL-LIABILITY-AND-EQUITY> 3,164,577
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 272,778
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (701)
<INCOME-PRETAX> (273,479)
<INCOME-TAX> 0
<INCOME-CONTINUING> (273,479)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (273,479)
<EPS-PRIMARY> (0.08)
<EPS-DILUTED> (0.08)
</TABLE>
