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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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FAMILY STEAK HOUSES OF FLORIDA, INC.
(Exact name of Registrant as specified in its charter)
Florida 5812 59 2597349
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation or organization) Classification Code No.) Identification No.)
2113 Florida Boulevard
Neptune Beach, Florida 32266
(904) 249-4197
(Address and telephone number of Registrant's principal executive offices)
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Mr. Glen F. Ceiley
Chairman of the Board
Family Steak Houses of Florida, Inc.
2113 Florida Boulevard
Neptune Beach, Florida 32266
(904) 249-4197
(Name, address and telephone number of agent for service)
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Copies To:
Halcyon E. Skinner, Esq.
McGuire Woods LLP
50 North Laura Street, Suite 3300
Jacksonville, Florida 32202
(904) 798-3200
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being
offered pursuant to dividend or investment 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, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box:[X]
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If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) 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 this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the box and list the Securities Act
Registration Statement for the same offering. [ ]
If the delivery of the Prospectus is expected to be made pursuant
to Rule 434, check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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Proposed
Maximum
Title of Each Class of Amount to be Aggregate Amount of
Securities To Be Registered Registered(1) Offering Registration
Price(2) Fee
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Common Stock, $.01 par value per share.... 1,250,000 1,325,000 332
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(1) Maximum number of shares of Common Stock of Family Steak Houses of
Florida, Inc. to be sold to current holders of its Common Stock in this
rights offering.
(2) Calculated in accordance with Rule 457(o) based on the estimated
maximum aggregate offering price of the Common Stock.
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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 Commission, acting pursuant to said
Section 8(a), may determine.
The information in this Prospectus is not complete and may be
changed. We may not sell these securities until the Registration Statement filed
with the Securities and Exchange Commission is effective. This Prospectus is not
an offer to sell, and it is not soliciting an offer to buy, these securities in
any state where the offer or sale is not permitted.
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SUBJECT TO COMPLETION, DATED _______________, 2001
PROSPECTUS
FAMILY STEAK HOUSES OF FLORIDA, INC.
1,250,000 Shares of Common Stock
We are offering 1,250,000 shares of common stock to our
shareholders who owned shares of our common stock as of the close of business on
______________, 2001, the record date.
- - You will receive, at no cost, a subscription right to purchase one
share of common stock for each two (2) shares of our common stock you
own on the record date.
- - The subscription price for your right is $_______ per share.
- - We will not issue fractional shares of common stock, and we will not
pay cash in place of fractional shares.
- - The rights are exercisable beginning on the date of this Prospectus and
continuing until 5:00 p.m., Eastern Time, on ______________, 2001, the
expiration date, unless extended.
- - If you want to participate in this offering, we recommend that you
submit your subscription documents to us, as subscription agent, before
the expiration date or to your broker or bank at least 10 days before
the expiration date.
- - All subscriptions will be held in escrow until the expiration date.
- - Your rights are not transferable.
- - The rights will not be listed for trading on any stock exchange.
- - We reserve the right to cancel this offering at any time before the
expiration date.
There is no minimum number of shares that we must sell in order to
complete this offering. Shareholders who do not participate in this offering
will continue to own the same number of shares, but will own a smaller
percentage of the total shares outstanding to the extent that other shareholders
participate in this offering.
Our common stock is quoted for trading on The Nasdaq Smallcap Market
under the trading symbol "RYFL." The closing price of our common stock on
_____________, 2001 was $_____ per share.
Proceeds to Family
Subscription Steak Houses of
Rights Price Florida(1)
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Per Share............................ $ $
Total................................
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(1) Before deducting expenses payable by us, estimated to be $____________
See "Risk Factors" commencing on page 6 for a discussion of certain
factors that you should consider before purchasing our common stock.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities, or determined if this
Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense. The date of this Prospectus is _______________, 2001.
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TABLE OF CONTENTS
PAGE
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SUMMARY.....................................................................1
QUESTIONS AND ANSWERS ABOUT FAMILY STEAK HOUSES
OF FLORIDA, INC. ........................................................1
QUESTIONS AND ANSWERS ABOUT THE RIGHTS OFFERING.............................1
A WARNING ABOUT FORWARD-LOOKING STATEMENTS..................................5
RISK FACTORS................................................................6
RISKS RELATED TO OUR BUSINESS.............................................6
RISKS RELATED TO OUR COMMON STOCK........................................12
RISKS RELATING TO RIGHTS OFFERING........................................14
USE OF PROCEEDS............................................................15
THE RIGHTS OFFERING........................................................15
IF YOU HAVE QUESTIONS......................................................22
PLAN OF DISTRIBUTION.......................................................22
EXPERTS....................................................................22
LEGAL MATTERS..............................................................22
HOW TO FIND ADDITIONAL INFORMATION.........................................22
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You should rely only on the information contained in this Prospectus or
to which we have referred you. We have not authorized anyone to provide you with
different information. This document may be used only where it is legal to sell
these securities. The information in this Prospectus is only accurate on the
date of this Prospectus.
On this Prospectus, all references to "Family Steak Houses of Florida,"
"we," "us," "Company," and "our" refer to Family Steak Houses of Florida, Inc.,
unless indicated otherwise.
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SUMMARY
This section answers in summary form some questions you may have about
Family Steak Houses of Florida, Inc. and this rights offering. The information
in this section is not complete and does not contain all of the information that
you should consider before exercising your subscription rights. You should read
the entire Prospectus carefully, including the "Risk Factors" section and the
documents listed under "How To Find Additional Information."
QUESTIONS AND ANSWERS ABOUT FAMILY STEAK HOUSES OF FLORIDA
WHAT IS FAMILY STEAK HOUSES OF FLORIDA?
Family Steak Houses of Florida, Inc., a Florida corporation, was formed
in 1985. It is the sole franchisee in Florida of Ryan's Properties, Inc. We
operate 23 Ryan's Family Steak House restaurants in North and Central Florida.
See "How To Find Additional Information" (page 22).
WHERE ARE WE LOCATED?
Our principal executive office is located at: 2113 Florida Boulevard,
Neptune Beach, Florida 32266. Our telephone number is (904) 249-4197.
QUESTIONS AND ANSWERS ABOUT THE RIGHTS OFFERING
WHAT IS A SUBSCRIPTION RIGHT?
We are distributing to you, at no charge, a subscription right to
purchase one share of common stock for every two (2) shares of common stock that
you owned on ________, 2001. Each subscription right entitles you to purchase
one share of common stock for $________ , subject to the terms of this rights
offering. When you "exercise" a subscription right, that means that you choose
to purchase the common stock that the subscription right entitles you to
purchase. You may exercise any number of your subscription rights, or you may
choose not to exercise any subscription rights. You cannot give or sell your
subscription rights to anybody else; only you can exercise them.
WHAT IS A RIGHTS OFFERING?
A rights offering is an opportunity for you to purchase additional
shares of common stock at a fixed price to be determined before the rights
offering begins and in an amount proportional to your existing interest, which
enables you to maintain your current percentage ownership interest in us. It
also allows you to buy shares of common stock without the payment of commissions
or other expenses.
WHAT IS THE BASIC SUBSCRIPTION PRIVILEGE?
The basic subscription privilege of each subscription right entitles
you to purchase one share of our common stock at a subscription price of
$__________.
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WHAT IS THE OVER-SUBSCRIPTION PRIVILEGE?
We do not expect that all of our shareholders will exercise all of
their basic subscription rights. By extending over-subscription privileges to
our shareholders, we are providing for the subscription for those shares which
are not purchased through exercise of basic subscription privileges. The over-
subscription privilege entitles you, if you fully exercise your basic
subscription privilege, to subscribe for additional shares of common stock not
acquired by other holders of rights at the same subscription price of
$__________ per share.
WHAT ARE THE LIMITATIONS ON THE OVER-SUBSCRIPTION PRIVILEGE?
We will only issue shares of common stock in the rights offering. The
number of shares available for over-subscription privileges will be minus the
number of shares purchased upon exercise of all basic subscription privileges.
If sufficient shares are available, we will seek to honor the over-
subscription requests in full. If over-subscription requests exceed the number
of shares available, we will allocate the available shares among shareholders
who over-subscribed in proportion to the number of shares purchased by those
over-subscribing shareholders through the basic subscription privilege. However,
if your pro rata allocation exceeds the number of shares you requested, you will
receive only the number of shares that you requested, and the remaining shares
from your pro rata allocation will be divided among other shareholders
exercising their over-subscription privileges who have subscribed for additional
shares in proportion to the number of shares purchased by that group of
over-subscribing shareholders through the basic subscription privilege.
WHY ARE WE ENGAGING IN A RIGHTS OFFERING?
We are offering the subscription rights to our current shareholders in
order to raise additional working capital which we intend to utilize to
construct and open up to two (2) additional restaurants in 2001 and remodel
others to include one (1) new display cooking concept. Additional funds would
improve our liquidity, and at this time we do not have satisfactory alternatives
to fund these new restaurants and renovations. Our Board of Directors has chosen
to give you the opportunity to buy more shares and provide us with additional
capital. This option provides each shareholder the opportunity to avoid dilution
of their ownership interest. Of course, we cannot assure you that we will not
need to seek additional financing in the future.
HOW MUCH MONEY WILL FAMILY STEAK HOUSES OF FLORIDA RECEIVE FROM THE RIGHTS
OFFERING?
Our gross proceeds from the rights offering depends on the number of
shares that are purchased. If we sell all shares which may be purchased upon
exercise of the rights offered by this Prospectus, then we will receive proceeds
of $________, before deducting expenses payable by us, estimated to be
$__________.
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ARE THERE ANY PURCHASE COMMITMENTS IN THE RIGHTS OFFERING?
As of the date of this Prospectus, certain directors and officers and
other shareholders have committed to purchase up to an aggregate of _______
shares of common stock pursuant to the offering if they are not otherwise
subscribed by other shareholders. To effect this commitment, each of these
purchasers has individually agreed to exercise his basic subscription privilege
in full and to subscribe for additional shares pursuant to the over-subscription
privilege.
HOW MANY SHARES MAY I PURCHASE?
You will receive one subscription right for each two (2) shares of
common stock that you owned on __________, 2001. We will not distribute
fractional subscription rights, but will round the number of subscription rights
you receive up to the nearest whole number. Each subscription right entitles you
to purchase one share of common stock for $______ . If you exercise all of the
subscription rights that you receive, you may have the opportunity to purchase
additional shares of common stock. On the enclosed subscription certificate, you
may request to purchase as many additional shares as you wish for $_______ per
share. Subject to the terms of the offering, we intend to honor all of the over-
subscription requests, but if not, you may not be able to purchase as many
shares as you requested on your subscription certificate. Subject to state
securities laws and regulations, we have the discretion to issue less than the
total number of shares that may be available for over-subscription requests in
order to comply with state securities laws.
HOW DID WE ARRIVE AT THE $___________ PER SHARE PRICE?
The subscription price of the rights was determined by our Board of
Directors without any independent valuation or appraisal of the value of our
common stock. The subscription price is not necessarily related to the assets,
book value or net worth of our company or any other established criteria of
value and may not be indicative of the fair value of the securities offered. In
determining the subscription price, the Board of Directors considered primarily
the historic and current market price of our common stock on the NASDAQ Smallcap
Market ($_________ per share at ______________, 2001), our earnings and
prospects and the general conditions of the securities markets.
HOW DO I EXERCISE MY SUBSCRIPTION RIGHTS?
You must properly complete the attached subscription certificate and
deliver it to the Company acting as Subscription Agent before 5 p.m., Eastern
Time, on _____________, 2001. The address for the Subscription Agent is on page
21. Your subscription certificate must be accompanied by proper payment for each
share that you wish to purchase.
HOW LONG WILL THE RIGHTS OFFERING LAST?
You will be able to exercise your subscription rights only during a
limited period. IF YOU DO NOT EXERCISE YOUR SUBSCRIPTION RIGHTS BEFORE 5 P.M.,
EASTERN TIME, ON _______________, 2001, YOUR SUBSCRIPTION RIGHTS WILL EXPIRE. We
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may, in our discretion, decide to extend the rights offering. In addition, if
the commencement of the rights offering is delayed, the expiration date will
similarly be extended.
AFTER I EXERCISE MY SUBSCRIPTION RIGHTS, CAN I CHANGE MY MIND?
No. Once you send in your subscription certificate and payment, you
cannot revoke the exercise of your subscription rights, even if you later learn
information about us that you consider to be unfavorable. You should not
exercise your subscription rights unless you are certain that you wish to
purchase additional shares of common stock at a price of $_______ per share.
IS EXERCISING MY SUBSCRIPTION RIGHTS RISKY?
The exercise of your subscription rights involves certain risks.
Exercising your subscription rights means buying additional shares of our common
stock, and should be carefully considered as you would view other equity
investments. Among other things, you should carefully consider the risks
described under the heading "Risk Factors," beginning on page 6.
WHAT HAPPENS IF I CHOOSE NOT TO EXERCISE MY SUBSCRIPTION RIGHTS?
You will retain your current number of shares of our common stock even
if you do not exercise your subscription rights. However, if other shareholders
exercise their subscription rights and you do not, the percentage of Family
Steak Houses of Florida that you own will diminish, and your relative voting
rights and economic interests will be diluted.
CAN I SELL OR GIVE AWAY MY SUBSCRIPTION RIGHTS?
No.
MUST I EXERCISE ANY SUBSCRIPTION RIGHTS?
No.
WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF EXERCISING MY SUBSCRIPTION
RIGHTS?
The receipt and exercise of your subscription rights are intended to be
nontaxable. You should seek specific tax advice from your personal tax advisor.
WHEN WILL I RECEIVE MY NEW SHARES?
If you purchase shares of common stock through the rights offering, you
will receive certificates representing those shares as soon as practicable after
___________, 2001. Subject to state securities laws and regulations, we have the
discretion to delay allocation and distribution of any shares you may elect to
purchase by exercise of your basic or over-subscription privilege in order to
comply with state securities laws.
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CAN WE CANCEL THE RIGHTS OFFERING?
Yes. Our Board of Directors may cancel the rights offering at any time
on or before __________, 2001, for any reason. If we cancel the rights offering,
any money received from shareholders will be refunded promptly, without
interest.
HOW WILL WE USE THE PROCEEDS FROM THE RIGHTS OFFERING?
We will use the proceeds from the rights offering for additional
working capital to fund the construction and opening of new restaurants and the
remodeling of others to include our new display cooking concept.
HOW MANY SHARES WILL BE OUTSTANDING AFTER THE RIGHTS OFFERING?
The number of shares of common stock that will be outstanding after the
rights offering depends on the number of shares that are purchased. If we sell
all of the shares offered by this Prospectus, then we will issue _______ new
shares of common stock during the rights offering. In that case, we will have
approximately _________ shares of common stock outstanding after the rights
offering.
A WARNING ABOUT FORWARD-LOOKING STATEMENTS
This Prospectus contains certain forward-looking statements, including
or related to our future results, including certain projections and business
trends. Assumptions relating to forward-looking statements involve judgments
with respect to, among other things, future economic, competitive and market
conditions and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond our control. When
used in this Prospectus, the words "estimate," "project," "intend," "believe"
and "expect" and similar expressions are intended to identify forward-looking
statements. Although we believe that assumptions underlying the forward-looking
statements are reasonable, any of the assumptions could prove inaccurate, and we
may not realize the results contemplated by the forward-looking statement.
Management decisions are subjective in many respects and susceptible to
interpretations and periodic revisions based on actual experience and business
developments, the impact of which may cause us to alter our business strategy or
capital expenditure plans that may, in turn, affect our results of operations.
In light of the significant uncertainties inherent in the forward- looking
information included in this Prospectus, you should not regard the inclusion of
such information as our representation that we will achieve any strategy,
objectives or other plans. The forward-looking statements contained in this
Prospectus speak only as of the date of this Prospectus as stated on the front
cover, and we have no obligation to update publicly or revise any of these
forward-looking statements.
These and other statements, which are not historical facts, are based
largely on management's current expectations and assumptions and are subject to
a number of risks and uncertainties that could cause actual results to differ
materially from those contemplated by such
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forward-looking statements. These risks and uncertainties include, among others,
the risks and uncertainties described in "Risk Factors", below.
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING FACTORS, IN ADDITION TO THE OTHER
INFORMATION IN THIS REGISTRATION STATEMENT, IN EVALUATING OUR COMPANY AND OUR
BUSINESS.
RISKS RELATED TO OUR BUSINESS:
WE DEPEND ON OUR FRANCHISOR, RYAN'S PROPERTIES, INC.
We currently operate 23 Ryan's Family Steak House restaurants as a
franchisee. As a result of the nature of franchising and our franchise agreement
with the franchisor, our long-term success depends, to a significant extent, on
- the continued vitality of the Ryan's Family Steak House
restaurant concept and the overall success of the Ryan's
Family Steak House system;
- the ability of the franchisor to identify and react to new
trends in the restaurant industry, including the development
of popular menu items;
- the goodwill associated with the Ryan's Family Steak House
trademark;
- the quality, consistency, and management of the overall Ryan's
Family Steak House system; and
- the successful operation of Ryan's Family Steak House
restaurants owned by the franchisor.
We believe that the experience, reputation, and financial strength of
the franchisor represent positive factors for our business. We have no control,
however, over the management or operation of the franchisor. A variety of
factors affecting the franchisor or the Ryan's Family Steak House concept could
have a material adverse effect on our business. These factors include the
following:
- any business reversals that the franchisor may encounter;
- a failure by the franchisor to promote the Ryan's Family Steak
House name or restaurant concept; or
- the inability or failure of the franchisor to support us.
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The future results of the operations of our restaurants will not
necessarily reflect the results achieved by the franchisor, but will depend upon
such factors as the effectiveness of our management team, the locations of our
restaurants, and the operating results of those restaurants.
FRANCHISE AGREEMENTS IMPOSE RESTRICTIONS AND OBLIGATIONS ON OUR BUSINESS.
Our franchise agreement with the franchisor requires us to pay
royalties of 3.0% of the restaurants' gross sales (scheduled to increase to 4.0%
on January 1, 2002).
In addition, the franchise agreement requires us to operate our
restaurants in accordance with the requirements and specifications established
by the franchisor. These requirements and specifications relate to a variety of
factors, including the following:
- the exterior and interior design, decor, and furnishings of
restaurants;
- menu selection;
- the preparation of food products;
- sources of food and other supplies;
- quality of service;
- general operating procedures;
- advertising;
- maintenance of records; and
- protection of trademarks.
If we fail to satisfy these requirements or otherwise default under the
franchise agreement, we could be subject to potential damages for breach of
contract and could lose our franchise rights for some or all of our restaurants.
We also could lose our rights to develop additional restaurants.
WE MAY NOT BE ABLE TO COMPLY WITH ALL OF THE REQUIREMENTS OF OUR FRANCHISE
AGREEMENT.
Our franchise agreement, which expires December 31, 2010, requires us
to operate at least 25 restaurants by December 31, 2001. We now have 23
operating restaurants. At the end of each year thereafter, we are required to be
operating two additional restaurants.
We may not be able to secure sufficient restaurant sites that we
believe are suitable or we may not be able to develop restaurants on sites on
terms and conditions that we consider
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favorable in order to satisfy the requirements of the franchise agreement. The
franchise agreement gives the franchisor certain remedies in the event that we
fail to comply with the development schedule in a timely manner. These remedies
include, under certain circumstances, the loss of our exclusive right to develop
restaurants in most of Florida.
At our request, the franchisor from time to time has agreed to amend
the schedule to reduce the number of restaurants required to be operated. The
franchisor may decline to modify the schedule in the future if we experience any
difficulty in satisfying the schedule for any reason, including a shortage of
capital or other financing.
WE FACE RISKS ASSOCIATED WITH THE EXPANSION OF OUR OPERATIONS.
The success of our business will to some extent depend on our ability
to expand the number of our restaurants, either by developing or acquiring
additional restaurants. Our success also depends on our ability to operate and
manage successfully these growing operations as well as existing locations. Our
ability to expand successfully will depend upon a number of factors, including
the following:
- the availability and cost of suitable restaurant locations for
development;
- the hiring, training, and retention of additional management
and restaurant personnel;
- the availability of adequate financing;
- competitive factors; and
- general economic and business conditions.
The opening of new restaurants depends upon our ability to:
- locate suitable sites in terms of
-- favorable population characteristics,
-- density and household income levels,
-- visibility, accessibility, and traffic volume,
-- proximity to demand generators, including shopping malls,
lodging, and office complexes, and
-- potential competition;
- obtain financing for construction, tenant improvements,
furniture, fixtures, and equipment;
- negotiate acceptable leases or terms of purchase;
- secure zoning, environmental, health, and similar regulatory
approvals;
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- recruit and train qualified personnel; and
- manage successfully the rate of expansion and expanded
operations.
Increased construction costs and delays resulting from governmental
regulatory approvals, strikes or work stoppages, adverse weather conditions, and
various acts of God may also affect the opening of new restaurants. Newly opened
restaurants may operate at a loss for a period following their initial opening.
The length of this period will depend upon a number of factors, including
- the time of year the restaurant is opened,
- sales volume, and
- our ability to control costs.
We may not successfully achieve our expansion goals. Additional
restaurants that we develop may not be profitable. In addition, the opening of
additional restaurants in an existing market may have the effect of drawing
customers from and reducing the sales volume of our existing restaurants in
those markets.
WE MAY NEED ADDITIONAL CAPITAL.
The development of new restaurants requires funds for construction,
tenant improvements, furniture, fixtures, equipment, training of employees,
permits, initial franchise fees, and additional expenditures. We expect that
cash flow from operations, together with financing commitments, will not be
sufficient to have the 25 Ryan's Family Steak House restaurants that our
franchise agreement requires us to operate by the end of 2001. We will also
require funds to develop the two additional restaurants that our franchise
agreement requires us to operate each year after 2001 and support our planned
remodeling program. In the future, we will seek additional equity or debt
financing to provide funds so that we can develop additional restaurants. Such
financing may not be available or may not be available on satisfactory terms.
Recently with the increase in land and restaurant construction costs, we have
found that the amount our lenders are willing to finance does not represent as
great a percentage of the construction expense as it had been in the past and we
are forced to supply more capital to support each new restaurant we open. If
financing is not available on satisfactory terms, we may be unable to satisfy
our obligations under our franchise agreement or otherwise to expand our
restaurant operations. See "Risk Factors." While debt financing will enable us
to add more restaurants than we otherwise would be able to do, debt financing
increases expenses and we must repay the debt regardless of our operating
results. Future equity financings could result in dilution to our shareholders.
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WE HAVE SIGNIFICANT BORROWINGS.
We have incurred significant indebtedness in connection with our
building program. As of May 9, 2001, we had long-term debt of approximately
$20.1 million.
Our borrowings will result in interest expense of approximately $1.78
million in 2001 and $2.13 million in 2002, based on currently prevailing
interest rates and assuming the outstanding indebtedness is paid in accordance
with the existing payment schedules without any prepayments or additional
borrowings. We must make these interest payments regardless of our operating
results. Currently, all of our owned restaurants are pledged to secure our debt
obligations. We also may seek additional equity or debt financing in the future
to provide funds to develop or acquire additional restaurants. See "Risk Factors
- -- We may need additional capital."
WE HAVE A HISTORY OF LOSSES AND MAY HAVE DIFFICULTY SUSTAINING PROFITABILITY IN
THE FUTURE.
We have incurred net losses in the operation of the business, including
net losses of $46,700, $1,982,200 and $709,300 for fiscal years 2000, 1999 and
1998, respectively. While we hope to be profitable during the 2001 fiscal year
with the opening of new, better-performing restaurants, we cannot assure you
that earnings will be positive this year or in the future. Nor can we assure you
that if we attain profitability this year that we be able to sustain
profitability in later periods. If we are unable to attain or sustain
profitability it could adversely affect our ability to meet certain debt
coverage ratios required under our loan agreements and could impede our ability
to raise capital through debt or equity financing to the extent needed for
planned expansion and renovations. Consequently, future losses may have a
material adverse effect on our business, prospects, financial condition, results
of operations and cash flows.
WE FACE RISKS THAT AFFECT THE RESTAURANT INDUSTRY IN GENERAL.
A variety of factors over which we have no control may affect the
ownership and operation of restaurants. These factors include the following:
- adverse changes in national, regional, or local economic or
market conditions;
- increased costs of labor or food products;
- fuel and other price increases;
- competitive factors; the number, density, and location of
competitors;
- changing demographics;
- changing traffic patterns;
- changing consumer tastes, habits, and spending priorities;
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- the cost and availability of insurance coverage;
- management problems;
- uninsured losses;
- limited alternative uses for properties and equipment;
- changes in government regulation; and
- weather conditions.
Third parties may file lawsuits against us based on discrimination,
personal injury, or other claims. As a multi-unit restaurant operator, our
business could be adversely affected by publicity about food quality, illness,
injury, or other health and safety concerns or operating issues at one
restaurant or a limited number of restaurants operated under the same name,
whether or not we actually own the restaurants in question. We cannot predict
any of these factors with any degree of certainty. Any one or more of these
factors could have a material adverse effect on our business.
WE FACE INTENSE COMPETITION.
The restaurant business is highly competitive with respect to price,
service, and food type and quality. Restaurant operators also compete for
attractive restaurant sites and qualified restaurant personnel and managers. Our
restaurants compete with a large number of other restaurants, including national
and regional restaurant chains and franchised restaurant systems, as well as
with locally owned, independent restaurants. Many of our competitors have
greater financial resources, more experience, and longer operating histories
than we have.
WE DEPEND UPON OUR SENIOR MANAGEMENT.
Our success depends, in large part, upon the services of our senior
management. The loss of the services of any members of our senior management
team could have a material and adverse effect on our business.
WE FACE RISKS ASSOCIATED WITH GOVERNMENT REGULATION.
Various federal, state, and local laws affect our business. The
development and operation of restaurants depend to a significant extent on the
selection and acquisition of suitable sites. These sites are subject to zoning,
land use, environmental, traffic, and other regulations of state and local
governmental agencies. City ordinances or other regulations, or the application
of such ordinances or regulations, could impair our ability to construct or
acquire restaurants in desired locations and could result in costly delays. In
addition, restaurant operations are subject to
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- licensing and regulation by state and local departments
relating to health, sanitation, safety standards, and fire
codes; and
- federal and state labor laws, including applicable minimum
wage requirements, tip credit provisions, overtime
regulations, workers' compensation insurance rates,
unemployment and other taxes, working and safety conditions,
and citizenship requirements.
The delay or failure to obtain or maintain any licenses or permits
necessary for operations could have a material adverse effect on our business.
In addition, an increase in the minimum wage rate, employee benefit costs, or
other costs associated with employees could adversely affect our business. We
also are subject to the Americans With Disabilities Act of 1990 that, among
other things, may require us to install certain fixtures or accommodations in
new restaurants or to renovate existing restaurants to meet federally mandated
requirements.
RISKS RELATED TO OUR COMMON STOCK:
THE MARKET PRICE OF OUR COMMON STOCK MAY BE VOLATILE.
Historically, the market price of our common stock has been volatile.
In the future, the market price of our common stock will be subject to
fluctuations as a result of a variety of factors, including the following:
- quarterly variations in our operating results or those of
other restaurant companies;
- changes in national and regional economic conditions, the
financial markets, or the restaurant industry; or
- other developments affecting our business or other restaurant
companies.
The trading volume of our common stock has been limited, which may
increase the volatility of the market price for our stock. In addition, the
stock market has experienced extreme price and volume fluctuation in recent
years. This volatility has had a significant effect on the market prices of
securities issued by many companies for reasons not necessarily related to the
operating performances of these companies.
WE COULD LOSE OUR LISTING ON THE NASDAQ SMALLCAP MARKET.
In January 2001, we received notice from Nasdaq that our closing bid
price had declined below $1.00 per share. The letter said that on or before
April 17, 2001, the closing bid price of our common stock must be a minimum of
$1.00 per share for ten consecutive trading days or we would lose our listing.
Our common stock met that requirement and our listing on the NASDAQ Smallcap
Market continues. However, if our common stock is delisted from Nasdaq, trading
would then be conducted on the over-the-counter markets in the so-called "pink
sheets" or the National Association of Securities Dealers, Inc.'s "Electronic
Bulletin Board." Consequently,
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the liquidity of the Company's securities could be impaired, not only in the
number of shares that could be bought and sold, but also as a result of delays
in the timing of the transaction, the reduction in the amount and quality of the
news media's coverage, lower prices for our securities than might otherwise be
obtained, and a larger spread between the bid and asked price for our
securities. Further, if our common stock were to be delisted from the NASDAQ
Smallcap Market, our securities could become subject to rules imposed upon
"penny stocks" which could adversely affect the market liquidity for our
securities.
OUR MANAGEMENT CONTROLS A SIGNIFICANT PORTION OF THE VOTING POWER OF OUR COMMON
STOCK.
Our directors and officers currently own, directly or indirectly,
approximately 859,034 shares, or 35.6%, of our outstanding common stock. These
directors and officers also hold options to purchase an aggregate of 66,800
shares of common stock at exercise prices ranging from $1.00 to $5.63 per share.
As a result, these persons voting together will have significant voting power.
If our directors and officers act together, they will have significant
influence on the outcome of all matters requiring shareholder approval
(including the election and removal of directors and any merger, consolidation
or sale of all or substantially all of our assets) and significant influence on
our management and affairs. That influence could discourage others from
initiating potential merger, takeover or other change of control transactions.
As a result, the market price of our common stock could be adversely affected.
SALES OF LARGE NUMBERS OF SHARES COULD ADVERSELY AFFECT THE PRICE OF OUR COMMON
STOCK.
Sales of substantial amounts of common stock in the public market, or
even the potential for such sales, could adversely affect prevailing market
prices for our common stock and could adversely affect our ability to raise
capital. As of ____________, 2001, there were outstanding _______________ shares
of our common stock. All of these shares are freely transferable without
restriction under the securities laws, unless they are held by our "affiliates,"
as that term is defined in the securities laws. Affiliates also are subject to
certain of the resale limitations of Rule 144. Generally, under Rule 144, each
person that beneficially owns restricted securities with respect to which at
least one year has elapsed since the later of the date the shares were acquired
from us or one of our affiliates may, every three months, sell in ordinary
brokerage transactions or to market makers an amount of shares equal to the
greater of 1% of our then-outstanding common stock or the average weekly trading
volume for the four weeks prior to the proposed sale of such shares.
WE DO NOT ANTICIPATE THAT WE WILL PAY DIVIDENDS.
We have never paid any dividends on our common stock, and we do not
anticipate that we will pay dividends in the foreseeable future. We intend to
apply any earnings to the operation, expansion and development of our business.
In addition, the terms of our credit facilities limit our ability to pay
dividends on our common stock.
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RISKS RELATING TO RIGHTS OFFERING:
IF YOU DO NOT EXERCISE ALL OF YOUR SUBSCRIPTION RIGHTS, YOU MAY SUFFER
SIGNIFICANT DILUTION OF YOUR PERCENTAGE OWNERSHIP OF OUR COMMON STOCK.
This rights offering is designed to allow all current shareholders to
purchase additional shares of common stock at a discount from the market price
of the stock on the date the rights are offered. The purpose of this structure
is to enable us to raise capital while allowing current shareholders to maintain
their relative proportionate voting and economic interest. To the extent that
current shareholders do not exercise their subscription rights and shares are
purchased by other shareholders in the rights offering, the proportionate voting
interest of the non-exercising shareholders will be reduced, and the percentage
that their original shares represent of our expanded equity after exercise of
the subscription rights will be disproportionately diluted.
THE PRICE OF OUR COMMON STOCK MAY DECLINE BEFORE OR AFTER THE
SUBSCRIPTION RIGHTS EXPIRE.
We cannot assure you that the public trading market price of our common
stock will not decline below the subscription price after you exercise your
subscription rights. If that occurs, you will have committed to buy shares of
common stock at a price above the prevailing market price and you will have an
immediate unrealized loss. Moreover, we cannot assure you that following the
exercise of subscription rights you will be able to sell your shares of common
stock at a price equal to or greater than the subscription price. Until
certificates are delivered upon expiration of the rights offering, you may not
be able to sell the shares of our common stock that you purchase in the rights
offering. Certificates representing shares of our common stock purchased will be
delivered as soon as practicable after expiration of the rights offering. We
will not pay you interest on funds delivered to the Subscription Agent pursuant
to the exercise of rights.
ONCE YOU EXERCISE YOUR SUBSCRIPTION RIGHTS, YOU MAY NOT REVOKE THE
EXERCISE.
Once you exercise your subscription rights, you may not revoke the
exercise, even if less than all of the shares that we are offering are actually
purchased. If we elect to withdraw or terminate the rights offering, we will
have no obligation with respect to the subscription rights except to return,
without interest, any subscription payments.
THE SUBSCRIPTION PRICE IS NOT NECESSARILY AN INDICATION OF THE VALUE OF
OUR COMPANY.
The subscription price was set by us after considering a variety of
factors, including the desire to encourage full shareholder participation in
this rights offering by setting an exercise price below the current market price
of the common stock. The subscription price does not necessarily bear any
relationship to the book value of our assets, past operations, cash flows,
losses, financial condition or any other established criteria for value. You
should not consider the subscription price as an indication of our present or
future value. We have established the subscription price at approximately a ___%
discount from the current market price of the common stock to encourage all
shareholders to exercise their subscription rights and thereby
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raise capital without diluting the interests of current shareholders. We have
neither sought nor obtained a valuation opinion from an outside financial
consultant or investment banker.
USE OF PROCEEDS
If all shares being offered pursuant to this rights offering are sold,
we estimate that the proceeds to Family Steak Houses of Florida will be
approximately $__________ before the fees and expenses related to this offering.
The net proceeds will be used for working capital purposes to fund new
restaurants and remodel existing restaurants.
THE RIGHTS OFFERING
BEFORE EXERCISING YOUR SUBSCRIPTION RIGHTS, YOU SHOULD READ CAREFULLY THE
INFORMATION SET FORTH UNDER "RISK FACTORS" BEGINNING ON PAGE 6.
THE SUBSCRIPTION RIGHTS
We are distributing non-transferable subscription rights to
shareholders who owned shares of our common stock on ______________, 2001, at no
cost to the shareholders. We will give you one subscription right for each two
(2) shares of common stock that you owned on __________, 2001. Each subscription
right will entitle you to purchase one share of common stock for $______ . If
you wish to exercise your subscription rights, you must do so before 5 P.M.,
Eastern Time, on _____________, 2001. After that date, the subscription rights
will expire and will no longer be exercisable unless the offering is extended.
BASIC SUBSCRIPTION PRIVILEGE
Each subscription right will entitle you to receive, upon payment of
$____________ , one share of common stock. You will receive certificates
representing the shares that you purchase pursuant to your basic subscription
privilege as soon as practicable after ______________, 2001, whether you
exercise your subscription rights immediately prior to that date or earlier.
OVER-SUBSCRIPTION PRIVILEGE
Subject to the allocation described below, each subscription right also
grants you an over-subscription privilege to purchase additional shares of
common stock that are not purchased by other shareholders. You are entitled to
exercise your over-subscription privilege only if you exercise your basic
subscription privilege in full. If you wish to exercise your over-subscription
privilege, you should indicate the number of additional shares that you would
like to purchase in the space provided on your subscription certificate. When
you send in your subscription certificate, you must also send the full purchase
price for the number of additional shares that you have requested to purchase
(in addition to the payment due for shares purchased through your basic
subscription privilege). If the number of shares remaining after the exercise of
all basic subscription privileges is not sufficient to satisfy all over-
subscription privileges, we will allocate the available shares among
shareholders who over-subscribed in proportion to the
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number of shares purchased by those over-subscribing shareholders through the
basic subscription privilege. However, if your pro rata allocation exceeds the
number of shares you requested, you will receive only the number of shares that
you requested, and the remaining shares from your pro rata allocation will be
divided among other shareholders exercising their over-subscription privileges
who have subscribed for additional shares in proportion to the number of shares
purchased by that group of over-subscribing shareholders through the basic
subscription privilege. In certain circumstances, however, in order to comply
with applicable state securities laws, we may not be able to honor all over-
subscription privileges even if we have shares available.
PURCHASE COMMITMENTS
As of the date of this Prospectus, certain directors, officers and
other shareholders have committed to purchase up to an aggregate of _________
shares of common stock pursuant to the offering. To effect this ______
commitment, each of these purchasers have individually agreed to exercise his
basic subscription privilege in full and to subscribe for additional shares
pursuant to the over-subscription privilege as follows:
Basic Subscription Over-Subscription
Name and Position Commitment Commitment Total Commitment
- ----------------- ------------------ ----------------- ----------------
NO RECOMMENDATION
We are not making any recommendations as to whether or not you should
exercise your subscription rights. You should make your decision based on your
own assessment of your best interests.
EXPIRATION DATE
The rights will expire at 5:00 p.m., Eastern Time, on _____________,
2001, unless we decide to extend the rights offering. If you do not exercise
your subscription rights prior to that time, your subscription rights will be
null and void. We will not be required to issue shares of common stock to you if
we receive your subscription certificate or your payment after that time,
regardless of when you sent the subscription certificate and payment, unless you
send the documents in compliance with the guaranteed delivery procedures
described below.
WITHDRAWAL RIGHT
Our Board of Directors may withdraw the rights offering in its sole
discretion at any time prior to or on _______________, 2001, for any reason
(including, without limitation, a change in the market price of the common
stock). If we withdraw the rights offering, any funds you paid will be promptly
refunded, without interest or penalty.
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DETERMINATION OF SUBSCRIPTION PRICE
The subscription price of the rights was determined by our Board of
Directors without any independent valuation or appraisal of the value of our
common stock. The subscription price is not necessarily related to the assets,
book value or net worth of our company or any other established criteria of
value and may not be indicative of the fair value of the securities offered. In
determining the subscription price, the Board of Directors considered primarily
the historic and current market price of our common stock on the NASDAQ Smallcap
Market (approximately $_________ per share at ________________, 2001), our
earnings and prospects and the general conditions of the securities markets.
The $__________ per share subscription price should not necessarily be
considered an indication of the actual value of Family Steak Houses of Florida
or of our common stock. We cannot assure you that the market price of the common
stock will not decline during or after the rights offering. We also cannot
assure you that you will be able to sell shares of common stock purchased during
the rights offering at a price equal to or greater than $_________ per share.
NON-TRANSFERABILITY OF SUBSCRIPTION RIGHTS
Both the basic subscription rights and over-subscription rights are
non-transferable and non-assignable. Only you may exercise these rights.
EXERCISE OF SUBSCRIPTION RIGHTS
You may exercise your subscription rights by delivering to us, as the
Subscription Agent on or prior to ____________, 2001;
-- A properly completed and duly executed subscription certificate;
-- Any required signature guarantees; and
-- Payment in full of $_______ per share for the shares of common stock
subscribed for by exercising your basic subscription rights and, if
desired, your over-subscription rights.
You should deliver your subscription certificate and payment to us at
the address shown under the heading "Subscription Agent." Registered mail or
overnight delivery is recommended. We will not pay you interest on funds
delivered pursuant to the exercise of rights.
METHOD OF PAYMENT
Payment for the shares must be made by check or bank draft (cashier's
check) drawn upon a United States bank or a postal, telegraphic or express money
order payable to the order of Family Steak Houses of Florida, Inc., as
Subscription Agent. Payment for basic subscription rights and over-subscription
rights may also be effected through wire transfer as follows:
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[INSERT INSTRUCTIONS]
Payment will be deemed to have been received by us only upon:
(A) clearance of any uncertified check;
(B) receipt by us of any certified check or bank draft drawn upon
a U.S. bank or of any postal, telegraphic or express money
order;
(C) receipt by us of any funds transferred by wire transfer; or
(D) receipt of funds through an alternative payment method
approved by us.
Please note that funds paid by uncertified personal check may take at
least ten business days to clear. Accordingly, if you wish to pay by means of an
uncertified personal check, we urge you to make payment sufficiently in advance
of __________, 2001, to ensure that the payment is received and clears before
that date. We also urge you to consider payment by means of a certified or
cashier's check or money order.
GUARANTEED DELIVERY PROCEDURES
If you want to exercise your subscription rights, but time will not
permit your subscription certificate to reach the Subscription Agent on or prior
to ___________, 2001, you may exercise your subscription rights if you satisfy
the following guaranteed delivery procedures:
(1) You send, and we receive, payment in full for each share of
common stock being subscribed for through the basic
subscription privilege and the over-subscription privilege, on
or prior to _____________, 2001;
(2) You send, and we receive, on or prior to _______________,
2001, a notice of guaranteed delivery, substantially in the
form provided with the attached instructions, from a member
firm of a registered national securities exchange or a member
of the National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or
correspondent in the United States. The notice of guaranteed
delivery must state your name, the number of subscription
rights that you hold, the number of shares of common stock
that you wish to purchase pursuant to the basic subscription
privilege and the number of shares, if any, you wish to
purchase pursuant to the over-subscription privilege. The
notice of guaranteed delivery must guarantee the delivery of
your subscription certificate to us within three Nasdaq
National Market trading days following the date of the notice
of guaranteed delivery; and
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(3) You send, and we receive, your properly completed and duly
executed subscription certificate, including any required
signature guarantees, within three Nasdaq National Market
trading days following the date of your notice of guaranteed
delivery. The notice of guaranteed delivery may be delivered
to us in the same manner as your subscription certificate at
the addresses set forth under the heading "Subscription
Agent," or may be transmitted to us by facsimile transmission.
You can obtain additional copies of the form of notice of
guaranteed delivery by requesting them from us at the address
set forth under the heading "Subscription Agent."
SIGNATURE GUARANTEE
Signatures on the subscription certificate do not need to be guaranteed
if either the subscription certificate provides that the shares of common stock
to be purchased are to be delivered directly to the record owner of such
subscription rights, or the subscription certificate is submitted for the
account of a member firm of a registered national securities exchange or a
member of the National Association of Securities Dealers, Inc., or a commercial
bank or trust company having an office or correspondent in the United States. If
a signature guarantee is required, signatures on the subscription certificate
must be guaranteed by an Eligible Guarantor Institution, as defined in Rule
17Ad-15 of the Securities Exchange Act of 1934, as amended. Eligible Guarantor
Institutions include banks, brokers, dealers, credit unions, national securities
exchanges and savings associations.
SHARES HELD FOR OTHERS
If you are a broker, a trustee or a depository for securities, or you
otherwise hold shares of common stock for the account of a beneficial owner of
common stock, you should notify the beneficial owner of such shares as soon as
possible to obtain instructions with respect to their subscription rights. If
you are a beneficial owner of common stock held by a holder of record, such as a
broker, trustee or a depository for securities, you should contact the holder
and ask him or her to effect transactions in accordance with your instructions.
AMBIGUITIES IN EXERCISE OF SUBSCRIPTION RIGHTS
If you do not specify the number of subscription rights being exercised
on your subscription certificate, or if your payment is not sufficient to pay
the total purchase price for all of the shares that you indicated you wished to
purchase, you will be deemed to have exercised the maximum number of
subscription rights that could be exercised for the amount of the payment that
we receive from you. If your payment exceeds the total purchase price for all of
the subscription rights shown on your subscription certificate, your payment
will be applied, until depleted, to subscribe for shares of common stock in the
following order:
(1) to subscribe for the number of shares, if any, that you
indicated on the subscription certificate that you wished to
purchase through your basic subscription privilege;
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(2) to subscribe for shares of common stock until your basic
subscription privilege has been fully exercised;
(3) to subscribe for additional shares of common stock pursuant to
the over-subscription privilege (subject to any applicable
proration).
Any excess payment remaining after the foregoing allocation will be
returned to you as soon as practicable by mail, without interest or deduction.
REGULATORY LIMITATION
We will not be required to issue you shares of common stock pursuant to
the rights offering if, in our opinion, you would be required to obtain prior
clearance or approval from any state or federal regulatory authorities to own or
control such shares if, at the time the subscription rights expire, you have not
obtained such clearance or approval.
STATE AND FOREIGN SECURITIES LAWS
The rights offering is not being made in any state or other
jurisdiction in which it is unlawful to do so, nor are we selling or accepting
any offers to purchase any shares of common stock to you if you are a resident
of any such state or other jurisdiction. We may delay the commencement of the
rights offering in certain states or other jurisdictions in order to comply with
the securities law requirements of such states or other jurisdictions. It is not
anticipated that there will be any changes in the terms of the rights offering.
In our sole discretion, we may decline to make modifications to the terms of the
rights offering requested by certain states or other jurisdictions, in which
case shareholders who live in those states or jurisdictions will not be eligible
to participate in the rights offering.
OUR DECISION REGARDING CERTAIN MATTERS BINDING ON YOU
All questions concerning the timeliness, validity, form and eligibility
of any exercise of subscription rights will be determined by us, and our
determinations will be final and binding. In our sole discretion, we may waive
any defect or irregularity, or permit a defect or irregularity to be corrected
within such time as we may determine, or reject the purported exercise of any
subscription right by reason of any defect or irregularity in such exercise.
Subscriptions will not be deemed to have been received or accepted until all
irregularities have been waived or cured within such time as we determine in our
sole discretion. We will not be under any duty to notify you of any defect or
irregularity in connection with the submission of a subscription certificate or
incur any liability for failure to give such notification.
NO REVOCATION
After you have exercised your basic subscription privilege or
over-subscription privilege, YOU MAY NOT REVOKE THAT EXERCISE. You should not
exercise your subscription rights unless you are certain that you wish to
purchase additional shares of common stock.
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SHARES OF COMMON STOCK OUTSTANDING AFTER THE RIGHTS OFFERING
Assuming we issue all of the shares of common stock offered in the
rights offering, approximately _______ shares of common stock will be issued and
outstanding. This would represent a ______% increase in the number of
outstanding shares of common stock. IF YOU DO NOT EXERCISE YOUR BASIC
SUBSCRIPTION RIGHTS, THE PERCENTAGE OF COMMON STOCK THAT YOU HOLD WILL DECREASE
IF SHARES ARE PURCHASED IN THE RIGHTS OFFERING.
FEES AND EXPENSES
We will pay all fees in connection with the processing of subscriptions
and the issuance of shares. You are responsible for paying any other
commissions, fees, taxes or other expenses incurred in connection with the
exercise of the subscription rights.
SUBSCRIPTION AGENT
We are acting as Subscription Agent for the rights offering. Our
address for packages sent by mail or overnight delivery is:
Family Steak Houses of Florida, Inc.
2113 Florida Boulevard
Neptune Beach, Florida 32266
Our telephone number is (904) 249-4197 and our facsimile number is
(904) 249-1466. You should deliver your subscription certificate, payment of the
subscription price and notice of guaranteed delivery (if any) to us.
IMPORTANT
PLEASE CAREFULLY READ THE INSTRUCTIONS ACCOMPANYING THE SUBSCRIPTION
CERTIFICATE AND FOLLOW THOSE INSTRUCTIONS IN DETAIL. YOU ARE RESPONSIBLE FOR
CHOOSING THE PAYMENT AND DELIVERY METHOD FOR YOUR SUBSCRIPTION CERTIFICATE, AND
YOU BEAR THE RISKS ASSOCIATED WITH SUCH DELIVERY. IF YOU CHOOSE TO DELIVER YOUR
SUBSCRIPTION CERTIFICATE AND PAYMENT BY MAIL, WE RECOMMEND THAT YOU USE
REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED. WE ALSO
RECOMMEND THAT YOU ALLOW A SUFFICIENT NUMBER OF DAYS TO ENSURE DELIVERY TO THE
SUBSCRIPTION AGENT AND CLEARANCE OF PAYMENT PRIOR TO ______________, 2001.
BECAUSE UNCERTIFIED PERSONAL CHECKS MAY TAKE AT LEAST TEN BUSINESS DAYS TO
CLEAR, WE STRONGLY URGE YOU TO PAY, OR ARRANGE FOR PAYMENT, BY MEANS OF
CERTIFIED OR CASHIER'S CHECK OR MONEY ORDER.
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IF YOU HAVE QUESTIONS
If you have questions or need assistance concerning the procedure for
exercising subscription rights or if you would like additional copies of this
Prospectus, the instructions, or the Notice of Guaranteed Delivery, you should
contact Edward B. Alexander, Executive Vice President of Family Steak Houses of
Florida, Inc., at:
2113 Florida Boulevard
Neptune Beach, Florida 32266
Telephone: (904) 249-4197
PLAN OF DISTRIBUTION
On or about _____________, 2001, we will distribute the subscription
rights, subscription certificates and copies of this Prospectus to individuals
who owned shares of common stock on ____________, 2001. If you wish to exercise
your subscription rights and purchase shares of common stock, you should
complete the subscription certificate and return it with payment for the shares,
to us, as Subscription Agent, at the address on page 21. If you have any
questions, you should contact Edward B. Alexander at the telephone number and
address on page 22.
We estimate that our total expenses in connection with the rights
offering will be $50,000.
EXPERTS
The financial statements and the related financial statement schedule
incorporated in this Prospectus by reference from the Company's Annual Report on
Form 10-K for the year ended January 3, 2001 have been audited by Deloitte &
Touche LLP, independent auditors as stated in their report, which is
incorporated herein by reference, and has been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
LEGAL MATTERS
McGuireWoods LLP, Jacksonville, Florida, will pass on the validity of
the issuance of the shares of our common stock offered by this Prospectus for
us.
HOW TO FIND ADDITIONAL INFORMATION
Family Steak Houses of Florida files annual, quarterly and special
reports, proxy statement and other information with the SEC. You may read and
copy this information at the SEC's public reference rooms, which are located at:
450 Fifth Street, N.W.
Washington, D.C. 20549
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7 World Trade Center, Suite 1300
New York, NY 10048
500 West Madison Street, Suite 1400
Chicago, IL 60661-2511
Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. This information is also available online through the
SEC's Electronic Data Gathering, Analysis and Retrieval System ("EDGAR"),
located on the SEC's web site (http://www.sec.gov).
Also, we will provide you (free of charge) with any of our documents
filed with the SEC. To get your free copies, please call or write to Family
Steak Houses of Florida at:
2113 Florida Boulevard
Neptune Beach, Florida 32266
Attention: Edward B. Alexander
Telephone: (904) 249-4197
We have filed a Registration Statement with the SEC on Form S-3 with
respect to the rights offering. This Prospectus is a part of the Registration
Statement, but the Prospectus does not repeat important information that you can
find in the Registration Statement, reports and other documents that we have
filed with the SEC. The SEC allows us to "incorporate by reference" those
documents, which means that we can disclose important information to you by
referring you to other documents. The documents that are incorporated by
reference are legally considered to be a part of this Prospectus. The documents
incorporated by reference are:
(1) our Annual Report on Form 10-K for the year ended January 3,
2001;
(2) our Quarterly Reports on Form 10-Q for the period ended April
4, 2001;
(3) the description of our common stock, par value $.01 per share,
contained in our Registration Statement on Form 8-A, as
amended (Registration No. 000-14311), filed with the SEC on
March 19, 1997; and
(4) any filings we make with the SEC pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934
between the date of this Prospectus and the expiration of the
rights offering.
As you read the above documents, you may find some inconsistencies in
information from one document to another. If you find inconsistencies between
the documents, or between a document and this Prospectus, you should rely on the
statement made in the most recent document.
You should rely only on the information in this Prospectus or
incorporated by reference. We have not authorized anyone to provide you with any
different information. This Prospectus
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is not an offer to sell nor is it seeking an offer to buy these securities in
any state where the offer or sale is not permitted.
This Prospectus is not an offer to sell nor is it seeking an offer to
buy securities other than the shares of common stock to be issued pursuant to
the rights offering. The information contained in this Prospectus is correct
only as of the date of this Prospectus, regardless of the time of the delivery
of this Prospectus or any sale of these securities.
No action is being taken in any jurisdiction outside the United States
to permit a public offering of the common stock or possession or distribution of
this Prospectus in any such jurisdiction. Persons who come into possession of
this Prospectus in jurisdictions outside the United States are required to
inform themselves about and to observe any restrictions as to this offering and
the distribution of this Prospectus applicable in that jurisdiction.
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1,250,000 Shares
FAMILY STEAK HOUSES OF FLORIDA, INC.
Common Stock
----------------
PROSPECTUS
----------------
_______________, 2001
You should rely only on information contained in this Prospectus. We
have not authorized anyone to provide you with information different from that
contained in this Prospectus. This Prospectus does not constitute an offer to
sell, or a solicitation of an offer to buy, to any person in any jurisdiction
where offers and sales are not permitted. The information contained in this
Prospectus is accurate only as of the date of this Prospectus, regardless of the
time of delivery of this Prospectus or of any sale of our common stock.
No action is being taken in any jurisdiction outside the United States
to permit a public offering of our common stock or possession or distribution of
this Prospectus in that jurisdiction. Persons who come into possession of this
Prospectus in jurisdictions outside the United States are required to inform
themselves about and to observe any restrictions as to this offering and the
distribution of this Prospectus applicable to that jurisdiction.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the fees and expenses incurred by Family
Steak Houses of Florida, Inc. in connection with the issuance and distribution
of the securities being registered.
Securities and Exchange Commission registration fee............. $ 332
NASDAQ Smallcap Market additional listing fee .................. $12,500
Accountants' fees and expenses*................................. $ 7,000
Legal fees and expenses*........................................ $20,000
Subscription Agent's fees and expenses*......................... $ 5,000
Printing and engraving expenses*................................ $ 5,000
Miscellaneous*.................................................. $ 168
Total Expenses............................................. $50,000
*Estimated
Item 15. Indemnification of Directors and Officers
Registrant's Articles of Incorporation and Bylaws provide that
Registrant will indemnify any person who is or was an officer or director of the
Registrant or is or was serving as an officer or director of another entity at
Registrant's request against reasonable expenses and any liability actually paid
in connection with any threatened, pending or completed proceeding. The
indemnification provided for in Registrant's Articles of Incorporation and
Bylaws is expressly in addition to any rights to which the person may be
entitled as a matter of law.
Florida Business Corporation Act. Section 607.0850 of the Florida
Business Corporation Act (the "FBCA") generally permits the Registrant to
indemnify its directors, officers, employees and other agents who are subject to
any third-party actions because of their service to the Registrant if such
persons acted in good faith and in a manner they reasonably believed to be in,
or not opposed to, the best interests of the Registrant. If the proceeding is a
criminal one, such person must also have had no reasonable cause to believe his
conduct was unlawful. In addition, the Registrant may indemnify its directors,
officers, employees or other agents who are subject to derivative actions
against expenses and amounts paid in settlement which do not exceed, in the
judgment of the board of directors, the estimated expense of litigating the
proceeding to conclusion, actually and reasonably incurred in connection with
the defense or settlement of such proceeding, if such person acted in good faith
and in a manner such person reasonably believed to be in, or not opposed to, the
best interests of the Registrant. To the extent that a director, officer,
employee or other agent is successful on the merits or otherwise in defense of a
third-party or derivative action, such person will be indemnified against
expenses actually and reasonably incurred in connection
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therewith. This Section also permits a corporation further to indemnify such
persons by other means unless a judgment or other final adjudication establishes
that such person's actions or omissions which were material to the cause of
action constitute (1) a crime (unless such person had reasonable cause to
believe his conduct was lawful or had not reasonable cause to believe it
unlawful), (2) a transaction from which he derived an improper personal benefit,
(3) a transaction in violation of Section 607.0834 of the FBCA (unlawful
distributions to shareholders), or (4) willful misconduct or a conscious
disregard for the best interests of the corporation in a proceeding by or in the
right of the corporation to procure a judgment in its favor or in a proceeding
by or in the right of a shareholder.
Furthermore, Section 607.0831 of the FBCA provides, in general, that no
director shall be personally liable for monetary damages to the Registrant or
any other person for any statement, vote, decision, or failure to act, regarding
corporate management or policy, unless: (a) the director breached or failed to
perform his duties as a director; and (b) the director's breach of, or failure
to perform, those duties constitutes (i) a violation of criminal law, unless the
director had reasonable cause to believe his conduct was lawful or had no
reasonable cause to believe his conduct was unlawful, (ii) a transaction from
which the director derived an improper personal benefit, either directly or
indirectly, (iii) a circumstance under which the liability provisions of Section
607.0834 of the FBCA are applicable, (iv) in a proceeding by or in the right of
the Registrant to procure a judgment in its favor or by or in the right of a
shareholder, conscious disregard for the best interest of the Registrant, or
willful misconduct, or (v) in a proceeding by or in the right of someone other
than the Registrant or a shareholder, recklessness or an act or omission which
was committed in bad faith or with malicious purpose or in a manner exhibiting
wanton and willful disregard of human rights, safety, or property. The term
"recklessness," as used above, means the action, or omission to act, in
conscious disregard of a risk: (a) known, or so obvious that it should have been
known, to the directors; and (b) known to the director, or so obvious that it
should have been known, to be so great as to make it highly probable that harm
would follow from such action or omission.
Insurance. In addition to the foregoing, the Registrant carries
insurance permitted by the laws of Florida on behalf of directors, officers,
employees or agents which may cover, among other things, liabilities under the
Securities Act of 1933, as amended.
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits. The following is a list of exhibits filed as part of the
Registration Statement.
Exhibit
No. Description
------- -----------
3.1 Articles of Incorporation of Family Steak Houses of Florida,
Inc. (Exhibit 3.01 to the Company's Registration Statement on
Form S-1, Registration No. 33-1887, is incorporated herein by
reference).
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3.2 Amended and Restated Bylaws of Family Steak Houses of Florida,
Inc. (Exhibit 4 to the Company's Form 8-A, filed with the
Commission on March 19, 1997, is incorporated herein by
reference).
3.3 Articles of Amendment to the Articles of Incorporation of
Family Steak Houses of Florida, Inc. (Exhibit 3.03 to the
Company's Registration Statement on Form S-1, Registration No.
33-1887, is incorporated herein by reference).
3.4 Articles of Amendment to the Articles of Incorporation of
Family Steak Houses of Florida, Inc. (Exhibit 3.04 to the
Company's Registration Statement on Form S-1, Registration No.
33-1887, as incorporated herein by reference).
3.5 Articles of Amendment to the Articles of Incorporation of
Family Steak Houses of Florida, Inc. (Exhibit 3 to the
Company's Form 8-A filed with the Commission on March 19,
1997, is incorporated herein by reference).
3.6 Articles of Amendment to the Articles of Incorporation of
Family Steak Houses of Florida, Inc. (Exhibit 3.08 to the
Company's Annual Report on Form 10-K, filed with the
Commission on March 31, 1998, is incorporated herein by
reference).
3.7 Amendment to Bylaws of Family Steak Houses of Florida, Inc.
(Exhibit 3.08 to the Company's Annual Report on Form 10-K,
filed with the Commission on March 15, 2000, is incorporated
herein by reference).
5.1 Form of Opinion of McGuire Woods LLP.
23.1 Independent Auditors' Consent (to be filed by amendment.)
24.1 Power of Attorney (included in the Signature Page contained in
Part II of the Registration Statement).
99.1 Form of Subscription Certificate.
99.2 Instructions on Use of Family Steak Houses of Florida, Inc.
Subscription Certificate.
99.3 Form of Letter to Shareholders.
99.4 Form of Letter to Brokers.
99.5 Notice of Guaranteed Delivery.
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Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement:
(i) to include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to rule 424(b)
if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement; and
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement.
provided, however, that paragraphs (i) and (ii) do not apply if the Registration
Statement is on Form S-3, Form S-8 or Form F-3 and information required to be
included in a post-effective amendments is contained in periodic reports filed
by the Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining liability under the
Securities Act, the Registrant will treat each post-effective amendment as a new
Registration Statement of the securities offered, and the offering of the
securities at that time shall be deemed to be the initial bona fide offering.
(3) That, the Registrant will file a post-effective amendment to
remove from registration any of the securities that remain unsold at the end of
the offering.
The undersigned Registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating
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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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the 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 the Registrant of expenses incurred or paid by a director, officer or
controlling person of the 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, the 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 public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that: (i) For the purposes
of determining any liability under the Securities Act, the information omitted
from the form of prospectus filed as part of this Registration Statement in
reliance upon Rule 430A and contained in a form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of the Registration Statement as of the time it was
declared effective (ii) For the purposes of determining any liability under 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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all requirements for filing on Form S-3 and has duly caused this Form S-3
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Orange, State of California on the 27th day of
June, 2001.
FAMILY STEAK HOUSES OF FLORIDA, INC.
By: /s/ Glen F. Ceiley
--------------------------------------------
Glen F. Ceiley, Principal Executive Officer
POWER OF ATTORNEY
KNOW ALL THESE PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Edward B. Alexander, as his
attorney-in-fact, with full power of substitution for him in any and all
capacities, to sign any and all amendments to this Registration Statement, and
to file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each said attorney-in-fact or his substitute or substitutes,
may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Form
S-3 Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Edward B. Alexander Executive Vice June 27, 2001
- ----------------------------- President, Principal
Edward B. Alexander Financial and
Accounting Officer
/s/ Steven Catanzaro Director June 27, 2001
- -----------------------------
Steven Catanzaro
/s/ Glen F. Ceiley Chairman of the Board June 27, 2001
- -----------------------------
Glen F. Ceiley
/s/ Jay Conzen Director June 27, 2001
- -----------------------------
Jay Conzen
/s/ William L. Means Director June 13, 2001
- -----------------------------
William L. Means
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INDEX TO EXHIBITS
Exhibit
No. Description
------- -----------
3.1 Articles of Incorporation of Family Steak Houses of Florida,
Inc. (Exhibit 3.01 to the Company's Registration Statement on
Form S-1, Registration No. 33-1887, is incorporated herein by
reference).
3.2 Amended and Restated Bylaws of Family Steak Houses of Florida,
Inc. (Exhibit 4 to the Company's Form 8-A, filed with the
Commission on March 19, 1997, is incorporated herein by
reference).
3.3 Articles of Amendment to the Articles of Incorporation of
Family Steak Houses of Florida, Inc. (Exhibit 3.03 to the
Company's Registration Statement on Form S-1, Registration No.
33-1887, is incorporated herein by reference).
3.4 Articles of Amendment to the Articles of Incorporation of
Family Steak Houses of Florida, Inc. (Exhibit 3.04 to the
Company's Registration Statement on Form S-1, Registration No.
33-1887, as incorporated herein by reference).
3.5 Articles of Amendment to the Articles of Incorporation of
Family Steak Houses of Florida, Inc. (Exhibit 3 to the
Company's Form 8-A filed with the Commission on March 19,
1997, is incorporated herein by reference).
3.6 Articles of Amendment to the Articles of Incorporation of
Family Steak Houses of Florida, Inc. (Exhibit 3.08 to the
Company's Annual Report on Form 10-K, filed with the
Commission on March 31, 1998, is incorporated herein by
reference).
3.7 Amendment to Bylaws of Family Steak Houses of Florida, Inc.
(Exhibit 3.08 to the Company's Annual Report on Form 10-K,
filed with the Commission on March 15, 2000, is incorporated
herein by reference).
5.1 Form of Opinion of McGuire Woods LLP.
23.1 Independent Auditors' Consent. (to be filed by amendment.)
24.1 Power of Attorney (included in the Signature Page contained in
Part II of the Registration Statement).
99.1 Form of Subscription Certificate.
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99.2 Instructions on Use of Family Steak Houses of Florida, Inc.
Subscription Certificate.
99.3 Form of Letter to Shareholders.
99.4 Form of Letter to Brokers.
99.5 Notice of Guaranteed Delivery.
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