Good News & Bad News. FRYA filed SEC SB-2A on May 2, 1997 to increase the number of post-split shares by 4,972,917 and warrants by 425,010 for a total increase of 5,397,927 shares. The form including the Prospectus can be found at sec.gov
It appears that they plan to offer the new shares at $1.90/share. Obviously this is a dilution. As of May 1,1997 the total numebr of shares outstanding were 4,763,909. This would raise the total number to 10,161,836 shares. Remeber we just suffered a 20:1 reverse split. If the offering is successful it will reduce our interest in FRYA by more than 50%. That is is bad news.
However, I don't think we have any choice (other than to sell). Reading the SEC Form 10KSB issued on May 12,1997 Mr. Kelly clearly admits that the company is out of money. As of January 31, 1997 the company had a grand sum of $1,519 in cash!
He states that they must pay S&H Electronics of Robesonia, PA a total of $700,000 to complete the tooling. Without that we are dead. He is seeking financing from three other sources as well.
I was surprised to learn that Tasty Fries does NOT own the patent for the Machine! It is owned 100% today by Premier Design Ltd. The Agreemement between Tasty Fries and Premier is that FRYA will get 50% interest in the patent after they pay another $225,000 to Premier for development costs.
The whole thing is a mess. There are more Philadelphia lawyers, suits and lining of pockets than I've seen in a long time. There are so many outstanding lawsuits and claims on future income, I don't think we'll see anything from it. I think the whole thing is a scam to transfer money money from shareholder's wallets to their pockets. Kelly gets paid $250,000/year (including $10,000 to attend Board meetings). He and VP Mr. Klarich both have $50,000 loans from FRYA(which they are repaying). Another agreement is that Kelly and another investor keep issuing themselves shares so that the two of them each own 25% of the company.
The deal with the Isralei company is NOT done. There is NO agreement for them to manufacture in place. If this whole thing was legitimate, that Billion dollar Koors Industries could underwrite this in a minute. Something is very, very wrong.
Getting this small amount of financing is taking far too much time. Building this machine is taking them longer than it took to develop the moon program!
If you want to become ill, pull down the above and read it yourself.
I'm still holding stock, but I think I should be put in an institution for buying into this mess. The only thing that keeps me from selling is knowing how many lawyers have invested in the deal. (Lawyers NEVER were good business people.) I think they all are preying on our love for french fries... they could do mankind a favor by just building and selling the machines. Someone needs to come in, get all this financial and legal mess behind them, and get on with it. |
