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Microcap & Penny Stocks : Restaurant Teams International, Inc.-RTIN -- Ignore unavailable to you. Want to Upgrade?

To: KZAP who wrote (2921)	12/10/1999 12:49:00 PM
From: TraderGreg	Respond to of 3351

Trash like OSFT is why I am still holding RTIN. No real news and the stock goes from the low 1s to the high 4s. What P&D outfit is pushing it I wonder? Sure wish they'd consider RTIN. TG

To: KZAP who wrote (2921)	12/10/1999 2:25:00 PM
From: TraderGreg	Read Replies (2) \| Respond to of 3351

AN OPEN LETTER TO RTIN MANAGEMENT Your stock is now trading nearly 80% below the point it was at when the decision to acquire Fatburgers was first made. Part of that is due to an increase in the number of shares issued, which is up from 8mm to just over 10mm at the present time. Nevertheless, the vast majority of the decline has been due to shareholder frustration with the delays in consummating the acquisition. At the time you first offered to buy FB, you rejected the option of seller financing, opting rather to concentrate on finding your own funding to do a 100% cash deal. Over the many months that have elapsed, it appears that you have been unsuccessful in obtaining the necessary financing to pay all cash to the FB sellers. During this period, you also decided to close down three of your restaurants in anticipation of the FB closing. As a result of that decision, you are no longer profitable on a quarter by quarter basis. So, you now have but ONE restaurant open, HALF the necessary funds to purchase FB, and a stock price down huge. Let us look at your available options: 1. Force the sellers of FB to finance half the acquisition. I am not an attorney, but were I sitting as a trier of fact on this case, I would turn to you and first ask the following question: Did you not reject the original seller take back loan option? I believe the answer to that is YES. I would then ask: Did you not commit to consummating this transaction with buyer provided funding? I believe the answer to that is also YES. Finally, I would ask, How many months have elapsed since that original seller take back offer(the one you rejected)? I believe that is on the order of at least 6 months, correct? It appears to me that you are now trying to force the seller to agree to terms that YOU had already rescinded in the spring. Now, I do not know how the court will rule. But suffice it to say that unless you can negotiate with the seller that this issue will not go away quietly. Meanwhile, your stock will certainly not gain strength. It will only weaken further. This will negatively impact on your other 2 options. 2. Secure financing to provide the necessary funding to close the FB transaction. I presume you have aggressively pursued this already with little success. The erosion in share value over the spring, summer and fall certainly has not made you a pristine candidate for traditional financing. I won't delve further on this one as double digit interest rates for financing could possibly exceed the profits that could be realized from a 30+ franchise operation. 3. Issue 144 restricted and/or convertible tranches of stock with a modest interest rate. This was a terrific idea back in the spring when the stock was trading at the 2+ level. An additional 2 million shares of convertibles or even 3 million of restricted stock would have raised the funds necessary to close. You would have 12 or 13 million shares outstanding and franchising expansion would already have been started. So, what can be done now? At this point you have 10+ million shares out, half the cash, and no income from the incomplete deal. Assuming you truly wish to close the deal, you must now DO whatever it takes. Even if you need to issue 10 million shares now(in restricted form) or say 5 million convertibles(with an .80 conversion price), you will still be ahead your current status. If the deal DOES NOT go off, what will happen to your escrow funds? The seller has given you a de facto exclusivity for this acquisition. Your failure to buy FB could be construed as a failure to perform. Were I the seller, I would sue for specific performance on your part. But let's forget about that for now. For if you do not buy FB, what do you have? If you pursue the 144 or convertible, it will be dilutive to be sure. But at least you will have substance. You will go from 1 restaurant with 3 lease payments to ADDING 30+ FB franchises. You will then hire a competent franchise consultant who will implement an expansion program. As you collect franchise fees, you can essentially retire the dilution(either directly from the holders or on the open market). Even if you don't, you will still have additional funds for enhanced expansion. Your cost to do this will be those 144 or convertible shares. Worst case scenario, you may have twice as many shares outstanding. However, you should immediately experience an order of magnitude increase in earnings and increase on the balance sheet. You will also have launched the platform for nationwide growth to perhaps hundreds or thousands of franchises, each paying you 5% of gross sales, not to mention the franchise fees. Please do the right thing here. Greg Grapsas aka Trader Greg, a very disappointed shareholder