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Red Hot Concepts Inc · 10QSB · For 9/30/96

Filed On 11/18/96 · SEC File 0-26838 · Accession Number 950159-96-232

  As Of               Filer                 Filing     On/For/As Docs:Pgs              Issuer               Agent

11/18/96  Red Hot Concepts Inc              10QSB       9/30/96    2:15                                     950159

Quarterly Report -- Small Business · Form 10-QSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10QSB       Quarterly Report -- Small Business                    14     66K 
 2: EX-27       Financial Data Schedule                                1      6K

10QSB · Quarterly Report -- Small Business
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (RTF, XML, et al.) Changes in Securities Defaults Upon Senior Securities Exhibits Financial Statements Legal Proceedings Management's Discussion and Analysis of Financial Condition and Plan of Operation Management's Discussion and Analysis of Financial Condition and Results of Operations 7-10 Other Information Submission of Matters to a Vote of Security Holder
1	1st Page
2	Item 1:. Financial Statements
"	Item 2:. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-10
9	Item 2. Management's Discussion and Analysis of Financial Condition and Plan of Operation
13	Item 1. Legal Proceedings
"	Item 2. Changes in Securities
"	Item 3. Defaults Upon Senior Securities
"	Item 4. Submission of Matters to a Vote of Security Holder
"	Item 5. Other Information
"	Item 6. Exhibits

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 UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 FORM 10-QSB

Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the quarter ended September 29, 1996        Commission File Number 33-86166 

RED HOT CONCEPTS, INC.
(Exact name of registrant as specified in its charter)

Delaware                                          52-1887105
(State or other jurisdiction of                         (I.R.S. Employer        
incorporation or organization)                           Identification No.)    

6701 Democracy Boulevard                                              
Suite 300                                                 
Bethesda, Maryland                                         20817
(Address of principal executive offices)                         (Zip code)     

Registrant's telephone number, including area code: (301) 493-4553              

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 of 15(d) of the  Securities  and  Exchange Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports)  and (2) has been  subject to such  filing
requirements for the past 90 days.                                              

Yes _X_    No ___     

As of November 15, 1996,  9,262,347  shares of common stock par value,  $.01 per
share were outstanding.                                                         

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 RED HOT CONCEPTS, INC. AND SUBSIDIARY

 FORM 10-QSB

QUARTERLY REPORT
 For the Period July 1, 1996 to September 29, 1996

 INDEX

Part I:  FINANCIAL INFORMATION                                                  

Item 1:  Financial Statements                                                   

Condensed Consolidated Balance Sheet as of September 29, 1996           
[Unaudited]                                                           1 

Condensed  Consolidated   Statements  of  Operation  for  the           
thirteen  week periods July 1, 1996 to September 29, 1996 and           
July 3, 1995 to October 1, 1995 and for the thirty-nine  week           
periods  January 1, 1996 to September 29, 1996 and January 2,           
1995 to October 1, 1995 [Unaudited]                                   2 

Condensed  Consolidated  Statement  of  Stockholders'  Equity           
[Deficit] for the thirty-nine  week period January 1, 1996 to           
September 29, 1996                                                    3 

Condensed  Consolidated  Statements  of  Cash  Flows  for the           
thirty-nine  week periods  January 1, 1996 to  September  29,           
1996 and January 2, 1995 to October 1, 1995 [Unaudited]               4 

Notes to Condensed Consolidated Financial Statements                5-6 

Item 2:  Management's Discussion and Analysis of Financial Condition            
    and Results of Operations                                     7-10

Part II: OTHER INFORMATION                                               11     

SIGNATURES                                                               12     

o o o o o o o o o o               

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RED HOT CONCEPTS, INC. AND SUBSIDIARIES                                         

CONDENSED CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 29, 1996                   
[UNAUDITED]                                                                     

                                                                · Download Table


                                                         As of        As of December
                                                      September 29,    31, 1995     
                                                          1996         [Audited]    
                                                                                    
Assets:                                                                             
  Cash and Cash Equivalents                              308,644      1,764,969     
  Accounts Receivable and Other Receivables              737,341        547,072     
  Inventories                                            318.172        194,035     
  Prepaid Expenses and Accrued Income                    386,075         65,378     
                                                      ----------     ----------     

  Total Current Assets                                 1,750,233      2,571,454     
                                                      ----------     ----------     

  Furniture and Equipment - Net                        5,436,370      2,012,343     
                                                      ----------     ----------     

  Other Assets:                                                                     
  Restaurant Development and Start-Up Costs            1,246,610        745,410     
  Development and License Agreements - Net               496,964        476,935     
  Loan to Officers                                       131,149         51,000     
                                                      ----------     ----------     
  Total Other Assets                                   1,743,574      1,273,345     
                                                      ----------     ----------     
  Total Assets                                         9,061,324      5,857,142     
                                                      ----------     ----------     

Liabilities and Stockholders' Equity:                                               
  Current Liabilities:                                                              
  Accounts Payable and Accrued Expenses                3,296,822      1,957,326     
  Current Notes Payable                                  100,000        100,000     
  Obligations under Capital Leases                        18,007         16,009     
  Due to Related Parties                               1,177,037        273,344     
                                                      ----------     ----------     
  Total Current Liabilities                            4,591,866      2,346,679     
  Long Term Liabilities:                                                            
  Long Term Debt                                       1,051,076        100,000     
  Obligations under Capital Leases                        45,596         25,880     
                                                      ----------     ----------     
  Total Long Term Liabilities                          1,096,672        125,880     
                                                      ----------     ----------     

Stockholders' Equity:                                                               
  Common Stock, $.01 Par Value,                                                     
     20,000,000 Shares Authorized,                                                  
     9,262,347 Shares Issued and Outstanding              92,623         47,623     
  Additional Paid-in Capital                           7,246,450      4,749,702     
  Retained Loss                                       (3,961,842)    (1,398,326)    
  Cumulative Foreign Currency Translation Adjustment      (4,445)       (14,416)    

  Total Stockholders' Equity                           3,372,786      3,384,583     
                                                      ----------     ----------     

  Total Liabilities and Stockholders' Equity           9,061,324      5,857,142     
                                                      ----------     ----------     


The  Accompanying  Notes are an Integral  Part of these  Condensed  Consolidated
Financial Statements.                                                           

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RED HOT CONCEPTS, INC. AND SUBSIDIARIES                                         

CONDENSED STATEMENTS OF OPERATIONS.                                             
[UNAUDITED]                                                                     

                                                        · Enlarge/Download Table

                                                For the Thirteen Weeks         For the Thirty-Nine Weeks  
                                             July 1, 1996     July 3, 1995    January 1,        January 2,
                                             to September     to October 1,    1996 to          1995 to   
                                                29, 1996          1995       September 29,      October 1,
                                                               [Audited]         1996             1995    
                                                                                                [Audited] 
                                                                                                          
Revenues                                        2,500,136           7,138      6,233,954          20,154  

Cost and Expenses                                                                                         
Cost of Sales                                     885,244              --      2,119,110              --  
Restaurant Expenses                             1,730,013              --      4,211,924              --  
Depreciation and Amortization                     884,641              --        489,257              --  
General and Administrative                        817,282         232,612      1,925,180         505,194  
Interest Expense                                   24,250           2,501         62,589           8,100  
Interest Income                                    (4,507)        (23,946)       (10,560)        (24,119) 
                                               ----------      ----------     ----------      ----------  
Net Loss                                        1,271,743         204,029      2,563,516         469,026  

Primary Net Loss Per Share                     $    (0.15)     $    (0.05)    $    (0.42)     $    (0.11) 

Primary Weighted Average Shares Outstanding     8,685,424       4,424,898      6,129,994       4,397,188  

The  Accompanying  Notes are an Integral  Part of these  Condensed  Consolidated
Financial Statements.                                                           

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RED HOT CONCEPTS INC. AND SUBSIDIARIES                                          

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY                        
[UNAUDITED]                                                                     

                                                        · Enlarge/Download Table

                                                                                           Cumulative              
                                            Common Stock                                    Foreign                
                                      Number                    Additional   Accumulated    Currency               
                                        of                       Paid-in      Deficit      Translation     Total   
                                      Shares          Amount     Capital                   Adjustments             
                                                                                                                   
Balance - December 31, 1995          4,762,347          47,623   4,749,702   (1,398,326)     (14,416)    3,384,581 

Additional Offering Costs in                                       (55,000)                                (55,000)
  Connection with Sale of Stock                                                                                    

Foreign Currency Translation                                                                  (9,971)       (9,971)
  Adjustment                                                                                                       

Net Loss for the period January 1,                                           (2,563,516)                (2,563,516)
  1996 to September 29, 1996                                                                                       

Issuance of Common Stock             4,500,000          45,000   2,551,748                               2,551,748 

                                    ----------      ----------  ----------   ----------   ----------    ---------- 
Balance - September 29, 1996         9,262,347          92,623   7,246,450   (3,961,842)      (4,445)   $3,372,786 
                                    ----------      ----------  ----------   ----------   ----------    ---------- 

Foreign Currency Translation                                                    

The  functional  currency  for  the  Company's  United  Kingdom  subsidiary  and
Australian  subsidiary  is the British  pound  sterling and  Australian  dollar,
respectively. The translation from British pound sterling and Australian dollars
in to U.S.  dollars is  performed  for  balance  sheet  accounts  using  current
exchange  rates in effect at the balance  sheet date and for revenue and expense
accounts using a weighted average exchange rate during the period.  The gains or
losses  resulting from such  translation are included in  stockholders'  equity.
Equity transactions denominated in British pound sterling and Australian dollars
have been translated  into U.S.  dollars using the effective rate of exchange at
date of issuance.                                                               

The  Accompanying  Notes are an Integral  Part of these  Condensed  Consolidated
Financial Statements.                                                           

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RED HOT CONCEPTS INC. AND SUBSIDIARIES                                          

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                                 
[UNAUDITED]                                                                     

                                                        · Enlarge/Download Table

                                                                          For the Thirty-Nine  For the Thirty-Nine
                                                                           Weeks January 1,     Weeks January 2,  
                                                                           1996 to September   1995 to October 1, 
                                                                              29, 1996               1995         
                                                                                                                  
Operating Activities:                                                                                             
Net Cash - Operating Activities                                               (1,527,941)          (184,597)      
                                                                             -----------        -----------       

Investing Activities:                                                                                             
Purchase of Furniture, Fixtures and Leasehold Improvements                    (3,484,470)          (207,455)      
Store Development and Unit Preopening Costs                                     (714,665)        (1,387,742)      
Development and License Agreement                                                (40,000)           (40,000)      
Loan to Officer - Net                                                            (80,149)                         

Net Cash - Investing Activities                                               (4,319,284)        (1,635,197)      
                                                                             -----------        -----------       

Financing Activities:                                                                                             
  Loans from Related Parties                                                     903,693                          
  Proceeds from Loan                                                           1,008,046                 --       
  Repayment of Debt                                                              (72,558)                --       
  Proceeds from Sale of Common Stock                                           2,541,748          5,228,320       
  Deferred Opening Costs                                                              --           (530,995)      
                                                                             -----------        -----------       
  Net Cash - Financing Activities                                              4,380,929          4,697,325       
                                                                             -----------        -----------       

Effect of Exchange Rate Changes on Cash                                            9,971             12,563       
                                                                             -----------        -----------       

  Net [Decrease]/Increase in Cash and Cash Equivalents                        (1,456,325)         2,890,094       

Cash and Cash Equivalents - Beginning of Periods                               1,764,969              5,716       
                                                                             -----------        -----------       
Cash and Cash Equivalents - End of Periods                                       308,644          2,895,810       
                                                                             -----------        -----------       

Supplemental Disclosures of Cash Flow Information:                                                                
  Cash paid during the periods for:                                                                               
    Interest Paid                                                                               $     8,100       
    Taxes Paid                                                                                                    
Supplemental Disclosures of Non-Cash Financing and Investing Activities:                                          

    Total offering costs during the period January 1, 1996 to September                                           
    29, 1996                                                                     158,252                          
    Fixed Assets acquired under Capital Leases                                    19,716                          

The  Accompanying  Notes are an Integral  Part of these  Condensed  Consolidated
Financial Statements.                                                           

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RED HOT CONCEPTS INC. AND SUBSIDIARIES                                          

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                            
[UNAUDITED]                                                                     

[A]      Significant Accounting Policies                                        

         Significant   accounting  policies  of  Red  Hot  Concepts,   Inc.  and
         Subsidiary  [the  "Company"] are set forth in the Company's Form 10-KSB
         for the year ended  December 31, 1995 as filed with the  Securities and
Exchange Commission.                                          

[B]      Basis of Reporting                                                     

         The condensed consolidated balance sheet as of September 29,. 1996, the
         condensed consolidated  statements of operations for the thirteen weeks
         and thirty-nine weeks ended September 29, 1996 and October 1, 1995, the
         condensed consolidated statement of stockholders' equity for the period
         January 1, 1996 to September 29, 1996,  and the condensed  consolidated
         statements of cash flows for the thirty-nine  weeks ended September 29,
         1996 and  October 1, 1995 have been  prepared  by the  Company  without
         audit.  The  accompanying  interim  condensed   consolidated  unaudited
         financial  statements  have been prepared in accordance  with generally
         accepted  accounting  principles for interim financial  information and
         with the  requirements  of  Regulation SB and Form 10-QSB for condensed
         financial  statements.  Accordingly,  they  do not  include  all of the
         information  and footnotes  required by generally  accepted  accounting
         principles  for complete  financial  statements.  In the opinion of the
         management  of the Company,  such  statements  include all  adjustments
         [consisting  only of  normal  recurring  items]  which  are  considered
         necessary  for a fair  presentation  of the  financial  position of the
         Company at September 29, 1996,  and the results of its  operations  and
         cash flows for the  periods  then  ended.  It is  suggested  that these
         unaudited  financial   statements  be  read  in  conjunction  with  the
         financial  statements and notes  contained in the Company's Form 10-KSB
         for the year ended  December  31,  1995 as amended by the notes set out
below.                                                        

[C]      Stock Transaction                                                      

         On May 1, 1995, in anticipation of filing a post-effective amendment to
         its Registration  Statement  changing the offering price for its shares
         in  its  initial  public  offering  from  $5 to  $6,  Woodland  Limited
         Partnership,  the  holder  of all the  shares  of  common  stock of the
         Company, at the time, contributed back to the Company 950,000 shares of
common stock.                                                 

         On August 7, 1995, the Company  completed its initial Public  Offering.
         In connection with the Offering, the Company sold 1,012,347 Units at $6
         per Unit.  Each  Unit  consists  of one  share of common  stock and two
         common  stock  purchase  warrants.  The net  proceeds  received  by the
         Company from the Offering were $5,228,320 after deducting  underwriting
         discounts  and  expense  reimbursements  to  the  underwriter  totaling
$758,158 and offering costs paid at the closing of $87,703.   

         On June 24, 1996, the Company  completed a Regulation S share offering.
         In the Offering,  the Company sold 3,000,000  shares of common stock at
$.40 per share.                                               

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         On August 4, 1996, the Company completed a Regulation S share offering.
         In the Offering,  the Company sold 1,500,000  shares of common stock at
$1.00 per share.                                              

         In September,  1996, the Company sold 5% of their Australian subsudiary
         to  Brinker   International.   Brinker  will  underwrite  Company  bank
guarantees used to secure restaurant sites in Australia.      

[D]      Acquisitions                                                           

         On November 9, 1995, the Company,  through a  wholly-owned  subsidiary,
         entered  into  a  Development  and  Franchise  Agreement  with  Brinker
         International,  Inc. ("Brinker") which grants the Company the exclusive
         right to own and  operate  Chili's  Restaurants  in  Australia  and New
         Zealand (the "Pacific Development Agreement").  The Pacific Development
         Agreement  has an  initial  term of 10 years  and is  renewable  at the
         Company's  discretion  for an  additional  10 year period if a combined
         minimum of 40 Chili's Restaurants are opened between the two countries.

         Also on November 9, 1995, the Company  acquired from Brinker all of the
         stock of  Chili's  Texas  Grill  Pty  Limited,  an  Australian  company
         (Chili's  Texas  Grill").  Chili's  Texas  Grill  operates  two Chili's
         Restaurants  near  Sydney,   Australia.  The  purchase  price  for  the
         acquisition   of  Chili's   Texas  Grill  is  payable  in  three  equal
         installments  on  November  9,  1995,  1996,  and  1997.  The  purchase
         agreement also required  Chili's Texas Grill to pay a management fee to
Brinker by November 30, 1995.                                 

 o o o o o o o o o o

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Item 2. Management's Discussion and Analysis of Financial                       
Condition and Plan of Operation                                 

General                                                                         

The  Company  was  incorporated  on June 14,  1994 and has a  limited  operating
history.  The  Company was in the  development  stage  until  October  1995 when
operations  commenced.  The  Company has spent  significant  time  focusing  its
efforts on various  activities  including  selecting sites,  hiring and training
management  personnel,  establishing  administrative  and financial policies and
procedures  and,   undertaking   other  activities   necessary  to  operate  new
restaurants in the United  Kingdom and  Australia.  To date, the Company has six
restaurants operating.                                                          

The  Company  was formed to develop  Chili's  Bar & Grill  Restaurants  [Chili's
Restaurants],   a  full   service   restaurant   concept   created   by  Brinker
International,  ["Brinker'].  The  Company  has the  exclusive  right to own and
operate Chili's Bar & Grill Restaurants in the United Kingdom, Australia and New
Zealand pursuant to development and license agreements [the Chili's  Development
Agreements"] with Brinker.                                                      

The Company  opened its first  Chili's  Restaurant at Canary Wharf on October 9,
1995 and  opened  additional  restaurants  on March 20,  1996 and May 1, 1996 in
Cambridge  and  central  London,   respectively.   The  Company   purchased  two
restaurants  in Australia in November,  1995 (see Note [D]).  The Company opened
its first  restaurant  in Melbourne on September 2, 1996.  The Company has other
restaurants under development in Australia.                                     

In August,  the  Company  hired  Norman  Abdallah  as the  President  of Red Hot
Concepts,  Inc.  Norman  Abdallah  was the former Vice  President  of  Franchise
Operations for Brinker International. We believe Mr. Abdallah's comprehension of
the Chili's concept and his industry  contacts will be a tremendous asset to the
Company. In addition,  the Company has restructured the headquarters staffing in
the UK to significantly reduce the headcount and overhead expenses.  The Company
believes these changes will have positive results on the UK income.             

Comparison  of the thirteen  week periods July 1, 1996 to September 29, 1996 and
July 2, 1995 to October 1, 1995.                                                

(US Dollars)      United Kingdom          Australia             Consolidated    
Revenue             1,186,188            1,313,979              2,500,136     

The Company  recognized only  consulting  revenues in the third quarter 1995. In
the third quarter 1996, the six  restaurants  generated  revenues of $2,500,136.
Average weekly sales were $35,716.                                              

UK                                                                              

Revenues                                                                        

The three  restaurants  in the United Kingdom  achieved  average weekly sales of
$30,415.  The Company  implemented  new sales  building  activities in the third
quarter  which  has  resulted  in sales  trends  improvements  at the end of the
quarter. Average weekly sales at the end of the quarter were $32,250. At the end
of the quarter,  the Company implemented a marketing plan designed to change the
brand identity to Chili's "Texas" Bar & Grill.                                  

Cost and Expenses                                                               

Food and labor  costs were  reduced as a  percentage  of revenue to 34% and 33%,
respectively.  The food costs were lower as the  Company was able to improve its
purchasing power through the economies of scale.  Labor costs fell  dramatically
from the previous  quarter as the Company was not  staffing for store  openings.
The general and  administrative  expenses fell by 2% from the previous  quarter.
The general and administrative  costs included one time expenses associated with
a significant reduction in head office personnel.                               

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AUSTRALIA                                                                       

Revenues                                                                        

The  three  restaurants  in  Australia  averaged  $42,385  per week in the third
quarter.  The  same  store  sales  increased  by 8%  over  last  year  when  the
restaurants were under difference ownership.                                    

Cost and Expenses                                                               

The food and labor costs are  consistent  with the  Company's  target of 30% for
food and 31% for labor. The Company's  administrative  costs are abnormally high
in the  period  as the  Company  consolidated  staffs  in  Sydney.  The  Company
anticipates  a decrease in  administrative  costs as a percentage  of revenue as
more restaurants are opened.                                                    

US                                                                              

The Company's  administrative  costs are abnormally high as significant time has
focused on improving the operations in the UK and Australia.                    

Comparison of the thirty-nine  week period January 1, 1996 to September 29, 1996
and January 2, 1995 to October 1, 1995.                                         

(US Dollars)       United Kingdom          Australia             Consolidated   
Revenue              2,713,107            3,520,847              6,233,954    

The Company  recognized only consulting  revenues in the first three quarters of
1995. In the thirty-nine weeks in 1996, the six restaurants  generated  revenues
of $6,233,954. Average weekly sales were $36,456.                               

UK                                                                              

Revenue                                                                         

The three  restaurants  in the United Kingdom  achieved  average weekly sales of
$30,484.  The sales at the two new restaurants trended downward from the opening
sales rate consistent  with the honeymoon  period  experience.  The sales trends
trended up at the end of the third quarter. For the first seven months, sales at
the Canary Wharf Restaurant were impacted by the IRA bombing activities.  At the
end of the third  quarter,  the Company  implemented  a marketing  plan designed
increase  sales at its  restaurants  by changing  the brand  identity to Chili's
"Texas" Grill & Bar.                                                            

Cost and Expenses                                                               

Food costs as a percentage of revenue came down 4% during the year,  from 40% to
36%. Labor costs as a percentage of revenue have fallen 5%.                     

AUSTRALIA                                                                       

Revenues                                                                        

The  three  restaurants  in  Australia  averaged  $42,937  per week in the third
quarter.  The  same  store  sales  increased  by 8%  over  last  year  when  the
restaurants were under difference ownership.                                    

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Cost and Expenses                                                               

The food and labor costs are consistent  with the Company's  target  objectives.
The food costs as a percentage  of revenue has remained  constant at 30% for the
year and labor costs have moved between 31 and 32%. The Company's administrative
costs as a percentage of revenue have averaged 10% and the Company anticipates a
decrease of the percentage as more restaurants are opened.                      

Liquidity and Capital Resources                                                 

The Company's cash and cash equivalents  decreased by $1,115,126 in the quarter.
For the first  thirty-nine  weeks,  the Company's cash position has decreased by
$1,456,325.  During the thirty-nine week period, the Company used $1,527,941 for
operating activities.  The Company had a net loss of $2,563,516,  an increase in
accounts  receivable of $190,269,  increase of inventories  of $124,137,  and an
increase of prepaid expenses of $320,697.  The loss was offset by an increase in
accounts payable of $1,339,496.                                                 

Cash used in investing  activities of $3,484,470  is primarily  attributable  to
leasehold  improvements  and furniture and fixtures for new  restaurants  in the
United  Kingdom  and  Australia.  Additionally,   $754,665  has  been  spent  on
capitalized  store opening costs and licensing  fees. Cash provided by financing
activities  for the year  include the  increase  of new  capital by  $2,541,748,
intercompany financing of $903,693 and bank debt of $1,008,046.                 

UK                                                                              

The  Company  was  obligated  under the UK  Development  Agreement  to decide by
November  1  whether  to  terminate  the  Development   Agreement  with  Brinker
International.  The Company has elected to proceed with the  development  of the
United Kingdom and is required to pay $225,000 for the development  rights.  The
Company  is not  obligated  to open any  additional  restaurants  in 1997 and is
obligated  to open 2  restaurants  in 1998.  The  Company  believes  the capital
requirements will be approximately  $1.2 million which amounts include leasehold
improvements, furniture and fixtures, equipment, opening inventories, hiring and
training staff.  In addition,  the Company must pay a license fee of $20,000 for
each restaurant it opens.                                                       

AUSTRALIA                                                                       

In Australia, the Company's capital requirements are significantly less than the
UK. The Company  plans to work with  developers  who will  provide  construction
financing of the restaurants. In addition, the Company has obtained a commitment
from National Australian Bank to provide 100% lease financing on the acquisition
of restaurant  equipment and furniture fittings.  Under the terms of the Pacific
Development  Agreement,  the Company is to open two (2)  restaurants in 1997 and
three (3) in 1998. The Company  believes that its capital  requirements  will be
approximately $300,000 per restaurant.                                          

Management Plans                                                                

The  Company  believes  that in  addition to  anticipated  revenues,  additional
capital or  borrowings  will be necessary to achieve the  Company's  development
schedule and satisfy future construction obligations, amounts due to Brinker and
amounts due to related parties. Other than described above, the Company does not
have any bank commitments at this time. There are no assurances that the Company
will  be  successful  in  obtaining  additional  financing  or  that  it will be
successful in attracting new capital. If the Company plans change or assumptions
or estimates prove to be inaccurate,  or, if the Company is unable to raise more
funds, the Company will have to reduce its operations to a level consistent with
its available financing.                                                        

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The Company has and will  continue to take action to improve its  viability as a
going concern. The Company believes it has built a strong management team and is
committed  to continue  to build a  management  team that is  familiar  with the
Chili's  concept.  In Australia,  as part of the Company's  expansion  plan, the
Company will attempt to work with "market  partners"  which have experience with
the Chili's  concept.  The Company  believes that by building a team and working
with others familiar with the concept,  the Company will be able to successfully
develop and expand the concept throughout the United Kingdom and Australia.     

The Company is also committed to work closely with Brinker. Brinker provides the
Company with  support in site  selection,  menu design and pricing,  local store
marketing and brand awareness and product procurement. The Company believes that
by working with Brinker,  the Company has a competitive  edge in the marketplace
in the territories in which the Company operates.                               

Impact of Inflation                                                             

Inflation is not expected to have a material impact on the Company's operations.

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Part II OTHER INFORMATION                                                       

Item 1.  Legal Proceedings                                                      

         The  Company  is  not  a  party  to  any  litigation  or   governmental
         proceedings that management believes would result in judgments or fines
that would have a material adverse effect on the Company.     

Item 2.  Changes in Securities                                                  

Not Applicable.                                               

Item 3.  Defaults Upon Senior Securities                                        

Not Applicable.                                               

Item 4.  Submission of Matters to a Vote of Security Holder                     

Not Applicable.                                               

Item 5.  Other Information                                                      

Not Applicable.                                               

Item 6.  Exhibits                                                               

(a)     Exhibits                                            

None.                                       

(b)     Reports on Form 8-K                                 

                  No reports on Form 8-K were filed during the period covered by
this report.                                

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SIGNATURES                                                                      

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.                                          

  RED HOT CONCEPTS, INC.

Date:  November 15, 1996      By: /s/ H. Michael Bush                           
                            ------------------------------------------------
                          H. Michael Bush, Chief Financial Officer

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Dates Referenced Herein and Documents Incorporated By Reference

		Referenced-On Page
This 10QSB Filing	Date	First	Last	Other Filings

	6/14/94	9
	1/2/95	2	10
	5/1/95	7
	7/2/95	9
	7/3/95	2	4
	8/7/95	7
	10/1/95	2	10
	10/9/95	9
	11/9/95	8
	11/30/95	8
	12/31/95	7
	1/1/96	2	10
	1/2/96	6
	3/20/96	9
	5/1/96	9
	6/24/96	7
	7/1/96	2	9
	8/4/96	8
	9/2/96	9
	9/29/96	1	10
For The Period Ended	9/30/96			10QSB/A, NT 10-Q
	10/1/96	4
	11/9/96	8
	11/15/96	1	14
Filed On / Filed As Of	11/18/96
	11/9/97	8

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Filing Submission - Alternative Formats (Word / Rich Text, HTML, Plain Text, SGML, XML, et al.)

Red Hot Concepts Inc · 10QSB · For 9/30/96

Filed On 11/18/96 · SEC File 0-26838 · Accession Number 950159-96-232

Quarterly Report -- Small Business · Form 10-QSBFiling Table of Contents

10QSB · Quarterly Report -- Small BusinessDocument Table of Contents

Dates Referenced Herein and Documents Incorporated By Reference

Quarterly Report -- Small Business · Form 10-QSB
Filing Table of Contents

10QSB · Quarterly Report -- Small Business
Document Table of Contents