UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-KSB

[x]      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
         OF 1934

                   For the fiscal year ended December 31, 1999

[ ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934

              For the transition period from _________ to _________

                        Commission file number 001-13559
                                               ---------

                      Restaurant Teams International, Inc.
                 (Name of small business issuer in its charter)


        Texas                                            75-2337102
(State of other jurisdiction                (I.R.S. Employer Identification No.)
of incorporation or organization)

 911 N.W. Loop 281, Suite 111, Longview, Texas           75604
 (Address of principal executive offices)             (Zip Code)

                    Issuer's telephone number: (903) 295-6800

Securities registered under Section 12(b) of the Exchange Act:

     Title of each class               Name of each exchange on which registered

                                                       None

Securities registered under Section 12(g) of the Exchange Act:

                       Common Stock, par value $.01
                             (Title of class)


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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[ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of  Regulation  S-B is not  contained in this form,  and no  disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

The Issuer's revenues for the most recent fiscal year:  $2,438,338.14.

Part III, Items 9 through 12, of Form 10KSB will be incorporated by reference to
the Issuer's  definitive  proxy statement for its annual meeting of shareholders
to be held in May 1999.

The  aggregate  market  value of  common  stock  held by  non-affiliates  of the
registrant  based on the sale trade price of the common stock as reported on the
OTC-BB on April 3, 2000 was $6,179,933.25. For purposes of this computation, all
officers,  directors,  and 10% beneficial  owners of registrant are deemed to be
affiliates.  Such  determination  should  not be deemed an  admission  that such
officers,  directors or 10%  beneficial  owners are, in fact,  affiliates of the
registrant.  Number of shares  outstanding  of each of the  Issuer's  classes of
common stock, as of April 3, 2000:  10,441,168 shares of common stock, par value
$.01.

Transitional Small Business Disclosure Format:  Yes [  ]  No [X]


<PAGE>



                                     PART I

Item 1.  DESCRIPTION OF BUSINESS

History

         Restaurant  Teams  International,  Inc.  (the  "Company")  is  a  Texas
corporation.  The Company originally was incorporated as a Delaware  corporation
on May 9, 1990, under the name "Bosko's,  Inc. On November 9, 1992, the Bosko's,
Inc.  name was  changed to Fresh'n  Lite,  Inc.  and on  September  15, 1998 the
Company  changed its name to Restaurant  Teams  International,  Inc. in order to
more  properly  reflect  management's  desire  to  position  the  Company  as  a
multi-concept holding company.

         In October 1995, the Delaware  corporation merged into its wholly-owned
subsidiary,  FNL,  Inc.,  a Texas  corporation.  FNL,  Inc.  was  the  surviving
corporation in the merger. FNL, Inc. then changed its name to Fresh'n Lite, Inc.
The purpose of the merger was to convert the Delaware  corporation  into a Texas
corporation.

         On  February  9, 2000 the  Company  acquired  substantially  all of the
assets of Hartan,  Inc. and it's  subsidiaries  out of chapter 11 bankruptcy for
$300,000 in cash and a $125,000 indemnity  agreement.  The assets consisted of 8
Tanner's  restaurants in the Atlanta,  GA market. The company  subsequently sold
one of  the  units  to the  chains  founder,  Rick  Tanner,  under  a  licensing
agreement. The remaining seven stores are operated as company stores.

         On March 16, 2000 the Company acquired Regulatory Solutions, Inc. (RSI)
in an equity  transaction  for $100,000 in cash and stock valued at  $3,000,000.
RSI is a workplace safety and governmental  regulation compliance specialty firm
with expertise in the  restaurant,  manufacturing,  oil & gas, and  construction
industries.

Company Business - Restaurant Segment

         The Company  currently  operates seven full service  restaurants  and 3
licensed  restaurants in the Atlanta, GA market under the name Tanner's Original
Rotisserie  Grill dba  Tanner's  Corner  Grill and one  full-service  restaurant
located in the Texas city of The Colony under the name Street Talk Cafe

         The Company's  restaurants  offer a variety of food items,  including a
wide selection of sandwiches,  salads, pizzas,  steaks,  seafood, and other food
items and desserts.

         The  majority of the  Company's  food items are prepared to order using
fresh meats,  cheeses, and vegetables.  While the restaurants offer full-service
casual  dining,  the menus are  designed to permit quick food  preparation.  The
restaurants offer take-out service.

         The key  strategic  elements of the both the  Tanner's  and Street Talk
Cafe concepts are:

o    Providing  guests a broad menu with 50% of the "tie breakers" of each
     segment in good tasting  versions to enhance frequency;

o    Pricing  menu  offerings  at  levels  comparable  to  other  casual  dining
     restaurants while providing more wholesome and consistent selections;

o    Selecting,  training and motivating cast members to enhance customer dining
     experiences by delivering a level of service that is a product unto itself;

o    Reinforcing  perceived  value through  unique  concept  elements to provide
     guests with a superior "total dining"  experience in a fun and entertaining
     atmosphere.

Menu

         The menu  features  a wide  variety  of  entrees  including  rotisserie
chicken, ribs, sandwiches,  salads, pizzas, steaks,  seafood, and special dinner
items and desserts.  Alcoholic beverages are served as a complement to meals and
average approximately 4% of restaurant revenues.


                                       2



<PAGE>


         The  Company  targets  urban   white-collar   markets  and  focuses  on
increasing  customer value by providing more wholesome and consistent  offerings
than other  casual  dining  restaurants  at  comparable  prices in a relaxed and
entertaining atmosphere.

         The Company's  strategy is to continually  deliver broad menu appeal by
offering patrons  selections from all dining segments in good tasting  versions.
In  addition,  the  Company's  efforts to assure  the broad  appeal of its menu,
combined with its emphasis on affordability and food quality,  promotes frequent
return visits by restaurant guests.

         To  accomplish  these  objectives,  the  Company  identifies  the "tie"
breaking and "forerunner" products in each restaurant segment.  Management feels
these "best sellers" are the single most important reason guests select a casual
dining restaurant.

         Dinner  entrees  presently  range in price  from  $6.95 to  $10.95.  An
assortment of sandwiches, baked potatoes, salads, burgers, soups and pizza round
out the menu. Both concepts use the same menu for lunch and supper.

Competition

         The Company's  restaurants  operate in the casual dining segment of the
foodservice industry.  This segment is estimated to be $36 billion per year with
another  $10  billion   estimated  in  the  Bar  and  Grill   segment.   Brinker
International  operates more brands in the casual dining  segment than any other
company with a total of seven different concepts.

         Casual operators agree that continued  expansion of core concepts and a
more aggressive  pursuit of acquisitions are the two prevailing trends that will
characterize the casual-theme segment in the near term.

         Despite the  category's  maturation,  wide spread labor  shortages  and
competitive  saturation  in dozens of  suburban  markets,  leading  casual-theme
operators  are  confident  there  is  plenty  of room  for  domestic  expansion.
Operators  are  looking  to the fact that Baby  Boomers  are  growing  older and
wealthier as their Echo Boom offspring grow "hipper".

         Fragmentation  is happening in the casual  segment.  Casual Diners have
historically  tried to be all things to all people by carrying Tex-Mex,  steaks,
ribs, and a bar. Today,  if people want steak,  they will go to operators in the
steak house niche like Outback or Lone Star. If they want Mexican,  they will go
to El Chico or Rio Bravo.

Suppliers

         The  Company's  primary  supplier  of goods is  Alliant  Food  Service.
("Alliant").  The Company is current in its account  with  Alliant.  The Company
also has accounts with other  suppliers to ensure  product  availability  in the
event that Alliant is unable to meet the Company's needs in the future.

Company Business - Regulatory Safety Segment

RSI is a  business  to  business,  (B2B),  Professional  Services  Company.  The
company's founder, Mr. Johann Wasserman, has remained in his current position as
President & CEO of RSI. Mr. Wasserman,  who has been in the regulatory  business
for over 15 years, brings the contacts and networking of over 1000 clients in 47
states such as Sodexho  Marriott  (NYSE:SDH),  Delta Daily Foods,  and Pavestone
Corp. to the acquisition.

RSI  specializes  in State and Federal  laws that govern both the  employer  and
employee in the work place. The company provides proprietary "Worksafe" training
and  certification  programs  utilized as a major  outsource  for  regional  and
national businesses alike.


                                       3

<PAGE>


The  "Worksafe"  programs,  which are marketed on both a corporate and franchise
level, provide cutting edge safety and training designed to address the specific
needs of management as it relates to ongoing safety and health issues associated
with  their  industry.  RSI  is  expanding  through  marketing  a  well-designed
franchise program. RSI franchisees will develop regional territories and provide
customer  service  for the ongoing  needs of the  franchise  client  acting as a
direct liaison  between the  franchisor and the end user. The Worksafe  programs
address vital compliance  issues with specific industry related agencies such as
DOH, DOT, OSHA, and EPA. The Worksafe  products are designed to reduce potential
liabilities  and assist their clients in obtaining the lowest  possible  premium
associated with Workers Compensation Insurance.

PENDING ACQUISITION

         On March 13, 2000 the Company entered into revised definitive agreement
to acquire the Fatburger hamburger chain ("Fatburger").  The Company is to close
the  acquisition  by April  28,  2000.  Fatburger,  founded  in 1952,  currently
operates 13 company owned Fatburger  restaurants in the Los Angeles,  California
market and  franchisees  21  restaurants  in Southern  California and Las Vegas,
Nevada under the  Fatburger  brand.  The purchase  price of the  acquisition  is
$8,100,000 plus $125,000 in sellers  expenses or which  $1,750,000 has been paid
as of March 13, 2000.

         In April  2000,  the Company  entered into  a  joint venture  agreement
with JD Enterprises, L.L.C. ("JDE") to fund the remaining purchase price and pay
certain costs incurred by Fatburger's owner. Terms of the agreement call for (a)
the Company to secure $3,000,000 in Senior Debt financing for NEWCO, and (b) JDE
to pay $2,000,000 and secure Subordinate loan financing of $2,000,000.  Proceeds
of this funding in excess of that  required to close the  Fatburger  transaction
totaling  $525,000 will be retained for working capital  purposes.  Upon closing
the  Fatburger  transaction,  all of the acquired  assets of  Fatburger  will be
assigned to a newly-incorporated  holding company ("NEWCO") of which the Company
will own  thirty-three  percent  and JDE  sixty-seven  percent of the issued and
outstanding  common  stock.  The  Company  will then  enter  into a  Development
Agreement  with  NEWCO  granting  the  Company  exclusive  rights  to  franchise
Fatburger  restaurants  in Texas and  Georgia  and the first right of refusal on
South Carolina.

Terminated Acquisition

         In October 1998 the Registrant  signed an asset  Purchase  Agreement to
acquire  all of the  properties  and  assets  comprising  the Old San  Francisco
Restaurant chain ("OSF").  The OSF acquisition was for all cash at closing,  and
Registrant  was  unable  to obtain  financing  for the  purchase  price on terms
acceptable  to it.  Registrant  therefore  declined to pursue its  agreement  to
purchase OSF, and the agreement was  terminated  without  penalty on February 1,
1999.  Registrant  instead  concentrated its efforts on pursuit of the Fatburger
transaction.

Employees

         Registrant  employed  458  persons  as of April 1, 2000,  including  20
executive  and office  personnel  and 438  restaurant  operational  managers and
staff.






                                       4

<PAGE>

<TABLE>

<CAPTION>


Item 2: DESCRIPTION OF PROPERTY

Restaurant Locations

         The following  table provides  information  with respect to each of the
Company's properties. The Texarkana,  Dallas, Irving, The Colony, and Richardson
buildings are owned,  with a lease on the land.  The Longview  facility is owned
and all seven Georgia facilities are leased.



         Location                                              Square Feet        Lease Expiration Date
<S>      <C>                                                    <C>                 <C>


         Dallas, Texas........................................  4,500 sq. ft.       January  21, 2015

         Richardson, Texas ...................................  4,700 sq. ft.       August 15, 2017

         Texarkana, Texas.....................................  3,600 sq. ft.       April 30, 2014

         Vinings, Georgia.....................................  3,266 sq. ft.       June 30, 2003

             Fayetteville, Georgia............................  5,000 sq. ft.       July 31, 2000
             Tucker, Georgia..................................  3,600 sq. ft.       May 31, 2002
             Lawrenceville, Georgia...........................  3,500 sq. ft.       January 31, 2002
             Emory, Georgia...................................  4,000 sq. ft.       September 30, 2000
             Fountain Oaks, Georgia...........................  3,335 sq. ft.       January 31, 2010
             Towne Lake, Georgia..............................  5,500 sq. ft.       April 30, 2009
             Longview, Texas..................................  33,000 sq.ft.       Owned


</TABLE>

         The Company no longer operates  restaurants in the Dallas,  Richardson,
and Irving  locations,  which are leased to other operators nor in the Texarkana
location which is classified as assets held for sale..

Item 3. LEGAL PROCEEDINGS

         Oxford Commercial  Funding,  L.L.C. vs Restaurant Teams  International,
Inc. Civil Action No. 99 C 8200  consolidated No. 00 C 1048 in the U.S. District
Court,  Northern  District of Illinois,  Eastern  Division.  This is a suit on a
promissory  note under which Oxford claims the sum of  $444,102.05  in principal
and accrued interest is due and owing. RTIN filed its answer to the complaint on
April 4, 2000. No discovery has been conducted to date. The Company's management
is in intensive  negotiations for settlement of the lawsuit.  If the parties are
unable to reach an agreement, management intends to assert counterclaims against
the Plaintiff.  At this stage of the  litigation,  there is no way to provide an
evaluation  of the  likelihood of an  unfavorable  outcome or an estimate of the
amount or range of potential loss.


Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None











                                       5

<PAGE>


                                     PART II

Item 5:  MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

         The  Company's  Common Stock began  trading on the OTC  Bulletin  Board
under the  symbol  FLTT on May 9,  1997.  Such  symbol  was  changed  to RTIN in
September  1998. The following  table sets forth for the quarters  indicated the
high  and low bid  prices  of the  Company's  Common  Stock as  reported  by the
National Quotation Bureau, Inc. The prices reflect inter-dealer prices,  without
retail  mark-up,   mark-down  or  commissions  and  may  not  represent   actual
transactions.


                                 1999                          High         Low


         First Quarter.....................................   $  3.19     $ 1.50

         Second Quarter ...................................      4.46       1.65

         Third Quarter.....................................      4.00       1.87

         Fourth Quarter....................................      5.00       1.37




                                 1998                          High         Low


         First Quarter.....................................   $  3.00     $ 1.64

         Second Quarter ...................................      4.46       1.65

         Third Quarter.....................................      4.00       1.87

         Fourth Quarter....................................      5.00       1.37


         As of  December  31,  1999,  the  Company  estimates  that  there  were
approximately  1000  beneficial  owners  of  the  Company's  Common  Stock,  and
approximately  250  holders of record.  The  Company  declared a dividend on its
Common Stock on March 22, 2000. The dividend consisted of 1 share of Ness Energy
International,  Inc.  ("NESS") to be  distributed to for every 20 shares of RTIN
held as of the record date, which was March 31, 2000.

Item 6:  MANAGEMENT'S DISCUSSION AND ANALYSIS ON PLAN OF OPERATION

Forward-Looking Statements

         This Annual Report on Form 10-KSB includes  forward-looking  statements
within the meaning of Section 27A of The Securities Act of 1933, as amended (the
Securities  Act),  and Section 21E of the  Securities  Exchange Act of 1934,  as
amended  (the   Exchange   Act),   which  can  be   identified  by  the  use  of
forward-looking  terminology such as may, believe,  expect, intend,  anticipate,
estimate or  continue or the  negative  thereof or other  variations  thereon or
comparable terminology.  All statements other than statements of historical fact
included in this Form  10-KSB,  are  forward-looking  statements.  Although  the
Company  believes  that  the  expectations  reflected  in  such  forward-looking
statements  are  reasonable,  it can give no  assurance  that  such  statements,
including  certain risks and  uncertainties  that could cause actual  results to
differ materially from the Company's  expectations  (Cautionary  Statements) are
disclosed in this Form 10-KSB. Important factors that could cause actual results
to  differ  materially  from  those  in the  forward-looking  statements  herein
include,  but are not  limited  to,  the  newness of the  Company,  the need for
additional  capital and additional  financing,  the Company's limited restaurant
base, lack of geographic diversification, the risks associated with expansion, a
lack  of   marketing   experience   and   activities,   risks  of   franchising,
seasonability,  the  choice  of site  locations,  development  and  construction
delays, need for additional personnel, increases in operating and food costs and
availability  of  supplies,   significant   industry   competition,   government
regulation,  insurance  claims and the ability of the Company to meet its stated
business  goals.  All  subsequent  written and oral  forward-looking  statements
attributable  to the  Company  or persons  acting on its  behalf  are  expressly
qualified in their entirety by the Cautionary Statements.

         The following  discussion  of the results of  operations  and financial
condition  should be read  together with the  Financial  Statements  and related
Notes thereto included herein.





                                       6

<PAGE>


Overview

The Company was  organized  in May 1990 as Bosko's,  Inc.  under the laws of the
State of  Delaware.  In November  1992 the  Company  changed its name to Fresh'n
Lite,  Inc.,  and in November 1995 the Company  merged into a Texas  corporation
also  bearing the name  Fresh'n  Lite,  Inc. On  September  15, 1998 the Company
changed its name to  Restaurant  Teams  International,  Inc. to more  accurately
reflect the  direction  management  is taking with  respect to  positioning  the
Company as a  multi-concept  holding  company.  The Company  currently  owns and
operates  seven  Tanner's  Corner  Grills in  Atlanta,  GA, one Street Talk Cafe
restaurant in The Colony, Texas, and Regulatory  Solutions,  Inc. of Richardson,
Texas.  Additionally,  the Company owns three other restaurant facilities in the
Texas  cities  of  Dallas,  Irving,  and  Richardson,  which is  leases to other
operators and one restaurant facility in Texarkana, Texas which is currently for
sale.

Results of Operations

Comparison of Year Ended December 31, 1998 and December 31, 1999.

         Revenues.  Operating  revenues for fiscal year ended  December 31, 1998
were $3,747,013, with an operating loss of $89,126.

         Operating  revenues  for  fiscal  year  ended  December  31,  1999 were
$2,438,537,  a 34.2% decrease from 1998, with an operating loss of $694,792. The
34.2%  decrease  in  revenues  over 1999 is  attributed  to the  closing  of the
Company's  restaurant  facilities  with  the  exception  of  The  Colony,  Texas
facility.

         Costs and  Expenses.  Costs and  expenses  for the  fiscal  year  ended
December 31, 1999  decreased by $702,810 or 18.3% to  $3,133,329  as compared to
$3,836,139  for the  corresponding  period ended  December  31,  1998.  This was
primarily due to reduction in debenture  related  expenses and the resolution of
the litigation.  General and  Administrative  Costs in 1999 increased by 7.0% to
$1,019,247  as compared to $947,551 in 1998.  This increase was primarily due to
the  development  of  infrastructure  in  anticipation  of the future growth and
acquisitions.  Additionally the Company  realized  increased  professional  fees
associated  with the proposed  acquisition of the Fatburger and Tanner's  chains
and Regulatory Solutions,  Inc. (also see "PENDING ACQUISITIONS) and acquisition
costs  which  were  expensed  in 1999.  Interest  expense in 1999  decreased  by
$753,987 to $806,712 from  $1,560,699 in 1998. This was primarily a result of an
$895,000  reduction in amortization of discount and issuance costs on debentures
and beneficial conversion features on common stock.

         Net Loss. The Company had a net loss for the fiscal year ended December
31, 1999 of $2,245,204  compared to net loss of $1,320,303 for fiscal year ended
December 31, 1998, representing <$.30> and <$.21> per share,  respectively.  The
net loss in 1998 was primarily due to the costs  associated with the issuance of
the  debentures in May and June of 1998.  The net loss in 1999 was primarily due
to the closing of the Company's Street Talk Cafe operations and the loss on sale
of assets associated with the sale of the Company's Addison restaurant.

Comparison of Year Ended December 31, 1997 and December 31, 1998.

         Revenues.  Operating  revenues for fiscal year ended  December 31, 1997
were $3,106,144, with an operating income of $179,020.

         Operating  revenues  for  fiscal  year  ended  December  31,  1998 were
$3,705,013,  a 19.3% increase from 1997, with an operating loss of $89,126.  The
19.3%  increase  in  revenues  over 1997 is  attributed  to the  opening  of the
Richardson Texas facility and the remodel of The Colony, Texas facility.

         Costs and  Expenses.  Costs and  expenses  for the  fiscal  year  ended
December 31, 1998  increased by $867,015 or 22.9% to  $3,794,139  as compared to
$2,927,124  for the  corresponding  period ended  December  31,  1997.  This was
primarily due to opening of higher volume restaurants in the Dallas market area.
General  and  Administrative  Costs in 1998  increased  by 318% to  $905,079  as
compared to $284,304 in 1997. This increase was primarily due to the development
of  infrastructure  in  anticipation  of the  future  growth  and  acquisitions.
Additionally the Company realized  increased  professional  fees associated with
the proposed  acquisition  of the OSF chain,  (see  "PENDING  ACQUISITIONS)  and
acquisition  costs  which  were  expensed  in  1998.  Interest  expense  in 1998
increased by  $1,561,238 to  $1,560,699  over a gain of $539 in 1997,  which was
attributed to the  reclassification of capitalized leases into operating leases.
The  increase  in  interest  expense  is almost  exclusively  attributed  to the
issuance by the company of the A & B convertible  debentures  dated May 29, 1998
and June 30, 1998 respectively.


                                       7

<PAGE>


         Net  Income.  The  Company  had a net loss for the  fiscal  year  ended
December  31, 1998 of  $1,320,303  compared to net income of $119,386 for fiscal
year  ended  December  31,  1997,   representing  <$.21>  and  $.02  per  share,
respectively.  The net loss in 1998 was  primarily  due to the costs  associated
with the issuance of the debentures in May and June of 1998.

Liquidity and Capital Resources

         Historically,  the Company has required  capital to fund the operations
and capital expenditure requirements of its Company-owned restaurants.

         The Company is  currently  operating  out of cash flow from  operations
following  its  acquisition  of  Tanner's  and RSI in early  2000.  The  Company
completed  two private  placements  of A Debentures  and B Debentures on May 29,
1998 and June 29, 1998,  respectively,  providing net proceeds to the Company of
$2,670,000.  The proceeds were used to fund the Company's  expansion strategy of
opening additional Street Talk Cafe restaurants in the Dallas market area.

         The Company met fiscal 1999 capital requirements with cash generated by
operations,  the proceeds  from the  debenture  offering and  borrowing on notes
payable. In fiscal 1999 the Company's  operations used approximately  $(542,229)
in cash,  as compared to $21,766  generated in 1998.  The  Company's  restaurant
operations  are  labor  intensive  and do not have  significant  receivables  or
inventory.  The Company  receives  trade credit based upon  negotiated  terms in
purchasing  food and supplies and  ordinarily  operates with a relatively  small
level of working capital.

         The  Company's  principal  capital  requirements  are  the  funding  of
acquisitions. During fiscal 1999, the Company began the acquisition of Fatburger
corporation.  The  total  capital  outlay  for the year was  $1,731,907  for the
Fatburger acquisition.












                                       8

<PAGE>


Item 7.  FINANCIAL STATEMENTS

                         RESTAURANT TEAMS INTERNATIONAL

                            FINANCIAL STATEMENTS AND
                          INDEPENDENT AUDITOR'S REPORT

                           DECEMBER 31, 1999 AND 1998









                                       9

<PAGE>
                      RESTAURANT TEAMS INTERNATIONAL, INC.


                          INDEX TO FINANCIAL STATEMENTS


Independent Auditor's Report - 1999.........................................F-1

Independent Auditor's Report - 1998.........................................F-2

Financial Statements

      Balance Sheet.........................................................F-3
      Statements of Operations..............................................F-4
      Statements of Stockholders' Equity....................................F-5
      Statements of Cash Flows..............................................F-6

Notes to Financial Statements...............................................F-8





<PAGE>

                          INDEPENDENT AUDITOR'S REPORT


Board of Directors and Stockholders
Restaurant Teams International, Inc.
Longview, Texas


We  have  audited  the   accompanying   balance   sheet  of   Restaurant   Teams
International,  Inc. as of December  31,  1999,  and the related  statements  of
operations,  stockholders'  equity and cash flows for the year then ended. These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Restaurant Teams International,
Inc. as of December 31,  1999,  and the results of its  operations  and its cash
flows for the year then ended in conformity with generally  accepted  accounting
principles.




HEIN + ASSOCIATES LLP

Dallas, Texas
April 7, 2000



                                       F-1

<PAGE>



                                       F-2

<PAGE>

<TABLE>

<CAPTION>

                      RESTAURANT TEAMS INTERNATIONAL, INC.

                                  BALANCE SHEET

                                DECEMBER 31, 1999



                                     ASSETS
                                     ------
<S>                                                                              <C>
CURRENT ASSETS:
   Cash                                                                          $     2,521
   Inventories                                                                        13,690
   Prepaid expenses                                                                   18,657
   Federal income tax receivable                                                      38,030
                                                                                 -----------
          Total current assets                                                        72,898

PROPERTY AND EQUIPMENT, at cost:
   Buildings                                                                       3,129,304
   Furniture, fixtures and restaurant equipment                                      943,959
   Vehicles                                                                           29,950
                                                                                 -----------
                                                                                   4,103,213
   Accumulated depreciation                                                         (495,099)
                                                                                 -----------
          Net property and equipment                                               3,608,114

OTHER ASSETS:
   Assets held for sale, net of $105,700 reserve for impairment                    1,844,586
   Acquisition costs of Fatburger (pending)                                        3,861,632
   Debenture issuance costs, net                                                      62,150
                                                                                 -----------
                  Total assets                                                   $ 9,449,380
                                                                                 ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

CURRENT LIABILITIES:
   Accounts payable                                                              $    76,324
   Accrued expenses and other liabilities                                            430,997
   Income taxes payable                                                               10,000
   Current installments of long-term debt                                            719,380
                                                                                 -----------
          Total current liabilities                                                1,236,701

LONG-TERM DEBT, net of current installments                                        1,328,276
DEFERRED LIABILITIES                                                                  24,819

CONVERTIBLE DEBENTURES, less unamortized discount of $97,154                       2,227,846

COMMITMENTS AND CONTINGENCIES (Notes 8 and 10)

STOCKHOLDERS' EQUITY:
   Preferred stock, $.01 par value, 10,000,000 shares authorized;
      no shares issued                                                                  --
   Series A - Preferred stock, $.10 par value, 25,000 shares authorized;
      no shares issued                                                                  --
   Common stock, $.01 par value, 50,000,000 shares authorized;
      14,941,506 shares issued (including 5,000,000 held in escrow)
      and 14,661,066 shares outstanding                                              149,416
   Additional paid-in capital                                                      8,921,335
   Accumulated deficit                                                            (3,311,120)
   Treasury stock, 280,440 shares at cost                                           (761,150)
   Notes receivable from related parties                                            (366,743)
                                                                                 -----------
          Total stockholders' equity                                               4,631,738
                                                                                 -----------
                  Total liabilities and stockholders' equity                     $ 9,449,380
                                                                                 ===========

</TABLE>

             See accompanying notes to these financial statements.

                                      F-3

<PAGE>

                      RESTAURANT TEAMS INTERNATIONAL, INC.

                            STATEMENTS OF OPERATIONS


                                                   YEAR ENDED DECEMBER 31,
                                                     1999           1998
                                                 -----------    -----------
REVENUES:
   Restaurant sales                              $ 2,323,537    $ 3,705,013
   Rental income                                     115,000         42,000
                                                 -----------    -----------
          Total revenues                           2,438,537      3,747,013

OPERATING COSTS AND EXPENSES:
   Cost of sales                                     674,209        968,382
   Restaurant labor and benefits                     612,605        971,727
   Other restaurant operating expenses               388,191        690,527
   General and administrative expenses             1,019,247        947,079
   Depreciation and amortization                     298,139        258,424
   Write-down and impairment of assets               140,938           --
                                                 -----------    -----------
          Total operating costs and expenses       3,133,329      3,836,139
                                                 -----------    -----------

          Loss from operations                      (694,792)       (89,126)

NON-OPERATING INCOME (EXPENSE):
   Interest expense                                 (806,712)    (1,560,699)
   (Loss) gain on sales of assets                   (502,202)       208,282
   Acquisition costs                                (288,288)          --
                                                 -----------    -----------
          Total non-operating income (expense)    (1,597,202)    (1,352,417)
                                                 -----------    -----------

          Loss before income taxes                (2,291,994)    (1,441,543)

INCOME TAX BENEFIT                                    46,790        121,240
                                                 -----------    -----------

NET LOSS                                          (2,245,204)   $(1,320,303)
                                                 ===========    ===========

NET LOSS PER COMMON SHARE, basic and diluted     $      (.30)   $      (.21)
                                                 ===========    ===========

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING,
   basic and diluted                               7,470,418      6,218,749
                                                 ===========    ===========



              See accompanying notes to these financial statements.


                                       F-4

<PAGE>

<TABLE>

<CAPTION>

                      RESTAURANT TEAMS INTERNATIONAL, INC.

                       STATEMENTS OF STOCKHOLDERS' EQUITY

                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998




                                                        Common Stock          Additional      Retained
                                                 -------------------------     Paid-In        Earnings       Treasury
                                                    Shares        Amount       Capital       (Deficit)        Stock
                                                 -----------   -----------   -----------    -----------    -----------
<S>                                              <C>           <C>           <C>            <C>            <C>
BALANCE, January 1, 1998                           6,158,482   $    61,585   $ 3,278,499    $   254,387    $    (1,250)
Sale of common stock                                 221,458         2,215       260,347           --             --
Issuance of common stock for compensation             45,000           450        95,175           --             --
Value assigned to beneficial conversion rights
    and warrants                                        --            --       1,400,000           --             --
Stock issued upon conversions of debentures          408,388         4,084       684,231           --             --
Treasury stock purchased                                --            --            --             --         (809,900)
Issuance of treasury stock for property and
   equipment                                            --            --            --             --           50,000
Net loss                                                --            --            --       (1,320,303)          --
                                                 -----------   -----------   -----------    -----------    -----------

BALANCE, December 31, 1998                         6,833,328        68,334     5,718,252     (1,065,916)      (761,150)
Sales of common stock, including $80,000
   for services                                      435,678         4,357       256,078           --             --
Issuances of common stock to consultants             933,000         9,330     2,120,395           --             --
Common stock placed into escrow for
    possible future conversion by debenture
     holders                                       5,000,000        50,000       (50,000)          --             --
Value assigned agreement to issue stock for
   settlement of debenture litigation                   --            --         116,250           --             --
Common stock issued to officers in connection
  with extinguishment of convertible debt          1,739,500        17,395       760,360           --             --
Notes receivable from related parties                   --            --            --             --             --
Net loss                                                --            --            --       (2,245,204)          --
                                                 -----------   -----------   -----------    -----------    -----------
BALANCE at December 31, 1999                      14,941,506   $   149,416   $ 8,921,335    $(3,311,120)   $  (761,150)
                                                 ===========   ===========   ===========    ===========    ===========


                                                       Notes
                                                     Receivable       Total
                                                       from        Stockholders'
                                                  Related Parties     Equity
                                                    -----------    -----------

BALANCE, January 1, 1998                            $      --      $ 3,593,221
Sale of common stock                                       --          262,562
Issuance of common stock for compensation                  --           95,625
Value assigned to beneficial conversion rights
    and warrants                                           --        1,400,000
Stock issued upon conversions of debentures                --          688,315
Treasury stock purchased                                   --         (809,900)
Issuance of treasury stock for property and
   equipment                                               --           50,000
Net loss                                                   --       (1,320,303)
                                                    -----------    -----------

BALANCE, December 31, 1998                                 --        3,959,520
Sales of common stock, including $80,000
   for services                                            --          260,435
Issuances of common stock to consultants                   --        2,129,725
Common stock placed into escrow for
    possible future conversion by debenture
     holders                                               --             --
Value assigned agreement to issue stock for
   settlement of debenture litigation                      --          116,250
Common stock issued to officers in connection
  with extinguishment of convertible debt                  --          777,755
Notes receivable from related parties                  (366,743)      (366,743)
Net loss                                                   --       (2,245,204)
                                                    -----------    -----------
BALANCE at December 31, 1999                        $  (366,743)   $ 4,631,738
                                                    ===========    ===========

</TABLE>

              See accompanying notes to these financial statements.

                                       F-5
<PAGE>

<TABLE>

                      RESTAURANT TEAMS INTERNATIONAL, INC.

                            STATEMENTS OF CASH FLOWS


                                                                                      YEAR ENDED DECEMBER 31,
                                                                                        1999           1998
                                                                                    -----------    -----------
<S>                                                                                 <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                                          $(2,245,204)   $(1,320,303)
  Adjustments to reconcile net loss to net cash provided by operating activities:
   Depreciation and amortization                                                        298,139        258,424
   Amortization of discount and issuance costs on convertible debentures                257,796      1,312,900
   Loss (gain) on sales of assets                                                       502,202       (208,282)
   Benefit for deferred income taxes                                                    (46,790)       (74,410)
   Stock for services                                                                    80,000           --
   Write-down and impairment of assets                                                  140,938           --
   Beneficial conversion feature in issuance of common stock                            255,906         95,625
   Value assigned to settlement of debenture litigation                                 116,250           --
   Changes in operating assets and liabilities:
           Decrease (increase) in inventories                                            29,345        (16,464)
           (Increase) in prepaid expenses                                               (11,242)        (7,415)
           Decrease (increase) in other assets                                           18,288        (23,188)
           (Increase) in federal income tax receivable                                     --          (38,030)
           (Decrease) in accounts payable                                               (13,511)       (11,133)
           Increase (decrease) in accrued expenses and other liabilities                113,976        (10,299)
           (Decrease) increase in deferred liabilities                                  (38,322)        63,141
           Increase in income taxes payable                                                --            1,200
                                                                                    -----------    -----------
                       Net cash (used in) provided by operating activities             (542,229)        21,766

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property and equipment                                                 (268,934)    (1,503,299)
   Proceeds from sales of property and equipment                                        156,229      1,450,000
   Decrease (increase) in notes receivable from related parties, net                    220,500       (922,700)
   Payments in connection with acquisition of Fatburger (pending)                    (1,731,907)          --
                                                                                    -----------    -----------
                       Net cash used in investing activities                         (1,624,112)      (975,999)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from issuance of long-term debt                                             508,784      1,946,050
   Principal payments on long-term debt                                                (648,451)    (1,356,928)
   Proceeds from issuance of notes due related parties                                  521,850           --
   Proceeds from issuance of convertible debentures                                        --        1,600,000
   Issuance costs of convertible debentures                                                --         (330,000)
   Proceeds from sales of common stock                                                  180,434        262,562
   Payments to purchase treasury stock                                                     --         (809,900)
   Proceeds from issuance of warrants and beneficial conversion                            --        1,400,000
   Principal payments on capital leases                                                    --         (171,679)
                                                                                    -----------    -----------
                       Net cash provided by financing activities                        562,617      2,540,105
                                                                                    -----------    -----------
NET (DECREASE) INCREASE IN CASH                                                      (1,603,724)     1,585,872

CASH, beginning of year                                                               1,606,245         20,373
                                                                                    -----------    -----------
CASH, end of year                                                                   $     2,521    $ 1,606,245
                                                                                    ===========    ===========
SUPPLEMENTAL CASH FLOW INFORMATION:
   Interest paid                                                                    $   194,140    $   112,573
                                                                                    ===========    ===========
   Income taxes paid                                                                       --             --
                                                                                    ===========    ===========

NON-CASH INVESTING AND FINANCING TRANSACTIONS:
   Property and equipment acquired in connection with default of related party
       note receivable                                                              $   306,498    $      --
   Debentures plus accrued interest converted to common stock                              --          688,315
   Common stock issued to consultants in connection with Fatburger
        acquisition (pending)                                                         2,129,725           --
   Long-term debt issued for property and equipment                                      21,500           --
   Treasury stock issued for property and equipment                                        --           50,000


</TABLE>

                    See accompanying notes to these financial statements.


                                       F-6

<PAGE>

                      RESTAURANT TEAMS INTERNATIONAL, INC.

                          NOTES TO FINANCIAL STATEMENTS



1.       ORGANIZATION AND DESCRIPTION OF BUSINESS


     Restaurant  Teams  International,  Inc.  ("the  Company"),  has  owned  and
     operated full-service  restaurants principally located in the Dallas, Texas
     metropolitan  area.  Currently,  the Company owns one restaurant,  which it
     operates  under the name  "Street  Talk  Cafe",  and owns three  restaurant
     facilities  which it leases to other  operators.  The  Company  desires  to
     become a multi-concept  restaurant  holding company.  In February 2000, the
     Company acquired restaurant  operations in Georgia, and is currently in the
     process of acquiring  additional  restaurant  operations in California (see
     Note 12).

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Financial Instruments

     The Company's  financial  instruments at December 31, 1999, other than cash
     and  accounts  payable,  include  notes  receivable,   long-term  debt  and
     convertible  debentures.  Management  believes the fair values of the notes
     receivable and long-term debt  approximate  their carrying  values based on
     the present  value of expected  future  cash flows  discounted  at interest
     rates   commensurate  to  rates   currently   offered  in  connection  with
     instruments  of  similar  terms  and  maturities.  Due to the  terms of the
     convertible  debentures  discussed  in  Note  5,  the  fair  value  of  the
     convertible debentures has not been determined.

     Inventories

     Inventories  consist  of  food  and  beverage  items  and  paper  supplies.
     Inventories are stated at the lower of cost (first-in, first-out method) or
     market.

     Property and Equipment

     Property and equipment are depreciated  using  accelerated or straight-line
     methods.  Buildings are  depreciated  over 20 years,  the estimated  useful
     lives of the assets.  Furniture  and  equipment  are  depreciated  over the
     estimated  useful lives of the assets,  which range from five to ten years.
     Leasehold  improvements  are amortized over the lesser of the lease term or
     estimated useful life of the improvements,  which range from ten to fifteen
     years.

     Certain  construction  overhead  costs  are  capitalized  and  included  in
     buildings. Major improvements, which significantly extend the useful lives,
     are  capitalized  and  depreciated  over the  remaining  useful life of the
     underlying  asset.  Maintenance  and repair costs are expensed as incurred.
     The cost of  properties  sold,  or  otherwise  disposed of, and the related
     accumulated depreciation or amortization are removed from the accounts, and
     any gains or losses are reflected in current operations.






                                      F-7

<PAGE>


                      RESTAURANT TEAMS INTERNATIONAL, INC.

                          NOTES TO FINANCIAL STATEMENTS


     Accounting for Long-Lived Assets

     The  Company   evaluates   long-lived   assets  and  certain   identifiable
     intangibles  to be held and used in the  business for  impairment  whenever
     events and changes in circumstances indicate that the carrying amount of an
     asset  may be  impaired.  In  these  circumstances,  the  estimated  future
     undiscounted  cash flows  associated  with the asset are compared  with the
     asset's  carrying  value to determine  if a  write-down  to market value or
     discounted cash flow is required.

     Assets Held for Sale

     The Company has classified  certain assets as "Assets Held for Sale", which
     are recorded at the lower of cost or estimated market value.  Buildings and
     restaurant equipment totaling $1,844,586, net of an impairment allowance of
     $105,700,  are being held for sale as of December 31, 1999.  Management  is
     not presently able to determine an expected  disposal date, but is actively
     pursuing sale of the assets.  Depreciation on the  reclassified  assets was
     ceased at the point that  management  committed to a plan to dispose of the
     assets.

     Debenture Issuance Costs

     Debenture  issuance  costs,  which are being  amortized using a method that
     approximates the effective interest method over the life of the Convertible
     Debentures,  adjusted for  conversions,  are included in the balance sheet.
     The Company  incurred  approximately  $330,000 in debenture  issuance costs
     related to the  Convertible  Debentures  in 1998 (see Note 5).  Accumulated
     amortization  of debenture  issuance  costs was  approximately  $268,000 at
     December 31, 1999.

     Revenue Recognition

     Sales and related  costs are  recognized  by the  Company  upon the sale of
     products at restaurant locations.

     Advertising Costs

     All  advertising  and  promotional  costs are expensed when  incurred.  The
     Company  incurred  approximately  $11,000  and  $97,000  in  marketing  and
     advertising expenses in 1999 and 1998, respectively.

     Income Taxes

     The Company  accounts for income taxes using the  liability  method.  Under
     this method,  deferred tax assets and liabilities  are determined  based on
     differences  between the financial  reporting basis and tax basis of assets
     and  liabilities,  and are  measured  using the  enacted tax rates and laws
     which will be in effect when the differences are expected to reverse.

     Per Share Data

     Basic  earnings  (loss) per share (EPS) is  computed by dividing  income or
     loss  available to common  stockholders  by the weighted  average number of
     common shares outstanding. Diluted EPS includes potentially dilutive common
     shares outstanding during the period. Potentially dilutive common shares in
     connection with stock options, warrants and shares issuable upon conversion
     of  the  Convertible  Debentures  totaling   approximately   8,056,000  and
     2,274,000 shares for 1999 and 1998, respectively, were not included as they
     are anti-dilutive.


                                       F-8

<PAGE>


                      RESTAURANT TEAMS INTERNATIONAL, INC.

                          NOTES TO FINANCIAL STATEMENTS


     Stock-Based Compensation

     The Company  measures  stock-based  employee  compensation  costs using the
     intrinsic value method  prescribed by Accounting  Principles  Board Opinion
     No.  25,   "Accounting   for   Stock-Based   Compensation",   and   related
     interpretations.  Accordingly,  compensation  cost for stock  options,  and
     other  stock-based  employee awards,  is measured as the excess, if any, of
     the quoted market price of the Company's  common stock at the date of grant
     over the amount the  employee  must pay to acquire the stock.  Required pro
     forma disclosures of compensation  expense  determined under the fair value
     method of Statement of Financial  Accounting  Standards  No. 123 ("SFAS No.
     123"), "Accounting for Stock-Based Compensation" are presented in Note 9.

     Liquidity

     The Company has  experienced  recurring  losses from operations in 1999 and
     1998 and has a working  capital deficit of $1,163,803 at December 31, 1999.
     Of this  amount,  $371,000  may be  repaid  in  Company  stock  or has been
     deferred and $400,000 is in dispute.  During 1999,  management  implemented
     cost-saving  measures which resulted in the closure and subsequent  leasing
     of certain  Company  restaurants  to other  operators.  Management has also
     implemented  an  aggressive  acquisition  and expansion  program  involving
     strategic purchases of existing restaurant operations and other businesses.
     The Company  acquired a restaurant  chain and another business in the first
     quarter of 2000,  which  management  believes will provide combined monthly
     cash flow during 2000 of  approximately  $230,000.  Management  believes it
     will  close the  acquisition  of  another  restaurant  chain in the  second
     quarter  of fiscal  2000.  (See Note  12.)  Based on these  considerations,
     management  believes  the  Company  will be able  to meet  its  obligations
     through fiscal 2000 and continue as a going concern.

     Use of Estimates

     In preparing  financial  statements in conformity  with generally  accepted
     accounting  principles,  management  is  required  to  make  estimates  and
     assumptions that affect the amounts reported in these financial  statements
     and  accompanying  notes.  Certain  significant  estimates  related  to the
     estimated  values of assets  held for sale are  included  in the  financial
     statements.  Actual  results  could  differ from these  estimates  and such
     differences could be material.

     Reclassifications

     Certain  reclassifications  have been made to  conform  the 1998  financial
     statements to the presentation in 1999. The reclassifications had no effect
     on net loss.


                                       F-9

<PAGE>


3.       ACCRUED EXPENSES AND  OTHER LIABILITIES

         Accrued expenses and other  liabilities at December 31, 1999 consist of
         the following:


        Accrued interest payable (a)                                  $  220,781
        Unpaid professional fees (b)                                     150,000
        Property taxes payable                                            38,962
        Accrued payroll and related taxes                                 12,800
        Sales taxes payable                                                8,454
                                                                      ----------
                                                                      $  430,997
                                                                      ==========

         (a)  Approximately  $215,000  of the  accrued  interest  may be paid in
         common stock at the Company's option.

         (b) In the first quarter of 2000,  the accrued  professional  fees were
         converted to 100,000  shares of Company  common  stock;  a $75,000 note
         payable, due in ten monthly installments at 8% following closing of the
         Fatburger acquisition (Note 12); and warrants to purchase 50,000 shares
         of the Company's common stock at $1.00 per share.

4.       LONG-TERM DEBT

         Long-term debt at December 31, 1999 consists of the following:


<PAGE>

<TABLE>

<CAPTION>

                      RESTAURANT TEAMS INTERNATIONAL, INC.

                          NOTES TO FINANCIAL STATEMENTS


        Note payable to financial institution, interest at 21%, remaining unpaid
        principal and accrued  interest past due as of August 26, 1999 (see Note
        10), collateralized by certain shares of Company common stock.
<S>                                                                                         <C>
                                                                                            $  400,000





        Two notes  payable to bank,  interest  at 9.5%,  monthly  principal  and
        interest payments totaling $14,620, remaining unpaid principal and
        interest due April 9, 2001, collateralized by certain real property.                 1,366,421


        Note payable to bank,  interest at 9.0%,  monthly principal and interest
        payments of $2,935,  remaining  unpaid principal and interest due August
        13, 2000, collateralized by certain real property.                                     251,770



        Note payable to insurance  company,  interest at 10.43%,  monthly payments
        of $1,605, due April 28, 2000, unsecured.                                                8,745

        Note  payable,  interest  at  11.65%,  monthly  principal  and  interest
        payments of $425,  remaining  unpaid  principal and accrued interest due
        April 9, 2001, collateralized by an automobile.                                         20,680
                                                                                      ----------------
        Total long-term debt                                                                 2,047,616


                                      F-10

<PAGE>


                      RESTAURANT TEAMS INTERNATIONAL, INC.

                          NOTES TO FINANCIAL STATEMENTS





          Less current installments                                                           (719,380)
                                                                                           -----------
          Long-term debt, excluding current installments                                   $ 1,328,236
                                                                                           ===========

</TABLE>

         Aggregate maturities of long-term debt obligations at December 31, 1999
are as follows:


                    Year ending December 31:

                    2000                                  $  719,380
                    2001                                   1,328,236
                                                          ----------
                                                          $2,047,616
                                                          ==========

5.       CONVERTIBLE DEBENTURES

     On May 29,  1998,  the  Company  entered  into an  agreement  to issue  two
     tranches  of  convertible  debentures  ("the  Convertible  Debentures")  to
     accredited  investors with a total face amount of  $3,000,000.  The Company
     received  net proceeds of  $2,670,000  after  paying  certain  costs of the
     purchasers.  The  Convertible  Debentures  bear  interest  at 6%,  and  are
     convertible  into shares of common stock of the Company.  The first tranche
     ($825,000  at  December  31,  1999)  matures on May 29, 2001 and the second
     tranche  ($1,500,000  at  December  31,  1999)  matures  on June 30,  2001.
     Conversion is at the option of the  investors,  and the number of shares of
     common stock to be received upon conversion is based upon the lesser of (a)
     the closing bid price on the day immediately preceding the agreement ($4.00
     per share),  or (b) the average  closing bid price for the Company's  stock
     for  the  five-trading-day   period  immediately   preceding  the  date  of
     conversion,  multiplied by a discount  ranging from 17.5% to 25%,  which is
     considered  a Beneficial  Conversion  Feature  (BCF).  In  accordance  with
     generally  accepted  accounting  principles,  the Company valued the BCF by
     multiplying the difference between the fair value of the Company's stock as
     of the  transaction  date and the conversion  price most  beneficial to the
     investors,  by the number of shares to be received  upon  conversion by the
     investors under the most beneficial  terms.  This resulted in a decrease in
     the  carrying  value  of the  Convertible  Debentures  and a  corresponding
     increase  in  stockholder's  equity of  $1,000,000.  The  related  discount
     recorded upon the issuance of the Convertible  Debentures was accreted into
     interest  expense over a  sixty-one-day  period,  beginning on the issuance
     date and ending on the first date at which the most  beneficial  conversion
     to the investors  could be realized.  This resulted in additional  interest
     expense of $1,000,000 and a corresponding increase in the carrying value of
     the  Convertible  Debentures  of  $1,000,000  in 1998.  The Company has the
     option of paying accrued  interest upon  conversion and at maturity in cash
     or through the issuance of an equal dollar value of additional  shares.  If
     the entire  principal  amount has not been  converted by the maturity date,
     the Company will  automatically  convert the remaining  principal using the
     same  conversion  formula  described  above.  The  Company has the right to
     redeem the  Convertible  Debentures  for the cash value of the shares  that
     would be received upon conversion as of the redemption date,  multiplied by
     the closing bid price on the last  trading day  immediately  preceding  the
     redemption date.

                                      F-11

<PAGE>


                      RESTAURANT TEAMS INTERNATIONAL, INC.

                          NOTES TO FINANCIAL STATEMENTS


     In the event of default,  as defined by the  agreement,  the  investors may
     consider the  Convertible  Debentures to be immediately  due and payable in
     cash, at an amount equal to the number of shares issuable upon  conversion,
     including related  discounts as described above,  multiplied by the closing
     bid price on the day immediately  preceding the notice of default. An event
     of default could result in the Company  paying  amounts to the investors in
     excess of the amounts recorded on the balance sheet.

     In connection with the issuance of the Convertible Debentures,  the Company
     issued to the investor and the placement  agent  warrants to purchase up to
     an aggregate of 150,000 and 50,000 shares,  respectively,  of the Company's
     stock with an exercise price equal to 110% of the average closing bid price
     for the five trading days immediately preceding the agreement date of $4.40
     per share. These warrants are exercisable at any time through May 2003. The
     warrants  were valued on the date of  issuance  at $2.00 per warrant  which
     resulted in a decrease in the carrying value of the Convertible  Debentures
     and a  corresponding  increase in  stockholder's  equity of $400,000.  This
     discount  is being  accreted  into  interest  expense  over the life of the
     debentures, as adjusted for conversions to common stock.

     During 1998,  the  investors  made two  conversions  of principal  totaling
     $657,000,  plus accrued  interest.  The Company  issued  408,388  shares of
     common stock in connection  with the  conversions.  As of December 31, 1999
     the Company has issued  5,000,000  shares of common stock into escrow to be
     applied toward future conversions. No additional conversions have been made
     through December 31, 1999.

6.       RELATED PARTY TRANSACTIONS

     As of December 31, 1999, the Company has notes  receivable due from related
     parties as follows:


        A $327,743  note from an entity owned by two  stockholders.  The note is
        due December 31, 2000, and bears interest at 6%.

        A $39,000  note from a  stockholder.  The note is due December 31, 2000,
        bears interest at 6% and is uncollateralized.


     Both of the notes are  recorded in  stockholders'  equity at  December  31,
     1999.

     In 1999, the Company borrowed  $521,850 and issued  convertible  promissory
     notes to two  officers.  The notes  allowed  conversion  into the Company's
     common  stock at a 33%  discount  to the  market  rate.  The  value of this
     beneficial  conversion  feature at the time of issuance  was  approximately
     $256,000,  which has been  recorded  as  interest  expense.  The notes were
     converted into 1,739,500 shares of common stock in December 1999.


                                      F-12



<PAGE>

                      RESTAURANT TEAMS INTERNATIONAL, INC.

                          NOTES TO FINANCIAL STATEMENTS


     In 1998,  the Company  sold two pieces of property to a sister  corporation
     for a  combined  gain of  approximately  $386,000,  of which  approximately
     $194,000 was deferred at December  31,  1998.  The deferred  portion of the
     gain related to a piece of property  that was sold for a $500,000  note. In
     1999, the sister  corporation  defaulted on the note. The Company took back
     the  property and has included it with assets held for sale at December 31,
     1999.

     The Company had leased office and retail space in one of its  facilities to
     an   affiliate   corporation   under  a  long-term   operating   lease  for
     approximately  $8,000 per month.  The  Company  waived all rental  fees due
     under this agreement in 1998. The Company  terminated the agreement and the
     affiliate corporation vacated the premises in March 1999.

7.       INCOME TAXES

     Deferred income taxes reflect the net tax effects of temporary  differences
     between  the  carrying  amounts of assets  and  liabilities  for  financial
     reporting  purposes  and the  amounts  used for  income tax  purposes.  The
     significant  components of the  Company's  deferred tax assets areset forth
     below. The Company had no material deferred tax liabilities at December 31,
     1999.  The  Company's  valuation  allowance  increased by  $1,197,000  from
     December 31, 1998 to December 31, 1999.



                                                        DECEMBER 31,
                                                            1999


         Deferred tax assets:

              Cash to accrual adjustment                 $   68,000
              Debenture beneficial conversion feature        85,000
              Reserve for litigation settlement              40,000
              Deffered rent                                   8,000
              Property and equipment depreciation            15,000
              Allowance on assets held for sale              36,000
              Net operating loss                          1,000,000
                                                         ----------


        Total deferred tax assets                         1,252,000
        Valuation allowance for deferred tax assets      (1,252,000)
              Net deferred tax assets                    ----------
                                                         $     --
                                                         ==========

     The  Company  has a net  operating  loss  of  approximately  $3,000,000  at
     December 31, 1999,  which may be applied to reduce  future  taxable  income
     through the year 2019.

     The  income taxes benefit consists of the following:

                                           YEAR ENDED DECEMBER 31,
                                             1999          1998

             Federal income tax:
             Current benefit              $    --     46,830
             Deferred benefit               46,790    74,410
                                          --------  --------
                                          $ 46,790  $121,240
                                          ========  ========



                                      F-13

<PAGE>

<TABLE>

<CAPTION>

                      RESTAURANT TEAMS INTERNATIONAL, INC.

                          NOTES TO FINANCIAL STATEMENTS

     The  reconciliation  between the expected tax at the federal U.S. corporate
     tax rate and the Company's consolidated actual tax is as follows:


                                                                   YEAR ENDED DECEMBER 31,
                                                                      1999         1998
                                                                  -----------  -----------
<S>                                                               <C>          <C>
        Loss before income taxes                                  $(2,291,994)  (1,441,543)
           U.S. corporate tax rate                                         34%          34%
                                                                  -----------  -----------
           Expected (benefit)                                        (779,278)    (490,125)
           Effect of valuation allowance on deferred tax assets       732,488         --
           Effects of permanent differences on the current
           and deferred provisions                                       --        358,868
           Other                                                         --        (44,567)
                                                                  -----------  -----------
                           Actual (benefit) expense               $   (46,790) $  (175,824)
                                                                  ===========  ===========
</TABLE>


8.       LEASES

     The Company leases the land where its restaurant  buildings are located and
     corporate office space under  non-cancellable lease agreements having terms
     that expire at various dates through  fiscal 2017.  The Company has options
     to renew the leases upon  expiration  for periods  ranging from five to ten
     years.  Total rental expense for operating leases amounted to approximately
     $224,000 and $234,000 in 1999 and 1998, respectively. The Company also pays
     real estate taxes,  insurance,  and maintenance  expenses  related to these
     leases.

     The Company currently leases three restaurant facilities to other operators
     under non-cancellable lease agreements, having terms that expire at various
     dates through 2015.  Assets subject to these leases totaling  approximately
     $2,816,000 and related accumulated depreciation of $139,000 are included in


                                      F-14

<PAGE>

     property  and  equipment at December  31,  1999.  Total  rental  income was
     approximately $115,000 and $42,000 in 1999 and 1998, respectively.

     Future  minimum  lease  commitments  and rentals at December 31, 1999 under
     operating leases having an initial or remaining  noncancellable term of one
     year or more are:

                                                                   LEASE
                                                LEASE              RENTAL
                                              COMMITMENTS          INCOME
                                              -----------         --------
             Year ended December 31:

             2000                             $  249,000         $  281,000
             2001                                234,000            192,000
             2002                                244,000            196,000
             2003                                246,000            196,000
             2004                                248,000            114,000
             Thereafter                        3,201,000            558,000
                                              ----------          ---------

             Total minimum rentals            $4,422,000         $1,537,000
                                            ============         ==========

9.       STOCKHOLDERS' EQUITY

     Preferred Stock

     The  Company has  10,000,000  shares of  preferred  stock  authorized.  The
     preferred  stock may be issued with rights or  preferences as determined by
     the board of  directors.  There was no preferred  stock  outstanding  as of
     December 31, 1999.

     Treasury Stock

     During 1998, the Company repurchased 300,023 shares of its common stock for
     $809,900.  Also in 1998,  the Company  issued  20,833  shares of its common
     stock as payment for restaurant equipment valued at $50,000.

     Stock Options

     The  Company has  authorized  the  granting of options  covering a total of
     1,200,000 shares of the Company's common stock to key employees,  officers,
     directors and certain consultants of the Company.  All options granted have
     five-year terms and become fully exercisable when granted.


                                      F-15

<PAGE>

<TABLE>

<CAPTION>

                      RESTAURANT TEAMS INTERNATIONAL, INC.

                          NOTES TO FINANCIAL STATEMENTS



     A summary of the  Company's  outstanding  stock option  transactions  is as
     follows:


                                                                       YEAR ENDED DECEMBER 31,
                                                                       -----------------------
<S>                                              <C>           <C>           <C>           <C>

                                                                  1999                       1998
                                                                 -----                       ----
                                                               Weighted                    Weighted
                                                                Average                    Average
                                                               Exercise                    Exercise
                                                 Shares         Price        Shares          Price

      Outstanding at beginning of year           897,072         $ 2.57      647,072        $ 2.47
           Granted                                     -              -      250,000          2.83
           Exercised                                   -              -            -             -
           Forfeited                                                  -                          -
                                                  ------                     -------

      Outstanding at end of year                 897,072         $ 2.57      897,072        $ 2.57

      Options exercisable at end of year         897,072         $ 2.57      897,072        $ 2.57
                                                 =======         ======      =======        ======

      Weighted average fair value of options
      granted during the year                     N/A                        $  2.04
                                                 =======                     =======
</TABLE>

     The weighted  average  remaining  contractual life of those options is 2.03
     and 3.03  years in 1999 and  1998,  respectively.  The  exercise  prices of
     outstanding  options  range from $.10 to $3.00 as of December  31, 1999 and
     1998. In connection with the Company's stock option plan,  1,200,000 shares
     of common stock have been reserved for future issuance.

     The Company has adopted  the  disclosure-only  provisions  of SFAS No. 123.
     Accordingly, no compensation cost has been recognized for the Company stock
     option plan. Had compensation  cost been determined based on the fair value
     at the date of grant for awards  issued in 1998,  pursuant to the  employee
     compensation  provisions  of SFAS No. 123, the  Company's net loss and loss
     per share would have been adjusted to the pro forma amounts indicated:


                                      F-16


<PAGE>

<TABLE>

<CAPTION>

                      RESTAURANT TEAMS INTERNATIONAL, INC.

                          NOTES TO FINANCIAL STATEMENTS


                                                                    YEAR ENDED DECEMBER 31,
                                                                    -----------------------
                                                                     1999             1998
<S>                                                              <C>             <C>

         Net loss - as reported                                  $(2,245,204)    $ (1,320,303)

         Net loss - pro forma                                     (2,245,204)      (1,635,283)
         Loss per common share - as reported                            (.30)            (.21)
         Loss per common share - pro forma                              (.30)            (.26)
</TABLE>



     The fair value of each option grant is estimated on the date of grant using
     the Black-Scholes  option-pricing model with the following weighted-average
     assumptions used for grants:  dividend yield of 0%; expected  volatility of
     113.9% in 1998;  risk-free  interest rates of 4.57% and 5.65% in 1998.; and
     expected lives of 3.25 years.

     Warrants

     As discussed  in Note 5, the Company has issued  warrants to purchase up to
     200,000  shares  of the  Company's  common  stock  in  connection  with the
     issuance of convertible debentures in 1998.

     Effective  January  1, 1999 the  Company  issued to  existing  stockholders
     warrants to purchase up to  approximately  669,000  shares of the Company's
     common stock with an exercise price of $5.00 per share.  These warrants are
     exercisable at any time through December 2003.

10.      COMMITMENTS AND CONTINGENCIES

     Settlement with Debenture Holders

     In 1998,  the Company filed a lawsuit  against three  investment  funds and
     their principals ("the Debenture  Holders"),  alleging fraud and violations
     of federal and state  securities  laws in connection  with their $3 million
     investment in the Company's convertible  debentures.  (See Note 5.) Certain
     defendants to the Company's lawsuit had  counterclaimed  seeking damages in
     excess of $3 million.

     On  December  28,  1999,  the  Company  and  Debenture  Holders  reached an
     agreement  to  settle  their  litigation.  As part of the  settlement,  the
     Company  agreed to issue the  Debenture  Holders  an  additional  5% of the
     outstanding  principal value of the  debentures,  payable in Company common
     stock (approximately  258,000 shares at December 31, 1999). The approximate
     value of the shares was recorded as an expense of $116,250 in 1999.

     Loan Default Litigation

     As of December  31, 1999,  the Company was in default of a promissory  note
     agreement that matured August 26, 1999. In February 2000, the holder of the
     promissory  note filed a lawsuit  seeking  damages of unpaid  principal and
     accrued interest totaling approximately $444,000, plus attorneys' fees. The
     Company  intends to fully  defend its  position.  Management  believes  the
     Company  incurred  damages as a result of the  lender's  failure to provide
     agreed upon funding in connection with the Fatburger  acquisition (see Note
     12) and intends to file a counter claim against the original  issuer of the
     promissory  note.  Management  believes  the effect of this action will not
     have a material  adverse  effect on the  Company's  financial  position  or
     results of operations.


                                      F-17

<PAGE>

                      RESTAURANT TEAMS INTERNATIONAL, INC.

                          NOTES TO FINANCIAL STATEMENTS



11.      CONCENTRATION OF CREDIT RISK

     Notes  receivable from related parties (Note 6) primarily result from sales
     of assets and cash  advances to entities  under common  control or owned by
     stockholders of the Company.  This  concentration  of related party debtors
     may  impact  the  Company's   overall  credit  risk  either  positively  or
     negatively,  in that these entities may be similarly affected by changes in
     economic or other conditions.

12.      Acquisitions and Subsequent Events

     Acquisition Terminated in 1999

     During  1998,  the Company  entered  into an Asset  Purchase  Agreement  to
     acquire the  properties and assets  comprising the Old San Francisco  Steak
     House ("OSF")  restaurant  chain.  In February  1999,  the OSF  acquisition
     attempt  was   abandoned  and   associated   acquisition   costs   totaling
     approximately $188,000 have been charged to operations.

     Pending Acquisition

     In 1999,  as amended in March 2000,  the Company  entered into a definitive
     agreement  to acquire all the  outstanding  common  stock of the  Fatburger
     Corporation ("Fatburger"),  a restaurant chain currently operating thirteen
     company-owned  restaurants  in the  Los  Angeles,  California  market  with
     twenty-two  franchised  restaurants  in Southern  California and Las Vegas,
     Nevada which  operate  under the Fatburger  brand name,  for  $8,100,000 in
     cash,  of which  $1,500,000  has been paid as of December 31,  1999.  As of
     December 31, 1999,  the Company has  capitalized  an additional  $2,362,000
     relating to consulting, legal and other direct costs incurred in connection
     with this acquisition.

     In April 2000, the Company  entered into a joint venture  agreement with JD
     Enterprises,  L.L.C.  ("JDE") to fund the remaining  purchase price and pay
     certain costs  incurred by Fatburger's  owner.  Terms of the agreement call
     for (a) the  Company to secure  $3,000,000  in Senior  Debt  financing  for
     Newco, and (b) JDE to pay $2,000,000 and secure  Subordinate loan financing
     of $2,000,000. Proceeds of this funding in excess of that required to close
     the Fatburger  transaction  totaling  $525,000 will be retained for working
     capital  purposes.  Upon  closing  the  Fatburger  transaction,  all of the
     acquired  assets of  Fatburger  will be  assigned  to a  newly-incorporated
     holding  company  ("NEWCO")  of which  the  Company  will own  thirty-three
     percent and JDE sixty-seven  percent of the issued and  outstanding  common
     stock. The Company intends to enter into a Development Agreement with NEWCO
     granting the Company exclusive rights to franchise Fatburger restaurants in
     Texas and Georgia and the first right of refusal for South Carolina.

     The Company anticipates  completing its acquisition of Fatburger during the
     second  quarter  of  2000,  but can  not be  assured  when,  if  ever,  the
     acquisition will be completed.


                                      F-18

<PAGE>

     Acquisitions  Completed  After  Year-End 1999

     In February 2000 and March, the Company made the following acquisitions:

     The Company  acquired  the assets of  Tanner's  Original  Rotisserie  Grill
     ("Tanner's"),  an  eight-unit  restaurant  operation  located  in  Atlanta,
     Georgia for  $250,000 in cash and the  forgiveness  of $50,000 debt owed by
     Tanner's to the Company in connection  with Debtor in Possession  financing
     previously paid by the Company.

     The  Company  acquired  all the  outstanding  common  stock  of  Regulatory
     Solutions,  Inc. ("RSI"), a professional  services company  specializing in
     "Worksafe"  training  and  certification  programs  relating  to local  and
     federal   law   governing    both    employer   and   employee    workplace
     responsibilities,  for  $100,000  in cash and  1,000,000  shares of Company
     common  stock;   plus   $2,000,000   equivalent  of  Company  common  stock
     ($1,000,000 each to be issued at the end of years one and two following the
     acquisition)  based on the average closing price of the Company's stock for
     the thirty-day period preceding issuance.

                                   **********











                                      F-19


<PAGE>

                              Part III. EXHIBITS

Items 9 through 12. To be set forth in Registrant's  definitive  proxy statement
for its annual meeting to be held in May 2000.

Item 13.  Exhibits and Reports on Form 8-K.Part III. EXHIBITS Part III. EXHIBITS

         (a)  Hereafter  set forth as exhibits to the Form 10-KSB of  Restaurant
Teams  International,  Inc and  incorporated  by  reference  are  the  following
exhibits:



No. as per
Part III of
Form 1A                Description of Exhibit
-----------            ----------------------

2.1*           Articles of Incorporation

2.21+          Amendment to Articles of Incorporation

2.22+          Articles of Amendment

2.3*           By-Laws

3.1            Warrant  Agreement  filed as an  exhibit  to the  Company's  Form
               10-KSB dated February 28, 1997

6.1**          Primary Distribution  Agreement dated as of February 17, 1995, by
               and  between  Consolidated  Companies,  Inc.  on the one hand and
               Fresh'n Lite Inc. on the other

6.3CE**        Restaurant  Lease dated as of  September  15, 1997 by and between
               USRP (Midon),  LLC on the one hand and Fresh'n Lite,  Inc. on the
               other

6.4CE**        Ground Lease dated as of February  21, 1995 by and between  Peter
               D. Fonberg  Investments on the one hand and Fresh'n Lite, Inc. on
               the other

6.5CE**        Ground  Lease dated as of July 15, 1996 by and between  MacArthur
               Partners,  Ltd.  on the one hand and  Fresh'n  Lite,  Inc. on the
               other

6.6CE**        Ground Lease  Agreement dated as of April 11, 1997 by and between
               Robert M. Farrell  Development,  Ltd. on the one hand and Fresh'n
               Lite, Inc. on the other

6.8CE**        1997 Incentive Stock Option Plan

6.9**          Franchise  Agreement  dated as of October 1, 1995 by and  between
               Fresh'n Lite, Inc. on the one hand and F'NL  Investments,  LLC on
               the other

6.10CE**       Lease with Option to Purchase dated as of October 15, 1993 by and
               between  Connor Patman and Steve and Ann M.  Raffaelli on the one
               hand and Fresh'n Lite, Inc. on the other

6.11CE+        Sub-Lease dated as of November 2, 1998 by and between  Restaurant
               Teams International, Inc. and the one hand and Zeke's Grill, Inc.
               on the other

27.1           + Financial  Data Schedule filed as an exhibit to the Form 10-KSB
               filed April 15, 1999

*    Previously filed as an exhibit to the Company's  Registration  Statement on
     Form 10-SB (File No.  001-13559)  filed with the  Securities  and  Exchange
     Commission on November 10, 1997.

**   Filed as a paper exhibit to the Company's Form 10-SB filed October 23, 1997
     and filed in electronic format as exhibits to Amendment No. 1 to Form 10-SB
     filed June 25, 1998 and incorporated herein by reference.

+    Filed  herewith

(b)  Reports on Form 8-K
                                       20


<PAGE>


                                   SIGNATURES

         The undersigned registrant hereby amends and restates its Annual Report
on Form 10-KSB for the fiscal year ended December 31, 1999.

         In accordance with Section 13 or 15(d) of the Securities  Exchange Act,
the  registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized, this 14th day of April, 2000.

                                     Registrant

                                     By: /s/ Stanley L. Swanson
                                         --------------------------------------
                                             Stanley L. Swanson
                                             Chairman of the Board of Directors
                                             and Chief Executive Officer

         In accordance  with the Exchange  Act,  this  amendment has been signed
below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.

April 14, 2000


                                       By:  /s/ Curtis A. Swanson
                                            ------------------------------------
                                                Curtis A. Swanson, Director
                                                Vice President and Chief
                                                Financial Officer

April 14, 2000
                                       By:  /s/ Edward Dmytryk
                                            ------------------------------------
                                                Edward Dmytryk,
                                                     Director

April 14, 2000
                                       By:  /s/ Robert Lilly
                                            ------------------------------------
                                                Robert Lilly ,
                                                Director