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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2005
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 Commission file number: 0000-23278
 BRAZIL FAST FOOD CORP.
  Delaware
    
    13-3688737(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 Rua Voluntários da Pátria 89, 9o andar
    
    N/ABotafogo, CEP 22.270-010, Rio de Janeiro, Brazil(Address of principal executive offices)
    
    (Zip Code)
  
 
 
   
  o þ
  o þ
  þ o
 o
 o
 o þ
  o þ
   Class
    
    Outstanding at March 29, 2006Common Stock, $0.0001 par value per share
    
    8,173,427 shares
 
 Documents Incorporated By Reference




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##### 



TABLE OF CONTENTS
  
 PART IITEM 1.
    
    BUSINESS
    
    
    1ITEM 1A.
    
    RISK FACTORS
    
    
    9ITEM 1B.
    
    UNRESOLVED STAFF COMMENTS
    
    
    15ITEM 2.
    
    PROPERTIES
    
    
    15ITEM 3.
    
    LEGAL PROCEEDINGS
    
    
    16ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    17PART IIITEM 5.
    
    MARKET FOR REGISTRANTS COMMON STOCK AND RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
    
    
    18ITEM 6.
    
    SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA
    
    
    20ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
    
    
    21ITEM 7A.
    
    QUANTITATIVE AND QUALITATIVE INFORMATION ABOUT MARKET RISK
    
    
    36ITEM 8.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    
    37ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    37ITEM 9A.
    
    CONTROLS AND PROCEDURES
    
    
    37ITEM 9B.
    
    OTHER INFORMATION
    
    
    38PART IIIITEM 10.
    
    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
    
    
    39ITEM 11.
    
    EXECUTIVE COMPENSATION
    
    
    39ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
    
    
    39ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
    
    
    39ITEM 14.
    
    PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    39PART IVITEM 15.
    
    EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8  K
    
    
    40




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Unless otherwise specified, all references in this report to Reais, the Real or R$ are to the
Brazilian Real (singular), or to the Brazilian Reais (plural), the legal currency of Brazil, and
U.S. Dollars or $ are to United States Dollars. Unless otherwise specified, all financial
statements and other financial information presented herein are stated in R$ and are in accordance
with generally accepted accounting principles in the United States (U.S. GAAP).
 
 PART I
 
 ITEM 1. BUSINESS
     Recent Developments




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Restaurant Operations
        2




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Years Ended December 31,2005
    
    2004
    
    2003Stores
    
    Kiosks
    
    Stores
    
    Kiosks
    
    Stores
    
    KiosksOwned and operated restaurants (a):Opened during period
    
    
    0
    
    
    
    4
    
    
    
    5
    
    
    
    4
    (b)
    
    
    0
    
    
    
    1Closed during period
    
    
    1
    
    
    
    0
    
    
    
    3
    
    
    
    0
    
    
    
    1
    
    
    
    0Sold to franchisees
    
    
    0
    
    
    
    0
    
    
    
    4
    
    
    
    2
    
    
    
    4
    
    
    
    0Bought from franchisees
    
    
    1
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    1
    
    
    
    3Open at end of period
    
    
    49
    
    
    
    16
    
    
    
    49
    
    
    
    12
    
    
    
    51
    
    
    
    10Franchised restaurants (a):Opened during period
    
    
    36
    
    
    
    48
    
    
    
    28
    (c)
    
    
    31
    
    
    
    33
    
    
    
    30Closed during period
    
    
    13
    
    
    
    5
    
    
    
    15
    
    
    
    3
    
    
    
    18
    
    
    
    6Sold to us by our franchisees
    
    
    1
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    1
    
    
    
    3Open at end of period
    
    
    259
    
    
    
    127
    
    
    
    237
    
    
    
    84
    
    
    
    224
    
    
    
    56Total stores & kiosks at end of period:
    
    
    308
    
    
    
    143
    
    
    
    286
    
    
    
    96
    
    
    
    275
    
    
    
    66
 
 (a)
    
    Does not include trailers and kiosks used for temporary locations during 2005, 2004 and 2003.(b)
    
    In prior annual report, the total number of owned and operated kiosks opened during the
period ended December 31, 2004 was mistakenly overstated in two units.(c)
    
    In prior annual report, the total number of franchised restaurants opened during the period
ended December 31, 2004 was mistakenly overstated in four units.    Growth Strategy
  3




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
    
    27.60% received up to the minimum wage (R$300.00); and,
 
    
    0.90% received above 20 times the minimum wage (R$6,000.00)
    Franchise Program
    4




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5




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Advertising and Promotions
         6




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Sources of Supply
     Trademarks
   Trademark or Service Mark
    
    Expiration DateBobs Double Cheeseburger
    
    October 24th, 2010Big Bob
    
    January 5th, 2012Bobs
    
    June 5th, 2012Franfilé
    
    March 24th, 2013
  7




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Competition
       8




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Personnel
   (d)
    
    FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES
     
 ITEM 1A. RISK FACTORS
 FORWARD LOOKING STATEMENTS
  9




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Risks Relating to Operations
 
    
    We have a history of significant net losses, and we may not
be profitable in the future; we may need to seek the
forbearance of creditors in the future.
  
    
    Our registered public accounting firms report raises uncertainties about our ability to
continue as a going concern.
  
    
    Our success depends on our ability to compete with our major competitors in the fast food
industry.
  
    
    A new challenge: the light food.
  10




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##### Table of Contents




    
    Our future success is dependent upon the success and expansion of our franchise program.
  
    
    We are subject to extensive regulatory requirements applicable to the food service
industry.
  Risks Relating to Brazil
 
    
    Our operations are subject to changes in Brazils economy.
    11




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
    
    Our business may be affected by political and constitutional uncertainty in Brazil.
  
    
    Controls on foreign investments may limit our ability to receive capital from our Brazilian
operating subsidiary
  Risks related to our common stock and shareholders agreement
 
    
    Common stock.
  
    
    Shareholders agreement.
    12




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Risks related to juridical and financial contingencies
 
    
    Special financing of fiscal debts.
    
    
    Past due fiscal obligations of VENDEX.
   13




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
    
    Legal contingencies.
  
    
    Tax contingencies.
    14




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ITEM 1B. UNRESOLVED STAFF COMMENTS
  
 ITEM 2. PROPERTIES
      15




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ITEM 3. LEGAL PROCEEDINGS
     16




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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  17




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ITEM 5. MARKET FOR REGISTRANTS COMMON STOCK AND RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
 Market Information
  Common StockThree Months Ended
    
    High
    
    LowMarch 31, 2005
    
    
    .80
    
    
    
    .40June 30, 2005
    
    
    1.65
    
    
    
    .54September 30, 2005
    
    
    1.01
    
    
    
    .55December 30, 2005
    
    $
    1.51
    
    
    
    .81March 31, 2004
    
    
    .61
    
    
    
    .21June 30, 2004
    
    
    .55
    
    
    
    .30September 30, 2004
    
    
    .51
    
    
    
    .31December 31, 2004
    
    $
    .51
    
    
    
    .25
 Holders
  Dividends
    18




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Equity Compensation Plans
   RemainingAvailable ForSecurities to be
    
    
    
    
    
    Future Issuanceissued upon
    
    
    
    
    
    Under Equityexercise of
    
    Weighted-Average
    
    Compensationoutstanding
    
    Exercise Price Of
    
    Plans (excludingoptions, warrants
    
    Outstanding
    
    securities reflectedand rights
    
    Options, Warrants
    
    in column (a)Plan Category
    
    (a)
    
    And Rights
    
    (c)Equity compensation plans approved by security holders (1)
    
    
    347,000
    
    
    $
    1.65
    
    
    Equity compensation plans not approved by security holders (2)
    
    
    
    
    
    
    
    
    
    Total (1) + (2)
    
    
    347,000
    
    
    $
    1.65
    
    
    
 19




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##### Table of Contents



ITEM 6. SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA
  Year Ended December 31,2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001STORE RESULTSNet Restaurant Sales
    
    R$

    75,559
    
    
 R$
    65,338
    
    
    R$

    60,466
    
    
    R$

    63,465
    
    
    R$

    68,107Store Costs and ExpensesFood, Beverage and Packaging
    
    
    (28,306
    )
    
    
    (24,728
    )
    
    
    (23,754
    )
    
    
    (25,333
    )
    
    
    (27,331
    )Payroll & Related Benefits
    
    
    (17,094
    )
    
    
    (14,778
    )
    
    
    (13,688
    )
    
    
    (13,802
    )
    
    
    (13,983
    )Restaurant Occupancy
    
    
    (8,926
    )
    
    
    (8,348
    )
    
    
    (7,569
    )
    
    
    (8,417
    )
    
    
    (8,341
    )Contracted Services
    
    
    (8,624
    )
    
    
    (8,324
    )
    
    
    (7,950
    )
    
    
    (7,529
    )
    
    
    (7,330
    )Depreciation and Amortization
    
    
    (2,194
    )
    
    
    (2,225
    )
    
    
    (2,651
    )
    
    
    (3,017
    )
    
    
    (3,146
    )Other Store Costs and Expenses
    
    
    (3,240
    )
    
    
    (2,250
    )
    
    
    (1,684
    )
    
    
    (1,828
    )
    
    
    (2,850
    )Total Store Costs and Expenses
    
    
    (68,384
    )
    
    
    (60,653
    )
    
    
    (57,296
    )
    
    
    (59,926
    )
    
    
    (62,981
    )STORE OPERATING INCOME
    
    
    7,175
    
    
    
    4,685
    
    
    
    3,170
    
    
    
    3,539
    
    
    
    5,126FRANCHISE RESULTSNet Franchise Revenues
    
R$

    11,963
    
    
    R$

    9,414
    
    
    R$

    9,264
    
    
    R$

    4,904
    
    
    R$

    3,981Franchise Costs and Expenses
    
    
    (2,144
    )
    
    
    (1,916
    )
    
    
    (2,150
    )
    
    
    (1,166
    )
    
    
    (1,342
    )FRANCHISE OPERATING INCOME
    
    
    9,819
    
    
    
    7,498
    
    
    
    7,114
    
    
    
    3,738
    
    
    
    2,639MARKETING, GENERAL AND ADMINISTRATIVE (EXPENSES) INCOMEMarketing (Expenses) Income
    
    
    (2,453
    )
    
    
    342
    
    
    
    (659
    )
    
    
    (375
    )
    
    
    (2,362
    )Administrative Expenses
    
    
    (9,192
    )
    
    
    (7,828
    )
    
    
    (6,520
    )
    
    
    (7,434
    )
    
    
    (7,594
    )Other Operating Income
(Expenses)
    
    
    2,248
    
    
    
    634
    
    
    
    (2,936
    )
    
    
    (607
    )
    
    
    2,054Depreciation and Amortization
    
    
    (1,158
    )
    
    
    (1,160
    )
    
    
    (704
    )
    
    
    (756
    )
    
    
    (820
    )Net result of assets sold
    
    
    (52
    )
    
    
    432
    
    
    
    48
    
    
    
    (287
    )
    
    
    (122
    )Impairment of assets
    
    
    (148
    )
    
    
    
    
    
    
    (204
    )
    
    
    (1,374
    )
    
    
    Total Marketing, G & A
(Expenses) Income
    
    
    (10,755
    )
    
    
    (7,580
    )
    
    
    (10,975
    )
    
    
    (10,833
    )
    
    
    (8,844
    )OPERATING INCOME (LOSS)
    
    
    6,239
    
    
    
    4,603
    
    
    
    (691
    )
    
    
    (3,556
    )
    
    
    (1,079
    )Interest Income (Expenses)
    
    
    537
    
    
    
    (3,151
    )
    
    
    (3,017
    )
    
    
    (4,174
    )
    
    
    (5,502
    )Foreign Exchange and Monetary
Restatement Loss
    
    
    (84
    )
    
    
    (252
    )
    
    
    (410
    )
    
    
    (3,480
    )
    
    
    (1,669
    )NET INCOME (LOSS) BEFORE INCOME
TAXES
    
    
    6,692
    
    
    
    1,200
    
    
    
    (4,118
    )
    
    
    (11,210
    )
    
    
    (8,250
    )Income taxes
    
    
    (2,248
    )
    
    
    (599
    )
    
    
    
    
    
    
    
    
    
    
    NET INCOME (LOSS)
    
 R$
    4,444
    
    
    R$

    601
    
    
    R$
    (4,118
    )
    
    R$
    (11,210
    )
    
    R$

    (8,250
    )NET INCOME (LOSS) PER COMMON
SHARE
BASIC AND DILUTED
    
    R$

    0.55
    
    
    R$

    0.08
    
    
    R$

    (0.55
    )
    
    R$

    (1.96
    )
    
    R$

    (2.27
    )WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:BASIC AND DILUTED
    
    
    8,061,317
    
    
    
    7,970,473
    
    
    
    7,552,363
    
    
    
    5,707,957
    
    
    
    3,626,626Balance Sheet Data (End of
Period):WORKING CAPITAL DEFICIT
    
    
    4,371
    
    
    
    5,235
    
    
    
    5,882
    
    
    
    14,238
    
    
    
    18,717TOTAL ASSETS
    
    
    38,070
    
    
    
    37,859
    
    
    
    35,805
    
    
    
    36,984
    
    
    
    39,777ACCUMULATED DEFICIT
    
    
    (58,687
    )
    
    
    (63,131
    )
    
    
    (63,732
    )
    
    
    (59,614
    )
    
    
    (48,404
    )TOTAL SHAREHOLDERS EQUITY
(DEFICIT)
    
    
    34
    
    
    
    (4,192
    )
    
    
    (5,103
    )
    
    
    (1,510
    )
    
    
    1,217
 20




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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Background
  Brazilian Political Environment
    Brazilian Economic Environment
   21




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Year Ended December 31,2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001
    
    
    2000
    
    
    1999
    
    
    1998GDP
    
    
    2.3
    %
    
    
    4.9
    %
    
    
    0.5
    %
    
    
    1.9
    %
    
    
    1.3
    %
    
    
    4.4
    %
    
    
    0.8
    %
    
    
    0.1
    %Inflation1
    
    
    5.7
    %
    
    
    7.6
    %
    
    
    9.3
    %
    
    
    12.5
    %
    
    
    7.7
    %
    
    
    6.0
    %
    
    
    8.9
    %
    
    
    1.6
    %Interest Rates2
    
    
    18.1
    %
    
    
    17.8
    %
    
    
    16.3
    %
    
    
    24.9
    %
    
    
    19.1
    %
    
    
    15.8
    %
    
    
    19.0
    %
    
    
    29.0
    %Devaluation3
    
    
    -11.8
    %
    
    
    -8.1
    %
    
    
    -18.2
    %
    
    
    52.3
    %
    
    
    18.7
    %
    
    
    9.3
    %
    
    
    48.0
    %
    
    
    8.3
    %
 
 1 Inflation as measured by IPCA  Broad Consumers Price Index2 Nominal Interest Rates (p.a.) as measured by the average interest rate in daily
transactions with federal government bond3 Devaluation/Revaluation of the Brazilian (R$) currency against U.S. Dollar ($)Source: Brazilian Institute of Geography and Statistics (IBGE) and Central Bank of Brazil. 22




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RESULTS OF OPERATIONS
   Twelve Months
    
    
    
    
    
    
    Twelve Months
    
    
    
    
    
    
    Twelve MonthsEnded
    
    
    
    
    
    
    Ended
    
    
    
    
    
    
    EndedDecember 31, 2005
    
    
    %
    
    
    December 31, 2004
    
    
    %
    
    
    December 31, 2003
    
    
    %STORE RESULTSNet Restaurant Sales
    
    R$

    75,559
    
    
    
    100.0
    %
    
    R$

    65,338
    
    
    
    100.0
    %
    
    R$

    60,466
    
    
    
    100.0
    %Store Costs and ExpensesFood, Beverage and Packaging
    
    
    (28,306
    )
    
    
    -37.5
    %
    
    
    (24,728
    )
    
    
    -37.8
    %
    
    
    (23,754
    )
    
    
    -39.3
    %Payroll & Related Benefits
    
    
    (17,094
    )
    
    
    -22.6
    %
    
    
    (14,778
    )
    
    
    -22.6
    %
    
    
    (13,688
    )
    
    
    -22.6
    %Restaurant Occupancy
    
    
    (8,926
    )
    
    
    -11.8
    %
    
    
    (8,348
    )
    
    
    -12.8
    %
    
    
    (7,569
    )
    
    
    -12.5
    %Contracted Services
    
    
    (8,624
    )
    
    
    -11.4
    %
    
    
    (8,324
    )
    
    
    -12.7
    %
    
    
    (7,950
    )
    
    
    -13.1
    %Depreciation and Amortization
    
    
    (2,194
    )
    
    
    -2.9
    %
    
    
    (2,225
    )
    
    
    -3.4
    %
    
    
    (2,651
    )
    
    
    -4.4
    %Other Store Costs and Expenses
    
    
    (3,240
    )
    
    
    -4.3
    %
    
    
    (2,250
    )
    
    
    -3.4
    %
    
    
    (1,684
    )
    
    
    -2.8
    %Total Store Costs and Expenses
    
    
    (68,384
    )
    
    
    -90.5
    %
    
    
    (60,653
    )
    
    
    -92.8
    %
    
    
    (57,296
    )
    
    
    -94.8
    %STORE OPERATING INCOME
    
    
    7,175
    
    
    
    9.5
    %
    
    
    4,685
    
    
    
    7.2
    %
    
    
    3,170
    
    
    
    5.2
    %FRANCHISE RESULTSNet Franchise Revenues
    
    R$

    11,963
    
    
    
    15.8
    %
    
    R$

    9,414
    
    
    
    14.4
    %
    
    R$

    9,264
    
    
    
    15.3
    %Franchise Costs and Expenses
    
    
    (2,144
    )
    
    
    -2.8
    %
    
    
    (1,916
    )
    
    
    -2.9
    %
    
    
    (2,150
    )
    
    
    -3.6
    %FRANCHISE OPERATING INCOME
    
    
    9,819
    
    
    
    13.0
    %
    
    
    7,498
    
    
    
    11.5
    %
    
    
    7,114
    
    
    
    11.8
    %MARKETING, GENERAL AND
ADMINISTRATIVE (EXPENSES) INCOMEMarketing (Expenses) Income
    
    
    (2,453
    )
    
    
    -3.2
    %
    
    
    342
    
    
    
    0.5
    %
    
    
    (659
    )
    
    
    -1.1
    %Administrative Expenses
    
    
    (9,192
    )
    
    
    -12.2
    %
    
    
    (7,828
    )
    
    
    -12.0
    %
    
    
    (6,520
    )
    
    
    -10.8
    %Other Operating Income (Expenses)
    
    
    2,248
    
    
    
    3.0
    %
    
    
    634
    
    
    
    1.0
    %
    
    
    (2,936
    )
    
    
    -4.9
    %Depreciation and Amortization
    
    
    (1,158
    )
    
    
    -1.5
    %
    
    
    (1,160
    )
    
    
    -1.8
    %
    
    
    (704
    )
    
    
    -1.2
    %Net result of assets sold
    
    
    (52
    )
    
    
    -0.1
    %
    
    
    432
    
    
    
    0.7
    %
    
    
    48
    
    
    
    0.1
    %Impairment of assets
    
    
    (148
    )
    
    
    -0.2
    %
    
    
    
    
    
    
    0.0
    %
    
    
    (204
    )
    
    
    -0.3
    %Total Marketing, G & A (Expenses) Income
    
    
    (10,755
    )
    
    
    -14.2
    %
    
    
    (7,580
    )
    
    
    -11.6
    %
    
    
    (10,975
    )
    
    
    -18.2
    %OPERATING INCOME (LOSS)
    
    
    6,239
    
    
    
    
    
    
    
    4,603
    
    
    
    
    
    
    
    (691
    )Interest Income (Expense)
    
    
    537
    
    
    
    0.7
    %
    
    
    (3,151
    )
    
    
    -4.8
    %
    
    
    (3,017
    )
    
    
    -5.0
    %Foreign Exchage and Monetary
Restatement Loss
    
    
    (84
    )
    
    
    -0.1
    %
    
    
    (252
    )
    
    
    -0.4
    %
    
    
    (410
    )
    
    
    -0.7
    %NET INCOME (LOSS) BEFORE INCOME
TAXES
    
    
    6,692
    
    
    
    8.9
    %
    
    
    1,200
    
    
    
    1.8
    %
    
    
    (4,118
    )
    
    
    -6.8
    %Income taxes
    
    
    (2,248
    )
    
    
    -3.0
    %
    
    
    (599
    )
    
    
    -0.9
    %
    
    
    
    
    
    
    0.0
    %NET INCOME (LOSS)
    
    R$

    4,444
    
    
    
    5.9
    %
    
    R$

    601
    
    
    
    0.9
    %
    
    R$

    (4,118
    )
    
    
    -6.8
    %
 23




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##### Table of Contents



Net Restaurant Sales
        Food, Beverage and Packaging Costs
     24




---



##### Table of Contents



Payroll & Related Benefits
     Restaurant Occupancy Costs and Other Expenses
    Contracted Services
    Other Store Cost and Expenses
   25




---



##### Table of Contents



Net Franchise Revenues
  12 months ended December, 312005
    
    
    2004
    
    
    2003Net Franchise Royalty Fees
    
    
    10,167
    
    
    
    8,035
    
    
    
    6,663Initial Fee
    
    
    1,796
    
    
    
    1,379
    
    
    
    2,601Net Franchise Revenues
    
    
    11,963
    
    
    
    9,414
    
    
    
    9,264
   Franchise Costs and Expenses
     Marketing (expenses) income
  26




---



##### Table of Contents



General and Administrative Expenses
    Other Operating Income (Expenses)
  27




---



##### Table of Contents



December 31,2005
    
    
    2004
    
    
    2003Exclusivity and Rebate Agreements
    
    R$
    3,655
    
    
    R$
    3,949
    
    
    R$
    2,503Income from properties leasing
    
    
    410
    
    
    
    226
    
    
    
    156Uncollectable receivables
    
    
    (2,470
    )
    
    
    (2,243
    )
    
    
    (2,025
    )Reassessed tax and other tax adjustments
    
    
    1,552
    
    
    
    (632
    )
    
    
    (2,155
    )Accruals for contingencies
    
    
    (1,482
    )
    
    
    (117
    )
    
    
    (370
    )Transport and logistic operating income
(Suprilog)
    
    
    873
    
    
    
    9Preopening and other (expenses) income
    
    
    (290
    )
    
    
    (558
    )
    
    
    (1,045
    )R$
    2,248
    
    
    R$
    634
    
    
    R$
    (2,936
    )
    Depreciation and Amortization (Stores and Headquarters)
    Impairment of Assets and Net Result of Assets Sold
   28




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##### Table of Contents



Interest Income (Expenses)
    Foreign Exchange and Monetary Restatement Gain (Loss)
    29




---



##### Table of Contents



A) Introduction
     Year Ended December 31,2005
    
    
    2004
    
    
    2003NET INCOME (LOSS)
    
    R$
    4,444
    
    
    R$

    601
    
    
    R$

    (4,118
    )Interest expenses, Monetary
and Foreign exchange loss
    
    
    (453
    )
    
    
    3,403
    
    
    
    3,427Income taxes
    
    
    2,248
    
    
    
    599
    
    
    
    Depreciation and amortization
    
    
    3,352
    
    
    
    3,385
    
    
    
    3,355EBITDA
    
    R$
    9,591
    
    
   R$
    7,988
    
    
    R$
    2,664
  30




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##### Table of Contents



B) Debt Obligation  financial institutions
  December 31,2005
    
    
    2004Revolving lines of credit
    
    R$
  
    
    

    R$

    297Related party loans (a)
    
    
    
    
    
    
    999Mortgages payable (b)
    
    
    100
    
    
    
    2,867Notes payable linked to fixed assets acquisition (c)
    
    
    859
    
    
    
    1,943Leasing facilities (d)
    
    
    
    
    
    
    1,267Other notes payable
    
    
    
    
    
    
    92959
    
    
    
    7,465Less: current portion
    
    
    (959
    )
    
    
    (5,976
    )R$
    

    
    
 R$
    1.489
 (a)
    
    Credit facilities from related parties, including company and private individuals.
Repayment of principal is indexed to IGP-M (currently at 2.38% per annum) with interest
of 12.0% per annum. Those transactions were made at usual market value and were repaid
during the last quarter of 2005.(b)
    
    Comprised of credit facility from a Brazilian private financial institution,
guaranteed by certain officers and receivables. Principal and the interests of 34.89%
per annum are due in four monthly installments ending April 2006. Currently, the
Company has approximately R$3,500 of unused credit line.(c)
    
    This credit facility was used to purchase two stores. Repayment of principal is
due in ten monthly installments of R$53, ending July 2006, in addition of one payment
of R$488 on January 2006. There is no interest charged on these borrowings. Principal
is indexed to Brazilian inflation measured by IGP-M. This facility is secured by the
fixed assets purchased.(d)
    
    This amount is comprised of 9 different lease facilities with Brazilian private
institutions which were related to the logistics and distribution operations. This
portion of business was sold during the last quarter and the company which acquired
such business assumed the balance of those debts.
 C) Debt Obligation  taxes
   31




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##### Table of Contents



State Tax
    Federal Taxes
     D) Debt Obligation  summary of tax debts
   E) Other Obligations
   32




---



##### Table of Contents



Fiscal Year2006
    
 R$
    6,5082007
    
    
    4,4442008
    
    
    3,5432009
    
    
    2,5592010
    
    
    1,669Thereafter
    
    
    2,071Total
    
 R$
    20,794
       Contractual
    
    
    
    
    
    
    LoansFiscal Year
    
    Leases
    
    
    Fiscal Debt
    
    
    Payable
    
    
    Total2006
    
    
    6,508
    
    
    
    1,522
    
    
    
    959
    
    
    
    8,9892007
    
    
    4,444
    
    
    
    1,311
    
    
    
    
    
    
    
    5,7552008
    
    
    3,543
    
    
    
    1,311
    
    
    
    
    
    
    
    4,8542009
    
    
    2,559
    
    
    
    1,311
    
    
    
    
    
    
    
    3,8702010
    
    
    1,669
    
    
    
    1,311
    
    
    
    
    
    
    
    2,980Thereafter
    
    
    2,071
    
    
    
    7,862
    
    
    
    
    
    
    
    9,933Total
    
    
    20,794
    
    
    
    14,628
    
    
    
    959
    
    
    
    36,381
  33




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##### Table of Contents



34




---



##### Table of Contents



Constant currency restatement
  Foreign currency
  Accounts receivable
  Long-Lived Assets
    35




---



##### Table of Contents



ITEM 7A. QUANTITATIVE AND QUALITATIVE INFORMATION ABOUT MARKET RISK
  36




---



##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  
 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
   37




---



##### Table of Contents



ITEM 9B. OTHER INFORMATION
     AmountNumber of
    
    
    PaidQuarter
    
    Shares
    
    
    (Thousand of R$)1st
    
    
    9,800
    
    
    
    162nd
    
    
    31,400
    
    
    
    483rd
    
    
    16,300
    
    
    
    364th
    
    
    44,400
    
    
    
    116Total
    
    
    101,900
    
    
    
    216
 38




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##### Table of Contents



ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
  
 ITEM 11. EXECUTIVE COMPENSATION
  
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
  
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  39




---



##### Table of Contents



ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
          *
    
    Filed herewith.(1)
    
    Filed as an exhibit to Registrants Registration Statement on Form S-1 (File No. 333-3754).(2)
    
    Filed as an exhibit to Registrants Registration Statement on Form S-1 (File No. 33-71368).(3)
    
    Filed as an exhibit to Registrants Current Report on Form 8-K, dated May 15, 2002(4)
    
    Filed as an exhibit to Registrants Annual Report on Form 10-K for the year ended December 31,
1997 (File No. 0-23278).
 40




---



##### Table of Contents



SIGNATURES
  BRAZIL FAST FOOD CORP.By: /s/ Ricardo Figueiredo BomenyRicardo Figueiredo BomenyPresident and Chief Executive Officer
   41




---



##### Table of Contents



/s/ Ricardo Figueiredo Bomeny
    
    Date: March 31, 2006Ricardo Figueiredo BomenyChief Executive Officer and Acting Chief FinancialOfficer/s/ Omar Carneiro da Cunha
    
    Date: March 31, 2006Omar Carneiro da CunhaChairman of the Board/s/ Peter J.F. van Voorst Vader
    
    Date: March 31, 2006Peter J.F. van Voorst VaderDirector/s/ Romulo Borges Fonseca
    
    Date: March 31, 2006Romulo Borges FonsecaDirector/s/ José Ricardo Bousquet Bomeny
    
    Date: March 31, 2006José Ricardo Bousquet BomenyDirector/s/ Stephen J. Rose
    
    Date: March 31, 2006Stephen J. RoseDirector/s/ Guillermo Hector Pisano
    
    Date: March 31, 2006Guillermo Hector PisanoDirector/s/ Gustavo Figueiredo Bomeny
    
    Date: March 31, 2006Gustavo Figueiredo BomenyDirector
 42




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##### Table of Contents



BRAZIL FAST FOOD CORP. AND SUBSIDIARIES
 INDEX TO FINANCIAL STATEMENTS
 PageReports of independent registered public accounting firms
    
    F-2 and F-3Financial statements:Consolidated balance sheets
    
    F-4Consolidated statements of operations
    
    F-5Consolidated statements of comprehensive income (loss)
    
    F-6Consolidated statements of changes in shareholders equity (deficit)
    
    F-7Consolidated statements of cash flows
    
    F-8Notes to consolidated financial statements
    
    F-9 to F-30
 F-1




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
  F-2




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
  F-3




---



##### Table of Contents



BRAZIL FAST FOOD CORP. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
(In thousands of Brazilian Reais, except share amounts)
 December 31,2005
    
    
    2004ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    R$
    2,444
    
    
    R$
    1,717Inventories
    
    
    2,054
    
    
    
    2,366Accounts receivable
    
    
    Clients
    
    
    1,420
    
    
    
    1,820Franchisees
    
    
    5,267
    
    
    
    5,690Allowance for doubtful accounts
    
    
    (1,081
    )
    
    
    (1,420
    )Advances and prepaid expenses
    
    
    620
    
    
    
    874Other current assets
    
    
    1,076
    
    
    
    1,166TOTAL CURRENT ASSETS
    
    
    11,800
    
    
    
    12,213PROPERTY AND EQUIPMENT, NET
    
    
    15,970
    
    
    
    16,142DEFERRED CHARGES, NET
    
    
    5,477
    
    
    
    6,307OTHER RECEIVABLES AND OTHER ASSETS
    
    
    4,823
    
    
    
    3,197TOTAL ASSETS
    
    R$
    38,070
    
    
    R$
    37,859
 LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)
 CURRENT LIABILITIES:Current portion of notes payable
    
    R$
    959
    
    
    R$
    5,976Accounts payable and accrued expenses
    
    
    8,526
    
    
    
    6,104Payroll and related accruals
    
    
    2,317
    
    
    
    1,956Income taxes accruals
    
    
    737
    
    
    
    343Taxes, other than income taxes
    
    
    1,014
    
    
    
    768Deferred income
    
    
    996
    
    
    
    784Current portion of reassessed taxes
    
    
    1,522
    
    
    
    1,339Other current liabilities
    
    
    100
    
    
    
    178TOTAL CURRENT LIABILITIES
    
    
    16,171
    
    
    
    17,448NOTES PAYABLE, less current portion
    
    
    
    
    
    
    1,489DEFERRED INCOME, less current portion
    
    
    2,058
    
    
    
    2,628CONTINGENCIES AND REASSESSED TAXES, less
current portion (note 12)
    
    
    19,807
    
    
    
    20,457OTHER LIABILITIES
    
    
    
    
    
    
    29TOTAL LIABILITIES
    
    
    38,036
    
    
    
    42,051SHAREHOLDERS EQUITY (DEFICIENCY):Preferred stock, $.01 par value, 5,000 shares authorized; no
shares issuedCommon stock, $.0001 par value, 12,500,000 shares authorized;
    
    
    
    
    
    
    8,128,427 and 8,102,177 shares issued
    
    
    1
    
    
    
    1Additional paid-in capital
    
    
    59,883
    
    
    
    59,865Treasury Stock (101,900)
    
    
    (216
    )
    
    
    Accumulated Deficit
    
    
    (58,687
    )
    
    
    (63,131
    )Accumulated comprehensive loss
    
    
    (947
    )
    
    
    (927
    )TOTAL SHAREHOLDERS EQUITY (DEFICIT)
    
    
    34
    
    
    
    (4,192
    )TOTAL LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)
    
    R$
    38,070
    
    
    R$
    37,859
  F-4




---



##### Table of Contents



BRAZIL FAST FOOD CORP. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS  (in thousands of Brazilian Reais, except share amounts)
 Year Ended December 31,2005
    
    
    2004
    
    
    2003STORE RESULTSNet Restaurant Sales
    
    R$
    75,559
    
    
    R$
    65,338
    
    
    R$
    60,466Store Costs and ExpensesFood, Beverage and Packaging
    
    
    (28,306
    )
    
    
    (24,728
    )
    
    
    (23,754
    )Payroll & Related Benefits
    
    
    (17,094
    )
    
    
    (14,778
    )
    
    
    (13,688
    )Restaurant Occupancy
    
    
    (8,926
    )
    
    
    (8,348
    )
    
    
    (7,569
    )Contracted Services
    
    
    (8,624
    )
    
    
    (8,324
    )
    
    
    (7,950
    )Depreciation and Amortization
    
    
    (2,194
    )
    
    
    (2,225
    )
    
    
    (2,651
    )Other Store Costs and Expenses
    
    
    (3,240
    )
    
    
    (2,250
    )
    
    
    (1,684
    )Total Store Costs and Expenses
    
    
    (68,384
    )
    
    
    (60,653
    )
    
    
    (57,296
    )STORE OPERATING INCOME
    
    
    7,175
    
    
    
    4,685
    
    
    
    3,170FRANCHISE RESULTSNet Franchise Revenues
    
    R$
    11,963
    
    
    R$
    9,414
    
    
    R$
    9,264Franchise Costs and Expenses
    
    
    (2,144
    )
    
    
    (1,916
    )
    
    
    (2,150
    )FRANCHISE OPERATING INCOME
    
    
    9,819
    
    
    
    7,498
    
    
    
    7,114MARKETING, GENERAL AND
ADMINISTRATIVE (EXPENSES) INCOMEMarketing (Expenses) Income
    
    
    (2,453
    )
    
    
    342
    
    
    
    (659
    )Administrative Expenses
    
    
    (9,192
    )
    
    
    (7,828
    )
    
    
    (6,520
    )Other Operating Income (Expenses)
    
    
    2,248
    
    
    
    634
    
    
    
    (2,936
    )Depreciation and Amortization
    
    
    (1,158
    )
    
    
    (1,160
    )
    
    
    (704
    )Net result of assets sold
    
    
    (52
    )
    
    
    432
    
    
    
    48Impairment of assets
    
    
    (148
    )
    
    
    
    
    
    
    (204
    )Total Marketing, G & A (Expenses) Income
    
    
    (10,755
    )
    
    
    (7,580
    )
    
    
    (10,975
    )OPERATING INCOME (LOSS)
    
    
    6,239
    
    
    
    4,603
    
    
    
    (691
    )Interest Income (Expenses)
    
    
    537
    
    
    
    (3,151
    )
    
    
    (3,017
    )Foreign Exchange and Monetary
Restatement Loss
    
    
    (84
    )
    
    
    (252
    )
    
    
    (410
    )NET INCOME (LOSS) BEFORE INCOME TAXES
    
    
    6,692
    
    
    
    1,200
    
    
    
    (4,118
    )Income taxes
    
    
    (2,248
    )
    
    
    (599
    )
    
    
    NET INCOME (LOSS)
    
    R$
    4,444
    
    
    R$
    601
    
    
    R$
    (4,118
    )NET INCOME (LOSS) PER COMMON SHAREBASIC AND DILUTED
    
    R$
    0.55
    
    
    R$
    0.08
    
    
    R$
    (0.55
    )WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:BASIC AND DILUTED
    
    
    8,061,317
    
    
    
    7,970,473
    
    
    
    7,552,363
  F-5




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##### Table of Contents



BRAZIL FAST FOOD CORP. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)  (In thousands of Brazilian Reais)
 Year Ended December 31,2005
    
    
    2004
    
    
    2003Net Income (Loss)
    
    R$
    4,444
    
    
    R$
    601
    
    
    R$
    (4,118
    )Other comprehensive income (loss):Foreign currency translation adjustment
    
    
    (20
    )
    
    
    (25
    )
    
    
    292Comprehensive Income (Loss)
    
    R$
    4,424
    
    
    R$
    576
    
    
    R$
    (3,826
    )
 
 F-6




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##### Table of Contents



BRAZIL FAST FOOD CORP. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (DEFICIT)

(In thousands of Brazilian Reais)
 Additional
    
    
    
    
    
    
    
    
    
    
    AccumulatedCommon Stock
    
    
    Paid-In
    
    
    Treasury
    
    
    Accumulated
    
    
    ComprehensiveShares
    
    
    Par Value
    
    
    Capital
    
    
    Stock
    
    
    Deficit
    
    
    Loss
    
    
    TotalBalance, December 31, 2002
    
    
    7,542,790
    
    
    R$
    1
    
    
    R$
    59,297
    
    
    R$
    
    
    
    R$
    (59,614
    )
    
    R$
    (1,194
    )
    
    R$
    (1,510
    )Exercise of options
    
    
    23,750
    
    
    
    
    
    
    
    14
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14Shares in exchange of services
    
    
    240,000
    
    
    
    
    
    
    
    219
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    219Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,118
    )
    
    
    
    
    
    
    (4,118
    )Cumulative translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    292
    
    
    
    292Balance, December 31, 2003
    
    
    7,806,540
    
    
    R$
    1
    
    
    R$
    59,530
    
    
    R$
    
    
    
    R$
    (63,732
    )
    
    R$
    (902
    )
    
    R$
    (5,103
    )Shares in exchange of services
    
    
    260,000
    
    
    
    
    
    
    
    299
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    299Shares granted to Venbo Employees
and share adjustment (see note 13)
    
    
    35,637
    
    
    
    
    
    
    
    36
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    601
    
    
    
    
    
    
    
    601Cumulative translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (25
    )
    
    
    (25
    )Balance, December 31, 2004
    
    
    8,102,177
    
    
    R$
    1
    
    
    R$
    59,865
    
    
    R$
    
    
    
    R$
    (63,131
    )
    
    R$
    (927
    )
    
    R$
    (4,192
    )Exercise of options
    
    
    26,250
    
    
    
    
    
    
    
    18
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,444
    
    
    
    
    
    
    
    4,444Acquisition of Company s own shares
    
    
    (101,900
    )
    
    
    
    
    
    
    
    
    
    
    (216
    )
    
    
    
    
    
    
    
    
    
    
    (216
    )Cumulative translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20
    )
    
    
    (20
    )Balance, December 31, 2005
    
    
    8,026,527
    
    
    R$
    1
    
    
    R$
    59,883
    
    
    R$
    (216
    )
    
    R$
    (58,687
    )
    
    R$
    (947
    )
    
    R$
    34
 
 F-7




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##### Table of Contents



BRAZIL FAST FOOD CORP. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS  (In thousands of Brazilian Reais)
 Year Ended December 31,2005
    
    
    2004
    
    
    2003CASH FLOW FROM OPERATING ACTIVITIES:Net Income (loss)
    
    R$
    4,444
    
    
    R$
    601
    
    
    R$
    (4,118
    )Adjustments to reconcile net income (loss) to cash provided by
(used in) operating activities:Depreciation and amortization
    
    
    3,352
    
    
    
    3,385
    
    
    
    3,355(Gain) Loss on assets sold and impairment of assets
    
    
    200
    
    
    
    (432
    )
    
    
    156Accrued reassessed tax
    
    
    (809
    )
    
    
    
    
    
    
    2,045Expense accounted for on grant of
shares
    
    
    
    
    
    
    36
    
    
    
    Expense paid through issuance of equity
    
    
    
    
    
    
    299
    
    
    
    118Changes in assets and liabilities:(Increase) decrease in:Accounts receivable
    
    
    484
    
    
    
    (895
    )
    
    
    (1,041
    )Inventories
    
    
    312
    
    
    
    (770
    )
    
    
    (60
    )Prepaid expenses and other current
assets
    
    
    344
    
    
    
    92
    
    
    
    (329
    )Other assets
    
    
    (1,626
    )
    
    
    (1,166
    )
    
    
    (117
    )(Decrease) increase in:Accounts payable and accrued
expenses
    
    
    2,422
    
    
    
    504
    
    
    
    305Payroll and related accruals
    
    
    361
    
    
    
    372
    
    
    
    (1,061
    )Taxes
    
    
    640
    
    
    
    409
    
    
    
    (453
    )Other liabilities
    
    
    235
    
    
    
    (1,785
    )
    
    
    1,059Deferred income
    
    
    (358
    )
    
    
    1,053
    
    
    
    (40
    )CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES
    
    
    10,001
    
    
    
    1,703
    
    
    
    (181
    )CASH FLOW FROM INVESTING ACTIVITIES:Additions to property and equipment
    
    
    (4,356
    )
    
    
    (3,354
    )
    
    
    (2,503
    )Leased Assets
    
    
    
    
    
    
    (2,017
    )
    
    
    Acquisition of Companys own shares
    
    
    (216
    )
    
    
    
    
    
    
    Proceeds from sale of property, equipment and deferred charges
    
    
    1,806
    
    
    
    3,757
    
    
    
    1,422CASH FLOWS (USED IN) INVESTING ACTIVITIES
    
    
    (2,766
    )
    
    
    (1,614
    )
    
    
    (1,081
    )CASH FLOW FROM FINANCING ACTIVITIES:Net Borrowings (Repayments) under lines of credit
    
    
    (6,506
    )
    
    
    (1,427
    )
    
    
    558Proceeds for leased assets
    
    
    
    
    
    
    2,017
    
    
    
    Proceeds from issuance of shares of common stock
    
    
    18
    
    
    
    
    
    
    
    14CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
    
    
    (6,488
    )
    
    
    590
    
    
    
    572EFFECT OF FOREIGN EXCHANGE RATE
    
    
    (20
    )
    
    
    (25
    )
    
    
    292NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    727
    
    
    
    654
    
    
    
    (398
    )CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
    
    
    1,717
    
    
    
    1,063
    
    
    
    1,461CASH AND CASH EQUIVALENTS AT END OF YEAR
    
    R$
    2,444
    
    
    R$
    1,717
    
    
    R$
    1,063
  F-8




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##### Table of Contents



BRAZIL FAST FOOD CORP. AND SUBSIDIARIES  (In thousands of Brazilian reais)
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1
    
    BUSINESS AND OPERATIONSBrazil Fast Food Corp. (the Company) was incorporated in the State of Delaware on
September 16, 1992. During 1996, the Company acquired (the Acquisition)100% of the capital
of Venbo Comercio de Alimentos Ltda. (Venbo), a Brazilian limited liability company which
conducts business under the trade name Bobs, owns and, directly and through franchisees,
operates a chain of hamburger fast food restaurants in Brazil.During the second half of 2004, Venbo established, in an association with a Brazilian
individual (Associate), a new company, Suprilog Transportadora Ltda (Suprilog).
Suprilog renders transportation services at usual market value to Venbo, to Bobs
franchisees and to other Brazilian companies. At the time of its constitution, Venbo paid
in 90% of Suprilogs Capital and the remaining 10% would be paid in by the Associate in no
later than a year. As of December 31, 2004, the Associate had not capitalized his share. In
the beginning of 2005, the associate reach an agreement with Venbo, by which he left the
joint venture and Venbo became sole-owner of Suprilog.During the last quarter of 2005, the contract with one of the main suppliers, Fast Food
Distributor Ltda. (FBD  a non-affiliate company), expired. The renewal of this contract,
considered different basis form the previous one, including logistics and transportation
services. Because of such renewal, Venbo sold the main operating assets and liabilities of
Suprilog to FBD, and left the transportation business. As result of this transaction, the
Company recorded an operating gain of approximately $82 at the Consolidated Statement of
Operations of 2005.Suprilogs operated the transportation business until the end of November, 2005. Currently
the transportation is being provided by a third party. As of December, 31, 2005 Suprilog was
a non-operating company, and even though, its financial statements are being entirely
consolidated in the accompanying financial statements.2
    
    MANAGEMENT PLANS REGARDING GOING CONCERNSince March 1996, the Company has sustained net losses totaling R$58,687, and at December
31, 2005, consolidated current liabilities exceed consolidated
current assets by R$4,371.To date, the Company has been dependent upon its initial capital, additional equity and debt
financing to fund the expansion of its operations. Currently, the Company has approximately
R$3,500 of unused credit line.
 F-9




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##### Table of Contents



Management plans to address its immediate and future cash flow needs by focusing on a number
of areas including: reduction of expenses including headcount optimization; the continued
expansion of its franchisee base, including sales of some company-owned stores to
franchisees, which will generate additional cash flows from royalties and franchise fees
without significant capital expenditure; the menu expansion to meet customer demand,
development of intensive training programs and other human resources investments. In order
to act on these plans and sustain current operations, the Company may be dependent upon the
continued forbearance of its creditors, as well as additional financing.There can be no assurance that managements plans will be realized, or that additional
financing will be available to the Company when needed, or at terms that are desirable.
Furthermore, there can be no assurance that the Company will continue to receive the
forbearance of its creditors, or that it will locate suitable new franchisees, or desirable
locations for new franchisees to open stores. The Companys ability to remarket
Company-owned stores to franchisees, and to generate cash flows from such activities, is
impacted by the ability to locate suitable buyers with the interest and capital to complete
such transactions, and by the time to complete such sales. Additionally, the Companys
ability to achieve its plans is further impacted by the instability of the economic
environment in Brazil, which has a direct impact on the desire and ability of consumers to
visit fast food outlets. The Company is also dependent upon the continued employment of key
personnel.The Acquisitions Purchase Agreement stated that Venbos former owner (VENDEX) would be
responsible for off-balance liabilities derived from Venbos transactions prior to the
Acquisition, up to 5% of the purchasing price. Through 1997 to date, the Company has been
receiving some communications from the Brazilian fiscal authorities related to the period
prior to the Acquisition. Those communications are always sent to Vendex and its attorneys.
Since the last months of 2004, the Company have been receiving several communications of tax
debts which amounts may exceed the above mentioned limit.The Company also received intimations to pay some tax debts of R$62 from the period prior to
the Acquisition, to which the company had to colateralize some of its properties. VENDEX
did not substitute such colateral by cash deposits or its own properties, as determined by
the Acquisition Purchase Agreement, because of its weak current financial condition.All demands are being defended by VENDEX attorneys, however the Company can not predict if
their outcome will result in liabilities that will reach the Company  ́s financial position.These factors, among others, raise substantial doubt about the Companys ability to continue
as a going concern.3
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESGenerally Accepted Accounting Principles (GAAP)These consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in the United States (U.S. GAAP). Such accounting
principles differ in certain respects from accounting principles generally accepted in
Brazil (Brazilian GAAP), which is applied by the Company for its annual consolidated
financial statement preparation. Unless otherwise specified, all references in these
financial statements to (i) reais, the real or R$ are to the Brazilian real
(singular), or to the Brazilian reais(plural), the legal currency of Brazil, and (ii) U.S.
dollars or $ are to United States dollars.
 F-10




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##### Table of Contents



Use of estimatesThe preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results could differ
from those estimates.Geographic area of operationsThe Company operates, directly and through franchisees, point of sales in all Brazilian
states (primarily in Rio de Janeiro and São Paulo). The operation in Brazil is susceptible
to changes in Brazilian economic, political, and social conditions. Brazil has experienced
political, economic and social uncertainty in recent years, including an economic crisis
characterized by exchange rate instability and Real devaluation, increased inflation, high
domestic interest rates, negative economic growth, reduced consumer purchasing power and
high unemployment. Under its current leadership, the Brazilian government has been pursuing
economic stabilization policies, including the encouragement of foreign trade and investment
and an exchange rate policy of free market flotation. Despite the current improvement of
Brazilian economic environment, no assurance can be given that the Brazilian government will
continue to pursue these policies, that these policies will be successful if pursued or that
these policies will not be significantly altered. A decline in the Brazilian economy,
political or social problems or a reversal of Brazils foreign investment policy is likely
to have an adverse effect on the Companys results of operations and financial condition.
Additionally, inflation in Brazil may lead to higher wages and salaries for employees and
increase the cost of raw materials, which would adversely affect the Companys
profitability.Risks inherent in foreign operations include nationalization, war, terrorism and other
political risks and risks of increases in foreign taxes or U.S. tax treatment of foreign
taxes paid and the imposition of foreign government royalties and fees.Principles of consolidationThe consolidated financial statements include the accounts of the Company and its wholly
owned (directly and indirectly) subsidiaries. All material intercompany accounts and
transactions have been eliminated in consolidation.Constant currency restatementThrough June 30, 1997 the Brazilian economy was hyperinflationary as defined in Statement of
Financial Accounting Standards (SFAS) No.52. The financial statements prior to that time
were comprehensively restated for the effects of inflation. After that date, inflation
restatement was not applied, however the non-monetary assets reflect the effects of
inflation through that date.
 F-11




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##### Table of Contents



Foreign currencyAssets and liabilities recorded in functional currencies other than Brazilian Reais are
translated into Brazilian Reais at the prevailing exchange rate as reported by the Central
Bank of Brazil as of the balance sheet date. Revenue and expenses are translated at the
weighted-average exchange rates for the year. The resulting translation adjustments are
charged or credited to other comprehensive income. Gains or losses from foreign currency
transactions, such as those resulting from the settlement of receivables or payables
denominated in foreign currency, are recognized in the consolidated statement of operations
as they occur.Cash and cash equivalentsThe Company considers all highly liquid investments purchased with an original maturity of
three months or less to be cash equivalents.Accounts receivableAccounts receivable consist primarily of receivables from food sales, franchise royalties
and assets sold to franchisees.As a rule, all invoices past due over 6 months and below the amount of R$5 K are
written-off. This criterion is recommended by the Brazilian tax authorities to determine
deductible expenses regarding the accounting judgment applied to the realization of account
receivables. We believe that this fiscal rule is conservative and perfectly applicable to
our business. Despite of writing-off those receivables on the accounting books, the finance
department keeps these records to conduct the commercial negotiations.In addition, the Company records a provision for doubtful receivables to allow for any
amounts which may be unrecoverable and is based upon an analysis of the Companys prior
collection experience, customer credit worthiness, and current economic trends. After all
attempts to collect a receivable have failed, the receivable is written off against the
allowance.InventoriesInventories, primarily consisting of food, beverages and supplies, are stated at the lower
of cost or replacement value. Cost of inventories is determined principally on the average
cost method.Property and equipmentProperty and equipment are stated at price-level adjusted cost, less price-level adjusted
accumulated depreciation through June 30, 1997. Depreciation on property and equipment is
provided using the straight-line method over the following estimated useful lives of the
related assets:
 YearsBuildings and building improvements
    
    
    50Leasehold improvements
    
    
    4 - 5Machinery and equipment
    
    
    10-15Furniture and fixtures
    
    
    10-15Vehicles
    
    
    5-13
 F-12




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##### Table of Contents



Deferred charges
   Preopening costs
  Revenue recognition
   Marketing expense, Marketing fund and Advertising expenses
    Stock options
  F-13




---



##### Table of Contents



2005
    
    2004
    
    2003Net income (loss) as reported
    
    
    4,444
    
    
    
    601
    
    
    
    (4,118
    )Stock compensation
    
    
    (124
    )
    
    
    (449
    )
    
    
    (484
    )Net income (loss) pro forma
    
    
    4,320
    
    
    
    152
    
    
    
    (4,602
    )Net income (loss) per share, as reported
    
    
    0.55
    
    
    
    0.08
    
    
    
    (0.55
    )Net income (loss) per share, pro forma
    
    
    0.54
    
    
    
    0.03
    
    
    
    (0.61
    )
     Income taxes
  F-14




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##### Table of Contents



Long-lived and intangibles assets
   Net income (loss) per common share
  Recently issued accounting standards
   F-15




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##### Table of Contents



Reclassifications
  F-16




---



##### Table of Contents



5
    
    OTHER CURRENT ASSETS, OTHER RECEIVABLES AND OTHER ASSETS
  Other current assets:
 December 31,2005
    
    
    2004Witholding taxes
    
    R$
    271
    
    
    R$
    116Receivables from suppliers  exclusivity and
rebates (a)
    
    
    
    
    
    
    810Receivables from franchisees and from FBD 
Suprilog Assets (b)
    
    
    736
    
    
    
    222Other current receivables
    
    
    69
    
    
    
    18R$
    1,076
    
    
    R$
    1,166
 Other receivable and other assets:
 December 31,2005
    
    
    2004Receivables from franchisees  assets sold (c)
    
    R$
    1,057
    
    
    
    494Judicial deposits (d)
    
    
    3,747
    
    
    
    2,703Other receivables
    
    
    19
    
    
    
    R$
    4,823
    
    
    R$
    3,197
 
 (a)
    
    Receivables derived from both exclusivity and rebates agreements with the Companys
suppliers;(b)
    
    Short term receivables from franchisees developed from rights other than royalties and
sale of assets and receivables derived from transaction discussed at note 1;(c)
    
    Long term portion of receivables derived from selling of restaurants to franchisees;(d)
    
    Deposits required by Brazilian court in connection to some of legal disputes, also
discussed at note 12; F-17




---



##### Table of Contents



6
    
    PROPERTY AND EQUIPMENT, NETProperty and equipment consists of the following:
 December 31,2005
    
    
    2004Land
    
    R$
    2,322
    
    
    R$
    2,322Buildings and building improvements
    
    
    2,886
    
    
    
    2,835Leasehold improvements
    
    
    7,449
    
    
    
    5,683Machinery, equipment and software
    
    
    14,474
    
    
    
    13,147Furniture and fixtures
    
    
    2,667
    
    
    
    2,378Assets under capitalized leases
    
    
    3,594
    
    
    
    6,142Vehicles
    
    
    314
    
    
    
    58533,706
    
    
    
    33,092Less: Accumulated depreciation and amortization
    
    
    (17,736
    )
    
    
    (16,950
    )R$
    15,970
    
    
    R$
    16,142
  7
    
    DEFERRED CHARGES, NETDeferred charges consists of the following:
 December 31,2005
    
    
    2004Leasehold premiums
    
    R$
    9,936
    
    
    R$
    10,330Less: accumulated amortization
    
    
    (4,459
    )
    
    
    (4,023
    )R$
    5,477
    
    
    R$
    6,307
   F-18




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##### Table of Contents



8
    
    NOTES PAYABLENotes payable consists of the following:
 December312005
    
    
    2004Revolving the lines of credit
    
   R$
    
    
    
   R$
    297Related party loans(a)
    
    
    100
    
    
    
    999Mortgages payable(b)
    
    
    859
    
    
    
    2,867Notes Payable linked to fixed assets aquisition(c)
    
    
    
    
    
    
    1, 943Leasing facilities (d)
    
    
    
    
    
    
    1,267Other notes payable
    
    
    
    
    
    
    92959
    
    
    
    7,465Less: current portion
    
    
    (959
    )
    
    
    (5,976
    )R$
    
    
    
    R$
    1,489
 
 (a)
    
    Credit facilities from related parties, including company and private
individuals. Repayment of principal is indexed to IGP-M (currently at 2.38% per
annum) with interest of 12.0% per annum. Those transactions were made at usual market
value and were repaid during the last quarter of 2005.(b)
    
    Comprised of credit facility from a Brazilian private financial institution,
guaranteed by certain officers and receivables. Principal and the interests of 34.89%
per annum are due in four monthly installments ending April 2006. Currently, the
Company has approximately R$3,500 of unused credit line.(c)
    
    This credit facility was used to purchase two stores. Repayment of principal is
due in ten monthly installments of R$53, ending July 2006, in addition of one payment
of R$488 on January 2006. There is no interest charged on these borrowings. Principal
is indexed to Brazilian inflation measured by IGP-M. This facility is secured by the
fixed assets purchased.(d)
    
    This amount is comprised of 9 different lease facilities with Brazilian private
institutions which were related to the logistics and distribution operations. This
portion of business was sold during the last quarter and the company which acquired
such business assumed the balance of those debts (see note 1).  F-19




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##### Table of Contents



9
    
    ACCOUNTS PAYABLE AND ACCRUED EXPENSESAccounts payable and accrued expenses consist of the following:
 December 31,2005
    
    
    2004Suppliers
    
    
    R$4,500
    
    
    
    R$3,777Rent payable
    
    
    816
    
    
    
    776Outsourcing fees
    
    
    451
    
    
    
    417Accrued utilities
    
    
    398
    
    
    
    316Accrued maintenance
    
    
    182
    
    
    
    162Accrued advertising
    
    
    229
    
    
    
    231Marketing fund (See notes 3 and 12)
    
    
    1,378
    
    
    
    Audit services
    
    
    96
    
    
    
    88Other accrued liabilities
    
    
    476
    
    
    
    337R$8,526
    
    
    
    R$6,104
 10
    
    CASH FLOW INFORMATIONSupplemental Disclosure of Cash Flow Information:(i)Interest and income tax:
 Year ended December 31,2005
    
    
    2004
    
    
    2003Interest paid
    
R$
    828
    
    
R$
    948
    
    
R$
    471Income taxes paid
    
R$
    1,584
    
    
R$
    224
    
    
R$
    
 11
    
    TAXATIONTax losses through December 31, 2005 relating to income tax were R$40,506 and to social
contribution tax were R$41,363. Social contribution tax is a Brazilian tax levied on
taxable income and is by its nature comparable to corporate income tax.The accumulated tax loss position can be offset against future taxable income. Brazilian
tax legislation restricts the offset of accumulated tax losses to 30% of taxable profits on
an annual basis. These losses can be used indefinitely and are not impacted by a change in
ownership of the Company.
 F-20




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##### Table of Contents



December 31,2005
    
    
    2004
    
    
    2003Tax (expense) income at the combined statutory rate
    
    R$
    (2,275
    )
    
    R$
    (408
    )
    
    R$
    1,400Current income tax offset by
accumulated tax loss credits
    
    
    1,688
    
    
    
    234Combined
statutory rate applied to differences between taxable results in Brazil and reported results
    
    
    (1,661
    )
    
    
    (425
    )
    
    
    (1,377
    )Tax (expense) income for the year
    
    
    (2,248
    )
    
    
    (599
    )
    
    
    23Valuation allowances recorded against net deferred
tax assets
    
    
    
    
    
    
    
    
    
    
    (23
    )Income tax (expense) income as reported in the
accompanyingconsolidated statement of operations
    
    R$
    (2,248
    )
    
    R$
    (599
    )
    
    R$
    
   December 31,2005
    
    
    2004Deferred tax assets:Tax loss carry forward
    
    R$
    13,850
    
    
    R$
    14,796Provision for contingencies
    
    
    836
    
    
    
    436Property and equipment
    
    
    277
    
    
    
    Total deferred tax assets
    
    
    14,963
    
    
    
    15,232Deferred tax liabilities:Property and equipment
    
    
    
    
    
    
    142Deferred charges
    
    
    1,326
    
    
    
    1,515Total deferred tax liabilities
    
    
    1,326
    
    
    
    1,657Net deferred tax asset
    
    
    13,637
    
    
    
    13,575Valuation allowance
    
    
    (13,637
    )
    
    
    (13,575
    )R$
    
    
    
    R$
    
  F-21




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##### Table of Contents



12
    
    COMMITMENTS AND LITIGATIONa) Operating leasesThe future minimum lease payments under operating leases with an initial or remaining
noncancelable lease terms in excess of one year at December 31, 2005 are as follows:
 Fiscal Year
    
    Amount2006
    
   R$
    6,5082007
    
    
    4,4442008
    
    
    3,5432009
    
    
    2,5592010
    
    
    1,669Thereafter
    
    
    2,071Total
    
   R$
    20,794
  b) Other commitments
   c) Reassessed taxes and Contingencies
 Reassessed taxes
   F-22




---



##### Table of Contents




    
    State tax  value added
    
    
    Federal taxes  PAES
      F-23




---



##### Table of Contents



Contingencies
 
    
    Leasing litigation
  
    
    ISS tax litigation
        F-24




---



##### Table of Contents




    
    Other litigations
      December 31,2005
    
    
    2004Long
    
    
    
    
    
    
    
    
    
    
    LongTotal
    
    
    Current
    
    
    Term
    
    
    Total
    
    
    Current
    
    
    TermLiability
    
    
    Liability
    
    
    Liability
    
    
    Liability
    
    
    Liability
    
    
    LiabilityReassessed taxesState tax (value-added)
    
    
    362
    
    
    
    
    
    
    
    362
    
    
    
    1,039
    
    
    
    
    
    
    
    1,039Federal-taxes (PAES)
    
    
    14,628
    
    
    
    1,522
    
    
    
    13,106
    
    
    
    16,215
    
    
    
    1,339
    
    
    
    14,876ContingenciesLeasing litigation
    
    
    3,144
    
    
    
    
    
    
    
    3,144
    
    
    
    3,144
    
    
    
    
    
    
    
    3,144ISS tax litigation
    
    
    985
    
    
    
    
    
    
    
    985
    
    
    
    446
    
    
    
    
    
    
    
    446Other litigations
    
    
    2,210
    
    
    
    
    
    
    
    2,210
    
    
    
    952
    
    
    
    
    
    
    
    952TOTAL
    
    
    R$21,329
    
    
    
    R$1,522
    
    
    
    R$19,807
    
    
    
    R$21,796
    
    
    
    R$1,339
    
    
    
    R$20,457
   F-25




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##### Table of Contents



13
    
    SHAREHOLDERS EQUITY
 Common Stock
  December 31,2005
    
    
    2004Issued shares
    
    
    8,128,427
    
    
    
    8,102,177Less: Treasury stock
    
    
    (101,900
    )
    
    
    Outstanding shares
    
    
    8,026,527
    
    
    
    8,102,177
 Preferred stock
  Private placements
   F-26




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##### Table of Contents



Stock repurchase plan
   Services provided in exchange of common shares
     Shares granted to Venbo employees and shares adjustments
   F-27




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##### Table of Contents



Stock option plan
         F-28




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##### Table of Contents



2005
    
    
    2004
    
    
    2003Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    Exercise
    
    
    
    
    
    
    ExerciseShares
    
    
    Price
    
    
    Shares
    
    
    Price
    
    
    Shares
    
    
    PriceOptions outstanding at beginning
of year
    
    
    521,250
    
    
    $
    1.86
    
    
    
    570,625
    
    
    $
    1.76
    
    
    
    590,000
    
    
    $
    2.35Granted
    
    
    32,500
    
    
    
    0.16
    
    
    
    
    
    
    
    
    
    
    
    32,500
    
    
    
    0.32Exercised
    
    
    (26,250
    )
    
    
    0.29
    
    
    
    
    
    
    
    
    
    
    
    (23,750
    )
    
    
    0.19Expired
    
    
    (170,000
    )
    
    
    2.24
    
    
    
    (49,375
    )
    
    
    2.78
    
    
    
    (28,125
    )
    
    
    2.45Canceled
    
    
    (10,500
    )
    
    
    1.77
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Options outstanding at December 31,
    
    
    347,000
    
    
    $
    1.65
    
    
    
    521,250
    
    
    $
    1.86
    
    
    
    570,625
    
    
    $
    1.76Options exercisable at December 31,
    
    
    347,000
    
    
    $
    1.65
    
    
    
    521,250
    
    
    $
    1.86
    
    
    
    558,125
    
    
    $
    1.77
  14 OTHER INCOME (EXPENSES)
  December 31,2005
    
    
    2004
    
    
    2003Exclusivity and Rebate Agreements
    
    R$
    3,655
    
    
    R$
    3,949
    
    
    R$
    2,503Income from properties leasing
    
    
    410
    
    
    
    226
    
    
    
    156Uncollectable receivables
    
    
    (2,470
    )
    
    
    (2,243
    )
    
    
    (2,025
    )Reassessed tax and other tax adjustments
    
    
    1,552
    
    
    
    (632
    )
    
    
    (2,155
    )Accruals for contingencies
    
    
    (1,482
    )
    
    
    (117
    )
    
    
    (370
    )Transport and logistic operating income
    
    
    873

    
    
    
    9Preopening and other (expenses) income
    
    
    (290
    )
    
    
    (558
    )
    
    
    (1,045
    )R$
    2,248
    
    
    R$
    634
    
    
    R$
    (2,936
    )
 15 TRANSACTIONS WITH RELATED PARTIES
  F-29




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##### Table of Contents



16 SELECTED QUARTERLY FINANCIAL DATA
 2005First
    
    Second
    
    Third
    
    FourthQuarter
    
    Quarter
    
    Quarter
    
    Quarter(Amounts in Thousands of Brazilian Reais, except sharesand income (loss) per share)Net Restaurant Sales
    
    
    18,099
    
    
    
    16,774
    
    
    
    18,221
    
    
    
    22,465Net Franchise Revenues
    
    
    2,701
    
    
    
    2,606
    
    
    
    2,982
    
    
    
    3,674Operating income (loss)
    
    
    2,824
    
    
    
    79
    
    
    
    721
    
    
    
    2,615Net income (loss)
    
    
    2,018
    
    
    
    (680
    )
    
    
    484
    
    
    
    2,622Basic and diluted income (loss) per share
    
    
    0.25
    
    
    
    (0.08
    )
    
    
    0.06
    
    
    
    0.32Weighted average common shares outstanding
    
    
    8,098,257
    
    
    
    8,068,015
    
    
    
    8,057,154
    
    
    
    8,022,716
 2004Net Restaurant Sales
    
    
    16,154
    
    
    
    15,697
    
    
    
    15,082
    
    
    
    18,405Net Franchise Revenues
    
    
    2,218
    
    
    
    2,223
    
    
    
    2,181
    
    
    
    2,792Operating income (loss)
    
    
    2,198
    
    
    
    28
    
    
    
    557
    
    
    
    1,820Net income (loss)
    
    
    1,040
    
    
    
    (447
    )
    
    
    110
    
    
    
    (102
    )Basic and diluted income (loss) per share
    
    
    0.13
    
    
    
    (0.06
    )
    
    
    0.01
    
    
    
    (0.02
    )Weighted average common shares outstanding
    
    
    7,806,540
    
    
    
    7,936,540
    
    
    
    8,066,540
    
    
    
    8,066,936
 F-30




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##### Table of Contents



EXHIBIT INDEX
 Exhibit Index
    
    Description3.1
    
    Certificate of Incorporation of the Registrant, as amended(1)3.2
    
    By-laws of the Registrant (2)4.1*
    
    Capitalization and Administrative
Restructuring Intentions Protocol dated May 15, 200210.1
    
    Amended and Restated 1992 Stock Option Plan (2)10.2
    
    Capitalization and Administrative Restructuring Intentions Protocol
dated May 15, 2002 by and among Brazil Fast Food Corp., Gustavo Figueredo Bomeny,
CCC Emprendimentos e Participacoes Ltda., BigBurger Ltda., Jose Ricardo Bousquet
Bomeny, Omar Carneiro da Cunha, Seaview Venture Group, Peter van Voorst Vader and
Shampi Investments A.E.C. (3)21.1
    
    Subsidiaries of Registrant (4)24.1
    
    Power of Attorney (comprises a portion of the signature page of this
report)31.1*
    
    Certification by Ricardo Figueiredo Bomeny, Chief Executive Officer
and Acting Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley
Act of 200232.1*
    
    Certification by Ricardo Figueiredo Bomeny, Chief Executive Officer
and Acting Chief Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley
Act of 200299.1
    
    Certifying Statement of the Chief Executive Officer and Acting Chief
Financial Officer pursuant to Section 1350 of the Title 18 of the United States
Code.
 
 *
    
    Filed herewith.(1)
    
    Filed as an exhibit to Registrants Registration Statement on Form S-1 (File No. 333-3754).(2)
    
    Filed as an exhibit to Registrants Registration Statement on Form S-1 (File No. 33-71368).(3)
    
    Filed as an exhibit to Registrants Current Report on Form 8-K, dated April 1, 2002.(4)
    
    Filed as an exhibit to Registrants Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 0-23278). 75