|
Prospectus
Supplement
(To
Prospectus dated October 7, 2005)
|
Filed
Pursuant to Rule 424(b)(3) and 424(c)
Commission
File No. 333-126487
|
27,772,411
Shares
Common
Stock
This
prospectus supplement supplements the prospectus dated October 7, 2005, which
relates to the shares of our common stock that may be sold by the selling
stockholders named therein.
This
prospectus supplement should be read in connection with, and may not be
delivered or utilized without, the prospectus dated October 7, 2005, and the
prospectus supplements dated November 2, 2005, December 1, 2005, December 2,
2005 and March 23, 2006. This prospectus supplement is qualified by reference
to
the prospectus and the prospectus supplements, except to the extent that the
information in this prospectus supplement updates or supersedes the information
contained in the prospectus dated October 7, 2005, or the prospectus supplements
dated November 2, 2005, December 1, 2005, December 2, 2005 and March 23, 2006.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or determined if this prospectus
supplement is truthful or complete. Any representation to the contrary is a
criminal offense.
_______________
The
date
of this prospectus supplement is April 7, 2006
_______________
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of
Report (Date of earliest event reported) April
3, 2006
|
Shells
Seafood Restaurants, Inc.
|
|
(Exact
Name of Registrant as Specified in its
Charter)
|
|
Delaware
|
0-28258
|
65-0427966
|
||
|
(State
or Other Jurisdiction
of
Incorporation)
|
(Commission
File
Number)
|
(IRS
Employer
Identification
No.)
|
|
16313
N. Dale Mabry Hwy, Suite 100, Tampa, FL
|
33618
|
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
Registrant’s
telephone number, including area code: (813)
961-0944
|
Not
Applicable
|
|
(Former
Name or Former Address, if Changed Since Last
Report)
|
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2 below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement
communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications
pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
2.02 Results of Operations and Financial Condition
The
following tables provides a summary of the restatement adjustments of Shells
Seafood Restaraunts, Inc. (the “Company”) as disclosed in Item 4.02 below for
the thirteen and twenty-six weeks ended July 3, 2005, and the thirteen and
thirty-nine weeks ended October 2, 2005.
Consolidated
Statements of Operations (Dollars in Thousands)
(Unaudited)
|
13
Weeks Ended July 3, 2005
|
26
Weeks Ended July 3, 2005
|
||||||||||||||||||
|
As
Previously Reported
|
Adjustment
|
As
Restated
|
As
Previously Reported
|
Adjustment
|
As
Restated
|
||||||||||||||
|
NET
INCOME
|
$
|
159
|
-
|
$
|
159
|
569
|
-
|
569
|
|||||||||||
|
Deemed
dividend associated with warrants and beneficial conversion feature
of
preferred stock
|
-
|
(1,735
|
)
|
(1,735
|
)
|
-
|
(1,735
|
)
|
(1,735
|
)
|
|||||||||
|
NET
INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS
|
$
|
159
|
$
|
(1,735
|
)
|
$
|
(1,576
|
)
|
$
|
569
|
$
|
(1,735
|
)
|
$
|
(1,166
|
)
|
|||
|
NET
INCOME (LOSS) PER SHARE OF COMMON STOCK:
|
|||||||||||||||||||
|
Basic
|
$
|
0.01
|
$
|
(0.11
|
)
|
$
|
(0.10
|
)
|
$
|
0.04
|
$
|
(0.12
|
)
|
$
|
(0.08
|
)
|
|||
|
Diluted
|
$
|
0.01
|
$
|
(0.11
|
)
|
$
|
(0.10
|
)
|
$
|
0.03
|
$
|
(0.11
|
)
|
$
|
(0.08
|
)
|
|||
|
13
Weeks Ended October 2, 2005
|
39
Weeks Ended October 2, 2005
|
||||||||||||||||||
|
As
Previously Reported
|
Adjustment
|
As
Restated
|
As
Previously Reported
|
Adjustment
|
As
Restated
|
||||||||||||||
|
NET
INCOME (LOSS)
|
$
|
(152
|
)
|
-
|
$
|
(152
|
)
|
$
|
417
|
-
|
$
|
417
|
|||||||
|
Deemed
dividend associated with warrants and beneficial conversion feature
of
preferred stock
|
-
|
-
|
-
|
-
|
(1,735
|
)
|
(1,735
|
)
|
|||||||||||
|
NET
INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS
|
$
|
(152
|
)
|
$
|
-
|
$
|
(152
|
)
|
$
|
417
|
$
|
(1,735
|
)
|
$
|
(1,318
|
)
|
|||
|
NET
INCOME (LOSS) PER SHARE OF COMMON STOCK:
|
|||||||||||||||||||
|
Basic
|
$
|
(0.01
|
)
|
$
|
-
|
$
|
(0.01
|
)
|
$
|
0.03
|
$
|
(0.12
|
)
|
$
|
(0.09
|
)
|
|||
|
Diluted
|
$
|
(0.01
|
)
|
$
|
-
|
$
|
(0.01
|
)
|
$
|
0.02
|
$
|
(0.11
|
)
|
$
|
(0.09
|
)
|
|||
2
Consolidated
Balance Sheets (Dollars in Thousands) (Unaudited)
|
July
3, 2005
|
October
2, 2005
|
||||||||||||||||||
|
As
Previously Reported
|
Adjustment
|
As
Restated
|
As
Previously Reported
|
Adjustment
|
As
Restated
|
||||||||||||||
|
Stockholders'
Equity:
|
|||||||||||||||||||
|
Additional
paid-in-capital
|
$
|
22,910
|
$
|
1,735
|
$
|
24,645
|
$
|
23,387
|
$
|
1,735
|
$
|
25,122
|
|||||||
|
Accumulated
deficit
|
(13,942
|
)
|
(1,735
|
)
|
(15,677
|
)
|
(14,094
|
)
|
(1,735
|
)
|
(15,829
|
)
|
|||||||
|
Total
stockholders' equity
|
9,129
|
-
|
9,129
|
9,455
|
-
|
9,455
|
|||||||||||||
The
information furnished pursuant to this Item of the Current Report on Form
8-K
(including the exhibits hereto) shall not be deemed to be “filed” under
Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise
subject to the liabilities of that section or Section 11 or 12(a)(2) of the
Securities Act of 1933, as amended, and is not incorporated by reference
into
any of the Company’s filings under the Securities Act of 1933, as amended, or
under the Securities Exchange Act of 1934, as amended, whether made before
or
after the date of this report and irrespective of any general incorporation
language in such filing, unless the Company expressly states in such filing
that
such information is to be considered or incorporated by reference
therein.
Item
4.02 Non-reliance on Previously Issued Financial Statements or a Related
Audit
Report or Completed Interim Review.
The
Company announced on April 3, 2006 that it will restate its second and third
quarter fiscal 2005 financial statements to reflect an adjustment to its
accounting for the issuance of the Series B Preferred Stock and warrants
in the
May 2005 private placement. The adjustment is to account for the non-cash
beneficial conversion feature of the Series B Preferred Stock , which requires
that the gross proceeds to the Company of $6,929,000 be allocated in that
period
to the different securities issued, based upon their relative fair market
value.
As
a
result, the Company will record $1,735,000 for this beneficial conversion
feature as a one-time accounting adjustment of a preferred stock dividend
through retained earnings. For the fiscal year ended January 1, 2006, the
pro-forma net loss attributable to common shareholders on the Company’s
Statement of Operations will increase to ($3,587,000), or ($0.24) per share,
from ($1,852,000), or ($0.13) per share, as previously reported. Similarly,
additional paid-in-capital will increase to $25,122,000 from $23,387,000,
while
accumulated deficit will increase to ($18,098,000) from ($16,363,000) on
the
Company’s Statement of Stockholders’ Equity.
This
restatement has no effect on the financial results of restaurant operations
or
the Company’s cash position.
The
need
for an accounting adjustment was discovered internally by the Company in
conjunction with its procedures relative to the fiscal 2005 year end audit.
The
decision to restate these financial statements was based on collective
discussions by management and the Company’s Board of Directors, in conjunction
with its independent registered public accounting firm, and the conclusion
by
the Company’s Board that the aforementioned financial statements could no longer
be relied upon due to the errors in such financial statements.
3
Additionally,
in conjunction with correcting its previously issued financial statements,
the
Company will file a Form 12b-25 with the Securities and Exchange Commission,
extending the deadline for filing its Annual Report on Form 10-K for the
fiscal
year ended January 1, 2006 until April 17, 2006 and expects to file its Annual
Report on Form 10-K within that time frame.
Item
9.01 Financial Statements and Exhibits.
| (d) |
Exhibits.
|
| Item No. |
Description
|
|
99.1
|
Press
Release dated April 3, 2006 issued by Shells Seafood Restaurants,
Inc.
*
|
*
This
exhibit is furnished with this Current Report on Form 8-K and shall not be
deemed to be “filed” under Section 18 of the Securities Exchange Act of
1934, as amended, or otherwise subject to the liabilities of that section
or
Section 11 or 12(a)(2) of the Securities Act of 1933, as amended, and is
not incorporated by reference into any of the Company’s filings under the
Securities Act of 1933, as amended, or under the Securities Exchange Act
of
1934, as amended, whether made before or after the date of this report and
irrespective of any general incorporation language in such filing, unless
the
Company expressly states in such filing that such information is to be
considered or incorporated by reference therein.
4
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
SHELLS
SEAFOOD RESTAURANTS, INC.
|
||
| |
|
|
|
Date:
April 3, 2006
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By: |
/s/
Warren R. Nelson
|
|
Name:
Warren
R. Nelson
|
||
|
Title:
Vice
President and Chief Financial
Officer
|
||
5
Exhibit
Index
| Item No. |
Description
|
| 99.1 |
Press
Release dated April 3, 2006
|
6
Exhibit
99.1
For
more
information call:
Investors:
Raphael
Gross
(203)
682-8253
Media:
Rick
Van
Warner
(407)
628-3104
SHELLS
SEAFOOD RESTAURANTS, INC. TO RESTATE
ITS
SECOND AND THIRD QUARTER 2005 FINANCIAL STATEMENTS;
NON-CASH
ADJUSTMENT TO MAY 2005 PREFERRED STOCK FINANCING
-Restatement
to have no effect on restaurant operating results or cash position-
TAMPA,
FL-- (Businesswire) -- April 3, 2006 - Shells Seafood Restaurants, Inc. (OTC
Bulletin Board:SHLL) today announced that it will restate its second and
third
quarter fiscal 2005 financial statements to reflect an adjustment to its
accounting for the issuance of the Series B Preferred Stock and warrants
in the
May 2005 private placement. The adjustment is to account for the non-cash
beneficial conversion feature of the Series B Preferred Stock, which requires
that the gross proceeds to the Company of $6,929,000 be allocated in that
period
to the different securities issued, based upon their relative fair market
value.
As
a
result, the Company will record $1,735,000 for this beneficial conversion
feature as a one-time accounting adjustment of a preferred stock dividend
through retained earnings. For the fiscal year ended January 1, 2006, the
pro-forma net loss attributable to common shareholders on the Company’s
Statement of Operations will increase to ($3,587,000), or ($0.24) per share,
from ($1,852,000), or ($0.13) per share, as previously reported. Similarly,
additional paid-in-capital will increase to $25,122,000 from $23,387,000,
while
accumulated deficit will increase to ($18,098,000) from ($16,363,000) on
the
Company’s Statement of Stockholders’ Equity.
This
restatement has no effect on the financial results of restaurant operations
or
the Company’s cash position.
The
need
for an accounting adjustment was discovered internally by the Company in
conjunction with its procedures relative to the fiscal 2005 year end audit.
The
decision to restate these financial statements was based on collective
discussions by management and the Company’s Board of Directors, in conjunction
with its independent registered public accounting firm, and the conclusion
by
the Company’s Board that the aforementioned financial statements could no longer
be relied upon.
The
Company is filing a Form 8-K with the SEC in connection with its restatement
decision. Additionally, in
conjunction with correcting its previously issued financial statements, the
Company will file a Form 12b-25 with the SEC, extending the deadline for
filing
its Annual Report on Form 10-K for the fiscal year ended January 1, 2006
until
April 17, 2006 and expects to file its Annual Report on Form 10-K within
that
time frame.
Company
Description
The
Company manages and operates 25 full-service, neighborhood seafood restaurants
in Florida under the name “Shells”. Shells restaurants feature a wide selection
of seafood items, including shrimp, oysters, clams, mussels, scallops, lobster,
crab and daily fresh fish specials, cooked to order in a variety of ways:
steamed, sautéed, grilled, blackened and fried. Shells restaurants also offer a
wide selection of signature pasta dishes, appetizers, salads, desserts and
full
bar service.
In
addition to seasonal fluctuations, the Company’s quarterly and annual operating
results are affected by a wide variety of other factors that could materially
and adversely affect revenues and profitability, including changes in consumer
preferences, tastes and eating habits; increases in food and labor costs;
the
availability of food acceptable to our quality standards at acceptable prices;
the availability of qualified labor; national, regional and local economic
and
weather conditions; promotional timings and seasonality; demographic trends
and
traffic patterns; changes in travel and tourism tendencies, particularly
in
light of world events; competition from other restaurants and food service
establishments; availability of third party financing to fund capital or
operating activities, if required; and the timing, costs and charges relating
to
restaurant openings, closings and remodelings. As a result of these and other
factors, the Company may experience material fluctuations in future operating
results on a quarterly or annual basis, which could materially and adversely
affect its business, financial condition and stock price. Furthermore, this
press release and other documents filed by the Company with the Securities
and
Exchange Commission (“SEC”) contain certain forward-looking statements with
respect to the business of the Company and the industry in which it operates.
These forward-looking statements are subject to certain risks and uncertainties,
including those mentioned above, which may cause results to differ significantly
from these forward-looking statements. An investment in the Company involves
various risks, including those mentioned above and those that are detailed
from
time-to-time in the Company’s SEC filings.