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As filed with the Securities and Exchange Commission on August 29, 1997
Registration No. 333-3548
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM SB-2
ON
FORM S-3
PURSUANT TO RULE 401(e)
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MICHIGAN BREWERY, INC.
(Exact name of registrant as specified in its charter)
MICHIGAN 5813 38-3196031
(State or other (Primary Standard (I.R.S. Employer
Jurisdiction of Industrial Classification Identification
Incorporation or Code Number) Number)
Organization)
550 SOUTH WISCONSIN STREET
GAYLORD, MICHIGAN 49735
(517) 731-0401
(Address and telephone number, including area code, of
registrant's principal executive offices)
WILLIAM F. ROLINSKI, PRESIDENT
MICHIGAN BREWERY, INC.
550 SOUTH WISCONSIN STREET
GAYLORD, MICHIGAN 49735
(517) 731-0401
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPIES TO:
CHRISTOPHER C. CLEVELAND, ESQ.
BRETT D. ANDERSON, ESQ.
BRIGGS AND MORGAN, P.A.
2400 IDS CENTER
MINNEAPOLIS, MINNESOTA 55402
(612) 334-8400
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE REGISTRATION STATEMENT BECOMES EFFECTIVE.
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If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: /X/
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this Form, check the following box: / /
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: / /
If this form is a post effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: / /
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(a)
MAY DETERMINE.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there by any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
SUBJECT TO COMPLETION, DATED AUGUST 29, 1997
PROSPECTUS
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2,550,000 SHARES
MICHIGAN BREWERY, INC.
COMMON STOCK
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Michigan Brewery, Inc. (The "Company") is offering 2,550,000 shares of
common stock (the "Shares"), par value $.01 per share (the "Common Stock"),
issuable upon exercise of outstanding Class A Warrants. Each Class A Warrant
entitles the holder to purchase at any time until June 13, 2000, one share of
Common Stock at an exercise price of $8.00 per share, subject to adjustment.
The Class A Warrants are subject to redemption by the Company for $0.01 per
warrant at any time on 30 days' written notice, provided that the closing high
bid price of the Common Stock exceeds $9.00 per share (subject to adjustment)
for any 20 consecutive trading days. The Class A Warrants were originally
issued by the Company in the Company's June 1996 initial public offering (the
"offering") as part of a unit (a "Unit") consisting of one share of the
Company's Common Stock and one Class A Warrant.
The Company's Common Stock is traded on the Nasdaq Smallcap Market under
the symbol "BBUC." On August 28, 1997, the average of the high and low prices
of the Common Stock on the Nasdaq Smallcap Market was $3.625 per share. Current
market quotations are listed in THE WALL STREET JOURNAL and many other
newspapers of general circulation.
THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING
ON PAGE 6 OF THIS PROSPECTUS. THESE ARE SPECULATIVE SECURITIES.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
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PRICE TO WARRANT UNDERWRITING PROCEEDS TO
HOLDERS DISCOUNT COMPANY(1)(2)
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Per Share . . . . . . . . . . $8.00 -- $8.00
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Total . . . . . . . . . . . . $20,400,000 -- $20,400,000
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(1) ASSUMES ALL CLASS A WARRANTS ARE EXERCISED.
(2) BEFORE DEDUCTING EXPENSES ESTIMATED AT $30,000.
THE DATE OF THIS PROSPECTUS IS ____________, 1997.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company pursuant to the Exchange
Act may be inspected and copied at the public reference facilities maintained by
the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549 and at the regional offices of the Commission located at Seven World Trade
Center, Suite 1300, New York, New York 10048 and Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material can also be obtained from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates. The Commission maintains a Web site that contains reports,
proxy statements and other information regarding registrants that file
electronically with the Commission at http://www.sec.gov. In addition, the
Company's Common Stock is quoted on the Nasdaq SmallCap Market. Reports, proxy
statements and other information concerning the Company can be inspected and
copied at the Public Reference Room of the National Association of Securities
Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act. This Prospectus does not
contain all of the information, exhibits and undertakings set forth in the
Registration Statement, certain parts of which are omitted as permitted by the
rules and regulations of the Commission. For further information, reference is
hereby made to the Registration Statement which may be inspected and copied in
the manner and at the sources described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company (File No. 0-20845)
with the Commission pursuant to the Exchange Act are incorporated into this
Prospectus by reference:
(a) The Company's Annual Report on Form 10-KSB for the year ended December
29, 1996, filed on March 31, 1997.
(b) The Company's Quarterly Reports on Form 10-QSB for the fiscal quarters
ended March 30, 1997 and June 29, 1997, filed on May 9, 1997 and
August 12, 1997, respectively.
(c) The Company's Current Report on Form 8-K, filed on May 28, 1997,
relating to the safe harbor for forward-looking statements.
(d) The Company's Definitive Schedule 14A (Proxy Statement), filed on
April 21, 1997, relating to the Company's Annual Meeting of
Shareholders held on June 4, 1997.
(e) The description of the Company's capital stock contained in its
Registration Statement on Form SB-2 (File No. 333-3548), filed on
April 15, 1996, and as amended by Pre-Effective Amendments Nos. 1 and
2, filed on May 24, 1996 and June 12, 1996, respectively.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering hereunder shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents.
Any statement contained herein or in a document all or any portion of which
is incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed document which
also is or is deemed
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to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide, without charge, to each person to whom this
Prospectus is delivered, upon written or oral request of any such person, a copy
of any or all of the foregoing documents (other than exhibits to such documents
which are not specifically incorporated by reference in such documents).
Written requests for such copies should be directed to the Company at 550 South
Wisconsin Street, Gaylord, Michigan 49735, Attention: Chief Financial Officer.
Telephone requests may be directed to the office of the Chief Financial Officer
of the Company at (517) 731-0401.
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PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED BY THE MORE DETAILED INFORMATION AND
CONSOLIDATED FINANCIAL STATEMENTS APPEARING ELSEWHERE OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. UNLESS OTHERWISE INDICATED, INFORMATION IN THIS
PROSPECTUS GIVES EFFECT TO A 112.5-FOR-ONE STOCK SPLIT WITH RESPECT TO THE
COMMON STOCK EFFECTIVE JANUARY 19, 1996.
THIS PROSPECTUS CONTAINS "FORWARD-LOOKING STATEMENTS" AS DEFINED IN THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 THAT INVOLVE RISKS AND
UNCERTAINTIES. PURCHASERS OF THE COMPANY'S COMMON STOCK ARE CAUTIONED THAT THE
COMPANY'S ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM THE RESULTS DISCUSSED IN
THOSE FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO
SUCH DIFFERENCES INCLUDE THOSE FACTORS DISCUSSED HEREIN UNDER "RISK FACTORS" AND
ELSEWHERE IN THIS PROSPECTUS.
THE COMPANY
The business of Michigan Brewery, Inc. (the "Company") is to develop, own
and operate microbrewery/restaurants known as Big Buck Brewery & Steakhouses
("Big Buck Breweries" or "Breweries"). In May 1995, the Company opened its first
Big Buck Brewery in Gaylord, Michigan adjoining I-75 approximately 200 miles
north of Detroit (the "Gaylord Brewery"). On March 17, 1997, the Company opened
its second Big Buck Brewery in Grand Rapids, Michigan (the "Grand Rapids
Brewery"). The approximately 29,000 square-foot Gaylord Brewery served as a
model for the Grand Rapids Brewery and will serve as a model for the two Big
Buck Breweries which the Company intends to develop during the remainder of 1997
using the proceeds of its Offering and real estate financing.
A Big Buck Brewery offers casual dining featuring moderately priced steaks,
ribs, chicken and other food and a distinctive selection of beers which are
microbrewed on-site. The Company also sells its microbrewed beer off-site
through wholesale distributors in order to promote customer interest in the
Breweries. The Company's selection of beers ranges from a light golden ale to a
dark full-bodied stout and is designed to satisfy the tastes of a broad spectrum
of consumers. A key element of the Company's strategy is to capitalize on the
growing interest of consumers in high quality, more flavorful microbrewed beer.
The Company believes it will generate customer loyalty to its beers and its
restaurant operations through customer identification with each local Big Buck
Brewery.
The Company believes the appearance of the Breweries has contributed to
their popularity as eating and drinking establishments. The Gaylord Brewery
features a large, open and visually stimulating dining area which highlights the
array of stainless steel and copper brewing equipment used to brew the Company's
craftbrewed beer. The Gaylord Brewery features a 4,000 square foot dining area
and a 1,600 square foot bar area, with combined seating capacity of
approximately 420. The Gaylord Brewery is decorated with rustic wood-finished
interiors, mounted deer racks, 36-foot high vaulted ceilings and warm lighting.
The restaurant's specially commissioned Amish hand-carved wooden furniture and
overhead genuine Tennessee whisky barrel lighting fixtures add character to the
building's decor. The friendly and attentive staff, on-site brewing and
summertime outdoor seating and live music are designed to create an appealing
atmosphere for lunch, dinner and bar customers. Seating capacity at the Grand
Rapids Brewery is approximately 250 for the restaurant and bar combined. The
Grand Rapids Brewery's interior follows the Gaylord Brewery's motif with a warm,
cozy atmosphere utilizing soft lighting and Amish furniture. The brewing and
fermenting tanks front directly on 28th Street, a street with an average daily
vehicle count ("ADVC") of approximately 52,000. The menu and beer styles are
the same at both the Gaylord and Grand Rapids Breweries.
Consumer interest in more flavorful beer has resulted in significant growth
in the craftbrewed beer market during the last several years, despite a decline
in per capita beer consumption. The number of microbreweries in the United
States has grown from 21 in 1985 to approximately 380 as of March 1997. From
1985 to 1996, the annual production of craftbrewed beer in the United States
grew from 75,000 barrels to
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approximately 5.3 million barrels. Despite these high levels of growth,
sales of craftbrewed beers represented approximately 2.6% of total beer sales
in the United States as of December 1996.
The Company is currently constructing a third Big Buck Brewery on a site
in Auburn Hills, Michigan, a suburb of Detroit. This site is located just
off Interstate 75 at exit 79. The new facility will encompass 26,372 square
feet including brewery, bar and restaurant. Seating capacity in the
restaurant and bar will be approximately 665 and the brewery will house a
15-barrel brewing system. This Brewery will be accessible to the over 3.2
million Detroit metro area residents and is scheduled to open in October 1997.
The Company was incorporated in 1993 under the laws of the State of
Michigan. The Company's principal executive offices are located at 550 South
Wisconsin Street, Gaylord, Michigan 49735 and its telephone number is (517)
731-0401.
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RISK FACTORS
AN INVESTMENT IN THE SHARES OF COMMON STOCK OFFERED HEREBY INVOLVES A HIGH
DEGREE OF RISK. PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING
RISK FACTORS, IN ADDITION TO THE OTHER INFORMATION SET FORTH IN THIS PROSPECTUS,
IN CONNECTION WITH AN INVESTMENT IN THE SHARES OF COMMON STOCK OFFERED HEREBY.
WHEN USED BELOW AND ELSEWHERE IN THIS PROSPECTUS, INCLUDING DOCUMENTS
INCORPORATED HEREIN BY REFERENCE, THE WORDS "BELIEVES," "ANTICIPATES" AND
"INTENDS" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING
STATEMENTS. SUCH STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED. POTENTIAL
PURCHASERS OF THE COMPANY'S COMMON STOCK ARE CAUTIONED NOT TO PLACE UNDUE
RELIANCE ON SUCH FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE
HEREOF.
LACK OF PROFITABILITY; LACK OF OPERATING HISTORY
The Company had a net loss of $613,148 during the six months ended June 29,
1997 and a net loss of $703,592 during the year ended December 29, 1996. The
Company had working capital of $1,025,515 and $3,120,013 at June 29, 1997 and
December 29, 1996, respectively. The Company opened a Big Buck Brewery &
Steakhouse ("Brewery" or "Big Buck Brewery") in Gaylord, Michigan (the "Gaylord
Brewery"), in May 1995 and a Big Buck Brewery in Grand Rapids, Michigan (the
"Grand Rapids Brewery"), in March 1997. Prior to the opening of the Gaylord
Brewery, the Company had no operations or revenues. Accordingly, the Company's
operations are subject to all of the risks inherent in the establishment of a
new business enterprise, including the lack of operating history. The
likelihood of success of the Company must be considered in light of the
problems, expenses, difficulties, complications and delays frequently
encountered in connection with the establishment of a business. There can be no
assurance that future operations of any Big Buck Brewery will be profitable.
Future revenues and profits, if any, will depend upon various factors, including
the quality of restaurant operations, the acceptance of the Company's beer and
general economic conditions. In general, restaurants experience a decline in
revenue growth or of actual revenues following a period of excitement which
accompanies their opening. There is no assurance that the Company can operate
profitably or that it will successfully implement its plans to open additional
Big Buck Breweries, in which case the Company will continue to be dependent on
the revenues of the Gaylord and Grand Rapids Breweries.
DEVELOPMENT OF FUTURE BREWERIES; EXPANSION PLAN RISKS
The total cost of developing, constructing and opening the Gaylord Brewery
was approximately $5.8 million, including approximately $3.1 million for design
and construction, $1.3 million for equipment, furniture and fixtures relating to
the restaurant, $1.0 million for brewing and bottling equipment, and $400,000
for land. The Company purchased an existing structure for the Grand Rapids
Brewery. The total cost of the land, building, remodeling, equipment, furniture
and fixtures for the Grand Rapids Brewery was approximately $3.1 million.
Management believes that each new Brewery will be of a building style and size
suitable to its location. Accordingly, the Company has not developed a
standardized Brewery layout.
The Company anticipates it will develop and open two additional Big Buck
Breweries, including one in Auburn Hills, a suburb of Detroit, during the
remainder of 1997. The Company estimates that the cost of developing and
opening the Auburn Hills Brewery will be approximately $8.8 million. The
remaining Big Buck Brewery scheduled to be opened in 1997 is anticipated to be a
leased facility with an approximate cost, before deducting landlord
contributions for leasehold improvements, between $1.4 and $1.7 million. The
Company has obtained real estate financing for $3.0 million to $4.0 million of
the cost of developing and opening the new Breweries pursuant to a sale and
leaseback of the Auburn Hills site. The Company believes that the remaining net
proceeds of its initial public offering, together with such financing, will be
sufficient to finance these expansion plans, depending on the definitive
locations, site conditions, construction costs and size and type of Breweries
built. There can be no assurances that additional financing will be available
on terms acceptable or favorable to the Company, or at all. Without such
additional financing, the Company's development plans will be slower than
planned or even unachievable.
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Successful expansion of the Company's operations will be largely dependent
upon a variety of factors, some of which are currently unknown or beyond the
Company's control, including customer acceptance of Big Buck Brewery restaurants
and Big Buck Beer-Registered Trademark-; the ability of the Company's management
to identify suitable sites and to negotiate purchases and financing of such
sites; timely and economic development and construction of Breweries; timely
approval from local governmental authorities; the hiring of skilled management
and other personnel; the ability of the Company's management to apply its
policies and procedures to a larger number of Breweries; the availability of
adequate financing; the general ability to successfully manage growth; and the
general state of the economy. There can be no assurance that the Company will
be able to open new Breweries.
The Company's strategy includes operating a brewhouse at each Big Buck
Brewery. Successful operation of separate brewhouses will require the Company
to overcome various organizational challenges such as increasing and maintaining
production and establishing and maintaining quality control over numerous
geographically separated Breweries. In attempting to expand beer distribution,
the Company will be required to establish and manage relationships with
wholesale distributors, retailers and consumers in new markets. The Company is
the sole promoter of sales of its beer in new markets. Consumer tastes and
preferences may vary from market to market. There can be no assurance that the
Company will be successful in entering new markets.
NEED FOR FINANCING
The Company's ability to execute its business strategy is dependent on its
ability to obtain substantial financing for the development of additional
Breweries. The Company anticipates that future development and expansion will
be financed through the public or private sale of additional equity or debt
securities, capital leases and other credit facilities. There can be no
assurance that any additional funds will be available or that such funds, if
available, will be on terms acceptable to the Company or its shareholders. New
investors may seek and obtain substantially better terms than those available to
investors purchasing shares of Common Stock on the open market and the Company's
issuance of securities in the future may result in substantial dilution.
MICHIGAN LAW MAY LIMIT GROWTH
The Company is licensed under Michigan law as a "microbrewery." A
microbrewery in Michigan is limited to the production of not more than 30,000
barrels of beer per year by all breweries owned or controlled by the same
person, whether within or outside Michigan. Without a change in current law,
the Company will limit its sales of beer off-site so as to reserve its brewing
capacity for sales of beer on-site which provide the Company higher margins, but
do not reach the same customer base. There can be no assurance that legislation
raising the barrelage ceiling will pass, that any such legislation will pass in
a form which would facilitate the Company's expansion plans, or that if such
legislation is not passed, the Company will be able to become licensed to brew
in excess of 30,000 barrels per year.
RISKS RELATED TO SALE/LEASEBACKS
In April 1997, the Company sold the Grand Rapids site, including all
improvements thereto, to an unrelated third party pursuant to a real estate
purchase and leaseback agreement for $1.4 million. Pursuant to a separate lease
agreement, the Company leases the Grand Rapids site at a minimum annual base
rent of $140,000 and a maximum annual base rent of $192,500 over a ten-year
term. The lease may be extended at the option of the Company for two additional
five-year terms. In addition to the annual base rent, the Company is obligated
to pay an annual percentage rent in the amount of 5% on gross sales at the site
in excess of $2.9 million per year. In the event that such annual gross sales
do not exceed $2.9 million for any two consecutive years during the lease term,
the Company is obligated to repurchase the Grand Rapids site for $1.4 million,
plus $70,000 for each lease year on a pro rata basis. The Company has the
option to purchase the property from the lessor after the seventh full lease
year for $1.4 million, plus $70,000 for each lease year
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on a pro rata basis. The lessor has the option to require the Company to
purchase the property after the seventh full lease year at the same price.
In August 1997, the Company entered into a real estate purchase and
leaseback agreement providing for the sale of the Auburn Hills site, including
all improvements thereto, to an unrelated third party, Michael G. Eyde. The
agreement provides for financing at one of three possible levels ranging from
$3.0 to $4.0 million. Such price (the "Purchase Price") will be determined when
final construction of the Auburn Hills Brewery is completed. The Company plans
to lease the Auburn Hills Brewery pursuant to a separate lease agreement which
will provide for a minimum annual base rent ranging from $300,000 to $400,000,
and a maximum annual base rent ranging from $412,500 to $550,000, depending upon
the Purchase Price. The lease will have a 25-year term and the Company will be
able to extend such term for two additional ten-year terms. In addition to the
annual base rent, the Company will be obligated to pay an annual percentage rent
ranging from 3.5% to 5.0% of gross sales at the site in excess of $8.0 million
per year. In the event that such annual gross sales do not exceed $8.0 million
for any two consecutive years during the lease term, the Company will be
obligated to repurchase the Auburn Hills site at the Purchase Price, plus an
amount ranging from $150,000 to $200,000 for each lease year on a pro rata
basis. The lessor will have the ability to require that the Company issue
Common Stock (valued at $5.00 per share) in payment of such repurchase price.
The Company will have the option to purchase the property from the lessor after
the seventh full lease year at the Purchase Price, plus an amount ranging from
$150,000 to $200,000 for each lease year on a pro rata basis. Independent of
annual gross sales, the lessor will have the option to require the Company to
purchase the property before the third full lease year at the same price.
The lessor in each case may terminate in the event of a default which is
not cured within the applicable grace period. A default is defined as (i) the
Company's failure to make a rental payment within 30 days after receipt of
written notice that a payment is past due or (ii) the Company's failure to
perform its obligations under the lease (other than rent payments) within 30
days after written notice of a curable violation, provided, however that if such
default cannot be cured within the 30-day period, a default will be deemed to
have occurred only if the Company has failed to commence a cure within such
30-day period.
Annual percentage rent is required whether the Breweries are profitable or
not. In the event that the Company is required to pay annual percentage rent,
the funds available to the Company for working capital and development plans
will be reduced. In the event that annual percentage rent is not required over
two consecutive years, the Company may be forced to repurchase such sites at a
premium over their respective sale prices. There can be no assurance that the
Company will have sufficient funds to repurchase the Grand Rapids Brewery or the
Auburn Hills Brewery. In the event of a default and termination of either
lease, the Company would be unable to continue to operate the related Brewery,
which could have a material adverse impact on the Company's operating results.
COMPETITION; CERTAIN FACTORS AFFECTING THE RESTAURANT AND BREWING INDUSTRIES
The restaurant industry is highly competitive with respect to price,
service, food quality (including taste, freshness, and nutritional value) and
location. New restaurants have a high failure rate. The restaurant industry is
also generally affected by changes in consumer preferences, national, regional
and local economic conditions, and demographic trends. The performance of
individual restaurants may also be affected by factors such as traffic patterns,
demographic considerations, and the type, number and location of competing
restaurants. In addition, factors such as inflation, increased food, labor and
employee benefit costs, and the lack of availability of experienced management
and hourly employees may also adversely affect the restaurant industry in
general and the Company's restaurants in particular. Restaurant operating costs
are further affected by increases in the minimum hourly wage, unemployment tax
rates and similar matters over which the Company has no control. There are
numerous well-established competitors, including national, regional and local
restaurant chains, possessing substantially greater financial, marketing,
personnel and other resources than the Company. The Company also competes with
a large variety of locally owned restaurants, diners and other establishments
that offer moderately priced food to the public and with other microbrewery
restaurants in a highly competitive and developing microbrewery and brewpub
restaurant market. Other restaurants and
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companies could utilize the Big Buck Brewery format or a related format. There
can be no assurance that the Company will be able to respond to various
competitive factors affecting the restaurant industry.
The domestic beer market is highly competitive due to: the enormous
advertising and marketing expenditures by national and major regional brewers;
the continuing proliferation of microbreweries, regional craft breweries,
brewpubs and other small craftbrewers; the introduction of fuller-flavored
products by certain major national brewers; and a general surplus of domestic
brewing capacity, which facilitates existing contract brewer expansion and the
entry of new contract brewers. Although domestic demand for craftbrewed beers
has increased dramatically over the past decade, there can be no assurance that
this demand will continue. The Company anticipates intensifying competition in
the craftbrewed beer market. Most of the Company's brewing competitors possess
marketing, financial, personnel and other resources substantially greater than
those of the Company, and there can be no assurance that the Company will be
able to succeed against intensified competition in the craftbrewed and
fuller-flavored beer markets.
BREWERY OPERATING HAZARDS
The Company's brewing operations are subject to certain hazards and
liability risks faced by all brewers, such as potential contamination of
ingredients or products by bacteria or other external agents that may be
wrongfully or accidentally introduced into products or packaging. The Company's
products are not pasteurized. While the Company has never experienced a
contamination problem in its products, the occurrence of such a problem could
result in a costly product recall and serious damage to the Company's reputation
for product quality. The Company's operations are also subject to certain
injury and liability risks normally associated with the operation and possible
malfunction of brewing and other equipment. Although the Company maintains
insurance against certain risks under various general liability and product
liability insurance policies, there can be no assurance that the Company's
insurance will be adequate.
BEER AND LIQUOR REGULATION
A significant percentage of the Company's revenue is derived from beer
sales. On-site sales of beer accounted for 21% of revenues and off-site sales
of beer accounted for an additional 3.6% of revenues during the fiscal year
ended December 29, 1996. These percentages are expected to increase over the
next few years in relation to food sales. The Company must comply with federal
licensing requirements imposed by the Bureau of Alcohol, Tobacco and Firearms of
the United States Department of Treasury, as well as the licensing requirements
of states and municipalities where its Breweries are or will be located.
Failure to comply with federal, state or local regulations could cause the
Company's licenses to be revoked and force it to cease the brewing and/or sale
of its beer. Typically, licenses must be renewed annually and may be revoked or
suspended for cause at any time. Additionally, state liquor laws may prevent or
impede the expansion of the Company's Breweries into certain markets. While the
Company has not experienced and does not anticipate any significant problems in
obtaining required licenses, permits or approvals, any difficulties, delays or
failures in obtaining such required licenses, permits or approvals could delay
or prevent the opening of a Brewery in a particular area. In addition, changes
in legislation, regulations or administrative interpretation of liquor laws
after the opening of a Brewery in a jurisdiction may prevent or hinder the
Company's expansion or operations in that jurisdiction or increase operating
costs. See "Michigan Law May Limit Growth."
RESTAURANT REGULATION
The restaurant industry is subject to numerous federal, state and local
government regulations, including those relating to the preparation and sale of
food and to building and zoning requirements. The Company is subject to
regulation by air and water pollution control divisions of the Environmental
Protection Agency of the United States and by various states and municipalities
in which its Breweries are or will be located. The Company is also subject to
laws governing its relationship with employees, including minimum wage
requirements, overtime, working and safety conditions and citizenship
requirements. Restaurant operating costs are affected by increases in the
minimum hourly wage, unemployment tax rates, sales taxes and similar matters,
such as any government mandated health insurance, over which the Company has no
control.
9
<PAGE>
The Company is subject to "dram-shop" laws in Michigan and will be subject
to such statutes in certain other states into which it expands. These laws
generally provide someone injured by an intoxicated person the right to recover
damages from an establishment which wrongfully served alcoholic beverages to
such person. The Company carries liquor liability coverage as part of its
existing comprehensive general liability insurance. However, a judgment against
the Company under a dram-shop statute in excess of the Company's liability
coverage could have a material adverse effect on the Company.
TAXES; SMALL BREWERS EXCISE TAX CREDIT
The federal government currently imposes an excise tax of $18 on each
barrel of beer produced for domestic consumption in the United States. However,
each brewer with production under 2,000,000 barrels per year is granted a small
brewer's excise tax credit in the amount of $11 per barrel on its first 60,000
barrels produced annually. No assurance can be given that the federal
government will not reduce or eliminate this credit. To the extent Company-wide
production increases to amounts over 60,000 barrels per year, there will be an
increase in the average federal excise tax rate of the Company. Michigan
currently imposes an excise tax of $6.30 per barrel on each barrel of beer sold
in Michigan. However, each brewer which is a "microbrewery" under Michigan law
(presently with production under 30,000 barrels per year) is granted a
microbrewer's excise tax credit in the amount of $2 per barrel on its first
20,000 barrels produced annually. To the extent Company-wide production
increases to amounts over 20,000 barrels per year, there will be an increase in
the average Michigan excise tax rate of the Company. Other states and
municipalities into which the Company may expand also impose excise or other
taxes or special charges on alcoholic beverages in varying amounts, which
amounts are subject to change. It is possible that in the future the rate of
excise taxation could be increased by either the federal or state governments,
or both. Increased excise taxes on alcoholic beverages have been considered by
the United States Congress as an additional source of tax revenue in connection
with various proposals and could be included in future legislation. Future
increases in excise taxes on alcoholic beverages, if enacted, could adversely
affect the Company.
DEPENDENCE ON KEY PERSONNEL; NEED FOR ADDITIONAL PERSONNEL
The Company's future success will depend in large part upon the continued
service of its key management personnel including William F. Rolinski, Gary J.
Hewett and Anthony P. Dombrowski. Given the Company's limited operating
history, the Company is dependent on its ability to identify, hire, train and
motivate qualified personnel necessary to enable it to continue operations. The
Company does not have key person life insurance policies on any of its
employees. The departure of key employees could have a material adverse effect
on the Company's business. The Company's success will also be dependent upon
its ability to attract and retain qualified people, including additional
management personnel. No assurance can be given that the Company's current
employees will continue to work for the Company or that the Company will be able
to obtain the services of additional personnel necessary for the Company's
growth. To date, the Company has not entered into any employment agreements
with its personnel.
NO ASSURANCE AS TO LIQUIDITY ON THE NASDAQ SMALLCAP MARKET
The Company's Common Stock, Class A Warrants and Units are currently listed
on the Nasdaq SmallCap Market. There can be no assurance that an active public
market will develop or be sustained for the Company's securities. In addition,
if the Company's securities do not continue to trade on the Nasdaq SmallCap
Market, the securities would become subject to certain rules of the Securities
and Exchange Commission relating to "penny stocks." Such rules require
broker-dealers to make a suitability determination for purchasers and to receive
the purchaser's prior written consent for a purchase transaction, thus
restricting the ability to purchase or sell the securities in the open market.
POSSIBLE REDEMPTION OF WARRANTS
The Class A Warrants are subject to redemption at any time by the Company
at $.01 per warrant, on 30 days prior written notice, if the high closing bid
price of the Common Stock exceeds $9.00 per share
10
<PAGE>
(subject to adjustment) for 20 consecutive trading days. If the Class A
Warrants are redeemed, warrantholders will lose their right to exercise the
Class A Warrants except during such 30-day redemption period. Redemption of the
Class A Warrants could force the holders to exercise the Class A Warrants at a
time when it may be disadvantageous for the holders to do so or to sell the
Class A Warrants at the then market price or accept the redemption price of $.01
per warrant.
CONTROL BY MANAGEMENT
The current officers and directors of the Company beneficially own
approximately 43.7% of the outstanding Common Stock. Assuming the exercise of
all Class A Warrants, the current officers and directors of the Company will
beneficially own approximately 29.5% of the outstanding Common Stock.
Accordingly, such persons can exert substantial influence over the composition
of the Company's Board of Directors and generally direct the affairs of the
Company and may have the power to control the outcome of shareholder approvals
of business acquisitions, mergers and combinations and other actions.
SEASONALITY AND FLUCTUATIONS IN QUARTERLY RESULTS
The Company's sales and earnings are expected to fluctuate based on
seasonal patterns. The Company anticipates that its highest earnings will occur
in the second and third calendar quarters. In addition, quarterly results in
the future are likely to be substantially affected by the timing of new Brewery
openings. Because of the seasonality of the Company's business and the impact
of new Brewery openings, results for any quarter are not necessarily indicative
of the results for a full fiscal year.
UNCERTAIN TRADEMARK PROTECTION; PROPRIETARY MARKS
The Company's ability to successfully operate will depend in part upon its
ability to register and protect its trademarks. The Company applied for
registration of a number of trademarks and service marks with the United States
Patent and Trademark Office on February 1, 1996, including BIG BUCK BREWERY &
STEAKHOUSE and BIG BUCK BEER-Registered Trademark-. The Company received a
certificate of registration for BIG BUCK BEER-Registered Trademark- on March 11,
1997. The United States Patent and Trademark Office has yet to grant a
certificate of registration for BIG BUCK BREWERY & STEAKHOUSE. In the event the
Company is denied registration, the Company may incur significant expense in
creating and developing new marks or in operating under its existing marks, and
may be restricted in where it can locate future Breweries using the Company's
marks. There is no assurance that the Company's marks will be granted
registration for all or any of the uses proposed in the Company's applications.
In the event that the Company's marks are granted registration, there is no
assurance that such marks will be enforceable against prior users in the areas
where the Company conducts or will conduct its operations.
MICHIGAN ANTI-TAKEOVER LAWS
The Company is subject to Michigan statutes regulating business
combinations and restricting voting rights of certain persons acquiring shares
of Common Stock which may hinder or delay a change in control of the Company.
VOLATILITY OF MARKET PRICE OF COMMON STOCK
The market price of the Company's Common Stock has been subject to
significant fluctuations in response to numerous factors, including variations
in the annual or quarterly financial results of the Company or its competitors,
changes by financial research analysts in their estimates of the earnings of the
Company or its competitors, conditions in the economy in general or in the
brewing industry in particular, unfavorable publicity or changes in applicable
laws and regulations (or judicial or administrative interpretations thereof)
affecting the Company or the brewing industry. During fiscal year 1996, the
market price of the Company's Common Stock ranged from a high of $4.375 on
September 30 and October 1, 1996, to a low of $2.50 on September 23, 1996.
During the first seven months of 1997, the Company's Common Stock ranged from a
11
<PAGE>
high of $4.50 on June 5, 1997, to a low of $1.75 on March 24, 1997. There can
be no assurance that purchasers of shares of Common Stock will be able to sell
their shares at or above the prices at which they were purchased.
IMPACT OF SALE OF SECURITIES; SECURITIES ELIGIBLE FOR FUTURE SALE
The Company had 5,275,000 shares of Common Stock outstanding as of August
28, 1997, and had warrants and options outstanding to purchase additional Common
Stock totaling 3,283,500 shares of Common Stock, exercisable at prices ranging
from $2.00 to $8.00 per share. The sale of the Shares and additional Common
Stock which may become eligible for sale in the public market from time to time
upon exercise of warrants and stock options, or upon the expiration of
applicable holding periods, could have the effect of depressing the market
prices for the Company's Common Stock.
ABSENCE OF DIVIDENDS
The Company has not paid any cash dividends since its inception and does
not anticipate paying cash dividends in the foreseeable future. The Company
presently expects to retain its earnings to finance the development and
expansion of its business. The declaration or payment by the Company of
dividends, if any, on its Common Stock in the future is subject to the
discretion of the Board of Directors and will depend on the Company's earnings,
financial condition, capital requirements and other relevant factors. The
declaration or payment by the Company of dividends is also subject to the terms
of the Company's credit facility with its bank.
12
<PAGE>
USE OF PROCEEDS
In the event that the Company realizes proceeds from the exercise of the
Class A Warrants, the net proceeds to the Company are expected to be
approximately $20.4 million. The Company intends to use such net proceeds as
follows:
Percentage of
Use of Proceeds Dollar Amount Use of Proceeds
- ---------------------------------------- ---------------- -----------------
New Restaurant Construction $ 18,370,000 90.2%
Repayment of Indebtedness $ 2,000,000 9.8%
------------ ------
Total $ 20,370,000 100.0%
The Company plans to use approximately $18.4 million of the proceeds
from the exercise of the Class A Warrants for the development and opening of
approximately ten new Big Buck Breweries, depending upon the availability of
additional financing. The Company intends to obtain real estate financing
for up to 50% of the cost of developing and opening such Breweries. The
Company currently estimates that the cost of developing and opening each
Brewery, including equipment, furniture, fixtures, pre-opening expenses and
leasehold improvements, if such Breweries are leased, will range from
approximately $1.65 million to $8.8 million, depending upon the locations,
site conditions, construction costs and sizes and types of Breweries built or
leased. There can be no assurance that the Company will be able to develop
and open additional Big Buck Breweries at such costs or obtain the necessary
financing on terms favorable to the Company. In addition, the Company's
expansion plans will be altered absent the enactment of an amendment to
current Michigan law. See "Risk Factors -- Michigan Law May Limit Growth."
The Company anticipates using the remainder of the net proceeds for the
repayment of current indebtedness.
Pending the use of the net proceeds for the above purposes, the Company
intends to invest such funds in short-term bank deposits, United States
government securities and other short-term investment-grade securities.
PLAN OF DISTRIBUTION
The Common Stock issuable upon exercise of the Class A Warrants is
distributed when and as such Class A Warrants are exercised by the holders. The
Company may solicit the exercise of the Class A Warrants at any time, and may
redeem the Class A Warrants if the market price of the Company's Common Stock
rises to the necessary level for the necessary duration. The Company may also
reduce the exercise price of the Class A Warrants in order to encourage their
exercise. The exercise price and other terms of the Class A Warrants were
initially negotiated between the Company and the underwriter of its Offering.
LEGAL MATTERS
The validity of the Shares offered hereby and certain legal matters
pertaining to the Company were passed upon on behalf of the Company by Briggs
and Morgan, Professional Association.
EXPERTS
The financial statements as of December 31, 1995 and December 29, 1996 and
for each of the years in the two-year period ended December 29, 1996 of Michigan
Brewery, Inc., incorporated by reference in this Prospectus have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto and are incorporated by reference herein in reliance
upon the authority of said firm as experts in giving said report.
13
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFER DESCRIBED IN THIS PROSPECTUS AND, IF GIVEN OR MADE,
SUCH INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE SELLING SHAREHOLDERS. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE UNDER THIS PROSPECTUS SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR SINCE THE DATE OF ANY DOCUMENTS
INCORPORATED HEREIN BY REFERENCE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE
SECURITIES TO WHICH IT RELATES, OR AN OFFER OR SOLICITATION IN ANY STATE TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH STATE.
---------------------
TABLE OF CONTENTS
---------------------
PAGE
----
Available Information. . . . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents
by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2,550,000 SHARES
MICHIGAN BREWERY, INC.
COMMON STOCK
--------------------
PROSPECTUS
--------------------
__________, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II -- INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses payable by the Company
in connection with the sale and distribution of the Shares being registered.
All amounts shown are estimates, except the registration fee.
SEC registration fee . . . . . . . . . . . . . . . . . . . . . $ 7,773*
Legal fees and expenses. . . . . . . . . . . . . . . . . . . . 12,500
Accounting fees and expenses . . . . . . . . . . . . . . . . . 12,500
Blue sky and related fees and expenses . . . . . . . . . . . . 2,500
Miscellaneous (including listing fees, if applicable). . . . . 2,727
---------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . $ 38,000
---------
---------
* Previously paid.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article V, Section 3 of the Registrant's Bylaws generally provides that the
Registrant will indemnify its directors and officers to the fullest extent
authorized or permitted under the Michigan Business Corporation Act and that the
Company will make advancements of expenses at the request of a director or
officer. The Michigan Business Corporation Act authorizes a corporation, under
certain circumstances, to indemnify its directors and officers (including to
reimburse them for expenses incurred). Reference is made to Exhibit 3.2 of this
Registration Statement for the complete text of the Registrant's Bylaws.
The Registrant's Restated Articles of Incorporation generally limit the
personal liability of directors for monetary damages for breaches of fiduciary
duty. If a director were to breach such duty in performing his or her duties as
a director, neither the Registrant nor its shareholders could recover monetary
damages from the director, and the only course of action available to the
Registrant's shareholders would be equitable remedies, such as an action to
enjoin or rescind a transaction involving a breach of fiduciary duty. To the
extent claims against directors are limited to equitable remedies, the provision
in the Restated Articles of Incorporation may reduce the likelihood of
derivative litigation and may discourage shareholders or management from
initiating litigation against directors for breach of their fiduciary duty.
Under the Restated Articles of Incorporation, liability for monetary
damages remains for (i) any breach of duty of loyalty to the Registrant or its
shareholders, (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) violations of
Section 551(1) of the Michigan Business Corporation Act, (iv) any transaction
from which the director derived an improper personal benefit or (v) any act or
omission that occurred before the effective date of the provision of the
Articles of Incorporation.
Reference is made to Exhibit 3.1 of this Registration Statement for the
complete text of the Restated Articles of Incorporation.
Michigan corporations are also authorized to obtain insurance to protect
directors and officers from certain liabilities, including liabilities against
which corporations cannot indemnify their directors and officers.
II-1
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Exhibit
Number Description
- ------- -----------
3.1 Restated Articles of Incorporation*
3.2 Amended and Restated Bylaws*
4.1 Specimen Form of the Company's Common Stock Certificate*
4.2 Form of Warrant Agreement (including Form of Redeemable Class A
Warrant)*
4.3 Form of Subscription and Investment Representation Agreement, dated
December 1995, between the Company and Pyramid Partners, LP (including
Form of Convertible Secured Promissory Note, Form of Non-Convertible
Secured Promissory Note and Form of Warrant)*
5.1 Opinion of Briggs and Morgan, Professional Association
10.1 1996 Stock Option Plan*
10.2 1996 Director Stock Option Plan*
10.3 Loan Agreement, dated July 28, 1995, by and among the Company, William
F. Rolinski, Dr. Blair Murphy, Walter Zaremba, Casimer Zaremba and NBD
Bank*
10.4 Escrow Agreement dated June 7, 1996, by and among the Company, William
F. Rolinski, Dr. Blair A. Murphy, Casimer I. Zaremba, Henry T.
Siwecki, Norwest Bank Minnesota, National Association, and the
Commissioner of Commerce for the State of Minnesota**
23.1 Consent of Briggs and Morgan, Professional Association (filed as part
of Exhibit 5.1)*
23.2 Consent of Independent Public Accountants
24.1 Power of Attorney (included on signature page)*
- ------------
* Previously filed with the Company's Registration Statement on Form SB-2
(Registration No. 333-3548).
** Incorporated by reference to the Company's Annual Report on Form 10-KSB for
the year ended December 29, 1996, filed on March 31, 1997 (File No.
0-20845).
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that the undertakings set forth in paragraphs (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
II-2
<PAGE>
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the provisions summarized in Item 15 above, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel, the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that (1) for purposes of
determining any liability under the Securities Act of 1933, the information
omitted from the form of prospectus filed as part of this Registration Statement
in reliance on Rule 430A and contained in the form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this Registration Statement as of the time it was
declared effective and (2) for the purpose of determining any liability under
the Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Gaylord and State of Michigan, on August 29, 1997.
MICHIGAN BREWERY, INC.
By /s/ William F. Rolinski
------------------------------------------------
William F. Rolinski
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on the dates and
in the capacities indicated.
Signature Title Date
--------- ----- ----
/s/ William F. Rolinski President, Chief Executive August 29, 1997
- ------------------------------- Officer and Director
William F. Rolinski (Principal Executive Officer)
/s/ Anthony P. Dombrowski Chief Financial Officer and August 29, 1997
- ------------------------------- Treasurer (Principal Financial
Anthony P. Dombrowski Officer and Principal
Accounting Officer)
* Director
- -------------------------------
Blair A. Murphy, D.O.
* Director
- -------------------------------
Henry T. Siwecki
* Director
- -------------------------------
Casimer I. Zaremba
*By: /s/ Anthony P. Dombrowski
---------------------------
Anthony P. Dombrowski August 29, 1997
Attorney-In-Fact
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
3.1 Restated Articles of Incorporation*
3.2 Amended and Restated Bylaws*
4.1 Specimen Form of the Company's Common Stock Certificate*
4.2 Form of Warrant Agreement (including Form of Redeemable Class A
Warrant)*
4.3 Form of Subscription and Investment Representation Agreement, dated
December 1995, between the Company and Pyramid Partners, LP (including
Form of Convertible Secured Promissory Note, Form of Non-Convertible
Secured Promissory Note and Form of Warrant)*
5.1 Opinion of Briggs and Morgan, Professional Association
10.1 1996 Stock Option Plan*
10.2 1996 Director Stock Option Plan*
10.3 Loan Agreement, dated July 28, 1995, by and among the Company, William
F. Rolinski, Dr. Blair Murphy, Walter Zaremba, Casimer Zaremba and NBD
Bank*
10.4 Escrow Agreement dated June 7, 1996, by and among the Company, William
F. Rolinski, Dr. Blair A. Murphy, Casimer I. Zaremba, Henry T.
Siwecki, Norwest Bank Minnesota, National Association, and the
Commissioner of Commerce for the State of Minnesota**
23.1 Consent of Briggs and Morgan, Professional Association (filed as part
of Exhibit 5.1)*
23.2 Consent of Independent Public Accountants
24.1 Power of Attorney (included on signature page)*
- ----------------
* Previously filed with the Company's Registration Statement on Form SB-2
(Registration No. 333-3548).
** Incorporated by reference to the Company's Annual Report on Form 10-KSB
for the year ended December 29, 1996, filed on March 31, 1997 (File No.
0-20845).
<PAGE>
EXHIBIT 5.1
August 29, 1997
Michigan Brewery, Inc.
550 South Wisconsin Street
Gaylord, Michigan 49735
Gentlemen:
We are counsel to Michigan Brewery, Inc., a Michigan corporation (the
"Company"), in connection with its filing of Post-Effective Amendment No. 1 to
Form SB-2 on Form S-3 (the "Registration Statement"), under the Securities Act
of 1933, as amended, in connection with the proposed sale by the Selling
Shareholders of 2,550,000 shares of common stock, $.01 par value, of the Company
(the "Shares"). The Shares are issuable upon the exercise of the Class A
Warrants.
We have examined the Registration Statement and those documents, corporate
records, and other instruments we deemed relevant as a basis for the opinion
herein expressed.
Based on the foregoing, it is our opinion that when the Registration
Statement shall have been declared effective by order of the Securities and
Exchange Commission, and the Class A Warrants have been exercised in accordance
with their terms, and the Shares have been sold as contemplated by the
Registration Statement, the Shares will be legally and validly issued,
fully-paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters" in the Prospectus included in such Registration Statement.
Very truly yours,
BRIGGS AND MORGAN,
PROFESSIONAL ASSOCIATION
/s/ Christopher C. Cleveland
-----------------------------------
Christopher C. Cleveland
<PAGE>
EXHIBIT 23.2
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated January 24, 1997
included in Michigan Brewery, Inc.'s Form 10-KSB for the year ended December 29,
1996 and to all references to our Firm included in this registration statement.
Minneapolis, Minnesota
August 29, 1997
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
