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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-QSB
/X/ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED APRIL 4, 1999
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
COMMISSION FILE NUMBER 0-20845
BIG BUCK BREWERY & STEAKHOUSE, INC.
(Exact Name of Registrant as Specified in Its Charter)
MICHIGAN 38-3196031
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
550 SOUTH WISCONSIN STREET
GAYLORD, MICHIGAN 49735
(517) 731-0401
(Address of Principal Executive Offices and Registrant's
telephone number, including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No .
--- ---
As of May 19, 1999, there were outstanding 5,405,481 shares of common
stock, $.01 par value, of the registrant.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PART I FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . 2
ITEM 1 Financial Statements
Balance Sheets as of April 4, 1999 and January 3, 1999. . . . 2
Statements of Operations for the three months ended April 4,
1999 and March 29, 1998 . . . . . . . . . . . . . . . . . . . 3
Statements of Cash Flows for the three months ended April 4,
1999 and March 29, 1998 . . . . . . . . . . . . . . . . . . . 4
Condensed Notes to Financial Statements . . . . . . . . . . . 5
ITEM 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . . . . . 6
PART II OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . 12
ITEM 5 Other Information . . . . . . . . . . . . . . . . . . . . . . . . 12
ITEM 6 Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . 12
</TABLE>
1
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PART I
ITEM 1 Financial Statements
BIG BUCK BREWERY & STEAKHOUSE, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
April 4, 1999 January 3, 1999
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(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 119,915 $ 500,236
Accounts receivable 106,740 216,147
Inventories 270,724 308,286
Prepaids and other 312,039 274,819
------------- -------------
Total current assets 809,418 1,299,488
PROPERTY AND EQUIPMENT, net 19,390,859 18,847,968
MINORITY INTEREST IN JOINT VENTURE 3,289 0
OTHER ASSETS, net 621,402 672,530
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$ 20,824,968 $ 20,819,986
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,822,281 $ 925,031
Accrued expenses 371,863 709,070
Current maturities of long-term debt 1,639,329 1,644,228
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Total current liabilities 3,833,473 3,278,329
LONG-TERM DEBT, less current maturities 6,953,956 7,030,329
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Total liabilities 10,787,429 10,308,658
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COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock, $.01 par value, 20,000,000
shares authorized; 5,285,000 shares
issued and outstanding 52,850 52,850
Warrants 153,650 153,650
Additional paid-in capital 13,407,694 13,407,694
Accumulated deficit (3,576,655) (3,102,866)
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Total shareholders' equity 10,037,539 10,511,328
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$ 20,824,968 $ 20,819,986
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</TABLE>
The accompanying notes are an integral part of these balance sheets.
2
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BIG BUCK BREWERY & STEAKHOUSE, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
--------------------------------
April 4, 1999 March 29, 1998
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<S> <C> <C>
REVENUE:
Restaurant sales $ 3,165,427 $ 3,815,738
Wholesale beer and gift shop sales 121,244 149,197
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Total revenue 3,286,671 3,964,935
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COSTS AND EXPENSES:
Cost of sales 1,067,582 1,359,163
Restaurant salaries and benefits 989,372 1,146,341
Operating expenses 631,171 805,737
Depreciation and amortization 202,089 187,510
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Total costs and expenses 2,890,214 3,498,751
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Restaurant operating income 396,457 466,184
Preopening expenses 127,151 -
General and administrative expenses 531,131 424,176
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Income (loss) from operations (261,825) 42,008
OTHER INCOME (EXPENSE):
Interest expense (215,612) (188,026)
Interest income and other 359 3,512
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Other income (expense), net (215,253) (184,514)
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Minority interest share of joint venture 3,289 -
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LOSS BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE (473,789) (142,506)
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CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE FOR PREOPENING COSTS - (346,547)
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NET LOSS $ (473,789) $ (489,053)
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BASIC AND DILUTED NET LOSS PER COMMON SHARE $ (0.09) $ (0.09)
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WEIGHTED AVERAGE SHARES OUTSTANDING 5,285,000 5,285,000
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</TABLE>
The accompanying notes are an integral part of these financial statements
3
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BIG BUCK BREWERY & STEAKHOUSE, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
April 4, March 29,
1999 1998
------------------ ------------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss $ (473,789) $ (489,053)
Adjustments to reconcile net loss to cash flows used in
operating activities-
Depreciation and amortization 202,089 187,510
Cumulative effect of change in accounting
for preopening costs - 346,547
Change in operating assets and liabilities:
Accounts receivable 106,118 99,196
Inventories 37,562 593
Prepaids and other (37,220) 10,286
Accounts payable 897,250 (92,957)
Accrued expenses (337,207) (213,766)
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Net cash provided by (used in) operating activities 394,803 (151,644)
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INVESTING ACTIVITIES:
Purchases of property and equipment, net (733,457) (355,378)
Decrease in other assets 39,605 (42,284)
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Net cash used in investing activities (693,852) (397,662)
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FINANCING ACTIVITIES:
Proceeds from long-term debt and capital lease obligations - 699,650
Payments on long-term debt and capital lease obligations (81,272) (65,125)
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Net cash used provided by (used in)
financing activities (81,272) 634,525
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INCREASE (DECREASE) IN CASH (380,321) 85,219
CASH, beginning of period 500,236 354,015
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CASH, end of period $ 119,915 $ 439,234
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SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ 233,584 $ 193,556
Income taxes paid - -
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
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BIG BUCK BREWERY & STEAKHOUSE, INC.
Condensed Notes to Financial Statements
April 4, 1999
(1) Basis of Financial Statement Presentation
The accompanying unaudited financial statements included herein have been
prepared by Big Buck Brewery & Steakhouse, Inc. in accordance with
generally accepted accounting principles for interim financial information
and pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules
and regulations, although the Company believes that the disclosures made
are adequate to make the information not misleading.
The first quarter financial statements for Big Buck Brewery & Steakhouse,
Inc. include the results of operations for the joint venture described in
Big Buck's Form 10-KSB for the fiscal year ended January 3, 1999.
The unaudited balance sheet as of April 4, 1999 and the unaudited
statements of operations and cash flows for the three months ended April 4,
1999 and March 29, 1998 include, in the opinion of management, all
adjustments, consisting solely of normal recurring adjustments, necessary
for a fair presentation of the financial results for the respective interim
periods and are not necessarily indicative of results of operations to be
expected for the entire fiscal year ending January 2, 2000. The
accompanying interim financial statements have been prepared under the
presumption that users of the interim financial information have either
read, or have access to, the audited financial statements and notes in Big
Buck's Form 10-KSB for the fiscal year ended January 3, 1999. Accordingly,
footnote disclosures which would substantially duplicate the disclosures
contained in the January 3, 1999 audited financial statements have been
omitted from these interim financial statements except for the disclosures
below. It is suggested that these interim financial statements should be
read in conjunction with the financial statements and the notes thereto
included in Big Buck's Form 10-KSB for the fiscal year ended January 3,
1999.
(2) Recently Issued Accounting Pronouncements
Statement of Financial Accounting Standard (SFAS No. 130), "Reporting
Comprehensive Income," effective beginning in fiscal 1998, establishes
standards of disclosure and financial statement display for reporting total
comprehensive income and the individual components thereof. The adoption
of SFAS No. 130 did not have a material impact on Big Buck's financial
position or results of operations as comprehensive income and net income
were the same for all periods presented.
During April 1998, the Accounting Standards Executive Committee of the
America Institute of Certified Public Accountants (AICPA) issued Statement
of Position (SOP 98-5), "Reporting on the Costs of Start-Up Activities."
SOP 98-5 requires companies to expense as incurred all start-up and
preopening costs that are not otherwise capitalizable as long-lived assets.
Big Buck has elected early implementation of the accounting standard
retroactive to the beginning of 1998. The effect of this accounting change
was a charge to operations for the unamortized balance of preopening costs
for the year ended December 28, 1997 of $346,547.
5
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ITEM 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations
THIS DISCUSSION AND ANALYSIS CONTAINS CERTAIN FORWARD-LOOKING TERMINOLOGY SUCH
AS "BELIEVES," "ANTICIPATES," "EXPECTS," AND "INTENDS," OR COMPARABLE
TERMINOLOGY. SUCH STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES
THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED.
POTENTIAL PURCHASERS OF THE BIG BUCK'S SECURITIES ARE CAUTIONED NOT TO PLACE
UNDUE RELIANCE ON SUCH FORWARD-LOOKING STATEMENTS, WHICH ARE QUALIFIED IN THEIR
ENTIRETY BY THE CAUTIONS AND RISKS DESCRIBED HEREIN. PLEASE REFER TO THE
COMPANY'S ANNUAL REPORT ON FORM 10-KSB, FILED ON MARCH 29, 1999, FOR ADDITIONAL
FACTORS KNOWN TO BIG BUCK THAT MAY CAUSE ACTUAL RESULTS TO VARY.
OVERVIEW
Big Buck develops, owns and operates microbrewery/restaurants under the name
"Big Buck Brewery & Steakhouse." Until May 1995 when the Big Buck opened its
first Unit in Gaylord, Michigan, it had no operations or revenues and its
activities were devoted solely to development. In March 1997, Big Buck opened
its second unit in Grand Rapids, Michigan, and in October 1997, Big Buck opened
its third Unit in Auburn Hills, Michigan, a suburb of Detroit. Big Buck plans to
open its fourth unit in Grapevine, Texas, a suburb of Dallas. Scheduled to open
in the fall of 1999, this unit will be operated by Buck & Bass, L.P. pursuant to
a joint venture agreement between Big Buck and Bass Pro.
Future revenues and profits will depend upon various factors, including market
acceptance of the Big Buck Brewery & Steakhouse concept and general economic
conditions. Big Buck's present sources of revenue are the Gaylord, Grand Rapids
and Auburn Hills units. There can be no assurance that Big Buck will
successfully implement its expansion plans, in which case Big Buck will continue
to depend on the revenues from the existing units. Big Buck also faces all of
the risks, expenses and difficulties frequently encountered in connection with
the expansion and development of a new business. Furthermore, to the extent
that Big Buck's expansion strategy is successful, it must manage the transition
to multiple site, higher volume operations, control increased overhead expenses
and hire additional personnel.
Big Buck's sales and results of operations are expected to fluctuate based on
seasonal patterns. Big Buck anticipates that its highest earnings will occur in
the second and third quarters. Quarterly results in the future are likely to be
substantially affected by the timing of new unit openings. Because of the
seasonality of Big Buck's business and the impact of new unit openings, results
for any quarter are not necessarily indicative of the results that may be
achieved for a full fiscal year and cannot be used to indicate financial
performance for the entire year.
6
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QUARTERS ENDED APRIL 4, 1999 AND MARCH 29, 1998
The following table is derived from Big Buck's statements of operations and
expresses the results from operations as a percent of total revenue:
<TABLE>
<CAPTION>
Three Months Ended
---------------------
April 4, March 29,
1999 1998
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<S> <C> <C>
REVENUE:
Restaurant sales 96.3% 96.2%
Wholesale beer and gift shop sales 3.7 3.8
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Total revenue 100.0 100.0
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COSTS AND EXPENSES:
Cost of sales 32.5 34.3
Restaurant salaries and benefits 30.1 28.9
Operating expenses 19.2 20.3
Depreciation and amortization 6.1 4.7
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Total costs and expenses 87.9 88.2
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Restaurant operating income 12.1 11.8
Preopening expenses 3.9 -
General and administrative expenses 16.2 10.7
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Income (loss) from operations (8.0) 1.1
OTHER INCOME (EXPENSE):
Interest expense (6.6) (4.7)
Interest income and other - 0.1
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Other income (expense), net (6.6) (4.6)
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Minority interest share of joint venture 0.1 -
LOSS BEFORE CUMULATIVE EFFECT
OF CHANGE IN ACCOUNTING PRINCIPLE (14.5) (3.5)
------- -------
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE
FOR PREOPENING COSTS - (8.7)
------- -------
NET LOSS (14.5)% (12.2)%
------- -------
------- -------
</TABLE>
7
<PAGE>
RESULTS OF OPERATIONS FOR THE QUARTERS ENDED APRIL 4, 1999 AND MARCH 29, 1998
REVENUES
Revenues decreased 17% to $3,286,671 in the quarter ended April 4, 1999 from
$3,964,935 in the quarter ended March 29, 1998. The decrease was due to the
combined impact of the severe winter on all of Big Buck's units, the delayed
start of the NBA season on the Auburn Hills unit and the passing of the peak
period of sales following the opening of the Auburn Hills unit.
COST OF SALES
Cost of sales, which consists of food, merchandise and brewery supplies,
decreased $291,581 to $1,067,582 in the first quarter of 1999 compared to
$1,359,163 for the same period in 1998. As a percentage of revenues, cost of
sales decreased to 32.5% in the first quarter of 1999 compared to 34.3% for the
same quarter in 1998. The decrease is the result of an increase in menu prices
as well as additional savings due to greater purchasing volume.
RESTAURANT SALARIES AND BENEFITS
Restaurant salaries and benefits, which consist of restaurant management and
hourly employee wages and benefits, payroll taxes and workers' compensation
insurance, decreased $156,969 to $989,372 in the first quarter of 1999 compared
to $1,146,341 for the first quarter in 1998. The decrease was due to lower
staffing needs for hourly employees as a result of decreased sales volume. As a
percentage of revenues, restaurant salaries and benefits increased to 30.1% in
the first quarter of 1999 compared to 28.9% for the same period in 1998. This
increase is the result of higher restaurant management wages and benefits which
do not decrease directly with decreases in sales volume as compared to hourly
employee wages.
OPERATING EXPENSES
Operating expenses, which include supplies, utilities, repairs and
maintenance, advertising and occupancy costs, decreased $174,566 to $631,171
in the first quarter of 1999 compared to $805,737 for the first quarter of
1998. As a percentage of revenues, operating expenses decreased to 19.2% in
the first quarter of 1999 as compared to 20.3% for the same period in 1998.
This decrease is the result of a refocusing of advertising and marketing
efforts and tighter cost controls.
PREOPENING EXPENSES
Preopening expenses consist of expenses incurred prior to an opening of a new
unit, including but not limited to wages and benefits, relocation costs,
supplies, advertising expenses and training costs. Preopening expenses for the
fourth unit in Grapevine, Texas, were $127,151 for the first quarter of 1999.
There were no preopening expenses during the first quarter of 1998.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses increased $106,955 to $531,131 in the first
quarter of 1999 compared to the same quarter of 1998. The increase is related
to the development of the fourth unit in Grapevine, Texas, from additional legal
and consulting fees, as well as additional travel expenses. As a percentage of
revenues, these expenses increased to 16.2% for the first quarter in 1999 as
compared to 10.7% for the first quarter of 1998. The increase as a percentage
of revenues reflects the decrease in sales, as well as the additional expenses
related to the development of the fourth unit.
8
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DEPRECIATION AND AMORTIZATION
Depreciation and amortization expenses increased $14,579 to $202,089 in the
first quarter of 1999 compared to the first quarter of 1998. The increase
reflects the additional depreciation from new assets acquired from the second
through the fourth quarters of 1998. As a percentage of revenues, these
expenses increased to 6.1% in the first quarter of 1999 as compared to 4.7% for
the same period in 1998. The increase in these expenses as a percentage of
revenues reflects the decrease in sales, as well as the additional depreciation
from newly acquired assets.
INTEREST EXPENSE
Interest expense increased $27,586 to $215,612 in the first quarter of 1999
compared to the first quarter of 1998. The increase reflects the added
interest on the $1,400,000 borrowed from Crestmark Bank in November 1998. As
a percentage of revenues, interest expense increased to 6.6% for the first
quarter of 1999 as compared to 4.7% for the same period in 1998. As Buck &
Bass completes the fourth unit, management believes that Big Buck will incur
additional interest expense.
CHANGE IN ACCOUNTING PRINCIPLE
Big Buck has elected early adoption of Statement of Position (SOP 98-5),
"Reporting on the Costs of Start-Up Activities". SOP 98-5 requires companies to
expense as incurred all start-up and preopening costs that are not otherwise
capitalizable as long-lived assets. The effect of this accounting change is to
charge operations the unamortized balance of preopening costs as of December 28,
1997 of $346,547.
LIQUIDITY AND CAPITAL RESOURCES
Big Buck generated $394,803 in cash from operating activities for the quarter
ended April 4, 1998, and used $151,644 in cash for operating activities the
three months ended March 29, 1998. At April 4, 1999, Big Buck had a working
capital deficit of $3,024,055. In order to fund operations in the short-term,
Big Buck intends to use cash provided by the operations of its three existing
units. Big Buck is also exploring the possible issuance of debt or equity
securities to increase its working capital.
Big Buck spent $693,582 during the first quarter of 1999 for construction and
equipment for the Grapevine unit. Big Buck spent $81,272 in the first quarter
of 1999 for payments of long-term debt.
Since inception, Big Buck's principal capital requirements have been the funding
of (a) its operations and promotion of the Big Buck Brewery & Steakhouse format
and (b) the construction of units and the acquisition of furniture, fixtures and
equipment for such units. Total capital expenditures for the Gaylord, Grand
Rapids and Auburn Hills units were approximately $5.8 million, $3.2 million and
$9.7 million, respectively.
During 1998, Big Buck contributed $891,000 to the limited partnership which
will own and operate the Grapevine unit. Big Buck will be required to
contribute up to an additional $4.5 million to Buck & Bass to complete
construction of the Grapevine unit. Without addition financing, Big Buck
will be unable to make its required capital contribution to complete
construction of this unit. If such funds are not available when required by
the joint venture, Big Buck may be in material default under the joint
venture agreement. In the event of material default, Bass Pro would be
entitled to purchase Big Buck's interest in the joint venture at 40% of book
value, thereby eliminating Big Buck's interest in the Grapevine unit.
Further, Bass Pro has the right to purchase up to 15% of Big Buck's interest
in the joint venture, at 100% of Big Buck's original cost, within 24 months
of the opening of the Grapevine unit; provided, however, that Big Buck's
interest in the joint venture may not be reduced below 51%. Big Buck expects
that it will continue to require significant capital resources to fund new
unit development and construction.
9
<PAGE>
The completion of the Grapevine unit and the development of any additional units
will require Big Buck to obtain additional financing. The amount of financing
required for new units depends on the definitive locations, site conditions,
construction costs and size and type of units to be built. There can be no
assurance that financing will be available on terms acceptable or favorable to
Big Buck, or at all. Without such financing Big Buck's development plans will
be slower than planned or even unachievable.
YEAR 2000 READINESS DISCLOSURE
The term "Year 2000" is used to describe general problems that may result from
improper processing of dates and date-sensitive calculations by computers or
other machinery as the year 2000 is approached and reached. This problem stems
from the fact that many of the world's computer hardware and software
applications have historically used only the last two digits to refer to a year.
As a result, many of these computer programs do not or will not properly
recognize a year that begins with "20" instead of the familiar "19". If not
corrected, many computer applications could fail or create erroneous results.
STATE OF READINESS
To operate its business, Big Buck relies on many third party information
technology ("IT") systems, including its point of sale, table seating and
reservation management, inventory management, credit card processing, payroll,
accounts payable, fixed assets, banking and general ledger systems. Big Buck
does not maintain any proprietary IT systems and has not made any modifications
to any of the IT systems provided to it by its IT vendors. Big Buck is in the
process of requesting each of its hardware and software vendors to complete a
Year 2000 compliance questionnaire. Based on the results of such questionnaires
Big Buck will determine those IT systems that need to be upgraded or replaced to
function properly in the year 2000.
Big Buck is also in the process of assessing its non-IT systems (i.e. embedded
technology such as microprocessors in kitchen equipment, brewery equipment,
elevators, etc.). Big Buck plans to complete its assessment by July 31, 1999
and will then determine the best approach for remedying any non-compliant
system.
Big Buck also relies upon suppliers of raw materials and packaging for beer,
suppliers of food and retail products and other third party product and service
providers, over which it can assert little control. Big Buck is in the process
of contacting all critical suppliers and service providers to assess the
readiness of such parties and to determine the extent to which Big Buck may be
vulnerable to such parties' failure to resolve their own Year 2000 issues. This
effort is expected to be completed by July 31, 1999.
COSTS TO ADDRESS YEAR 2000 ISSUES
Big Buck expenses costs associated with its Year 2000 compliance efforts as
the costs are incurred. As of May 19, 1999, Big Buck had incurred
approximately $5,000 of costs in connection with its Year 2000 compliance
efforts. Big Buck estimates that its total cost of assessing and remedying
Year 2000 issues will approximate $40,000. Such estimate does not consider
any additional costs incurred due to the failure of any third party vendor,
supplier or service provider to achieve Year 2000 compliance.
10
<PAGE>
RISKS OF YEAR 2000 ISSUES
Big Buck recognizes that Year 2000 issues constitute a material known
uncertainty. Big Buck also recognizes the importance of ensuring that Year
2000 issues will not adversely affect its operations. Big Buck believes that
the processes described above will be effective to manage the risks associated
with the problem. However, there can be no assurance that the processes can be
completed on the timetable described above or that remediation will be fully
effective. The failure to identify and remediate Year 2000 issues, or the
failure of key vendors, suppliers and service providers or other critical third
parties who do business with Big Buck to timely remediate their Year 2000
issues could cause system failures or errors, business interruptions and, in
worst case scenario, the inability to engage in normal business practices for
an unknown length of time. Big Buck's business, operating results, financial
condition and cash flows could be materially adversely affected. At this time,
however, Big Buck does not possess information necessary to estimate the
overall potential financial impact of Year 2000 compliance issues. Specific
risks Big Buck faces with regard to Year 2000 issues include the following:
1. Disruption of Internal Computer Systems. If our internal computer
systems should fail, it could disrupt our accounting, restaurant management
and other systems. We believe that the failure of our internal computer
systems is unlikely. However, we expect that minor Year 2000 compliance
issues will continue to be identified through our discussions with our
hardware and software vendors. We intend to address these compliance issues
no later than July 31, 1999.
2. Disruption of Supply Materials. The inability of our suppliers and
service providers to be Year 2000 ready could result in delays in product
delivery, disruption in the distribution channels and disruption in services
required to operate. We are in the process of surveying our suppliers and
service providers with regard to their Year 2000 readiness. We are hopeful
of receiving adequate responses from critical suppliers and service providers
and many non-critical suppliers and service providers by July 31, 1999.
Where ultimate survey results show that the need arises, we will arrange for
back-up suppliers and service providers before the changeover due date.
CONTINGENCY PLANS
Big Buck recognizes the need for Year 2000 contingency plans in the event that
remediation is not fully successful or that the remediation efforts of Big
Buck's vendors, suppliers and service providers are not timely completed. Big
Buck intends to address contingency planning during calendar 1999. To the
extent that Big Buck's vendors, suppliers and service providers are unable to
provide sufficient evidence of Year 2000 readiness by July 31, 1999, Big Buck
will seek to arrange for their replacement.
11
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PART II
ITEM 5 OTHER INFORMATION
(a) Shareholder Proposals
If a shareholder of Big Buck wishes to present a proposal for consideration for
inclusion in the Proxy Statement for the 1999 Annual Meeting of Shareholders,
the proposal must be sent by certified mail, return receipt requested, and must
be received at the executive offices of Big Buck, 550 South Wisconsin Street,
P.O. Box 1430, Gaylord, Michigan 49734-5430, Attn: Secretary, no later than May
28, 1999. All proposals must conform to the rules and regulations of the SEC.
The SEC has amended Rule 14a-4, which governs the use of discretionary voting
authority with respect to shareholder proposals which are not included in the
Proxy Statement. Rule 14a-4(c)(1) provides that, if the proponent of a
shareholder proposal fails to notify Big Buck at least 45 days prior to the
month and day of the mailing of last year's Proxy Statement, the proxies of Big
Buck's management would be permitted to use their discretionary voting authority
if the proposal were raised at the meeting. For purposes of the 1999 Annual
Meeting of Shareholders, this deadline is June 21, 1999.
(b) Sales of Unregistered Securities
On May 13, 1999, Big Buck issued 120,481 shares of its Common Stock to Michael
G. Eyde, the landlord of Big Buck's Auburn Hills site, at a price of $2.075 per
share. This issuance was made in a private transaction pursuant to which Big
Buck obtained gross proceeds of approximately $250,000. This issuance was made
in reliance upon the exemption provided in Section 4(2) of the Securities Act of
1933, as amended (the "Act"). The foregoing securities are restricted as to
sale or transfer, unless registered under the Act, and the certificate
representing such securities contains a restrictive legend preventing sale,
transfer or other disposition unless registered under the Act. In addition, the
recipient of such securities received, or had access to, material information
concerning Big Buck, including, but not limited to, Big Buck's reports on Form
10-KSB, Form 10-QSB and Form 8-K, as filed with the SEC. No underwriting
commissions or discounts were paid with respect to the issuance of such
securities.
12
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ITEM 6 Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
The registrant filed no Current Reports on Form 8-K during the
quarter ended April 4, 1999.
13
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
BIG BUCK BREWERY & STEAKHOUSE, INC.
Date: May 19, 1999 By /s/ Anthony P. Dombrowski
---------------------------------------
Anthony P. Dombrowski
Chief Financial Officer
14
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-02-2000
<PERIOD-END> APR-04-1999
<CASH> 119,915
<SECURITIES> 0
<RECEIVABLES> 106,740
<ALLOWANCES> 0
<INVENTORY> 107,724
<CURRENT-ASSETS> 809,418
<PP&E> 19,390,859
<DEPRECIATION> 0
<TOTAL-ASSETS> 20,824,968
<CURRENT-LIABILITIES> 3,833,473
<BONDS> 6,953,956
0
0
<COMMON> 52,850
<OTHER-SE> 9,984,689
<TOTAL-LIABILITY-AND-EQUITY> 20,824,968
<SALES> 3,286,671
<TOTAL-REVENUES> 3,286,671
<CGS> 1,067,582
<TOTAL-COSTS> 2,890,214
<OTHER-EXPENSES> 658,282
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 215,612
<INCOME-PRETAX> (473,789)
<INCOME-TAX> 0
<INCOME-CONTINUING> (473,789)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (473,789)
<EPS-PRIMARY> (0.09)
<EPS-DILUTED> (0.09)
</TABLE>
