SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
FOR THE QUARTERLY PERIOD ENDED September 30, 1997.
------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
FOR THE TRANSITION PERIOD FROM ____ TO ____.
Commission file number 0-28898
-------
Independence Brewing Company
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2763840
------------------------------ -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1000 East Comly Street, Philadelphia, Pennsylvania 19149
--------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(215) 537-2337
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No ___
---
Indicate the number of shares outstanding of each of the issued classes of
common equity, as of the latest practicable date: On November 14, 1997,
3,207,078 shares of the issuer's Common Stock, no par value, and 4,600,000
Redeemable Warrants were outstanding.
<PAGE>
Independence Brewing Company
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
PART I. FINANCIAL INFORMATION 2
Item 1. Financial Statements
Balance Sheet at September 30, 1996 and
December 31, 1997 (unaudited) 2
Statements of Operations for the Nine Months Ended
September 30, 1997 and 1996 (unaudited) 3
Statements of Changes in Shareholders Equity for the Nine
Months Ended September 30, 1997 (unaudited) and the Year
Ended December 31, 1996 4
Statements of Cash Flows for the Nine Months Ended
September 30, 1997 and 1996 (unaudited) 5
Notes to Financial Statements 6
Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations 8
PART II. OTHER INFORMATION 11
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES
</TABLE>
-2-
<PAGE>
Independence Brewing Company
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------- ------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 1,925,079 $ 363,484
Cash escrow 25,000 --
Accounts receivable, net 28,561 17,126
Inventory 171,620 134,816
Prepaid expenses 43,050 --
Advances to officer 1,000 10,000
----------- -----------
Total current assets 2,194,310 525,426
Equipment and leasehold improvements, net 2,020,494 1,395,875
Deferred charges -- 2,981,931
Deferred stock issuance costs -- 338,910
Other assets 107,693 25,902
----------- -----------
$ 4,322,497 $ 5,268,044
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt $ 108,000 $ 100,264
Current portion of capital lease obligations 570 4,026
Accounts payable and accrued expenses 351,824 753,749
Other current liabilities 9,077 --
----------- -----------
Total current liabilities 469,471 858,039
Long-term liabilities
Deferred rent 43,540 35,436
Convertible debentures -- 800,000
Long-term debt 433,402 517,497
----------- -----------
Total liabilities 946,413 2,210,972
----------- -----------
Series B preferred stock, $10.00 par value - authorized, 500,000 shares;
issued and outstanding, 70,000 shares -- 700,000
----------- -----------
Shareholders' equity
Common stock, no par value - authorized, 19,000,000 shares; issued and
outstanding, 3,207,078 and 2,307,078 shares in 1997 and
1996, respectively 8,976,634 3,691,428
Accumulated deficit (5,600,550) (1,334,356)
----------- -----------
Total shareholders' equity 3,376,084 2,357,072
----------- -----------
$ 4,322,497 $ 5,268,044
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
2
<PAGE>
Independence Brewing Company
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1997 1996 1997 1996
------------- -------------- -------------- ---------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Sales $ 199,475 $ 162,702 $ 452,202 $ 428,835
Less excise taxes 8,881 13,021 23,497 24,213
----------- ----------- ----------- -----------
Net sales 190,594 149,681 428,705 404,622
Cost of goods sold 259,990 193,413 747,026 582,098
----------- ----------- ----------- -----------
Gross loss (69,396) (43,732) (318,321) (177,476)
----------- ----------- ----------- -----------
Expenses
Advertising, promotional and selling 218,671 26,542 389,861 101,468
General and administrative 184,599 85,254 666,770 277,010
----------- ----------- ----------- -----------
Total expenses 403,270 111,796 1,056,631 378,478
----------- ----------- ----------- -----------
Operating loss (472,666) (155,528) (1,374,952) (555,954)
----------- ----------- ----------- -----------
Other income (expense)
Interest expense (11,648) (100,375) (2,982,122) (151,918)
Other income, net 32,059 (1,811) 90,880 19,873
----------- ----------- ----------- -----------
20,411 (102,186) (2,891,242) (132,045)
----------- ----------- ----------- -----------
NET LOSS $ (452,255) $ (257,714) $(4,266,194) $ (687,999)
=========== =========== =========== ===========
Per share data
Net loss per common share $ (0.14) $ (0.11) $ (1.39) $ (0.31)
=========== =========== =========== ===========
Weighted average shares outstanding 3,207,078 2,265,088 3,070,473 2,229,773
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
Independence Brewing Company
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Nine months ended September 30, 1997 (unaudited) and
year ended December 31, 1996
<TABLE>
<CAPTION>
Common stock
------------------------ Total
Number of Accumulated shareholders'
shares Amount deficit equity
--------- ------ ------------ -------------
<S> <C> <C> <C> <C>
Balance at January 1, 1997 2,307,078 $ 3,691,428 $(1,334,356) $ 2,357,072
Issuance of common stock (unaudited) 900,000 5,285,206 -- 5,285,206
Net loss for the nine months ended
September 30, 1997 (unaudited) -- -- (4,266,194) (4,266,194)
----------- ----------- ----------- -----------
Balance at September 30, 1997
(unaudited) 3,207,078 $ 8,976,634 $(5,600,550) $ 3,376,084
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
4
<PAGE>
Independence Brewing Company
STATEMENTS OF CASH FLOWS
Nine months ended September 30,
<TABLE>
<CAPTION>
1997 1996
------------ -----------
(unaudited)
<S> <C> <C>
Cash flows from operating activities
Net loss $(4,266,194) $ (687,999)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation and amortization 95,169 58,734
Amortization of original issue discount 2,981,931 72,617
Increase in accounts receivable (11,435) (18,762)
Increase in inventory (36,804) (22,918)
Increase in prepaid expenses (43,050) --
Decrease in other assets 342,598 1,032
(Decrease) increase in accounts payable,
accrued expenses and deferred rent (384,745) 381,013
----------- -----------
Net cash used in operating
activities (1,322,530) (216,283)
----------- -----------
Cash flows from investing activities
Purchases of property and equipment (715,266) (501,139)
Purchase of intangible (trademark) (90,000) --
Purchase of other (25,000) (60,000)
----------- -----------
Net cash used in investing
activities (830,266) (561,139)
----------- -----------
Cash flows from financing activities
(Repayments) proceeds from subordinated convertible notes (800,000) 988,300
Repayments of long-term debt (76,359) (24,192)
(Repayments) proceeds of preferred stock (700,000) 700,000
Proceeds (repayments) from issuance of common stock, net 5,285,206 (210,735)
Payments under capital lease obligations (3,456) (2,397)
Repayments from (advances to) officers, net 9,000 (15,150)
----------- -----------
Net cash provided by financing
activities 3,714,391 1,435,826
----------- -----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS 1,561,595 658,404
Cash and cash equivalents at
beginning of period 363,484 2,782
----------- -----------
Cash and cash equivalents at
end of period $ 1,925,079 $ 661,186
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
Independence Brewing Company
NOTES TO FINANCIAL STATEMENTS
September 30, 1997 and December 31, 1996
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Independence Brewing Company (the Company) is a regional producer of fresh,
high-quality, preservative-free, craft brewed ales, lagers, porters and seasonal
beers. The Company competes with other beer and beverage companies not only for
consumer acceptance and loyalty but also for shelf and tap space in retail
establishments and for marketing focus by the Company's third-party wholesale
distributors and their customers, all of which also distribute and sell other
beers and alcoholic beverage products.
The manufacture and sale of alcoholic beverages is a business that is highly
regulated and taxed at the federal, state and local levels. The Company's
operations may be subject to more restrictive regulations and increased taxation
by federal, state and governmental agencies than are those of non-alcohol
related businesses.
1. Interim Financial Information
The financial statements of the Company as of September 30, 1997 and for the
nine months ended September 30, 1997 and 1996 and related footnote information
are unaudited. All adjustments (consisting only of normal recurring adjustments)
have been made which, in the opinion of management, are necessary for a fair
presentation. Results of operations for the nine months ended September 30, 1997
are not necessarily indicative of the results that may be expected for any
future period.
2. Loss Per Common Share
Loss per common share was computed based on the weighted average number of
common shares and common share equivalents outstanding during the year, as
restated for the 100% stock dividend, effected in the form of a stock split,
issued on January 5, 1996 for shareholders of record on December 6, 1995.
Warrants were not considered because they are antidilutive. In connection with
certain Private Placements, 1,038,188 shares issued have been treated as
outstanding for all periods in calculating loss per common share because such
shares were issued for consideration below the Public Offering price of $5.00
per share. Fully dilutive loss per common share has not been presented because
it was antidilutive.
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 128, "Earnings Per Share," which is effective for
financial statements issued after December 15, 1997. Early adoption of the new
standard eliminates primary and fully diluted earnings per share and requires
presentation of basic and diluted earnings per share together with disclosure of
how the per share amounts were computed. The adoption of this new standard is
not expected to have a material impact on the disclosures of earnings per share
in the financial statements.
6
<PAGE>
Independence Brewing Company
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 1997 and December 31, 1996
NOTE B - INVENTORY
Inventory consists of the following:
September 30, December 31,
1997 1996
------------- ------------
(unaudited)
Raw materials $ 30,414 $ 11,513
Work in process 32,361 21,703
Finished goods 31,957 30,410
Packaging 76,888 71,190
----------- -----------
$ 171,620 $ 134,816
========== ==========
NOTE C - SHAREHOLDERS' EQUITY
The Company received approximately $5,285,000 of proceeds, net of underwriting
discounts and underwriting expenses from the sale of 900,000 shares of Common
Stock, no par value per share and 4,000,000 Redeemable Common Stock Purchase
Warrants (Redeemable Warrants). The initial public offering prices of the Common
Stock and the Redeemable Warrants was $5.00 and $0.50, respectively.
Additionally, the Company sold 600,000 Redeemable Warrants on the same terms and
conditions as set forth above solely to cover overallotments.
The Company has also agreed to sell to the underwriter, for nominal
consideration, warrants to purchase 90,000 shares of Common Stock and 400,000
Redeemable Warrants. The Underwriter's Warrants are initially exercisable at a
price of $6.00 per share of Common Stock and $0.60 per Redeemable Warrant for a
period of four years commencing one year from the date of this Prospectus. The
Redeemable Warrants underlying the Underwriter's Warrants are exercisable at a
price of $7.50 per share of Common Stock.
7
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Gross sales for the quarter ended September 30, 1997 were $199,475, an increase
of 23% when compared to $162,702 for the comparable year-ago quarter. Gross
sales for the nine months ended September 30, 1997 were $452,202, an increase of
5% when compared with $428,835 for the comparable year-ago period. The increase
in net sales from comparable periods last year was due to increased sales volume
and a major advertising campaign.
Excise taxes for the quarter ended September 30, 1997 were $8,881 as compared
with $13,021 for the comparable year-ago quarter. Excise taxes for the nine
months ended September 30, 1997 were $23,497 as compared with $24,213 for the
comparable year-ago period. Excise taxes as a percentage of sales for the
quarter ended September 30, 1997 were approximately 5% as compared with 8% for
the comparable year-ago quarter. Excise taxes as a percentage of sales for the
nine months ended September 30, 1997 was approximately 5% as compared with 6%
for the comparable year-ago period. The Company pays federal and certain local
taxes on sales volume. Accordingly, as sales increase, excise taxes paid by the
Company will increase unless the Company increases shipments to jurisdictions
where local excise taxes are paid by the third-party wholesale distributor
rather than the brewer, as is the case in Maryland and the District of Columbia.
Cost of goods sold for the quarter ended September 30, 1997 were $259,990 or
130% of sales as compared to $193,413 or 118% of sales for the comparable
year-ago quarter. Cost of goods sold for the nine months ended September 30,
1997 were $747,026 or 165% of sales as compared to $582,098 or 136% of sales for
the comparable year-ago period. The increase in cost of goods sold from the
comparable periods last year was due to higher raw material costs as a result of
increased sales volume, as well as increases in depreciation, production
salaries and production supplies expense. The installation of new bottling
equipment during the first quarter resulted in increased depreciation cost for
the Company. The increase in production salaries reflects an increase in brewery
personnel from previous comparable periods. The increase in production supplies
is due to costs associated with the operation of the Company's new bottling
equipment.
Advertising, promotional and selling expenses for the quarter ended September
30, 1997 were $218,671 or 110% of sales as compared to $26,542 or 16% of sales
for the comparable year-ago quarter. Advertising, promotional and selling
expenses for the nine months ended September 30, 1997 were $389,861 or 86% of
sales as compared to $101,468 or 24% of sales for the same period last year. The
increase in advertising expense from the comparable periods of a year ago were
primarily due to the launching of a major advertising campaign which included
billboard, magazine and radio advertisements. In addition, there were also
increasing costs associated with merchandising and direct mail campaigns.
General and administrative expenses for the three months ended September 30,
1997 were $184,599 or 93% of sales as compared to $85,254 or 52% of sales for
the comparable year-ago quarter. General and administrative expenses for the
nine months ended September 30, 1997 were $666,770 or 147% of sales as compared
to $277,010 or 65% for same period last year. The increase in general and
administrative expenses from the comparable periods of a year ago were primarily
due to increased salary, amortization, insurance and professional fee costs. The
Company incurred increased salary expenses in connection with the addition of
new sales representatives and additional management personnel. Amortization
increased as a result of a $60,000 direct write-off of financing fees. Insurance
expense rose in part due to the addition of a Directors and Officers general
policy. Professional fees rose as a result of higher legal and accounting costs
associated with the Company's initial public offerings as well as expenses
related to new business development.
8
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - CONTINUED
Interest expense for the quarter ended September 30, 1997 was $11,648 as
compared to $100,375 for the comparable year-ago quarter. Interest expense for
the nine months ended September 30, 1997 was $2,982,122 as compared to $151,918
for the comparable year-ago period. Interest expense increased substantially
during the first nine months of 1997 when compared to the same period in 1996
due to the write-off of unamortized original issue discount and financing costs
aggregating $2,916,256 in connection with the repayment of the Company's
debentures and series B preferred stock from the net proceeds of the Company's
initial public offering in the first quarter of 1997. The interest incurred for
the first nine months of 1997 is also associated with the Company's promissory
note in favor of CoreStates Bank, N.A. in connection with a Small Business
Administration loan (the SBA Loan) and Philadelphia Industrial Development
Corporation notes (PIDC Notes).
Other income, net for the three months and nine months ended September 30, 1997
was $32,059 and $90,880, respectively, an increase of $33,870 and $71,007 when
compared to comparable periods of a year ago. The increase in other income, net
from comparable year-ago periods was primarily due to interest earned on excess
funds resulting from the Company's initial public offering in the first quarter
of 1997.
LIQUIDITY AND CAPITAL RESOURCES
To date, the Company has funded its operations and capital requirements through
the issuance of Common Stock, the SBA Loan, the PIDC Notes and certain
subordinated convertible notes in 1995 and during 1996. In February 1997, the
Company completed its initial public offering. The Company received
approximately $5,289,000 of proceeds, net of underwriting discounts and
underwriting expenses (including the purchase of 600,000 redeemable warrants
upon partial exercise of the Underwriter's overallotment option and after
deducting the Underwriter's discount and offering expenses), from the initial
public offering.
Net cash used in operating activities for the nine months ended September 30,
1997 totalled $1,322,530 as compared to $216,283 for the comparable year-ago
period. The increase in use of cash is primarily due to the Company's operating
loss for the first nine months of 1997 and a significant decrease in accounts
payable.
Net cash used in investing activities for the nine months ended September 30,
1997 totalled $830,266 as compared to $561,139 for the same period last year.
The increase in the use of cash was the result of the purchase of new bottling
equipment and the cost of acquiring a trademark.
Net cash provided by financing activities for the nine months ended September
30, 1997 totalled $3,714,391 as compared to $1,435,826 for the same period last
year. This increase was due to net proceeds of $5,285,206 as a result of the
Company's initial public offering, which was only partially offset by the
repayment of debentures, preferred stock and other outstanding debt.
The matters discussed in this Form 10-QSB that are forward-looking statements
relate to future events or the future financial performance of the Company and
are based on current management expectations that involve risks and
uncertainties. Such statements are only predictions and actual events or
performance may differ materially from the events or performance expressed in
any such forward-looking statements.
Potential risks and uncertainties include, without limitation, the impact of
economic conditions generally and in the industry for mircobreweries; the
potential decline in the level of demand for the Company's products; the
commencement of brewery/pub operations by the Company and the inherent risks
associated therewith; risk of third-party claims concerning the Company's
intellectual property; loss of key personnel, distributors or suppliers; limited
product line; sales fluctuations due to seasonality; continued competitive and
pricing pressures in the industry; product supply shortages; legal proceedings;
and capital and financing availability.
9
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - CONTINUED
Although the Company has not attempted to calculate the effect of inflation,
management does not believe inflation has had a material effect to date on its
results of operations. However, production and raw material costs are expected
to increase over time as a result of general economic inflation.
10
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF SALES OF SECURITIES AND USE OF PROCEEDS THEREFROM
NOTE: THE FOLLOWING INFORMATION REPRESENTS A REPLACEMENT REPORT FOR DISCONTINUED
COMMISSION FORM SR.
MO. DAY YEAR
--- --- ----
For period ending 1 1 1 4 9 7
Indicate whether the report is an initial report __, an amendment X, or a final
report __.
If the report is an amendment, indicate the number of such amendment 0 1.
GENERAL INSTRUCTIONS.
A. The report shall be filed in accordance with the provision of Rule 463
(17 CFR 230.463). The provisions of Rule 405 (17 CFR 230.405) regarding
definitions of terms and Rule 409 (17 CFR 230.409) regarding information unknown
or not reasonably available are applicable to the report.
B. Answer each item in the box(es) or space provided. If additional space
is required for any response, continue the response on the attached sheet.
Where the number of boxes provided exceeds the number required for the response,
enter zero(es) in any unnecessary box(es) to the left of the response. For
example, if the date August 1, 1981 is to be entered in the boxes provided, the
entry should appear as MO. DAY YEAR
--- --- ----
0 8 0 1 8 1
C. If the report is being filed by a sucessor issuer, answer each item with
respect to the sucessor issuer.
D. If the issuer is required to file any report(s) on this form subsequent
to its initial filing thereon, each subsequent filing shall be deemed to be an
amendment to the initial filing. Do not report in any amendment on this form
any response to Items 3-12 unless the response reported on the most recent
prior filing has changed.
E. No fee is required to be paid in connection with the filing of the
report.
F. File four copies of the report at the office of the Commission where the
registration statement was filed. At least one copy shall be manually signed;
the other three copies may bear typed or printed signatures.
1. (a) State the name of the issuer or successor issuer filing the report.
Independence Brewing Company
(b) If a successor issuer is filing the report with respect to the
registration statement of its predecessor, state the name of such
predecessor issuer.
NOT APPLICABLE
------------------------------
<PAGE>
FORM SR [REPLACEMENT REPORT] Page 2
2. (a) Indicate the effective date of the registration statement for which
this form is filed. MO. DAY YEAR
--- --- ----
0 2 1 0 9 7
Regional
Office
(b) Provide the SEC file number assigned to the Code
registration statement If any
3 3 3 - 1 2 9 7 5 - __ __
(c) If the issuer has been assigned a CUSIP number, specify the first
(6) digits.
_ _ _ _ _ _
3. (a) Has the offering commenced?
Yes |X| NO __
(b) If yes, indicate the date of the offering commenced.
MO. DAY YEAR
--- --- ----
0 2 1 1 9 7
If no, explain briefly ___________________________________________
__________________________________________________________________
__________________________________________________________________
4. Did the offering terminate before any securities were sold?
Yes __ NO |X|
If yes, explain briefly __________________________________________
__________________________________________________________________
__________________________________________________________________
Note: If the offering terminated before any securities were sold, see
Rule 477 under Regulation C (17 CFR 230.477) regarding withdrawal
of the registration statement.
Instruction: If the answer to Item 4 is "yes," do not answer Items 5-12.
5. Did the offering terminate prior to the sale of all securities
registered? Yes __ NO |X|
If yes, explain briefly __________________________________________
__________________________________________________________________
__________________________________________________________________
<PAGE>
FORM SR [REPLACEMENT REPORT] Page 3
6. Furnish the name(s) of the managing underwriter(s), if any.
(01) A.S. Goldmen & Co., Inc.
______________________________________________________________________
(02)
______________________________________________________________________
(03)
______________________________________________________________________
(04)
______________________________________________________________________
7. (a) Indicate the title and code of each class of securities and, where
a class of convertible securities is being registered, indicate
the title and code of any class of securities into which such
securities may be converted.
Title of security Code
______________________________________________________________________
(01) Common Stock, no par value EP
______________________________________________________________________
(02) Redeemable Warrants OT
______________________________________________________________________
(03)
______________________________________________________________________
(04)
______________________________________________________________________
Instruction: Select the appropriate code for each class of securities
registered. Debt -- DE; Convertible Debt -- CD; Equity -- EQ; Limited
Partnership Interest -- LP; Other (e.g., investment contracts, warrants,
rights, and options) -- OT.
(b) Describe briefly any class of securities categorized as "other."
Each Redeemable Warrant entitles the holder to purchase one share
of Common Stock at an exercise price of $6.00 per share until
February 11, 2002.
8. Indicate on the following table the amount and aggregate offering price
of securities registered and sold to date for the account of the issuer
and for the account(s) of any selling security holder(s).
<PAGE>
FORM SR [REPLACEMENT REPORT] Page 4
<TABLE>
<CAPTION>
For the account of the issuer For the account(s) of any selling security holder(s)
----------------------------- ----------------------------------------------------
| |
- -----------------------------------------------------------------------------------------------------------------------------------
Title Amount Aggregate Amount Aggregate Amount Aggregate Amount Aggregate
of registered price of sold price of registered price of sold price of
security offering offering offering offering
amount amount amount amount
registered sold registered sold
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(01)
Common Stock 1,035,000 $5.00 900,000 $4.5 million
- -----------------------------------------------------------------------------------------------------------------------------------
(02)
Redeemable
Warrants 4,600,000 $0.50 4,600,000 $2.3 million
- -----------------------------------------------------------------------------------------------------------------------------------
(03)
- -----------------------------------------------------------------------------------------------------------------------------------
(04)
- -----------------------------------------------------------------------------------------------------------------------------------
(05)
Total
- -----------------------------------------------------------------------------------------------------------------------------------
Instructions: 1. List each class of securities registered except any class of securities into which a class of convertible
securities registered may be converted without additional payment to the issuer. Match any class listed with
the line on which it was listed in Item 7(a) (e.g., the class listed on line (01) of the table should be the
same class as listed on line (01) of Item 7(a).
2. Compute all amounts from the effective date of the registration statement to the ending date of the reporting
period for this report.
3. Round all amounts to the nearest dollar.
</TABLE>
<PAGE>
FORM SR [REPLACEMENT REPORT] Page 5
9. State, if known, or furnish a reasonable estimate of, the amount of
expenses incurred for the issuer's account in connection with the
issuance and distribution of the securities registered for each
category listed below. Place an "X" in the box to the left of any
amount given that is an estimate.
Direct or indirect payments Direct or indirect
to directors, officers, general payments to others
partners of the issuer or
their associates; to persons
owning ten percent or more of
any class of equity securities
of the issuer; and to
affiliates of the issuer
(A) (B)
- --------------------------------------------------------------------------------
(01) Underwriting
discounts and
commissions $ $ 680,000
- --------------------------------------------------------------------------------
(02)
Finders' Fees
- --------------------------------------------------------------------------------
(03) Expenses paid
to or for
underwriters $ 204,000
- --------------------------------------------------------------------------------
(04)
Other expenses 627,000
- --------------------------------------------------------------------------------
(05)
Total Expenses $ $1,511,000
- --------------------------------------------------------------------------------
Instructions: 1. Compute all amounts from the effective date of the
registration statement to the ending date of the reporting
period for this report.
2. Round all amounts to the nearest dollar.
10. Indicate the net offering proceeds to the issuer after the total
expenses in Item 9. above.
$5,289,000
11. State, if known, or furnish a reasonable estimate of, the amount of net
offering proceeds to the issuer used for each of the purposes listed
below. Do not include any amount in "working capital" to which a more
specific category is applicable. Place an "X" in the box to the left
of any amount given that is an estimate.
<PAGE>
FORM SR [REPLACEMENT REPORT] Page 6
Direct or indirect payments Direct or indirect
to directors, officers, general payments to others
partners of the issuer or
their associates; to persons
owning ten percent or more of
any class of equity securities
of the issuer; and to
affiliates of the issuer
(A) (B)
- --------------------------------------------------------------------------------
(01) Construction of
plant, building and
facilities $ $ 34,000
- --------------------------------------------------------------------------------
(02) Purchase and
installation of
machinery and
equipment 528,000
- --------------------------------------------------------------------------------
(03) Purchase of real
estate
- --------------------------------------------------------------------------------
(04) Acquisition of
other business(es)
- --------------------------------------------------------------------------------
(05) Repayment of
indebtedness 1,550,000
- --------------------------------------------------------------------------------
(06) Working capital |X| 12,926(1) 1,494,000
- --------------------------------------------------------------------------------
Temporary investment (specify)
- --------------------------------------------------------------------------------
(07) Certificate of
Deposit $ $1,250,000
- --------------------------------------------------------------------------------
(08) Government
Money Market 408,000
- --------------------------------------------------------------------------------
(09) Checking and
Savings -0-
- --------------------------------------------------------------------------------
(10) Cash Escrow 25,000
- --------------------------------------------------------------------------------
Total 5,289,000
Other purposes (specify)
- --------------------------------------------------------------------------------
(11) $ $
- --------------------------------------------------------------------------------
(12)
- --------------------------------------------------------------------------------
(13)
- --------------------------------------------------------------------------------
(14)
- --------------------------------------------------------------------------------
(15)
- --------------------------------------------------------------------------------
(16)
- --------------------------------------------------------------------------------
Instructions: 1. Specify under "other purposes" any purpose for which at
least 5 percent of the issuer's total offering proceeds
or $50,000, whichever is less, has been used.
2. Compute all amounts from the effective date of the
registration statement to the ending date of the reporting
period for this report.
3. Round all amounts to the nearest dollar.
(1) The individual who has served as outside general counsel to the Issuer
since November, 1995 was appointed to the Issuer's Board of Directors in
August, 1997. Accordingly, the estimated amount reported includes the
estimated portion of the offering proceeds used to pay legal and relative
costs to such counsel from 8/1/97 through 9/30/97.
<PAGE>
FORM SR [REPLACEMENT REPORT] Page 7
12. Do the use(s) of proceeds in Item 11 represent a material change in
the use(s) of proceeds described in the prospectus?
Yes __ NO |X|
If yes, explain briefly __________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
SIGNATURE
Pursuant to the requirements of Rule 463 under the Securities Act of 1933,
Robert W. Conner, Jr. has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Independence Brewing Company
---------------------------------
ISSUER
By
- ------------------ ---------------------------------
DATE (SIGNATURE)
Robert W. Connor, Jr., President
Instruction: The report shall be signed by an executive officer, general
partner or counsel of the issuer or by any other duly authorized
person. The name and any title of the person who signs the report
shall be typed or printed beneath his/her signature.
ATTENTION: Intentional misstatements or omissions or facts constitute
Federal criminal violations (See 18 U.S.C. 1001).
<PAGE>
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27. Financial Data Schedule
(b) Reports filed on Form 8-K.
None
11
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Independence Brewing Company
/s/ Robert W. Connor, Jr.
----------------------------------------
Robert W. Connor, Jr.
President, Chief Executive Officer
(and principal accounting officer)
Date: November 14, 1997
12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 1,950,079
<SECURITIES> 0
<RECEIVABLES> 28,561
<ALLOWANCES> 0
<INVENTORY> 171,620
<CURRENT-ASSETS> 2,194,310
<PP&E> 2,020,494
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,322,497
<CURRENT-LIABILITIES> 469,471
<BONDS> 433,402
0
0
<COMMON> 8,976,634
<OTHER-SE> (5,600,550)
<TOTAL-LIABILITY-AND-EQUITY> 4,322,497
<SALES> 452,202
<TOTAL-REVENUES> 428,705
<CGS> 747,026
<TOTAL-COSTS> 1,056,631
<OTHER-EXPENSES> (90,880)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,982,122
<INCOME-PRETAX> (4,266,194)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,266,194)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,266,194)
<EPS-PRIMARY> (1.39)
<EPS-DILUTED> 0
</TABLE>
