As filed with the Securities and Exchange Commission on July 24, 2000
Registration No. 333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MAIN STREET AND MAIN INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 11-2948370
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification number)
5050 NORTH 40TH STREET, SUITE 200
PHOENIX, ARIZONA 85018
(602) 852-9000
------------------------------------------------------------------------
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
BART A. BROWN, JR. COPIES TO:
PRESIDENT AND CHIEF EXECUTIVE OFFICER ROBERT S. KANT, ESQ.
5050 NORTH 40TH STREET, SUITE 200 JERE M. FRIEDMAN, ESQ.
PHOENIX, ARIZONA 85018 GREENBERG TRAURIG, LLP
(602) 852-9000 ONE EAST CAMELBACK ROAD
(Name, address, including zip code, PHOENIX, ARIZONA 85012
and telephone number, including (602) 263-2300
area code, of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practical after the Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
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, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [X]
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. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=======================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER SHARE(1) OFFERING PRICE REGISTRATION FEE
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Rights to purchase shares
of common stock(2)........ 4,011,740 rights -- -- --
Common stock................ 4,011,740 shares $2.9063 $11,659,319.00 $3,078.06
=======================================================================================================
</TABLE>
(1) Calculated for purposes of this offering under Rule 457(g) and Rule 457(c)
of the Securities Act of 1933, as amended, using the average of the high
and low sales prices for the Common Stock of Main Street and Main
Incorporated as reported on the Nasdaq National Market on July 20, 2000.
(2) Evidencing non-transferable rights to purchase shares of common stock.
Pursuant to Rule 457(g), no separate registration fee is required because
the rights are being registered in the same registration statement as the
common stock underlying the rights.
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 THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION FOR THIS OFFERING IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL, AND IT IS NOT SOLICITING AN OFFER TO BUY,
THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED JULY 24, 2000
PROSPECTUS
4,011,740 SHARES OF COMMON STOCK
MAIN STREET AND MAIN INCORPORATED
Main Street and Main Incorporated is conducting a rights offering. We are
distributing rights to purchase our common stock to each person that owned
shares of our common stock at the close of business on July 31, 2000. During
this rights offering, we may issue up to 4,011,740 shares of common stock.
You will receive one non-transferable subscription right for each 2.5
shares of common stock that you owned on July 31, 2000. Your subscription rights
will be aggregated for all of the shares that you owned on that date and then
rounded down to the nearest whole number, so that you will not receive any
fractional rights. The subscription rights are exercisable beginning on the date
of this prospectus and continuing until 5:00 p.m., Mountain Daylight Savings
Time, on __________, 2000. Each subscription right entitles you to purchase one
share of common stock at a purchase price of $___ per share. If you exercise all
of your subscription rights, you also may have the opportunity to purchase
additional shares at the same purchase price.
PROCEEDS TO
SUBSCRIPTION PRICE OUR COMPANY(1)
------------------ ---------------
Per Share............................... $ $
-------------- ---------------
Total................................... $ $
-------------- ---------------
----------
(1) Before deducting expenses associated with this offering, which we will pay.
We estimate these expenses will total approximately $_______.
The subscription rights may not be sold or transferred. The subscription
rights will not be listed for trading on any stock exchange or trading market.
Four of our five directors have advised us that they intend to exercise
their basic subscription privileges in full. Three of these directors have
further advised us that they intend to exercise their over-subscription
privileges for at least an additional __________ shares of common stock.
Accordingly, we expect to receive gross proceeds of at least $5.75 million.
Our common stock is traded on the Nasdaq National Market under the symbol
"MAIN." On July 21, 2000, the last sale price of our common stock as reported on
Nasdaq was $2.88 per share.
SEE "RISK FACTORS," BEGINNING ON PAGE 12, FOR A DISCUSSION OF CERTAIN RISK
FACTORS THAT YOU SHOULD CONSIDER BEFORE EXERCISING YOUR RIGHTS TO BUY SHARES OF
OUR COMMON STOCK.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS __________, 2000
<PAGE>
TABLE OF CONTENTS
PAGE NO.
--------
Statement Regarding Forward-Looking Statements........................... 2
Summary.................................................................. 3
Our Company............................................................ 3
Recent Developments.................................................... 4
Questions and Answers About the Rights Offering........................ 6
Summary Consolidated Financial Data.................................... 10
Summary Historical and Pro Forma Financial Information................. 11
Risk Factors............................................................. 12
Risks Related to Our Business.......................................... 12
Risks Related to Our Common Stock...................................... 18
Risks Related to the Rights Offering................................... 19
Use of Proceeds.......................................................... 20
Capitalization........................................................... 21
Unaudited Pro Forma Condensed Consolidated Financial Information......... 22
The Rights Offering...................................................... 27
Important................................................................ 34
Federal Income Tax Considerations........................................ 34
If You Have Questions.................................................... 35
Description of Securities................................................ 36
Determination of Offering Price.......................................... 37
Plan of Distribution..................................................... 37
Legal Opinions........................................................... 37
Experts.................................................................. 37
Where You Can Obtain Additional Information.............................. 38
----------
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
THE STATEMENTS CONTAINED IN OR INCORPORATED BY REFERENCE INTO THIS
PROSPECTUS THAT ARE NOT PURELY HISTORICAL ARE FORWARD-LOOKING STATEMENTS WITHIN
THE MEANING OF APPLICABLE SECURITIES LAWS. FORWARD-LOOKING STATEMENTS INCLUDE
STATEMENTS REGARDING OUR "EXPECTATIONS," "ANTICIPATION," "INTENTIONS,"
"BELIEFS," OR "STRATEGIES" REGARDING THE FUTURE. FORWARD-LOOKING STATEMENTS ALSO
INCLUDE STATEMENTS REGARDING OUR REVENUE, MARGINS, EXPENSES, AND EARNINGS
ANALYSIS FOR FUTURE PERIODS; FUTURE RESTAURANT OPERATIONS AND NEW RESTAURANT
ACQUISITIONS OR DEVELOPMENT; THE RESTAURANT INDUSTRY IN GENERAL; AND LIQUIDITY
AND ANTICIPATED CASH NEEDS AND AVAILABILITY. ALL FORWARD-LOOKING STATEMENTS
INCLUDED IN OR INCORPORATED BY REFERENCE INTO THIS PROSPECTUS ARE BASED ON
INFORMATION AVAILABLE TO US AS OF THE DATE OF THIS PROSPECTUS, AND WE ASSUME NO
OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS. OUR ACTUAL RESULTS
COULD DIFFER MATERIALLY FROM THE FORWARD-LOOKING STATEMENTS. AMONG THE FACTORS
THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY ARE THE FACTORS DISCUSSED
UNDER THE HEADING "RISK FACTORS."
2
<PAGE>
SUMMARY
THE FOLLOWING SUMMARY PROVIDES INFORMATION ABOUT OUR COMPANY AND THIS
RIGHTS OFFERING. THIS SUMMARY IS NOT COMPLETE AND DOES NOT CONTAIN ALL OF THE
INFORMATION THAT YOU SHOULD CONSIDER BEFORE EXERCISING YOUR SUBSCRIPTION RIGHTS.
YOU SHOULD CAREFULLY REVIEW THE DETAILED INFORMATION AND FINANCIAL STATEMENTS,
INCLUDING THE NOTES THERETO, APPEARING ELSEWHERE IN OR INCORPORATED BY REFERENCE
INTO THIS PROSPECTUS. UNLESS OTHERWISE INDICATED, ALL INFORMATION IN THIS
PROSPECTUS ASSUMES NO EXERCISE OF ANY CURRENTLY OUTSTANDING OR AUTHORIZED STOCK
OPTIONS OR WARRANTS.
OUR COMPANY
We are the world's largest franchisee of T.G.I. Friday's restaurants,
currently owning 53 and managing six T.G.I. Friday's restaurants. We also own
six Redfish Looziana Roadhouse & Seafood Kitchen restaurants and two Bamboo Club
restaurants.
T.G.I. Friday's restaurants are full-service, casual dining establishments
featuring a wide selection of freshly prepared, popular foods and beverages
served by well-trained, friendly employees in relaxed settings. Our T.G.I.
Friday's restaurants that were open during all of fiscal 1999 generated an
average of approximately $3.1 million of annual revenue. Alcoholic beverage
sales in fiscal 1999 accounted for approximately 24.4% of revenue. Menu prices
range from $6 to $17 for beef, chicken, and seafood entrees; $6 to $10 for
pizzadillas, pasta, wrappers, and oriental and southwestern specialty items; $4
to $9 for salads, sandwiches, and burgers; and $3 to $10 for appetizers and
soups.
T.G.I. Friday's restaurants have been in operation for 35 years. We develop
and operate our T.G.I. Friday's restaurants according to specified standards
established by the T.G.I. Friday's franchisor. We believe that the uniform
development and operating standards of the T.G.I. Friday's system facilitate the
efficiency of our restaurants and afford us significant benefits, including the
brand-name recognition and goodwill associated with T.G.I. Friday's restaurants.
Redfish Looziana Roadhouse & Seafood Kitchen restaurants are full-service,
casual dining restaurants that feature a broad selection of New Orleans style
fresh seafood, Creole and Cajun cuisine, and traditional southern dishes, as
well as a "VooDoo" style lounge, all under one roof. The restaurants offer
unique, freshly prepared food that is served quickly and efficiently in a
fun-filled New Orleans atmosphere. Each Redfish restaurant's VooDoo lounge
features a unique atmosphere decorated with an eclectic collection of authentic
New Orleans artifacts, signs, and antiques. Local bands and, occasionally,
national touring acts present live rhythm and blues music on weekends. Redfish
restaurants are open for lunch and dinner seven days a week from 11 a.m. until 2
a.m.
Bamboo Club restaurants are full-service, fine dining restaurants that
feature an extensive and diverse menu of innovative and tantalizing Pacific Rim
cuisine. Bamboo Club restaurants use fresh ingredients and premium herbs and
spices in creative combinations to serve high-quality, delicious food and
beverages that deliver a unique combination of delicious taste, eye-appealing
color, appetizing aroma, and delightful texture. The entire Bamboo Club concept
has been designed to deliver a consistent and enjoyable dining experience to
each guest in an elegant, upscale atmosphere. The restaurants feature a modern
decor that provides a dramatic yet comfortable impression, with food and
beverages prepared and served by a highly trained and skilled staff.
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Of our 61 currently owned restaurants, we acquired 32 and developed 29. The
following table shows, as of July 21, 2000, information regarding the number of
restaurants in each state in which we operate.
OWNED MANAGED OWNED OWNED BAMBOO
STATE T.G.I. FRIDAY'S T.G.I. FRIDAY'S REDFISH CLUB
----- --------------- --------------- ------- ----
Arizona......... 9 -- -- 2
California...... 33 5 1 --
Colorado........ -- -- 1 --
Illinois........ -- -- 2 --
Kansas.......... 3 -- -- --
Louisiana....... -- -- -- --
Missouri........ 2 -- -- --
Nevada.......... 4 -- -- --
New Mexico...... 1 -- -- --
Ohio............ -- -- 2 --
Texas........... 1 1 -- --
--- --- --- ---
Totals 53 6 6 2
We own the exclusive rights to develop additional T.G.I. Friday's
restaurants in several territories in the western United States. We plan to
develop additional T.G.I. Friday's restaurants in our existing development
territories, in which we are required to open 37 additional restaurants by
December 31, 2003. Our strategy is to
* capitalize on the brand-name recognition and goodwill associated with
T.G.I. Friday's restaurants;
* expand our restaurant operations through
* the development of additional T.G.I. Friday's restaurants in our
existing development territories,
* the development of additional Redfish and Bamboo Club
restaurants, and
* the acquisition or development of restaurants operating under
other restaurant concepts; and
* increase our profitability by continuing to enhance the dining
experience of our guests and improving operating efficiencies.
We may explore opportunities to franchise the Redfish and Bamboo Club concepts
to third parties in the future.
Our principal executive offices are located at 5050 North 40th Street,
Suite 200, Phoenix, Arizona 85018, and our telephone number is (602) 852-9000.
As used in this prospectus, the terms "we," "our," "us," or "Main Street" refers
to Main Street and Main Incorporated and its subsidiaries and operating
divisions.
RECENT DEVELOPMENTS
ACQUISITION OF BAMBOO CLUB RESTAURANTS
On July 21, 2000, we acquired the business and substantially all of the
assets of two Bamboo Club restaurants operated by two Arizona corporations owned
by a sole shareholder. As part of the acquisition, we also acquired the right,
title and interest under, in and to the "Bamboo Club" name and restaurant
concept. The two Bamboo Club restaurants are located in Phoenix and Scottsdale,
Arizona. The restaurants offer specialty Pacific Rim cuisine in an upscale
atmosphere. We paid a cash purchase price of approximately $12,000,000, which
consisted of approximately $3,273,000 for the operating assets and $8,727,000
for the rights and title to the "Bamboo Club" and restaurant concept.
We financed the acquisition with approximately $7.0 million from available
cash resources and $5.0 million of short-term debt from one of our lenders. The
short-term debt matures on December 31, 2000, but if we complete this rights
offering prior to that date we must use the first $5.0 million of proceeds from
this offering
4
<PAGE>
to repay the debt. John F. Antioco, our Chairman of the Board, and Bart A.
Brown, Jr., our President and Chief Executive Officer, each have personally
guaranteed the $5.0 million of short-term debt.
We intend to continue to operate the existing Bamboo Club restaurants, and
we currently are developing plans to expand the Bamboo Club concept by opening
additional restaurants. We currently do not have definitive plans with respect
to the number and timing for any new Bamboo Club restaurants that we may
develop. We also may explore opportunities to franchise the Bamboo Club concept
to third parties in the future.
THE BAMBOO CLUB CONCEPT
Bamboo Club restaurants are full-service, fine dining restaurants that
feature an extensive and diverse menu of innovative and tantalizing Pacific Rim
cuisine. Bamboo Club restaurants use fresh ingredients and premium herbs and
spices in creative combinations to serve high-quality, delicious food and
beverages that deliver a unique combination of delicious taste, eye-appealing
color, appetizing aroma, and delightful texture. The entire Bamboo Club concept
has been designed to deliver a consistent and enjoyable dining experience to
each guest in an elegant, upscale atmosphere. The restaurants feature a modern
decor that provides a dramatic yet comfortable impression, with food and
beverages prepared and served by a highly trained and skilled staff.
Bamboo Club restaurants are open for lunch and dinner, with hours of 11:30
a.m. to midnight Sunday through Thursday and 11:30 a.m. to 1:00 a.m. on Friday
and Saturday. The kitchen remains open until 11:00 p.m. Sunday through Thursday
and until midnight on Friday and Saturday to accommodate guests who prefer to
dine late. Bamboo Club restaurants take reservations and can serve large parties
or groups.
MENU
Bamboo Club restaurants feature a menu of more than 80 items inspired by
the diverse and exotic cuisines found in locations such as Bangkok, Canton,
Singapore, Seoul, Hong Kong, Indonesia, Hawaii, and other Pacific Rim cities and
provinces. The menu includes the following styles of dishes, with a few samples
listed below each category:
* Big Bamboo's Favorites
* Orange Scallops or Shrimp on Crispy Spinach
* Lemon Grass Chicken, Beef, Shrimp or Scallops
* Maui Volcano Beef on a Broccoli Island
* Dr. Kate's Honey Garlic Ribs
* Bamboo Beijing Duck with Asian Pancakes
* Steamed
* Steamed Salmon or Chicken and Broccoli in a Black Bean & Garlic Sauce
* Steamed Whole Red Snapper with Ginger and Lite Soya
* Woked
* Bangkok Shrimp with Bamboo Shoots and Mushrooms
* Beef or Chicken with Asparagus in Black Bean Sauce
* Hawaiian Macadamia Nut Chicken
* Woked Vietnamese Beef or Shrimp and Chicken
* Sizzled
* Crispy Whole Red Snapper with Ginger and Green Onion Infused Oil
* Hawaiian Sweet and Sour Pineapple Chicken
* Barbecued
* BBQ Pork with Hot Mustard
* BBQ Long Spare Ribs Cantonese Style
* Mixed BBQ Platter Hong Kong Style
* Deep Fried
* Coconut Shrimp with Honey Mustard Sauce
* Chicken and Vegetable Spring Rolls Vietnamese Style
* 1 1/2 lb. Live Lobster
* Saigon Lobster with Lemon Grass
* Szechuan Style Lobster Flambe
* Vegetarian
* Kim Chi - Korean Spicy Cabbage
* Three Kinds of Woked Mushrooms
* Noodled
* Pad Thai - Thai Rice Noodles with Chicken and Shrimp
* Cantonese Noodles with Shrimp and Chicken
* Korean Style Beef or Chicken on Crispy Rice Noodle
* Grilled
* Korean Garlic Steak with Roasted Garlic and Charred Onion
* Sizzling Benihana Steak on Seasonal Vegetables
* Teriyaki Steak with Bean Sprouts and Mushrooms
* Salad
* Spicy Crackling Calamari Salad
* BBQ Duck Salad with Spinach in a Plum Mustard Dressing
* Thai Spicy Beef Salad with Greens and Crispy Rice Noodles with Spinach
and Basil
* Fried Rice
* Club Special Fried Rice with Shrimp, Pork and Chicken in a Pineapple
Boat
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Each Bamboo Club restaurant also features a full-service bar that serves a
variety of popular drinks and liquors, such as martinis and tropical drinks, as
well as traditional mixed beverages, fine wines, a wide selection of popular
Asian and domestic beers, and fine cigars.
Menu prices range from $6 to $10 for salads; $5 to $10 for appetizers; and
$10 to $29 for entrees. The average guest check is approximately $25 per person.
Alcoholic beverage sales account for approximately 25% to 30% of total revenue,
depending on the time of year. Take-out orders represent approximately 5% of
total revenue. In addition, sales through a third-party delivery service
represent approximately 2.8% of total revenue.
RESTAURANT LAYOUT AND STAFFING
Bamboo Club restaurants have been designed to create a dramatic impression
in an atmosphere that is both spacious and intimate. The restaurants' decor
features artful lighting, dramatic murals, an eclectic mix of background music,
and a general color theme of black, copper, and bamboo to create a "hip," exotic
feeling of warmth and color.
The restaurants also feature an "exhibition kitchen" adjacent to the
seating area, where diners can watch highly skilled wok chefs prepare and serve
the restaurants' appetizers and entrees. Most dishes are prepared and served
within five to ten minutes from the time when the order is placed.
The two existing Bamboo Club restaurants are located in high-traffic retail
shopping environments. Each restaurant contains approximately 5,400 square feet
of space in leased facilities, excluding patio areas. Each of these restaurants
feature indoor seating and bar area seating for a total of approximately 200
guests, which does not include outdoor patio seating.
Bamboo Club restaurants have developed an extensive program to train and
motivate restaurant employees. The Bamboo Club serving staff are professional,
friendly, highly skilled, and knowledgeable about the restaurant's cuisine and
menu selections. Servers are trained to make suggestions or recommendations for
new or different menu items or combinations that patrons might try, which helps
each guest to enjoy a memorable dining experience.
QUESTIONS AND ANSWERS ABOUT THE RIGHTS OFFERING
WHAT IS A RIGHTS OFFERING?
A rights offering is an opportunity for our stockholders to purchase
additional shares of common stock at a fixed price to be determined before the
rights offering begins and in an amount proportional to the stockholders'
existing interests. This rights offering enables our company to raise additional
capital while enabling you to maintain your current percentage ownership in our
company.
WHAT IS A SUBSCRIPTION RIGHT?
We are distributing to you, at no charge, one subscription right for every
2.5 shares of common stock that you owned on July 31, 2000. We will not
distribute any fractional subscription rights, but will round the number of
subscription rights you receive down to the nearest whole number. Each
subscription right entitles you to purchase one share of common stock for
$_____. When you "exercise" a subscription right, you choose to purchase the
common stock that the subscription right entitles you to purchase. You may
exercise any number of your subscription rights, or you may choose not to
exercise any subscription rights. You cannot give or sell your subscription
rights to anybody else; only you can exercise them.
WHAT IS THE BASIC SUBSCRIPTION PRIVILEGE?
The basic subscription privilege of each subscription right entitles you to
purchase one share of our common stock at a subscription price of $___.
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<PAGE>
WHAT IS THE OVER-SUBSCRIPTION PRIVILEGE?
We do not expect that all of our stockholders will exercise all of their
basic subscription rights. By extending over-subscription privileges to our
stockholders, we are providing stockholders that exercise all of their basic
subscription privileges with the opportunity to purchase those shares that are
not purchased by other stockholders through the exercise of their basic
subscription privileges. The over-subscription privilege entitles you, if you
fully exercise your basic subscription privilege, to subscribe for additional
shares of common stock not acquired by other holders of rights at the same
subscription price of $__ per share.
WHAT ARE THE LIMITATIONS ON THE OVER-SUBSCRIPTION PRIVILEGE?
We will issue a maximum 4,011,740 shares of common stock in this rights
offering. The number of shares available for over-subscription privileges will
be 4,011,740 minus the number of shares purchased upon exercise of all basic
subscription privileges. If sufficient shares are available, we will seek to
honor the over-subscription requests in full. If over-subscription requests
exceed the number of shares available, we will allocate the available shares
among stockholders that over-subscribed in proportion to the number of shares
purchased by those over-subscribing stockholders through the basic subscription
privilege. However, if your pro rata allocation exceeds the number of shares you
requested, you will receive only the number of shares that you requested, and
the remaining shares from your pro rata allocation will be divided among other
stockholders exercising their over-subscription privileges that have subscribed
for additional shares in proportion to the number of shares purchased by that
group of over-subscribing stockholders through the basic subscription privilege.
See "The Rights Offering - Over-Subscription Privilege" for a more detailed
explanation of how we will make this allocation. In certain circumstances,
however, in order to comply with applicable state securities laws, we may not be
able to honor all over-subscription privileges, even if we have shares
available.
WHY ARE WE ENGAGING IN A RIGHTS OFFERING?
We are offering the subscription rights to our current stockholders in
order to raise approximately $_____ million in additional capital. We need
additional funds to repay short-term debt that we incurred in connection with
the acquisition of our Bamboo Club restaurants, as well as for working capital
purposes and to improve our liquidity. Instead of selling additional shares of
common stock to outside parties, our Board of Directors has chosen to give you
the opportunity to buy more shares and provide us with additional capital. Of
course, we cannot assure you that we will not need to seek additional financing
in the future.
HOW MANY SHARES MAY I PURCHASE?
You will receive one subscription right for every 2.5 shares of common
stock that you owned on July 31, 2000. We will not distribute fractional
subscription rights, but will round the number of subscription rights you
receive down to the nearest whole number. Each subscription right entitles you
to purchase one share of common stock for $___. If you exercise all of the
subscription rights that you receive, you may have the opportunity to purchase
additional shares of common stock. On the attached subscription certificate, you
may request to purchase as many additional shares as you wish for $___ per
share. We may honor all of the over-subscription requests, but if not, you may
not be able to purchase as many shares as you requested on your subscription
certificate. Subject to state securities laws and regulations, we have the
discretion to issue fewer than the total number of shares that may be available
for over-subscription requests in order to comply with state securities laws.
HOW DID WE ARRIVE AT THE OFFERING PRICE PER SHARE?
Our Board of Directors considered several factors in determining the price
at which a share of common stock may be purchased in this rights offering. These
factors include the historic and current market price of the common stock, our
business prospects, our recent and anticipated operating results, general
conditions in the securities markets, our need for capital, alternatives
available to us for raising capital, the amount of proceeds desired, the pricing
of similar transactions, the liquidity of our common stock, the level of risk to
our investors, and the need to offer shares at a price that would be attractive
to our investors relative to the current trading price
7
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of our common stock. We did not seek or obtain any opinion of financial advisors
or investment bankers in establishing the subscription price.
HOW DO I EXERCISE MY SUBSCRIPTION RIGHTS?
You must properly complete the attached subscription certificate and
deliver it to the Subscription Agent before 5 p.m., Mountain Daylight Savings
Time, on _______________, 2000. The address for the Subscription Agent is on
page __. Your subscription certificate must be accompanied by proper payment for
each share that you wish to purchase.
HOW LONG WILL THE RIGHTS OFFERING LAST?
You will be able to exercise your subscription rights only during a limited
period. IF YOU DO NOT EXERCISE YOUR SUBSCRIPTION RIGHTS BEFORE 5 P.M., MOUNTAIN
DAYLIGHT SAVINGS TIME, ON ___________________, 2000, YOUR SUBSCRIPTION RIGHTS
WILL EXPIRE. We may, in our discretion, extend the rights offering. In addition,
if the commencement of the rights offering is delayed, the expiration date will
similarly be extended.
AFTER I EXERCISE MY SUBSCRIPTION RIGHTS, CAN I CHANGE MY MIND?
No. Once you send in your subscription certificate and payment, you cannot
revoke the exercise of your subscription rights, even if you later learn
information about us that you consider to be unfavorable. You should not
exercise your subscription rights unless you are certain that you wish to
purchase additional shares of our common stock at a price of $____ per share.
IS EXERCISING MY SUBSCRIPTION RIGHTS RISKY?
The exercise of your subscription rights involves certain risks. Exercising
your subscription rights means buying additional shares of our common stock, and
you should carefully consider this investment as you would view other equity
investments. Among other things, you should carefully consider the risks
described under the heading "Risk Factors."
WHAT HAPPENS IF I CHOOSE NOT TO EXERCISE MY SUBSCRIPTION RIGHTS?
You will retain your current number of shares of common stock in our
company even if you do not exercise your subscription rights. However, if other
stockholders exercise their subscription rights and you do not exercise your
basic subscription privilege in full, your percentage ownership interest in our
company will diminish, and your relative voting rights and economic interests
will be diluted.
CAN I SELL OR GIVE AWAY MY SUBSCRIPTION RIGHTS?
No.
MUST I EXERCISE ANY SUBSCRIPTION RIGHTS?
No.
WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF EXERCISING MY SUBSCRIPTION
RIGHTS?
The receipt and exercise of your subscription rights are intended to be
nontaxable. You should seek specific tax advice from your personal tax advisor.
WHEN WILL I RECEIVE MY NEW SHARES?
If you purchase shares of common stock through this rights offering, you
will receive certificates representing those shares as soon as practicable after
______________, 2000. Subject to state securities laws and regulations, we have
the discretion to delay allocation and distribution of any shares you may elect
to purchase by exercise of your basic or over-subscription privilege in order to
comply with state securities laws.
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CAN WE CANCEL THE RIGHTS OFFERING?
Yes. Our Board of Directors may cancel the rights offering at any time on
or before ___________, 2000, for any reason. If we cancel this rights offering,
we will promptly refund any money that we received from stockholders, without
interest.
HOW MUCH MONEY WILL MAIN STREET AND MAIN INCORPORATED RECEIVE FROM THE RIGHTS
OFFERING?
Our gross proceeds from the rights offering will depend on the number of
shares that are purchased. If we sell all 4,011,740 shares that may be purchased
upon exercise of the rights offered by this prospectus, then we will receive
proceeds of $__________, before deducting expenses payable by us. We estimate
that those expenses will be $________. Since four of our directors have advised
us that they intend to exercise their basic subscription privileges in full and
three of those directors have further advised us that they intend to exercise
their respective over-subscription privileges for at least an additional _______
shares of common stock, we expect to receive proceeds of at least $5.75 million
from the rights offering, before deducting expenses.
HOW WILL WE USE THE PROCEEDS FROM THE RIGHTS OFFERING?
We will use the proceeds from this rights offering to repay short-term debt
that we incurred in connection with the acquisition of our Bamboo Club
restaurants, as well as for additional working capital to fund operations.
HOW MANY SHARES WILL BE OUTSTANDING AFTER THE RIGHTS OFFERING?
There are 10,029,351 shares of common stock outstanding as of July 21,
2000. The number of shares of common stock that will be outstanding after this
rights offering will depend on the number of shares that are purchased. If we
sell all of the shares offered by this prospectus, then we will issue 4,011,740
new shares of common stock during this rights offering. In that case, we will
have 14,041,091 shares of common stock outstanding after this rights offering.
WHAT IF I HAVE MORE QUESTIONS?
If you have more questions about this rights offering, please contact Duane
Wilkes, our Secretary, at (602) 852-9000 or by email at [email protected].
9
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SUMMARY CONSOLIDATED FINANCIAL DATA
The following summary of the historical consolidated statements of
operations and balance sheet data of our company as of and for each of the years
ended December 25, 1995, December 30, 1996, December 29, 1997, December 28,
1998, and December 27, 1999, have been derived from our audited consolidated
financial statements. The summary historical consolidated statements of
operations and balance sheet data of our company for the three months ended
March 27, 2000 and March 29, 1999, have been derived from our unaudited
condensed consolidated financial statements. Our unaudited condensed financial
statements include all adjustments, consisting of normal recurring accruals,
that we consider necessary for a fair presentation of the financial position and
the results of operations for those periods. Operating results for the three
months ended March 27, 2000, are not necessarily indicative of the results of
the entire year ending December 25, 2000. Amounts shown in the following table
are in thousands, except per share amounts.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED THREE MONTHS ENDED
------------------------------------------------------------- ----------------------
DEC. 25, DEC. 30, DEC. 29, DEC. 28, DEC. 27, MAR. 29, MAR. 27,
1995 1996 1997 1998 1999 1999 2000
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue $ 119,508 $ 122,563 $ 107,997 $ 115,324 $ 140,294 $ 31,464 $ 44,339
Restaurant operating expenses 110,377 115,477 97,605 103,069 125,952 27,891 40,402
Income from restaurant operations 9,131 7,086 10,392 12,255 14,342 3,573 3,937
Operating income (loss) 3,390 (18,960) 7,270 6,383 3,792 1,302 1,216
Net income (loss) before
cumulative effect of change
in accounting principle and
extraordinary item (1,034) (22,166) 4,804 4,165 1,138 731 404
--------- --------- --------- --------- --------- --------- ---------
Net income (loss)(1) $ (1,034) $ (22,166) $ 3,166 $ 4,165 $ 970 $ 563 $ 404
========= ========= ========= ========= ========= ========= =========
Diluted earnings per share:
Net income (loss) before
cumulative effect of change
in accounting principle and
extraordinary item $ (0.22) $ (2.73) $ 0.47 $ 0.39 $ 0.11 $ 0.07 $ 0.04
========= ========= ========= ========= ========= ========= =========
Net income (loss)(1) $ (0.22) $ (2.73) $ 0.31 $ 0.39 $ 0.09 $ 0.05 $ 0.04
========= ========= ========= ========= ========= ========= =========
Weighted average shares
outstanding - diluted 4,621 8,110 10,098 10,608 10,407 10,323 10,346
BALANCE SHEET DATA:
Working capital $ (7,848) $ (1,343) $ (1,330) $ (2,807) $ (16,652) $ (4,183) $ (12,989)
Total assets 88,605 70,848 61,168 70,255 86,525 71,248 94,640
Long-term debt, net of current
portion 31,204 33,809 24,308 28,264 31,513 27,917 41,861
Stockholders' equity 37,261 16,585 22,203 26,372 27,383 26,935 27,797
</TABLE>
----------
(1) Fiscal 1996 includes $20,208,000, or $2.49 per share, for asset impairment
and restructuring charges. Fiscal 1997 includes an extraordinary loss from
debt extinguishment of $1,638,000, or $0.16 per share. Fiscal 1999 includes
a charge of $168,000, or $0.02 per share, due to the cumulative effect of
change in accounting principle related to the adoption of SOP 98-5. The
three months ended March 31, 1999 includes a charge of $168,000, or $0.02
per share, for deferred preopening costs as a result of a change in
accounting principle.
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SUMMARY HISTORICAL AND PRO FORMA FINANCIAL INFORMATION
The summary pro forma financial information set forth below should be read
in conjunction with "Summary Consolidated Financial Data" and "Unaudited Pro
Forma Condensed Consolidated Financial Information" and the Notes thereto
included elsewhere in this Prospectus, and with our Consolidated Financial
Statements and the Notes thereto incorporated by reference in this prospectus.
See "Where You Can Obtain Additional Information." Amounts shown in the
following table are in thousands, except per share amounts.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED DECEMBER 27, 1999 THREE MONTHS ENDED MARCH 27, 2000
----------------------------------- -----------------------------------
HISTORICAL ACQUIRED(1) PRO FORMA(2) HISTORICAL ACQUIRED(1) PRO FORMA(2)
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue $ 140,294 $ 5,907 $ 146,201 $ 44,339 $ 1,717 $ 46,056
Restaurant operating expenses 125,952 5,198 131,150 40,402 1,365 41,767
Income from restaurant operations 14,342 709 15,051 3,937 352 4,289
Operating income 3,792 709 3,730 1,216 352 1,375
Income before cumulative
effect of change in accounting
principle and extraordinary item 1,138 709 589 404 352 441
Net income $ 970 $ 709 $ 421(3) $ 404 $ 352 $ 441(3)
Diluted earnings per share:
Income before cumulative effect
of change in accounting
principle and extraordinary
item $ 0.11 $ 0.06 $ 0.04 $ 0.04
========= ========= ========= =========
Net income $ 0.09 $ 0.04(3) $ 0.04 $ 0.04(3)
========= ========= ========= =========
Weighted average shares
outstanding-diluted 10,407 10,407 10,346 10,346
BALANCE SHEET DATA:
Working capital $ (19,652) $ (872) N/A(4) $ (12,989) $ (806) $ (24,989)
Total assets 86,525 654 N/A(4) 94,640 661 106,640
Long-term debt,
net of current portion 31,513 -- N/A(4) 41,801 -- 41,861
Stockholder's equity 27,383 (411) N/A(4) 27,797 (363) 27,797
</TABLE>
----------
(1) Reflects the historical financial information of FWC, Inc. and Chapter Two,
Inc.
(2) Gives effect to the recent acquisition of FWC, Inc. and Chapter Two, Inc.
as if each had occurred as of December 29, 1998. See "Unaudited Pro Forma
Condensed Consolidated Financial Information."
(3) Does not include any adjustment for the salaries and benefits of the sole
shareholder of FWC, Inc. and Chapter Two, Inc., who is continuing with the
combined companies in a consulting capacity. The inclusion would result in
an adjusted pro forma net income of $1,261,000, or adjusted pro forma
diluted earnings per share of $0.12, for the fiscal year ended December 27,
1999 and adjusted pro forma net income of $703,000, or adjusted pro forma
diluted earnings per share of $0.07, for the three months ended March 27,
2000.
(4) Pro forma balance sheet information as of December 27, 1999, was not
compiled and therefore is not presented here.
11
<PAGE>
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING FACTORS AND OTHER INFORMATION
IN THIS PROSPECTUS BEFORE DECIDING TO PURCHASE SHARES OF OUR COMMON STOCK IN THE
RIGHTS OFFERING.
RISKS RELATED TO OUR BUSINESS
WE DEPEND ON CARLSON WORLDWIDE.
We currently operate 53 T.G.I. Friday's restaurants as a T.G.I. Friday's
franchisee. We also manage an additional six T.G.I. Friday's restaurants for
other franchisees. Carlson Restaurants Worldwide, Inc., or Carlson Worldwide, is
the franchisor of T.G.I. Friday's restaurants. As a result of the nature of
franchising and our franchise agreements with Carlson Worldwide (formerly TGI
Friday's, Inc.), our long-term success depends, to a significant extent, on
* the continued vitality of the T.G.I. Friday's restaurant concept and
the overall success of the T.G.I. Friday's system;
* the ability of Carlson Worldwide to identify and react to new trends
in the restaurant industry, including the development of popular menu
items;
* the ability of Carlson Worldwide to develop and pursue appropriate
marketing strategies in order to maintain and enhance the name
recognition, reputation, and market perception of T.G.I. Friday's
restaurants;
* the goodwill associated with the T.G.I. Friday's trademark;
* the quality, consistency, and management of the overall T.G.I.
Friday's system; and
* the successful operation of T.G.I. Friday's restaurants owned by
Carlson Worldwide and other T.G.I. Friday's franchisees.
We believe that the experience, reputation, financial strength, and
franchisee support of Carlson Worldwide represent positive factors for our
business. We have no control, however, over the management or operation of
Carlson Worldwide or other T.G.I. Friday's franchisees. A variety of factors
affecting Carlson Worldwide or the T.G.I. Friday's concept could have a material
adverse effect on our business. These factors include the following:
* any business reversals that Carlson Worldwide may encounter;
* a failure by Carlson Worldwide to promote the T.G.I. Friday's name or
restaurant concept;
* the inability or failure of Carlson Worldwide to support its
franchisees, including our company;
* the failure to operate successfully the T.G.I. Friday's restaurants
that Carlson Worldwide itself owns; or
* negative publicity with respect to Carlson Worldwide or the T.G.I.
Friday's name.
The future results of the operations of our restaurants will not necessarily
reflect the results achieved by Carlson Worldwide or its other franchisees, but
will depend upon such factors as the effectiveness of our management team, the
locations of our restaurants, and the operating results of those restaurants.
FRANCHISE AGREEMENTS IMPOSE RESTRICTIONS AND OBLIGATIONS ON OUR BUSINESS.
Our franchise agreement with Carlson Worldwide for each T.G.I. Friday's
restaurant that we own generally requires us to
* pay an initial franchise fee of $50,000;
* pay royalties of 4% of the restaurant's gross sales; and
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<PAGE>
* spend up to 4% of the restaurant's gross sales on advertising, which
may include contributions to a national marketing pool administered by
Carlson Worldwide.
During fiscal 1999, Carlson Worldwide required us and its other franchisees to
contribute 2.1% of gross sales to the national marketing pool. We must pay or
accrue these amounts regardless of whether or not our restaurants are
profitable. In addition, the franchise agreements require us to operate our
T.G.I. Friday's restaurants in accordance with the requirements and
specifications established by Carlson Worldwide. These requirements and
specifications relate to a variety of factors, including the following:
* the exterior and interior design, decor, and furnishings of
restaurants;
* menu selection;
* the preparation of food products;
* quality of service;
* general operating procedures;
* advertising;
* maintenance of records; and
* protection of trademarks.
If we fail to satisfy these requirements or otherwise default under the
franchise agreements, we could be subject to potential damages for breach of
contract and could lose our franchise rights for some or all of our T.G.I.
Friday's restaurants. We also could lose our rights to develop additional T.G.I.
Friday's restaurants.
WE MAY NOT BE ABLE TO COMPLY WITH ALL OF THE REQUIREMENTS OF OUR DEVELOPMENT
AGREEMENTS.
At the beginning of our current fiscal year, our development agreements
with Carlson Worldwide required us to open at least 39 additional T.G.I.
Friday's restaurants by December 31, 2003, including nine by the end of 2000. We
opened three new T.G.I. Friday's restaurants during the first quarter of fiscal
2000 and two during the second quarter of fiscal 2000. One of these restaurants
fulfilled our development requirements for 1999. Accordingly, we must develop
five additional T.G.I. Friday's restaurants by the end of 2000 and a total of 35
additional T.G.I. Friday's restaurants by December 31, 2003.
The acquisition of restaurants does not constitute the opening of new
restaurants under the development agreements. We may not be able to secure
sufficient restaurant sites that we believe are suitable or we may not be able
to develop restaurants on sites on terms and conditions that we consider
favorable in order to satisfy the requirements of the development agreements.
The development agreements give Carlson Worldwide certain remedies in the event
that we fail to comply with the development schedule in a timely manner or if we
breach the confidentiality or noncompete provisions of the development
agreements. These remedies include, under certain circumstances, the right to
reduce the number of restaurants we may develop in the related development
territory or to terminate our exclusive right to develop restaurants in the
related development territory.
At our request, Carlson Worldwide from time to time has agreed to amend the
development schedules to extend the time by which we were required to develop
new restaurants in certain development territories. We requested those
amendments because we were unable to secure sites that we believed to be
attractive on favorable terms and conditions. Carlson Worldwide may decline to
extend the development schedule in the future if we experience any difficulty in
satisfying the schedule for any reason, including a shortage of capital.
WE FACE RISKS ASSOCIATED WITH THE ACQUISITION AND INTEGRATION OF BAMBOO CLUB AND
OTHER ACQUIRED RESTAURANTS WITH OUR EXISTING OPERATIONS.
We must integrate the operations of our Bamboo Club restaurants with our
existing operations in order to enhance revenue, realize cost savings, and
achieve anticipated operating efficiencies. Because Bamboo Club restaurants
feature a diverse Pacific Rim menu served in an upscale atmosphere, these
restaurants present
13
<PAGE>
operating requirements that differ from our existing T.G.I. Friday's and Redfish
restaurants, which could result in unanticipated challenges to our management
team. We may wish to acquire other complementary restaurant operations in the
future. We may not be able to identify suitable acquisition candidates or make
acquisitions on commercially acceptable terms. We also cannot provide assurance
that we will be able to
* effectively complete the integration of the Bamboo Club operations or
any other acquired businesses with our existing operations;
* manage effectively the Bamboo Club restaurants or the combined
operations of our different restaurant concepts;
* achieve our operating and growth strategies with respect to these
businesses;
* obtain increased revenue opportunities as a result of the anticipated
synergies created by the Bamboo Club and other acquisitions; or
* reduce the overall selling, general, and administrative expenses
associated with acquired operations.
The integration of the management, personnel, restaurant operations, and
facilities of Bamboo Club and any other businesses that we may acquire in the
future could involve unforeseen difficulties. These difficulties could disrupt
our ongoing business, distract our management and employees, and increase our
expenses, which could have a material adverse effect on our business, financial
condition, and operating results.
We conduct due diligence reviews of each acquired business, and we obtain
representations and warranties regarding each acquired business. Unforeseen
liabilities and difficulties, however, can arise in connection with the
operation of acquired businesses. Contractual or other remedies may not be
sufficient to compensate us in the event unforeseen liabilities or other
difficulties arise.
We strive to take advantage of the opportunities created by the combination
of acquired operations to achieve significant revenue opportunities and
substantial cost savings, including increased product offerings and decreased
operating expenses as a result of the elimination of duplicative facilities and
personnel associated with sales, marketing, administrative, and purchasing
functions. Significant uncertainties, however, accompany any business
combination. We may not be able to achieve revenue increases; integrate
facilities, functions, and personnel in order to achieve operating efficiencies;
or otherwise realize cost savings as a result of acquisitions. The inability to
achieve revenue increased or cost savings could have a material adverse effect
on our business, financial condition, and operating results.
WE FACE RISKS ASSOCIATED WITH THE EXPANSION OF OUR OPERATIONS.
The success of our business depends on our ability to expand the number of
our restaurants, either by developing or acquiring additional restaurants. Our
success also depends on our ability to operate and manage successfully our
growing operations. Our ability to expand successfully will depend upon a number
of factors, including the following:
* the availability and cost of suitable restaurant locations for
development;
* the availability of restaurant acquisition opportunities;
* the hiring, training, and retention of additional management and
restaurant personnel;
* the availability of adequate financing;
* the continued development and implementation of management information
systems;
* competitive factors; and
* general economic and business conditions.
The rate at which we will be able to increase the number of restaurants we
operate will vary depending upon whether we acquire existing restaurants or
develop new restaurants. The acquisition of existing restaurants
14
<PAGE>
depends upon our ability to identify and acquire restaurants on satisfactory
terms and conditions. The opening of new restaurants depends upon our ability to
* locate suitable sites in terms of
* favorable population characteristics,
* density and household income levels,
* visibility, accessibility, and traffic volume,
* proximity to demand generators, including shopping malls,
lodging, and office complexes, and
* potential competition;
* obtain financing for construction, tenant improvements, furniture,
fixtures, and equipment;
* negotiate acceptable leases or terms of purchase;
* secure liquor licenses and zoning, environmental, health, and similar
regulatory approvals;
* recruit and train qualified personnel; and
* manage successfully the rate of expansion and expanded operations.
Increased construction costs and delays resulting from governmental
regulatory approvals, strikes or work stoppages, adverse weather conditions, and
various acts of God may also affect the opening of new restaurants. Newly opened
restaurants may operate at a loss for a period following their initial opening.
The length of this period will depend upon a number of factors, including
* the time of year the restaurant is opened,
* sales volume, and
* our ability to control costs.
We may not successfully achieve our expansion goals. Additional restaurants
that we develop or acquire may not be profitable. In addition, the opening of
additional restaurants in an existing market may have the effect of drawing
customers from and reducing the sales volume of our existing restaurants in
those markets.
WE MAY NEED ADDITIONAL CAPITAL.
The development of new restaurants requires funds for construction, tenant
improvements, furniture, fixtures, equipment, training of employees, permits,
initial franchise fees, and additional expenditures. We expect that cash flow
from operations, together with financing commitments, will be sufficient to
develop the nine T.G.I. Friday's restaurants that our development agreements
require us to open by the end of 2000 and the one new Redfish restaurant that we
plan to develop during 2000. We will require funds to develop the additional
restaurants that our development agreements require us to open after 2000, to
develop and open additional Redfish and Bamboo Club restaurants, and to pursue
any additional restaurant development or restaurant acquisition opportunities.
In the future, we may seek additional equity or debt financing to provide funds
so that we can develop or acquire additional restaurants. Such financing may not
be available or may not be available on satisfactory terms. If financing is not
available on satisfactory terms, we may be unable to satisfy our obligations
under our development agreements with Carlson Worldwide or otherwise to expand
our restaurant operations. See "Risk Factors - We may not be able to comply with
all of the requirements of our development agreements." While debt financing
will enable us to add more restaurants than we otherwise would be able to do,
debt financing increases expenses and we must repay the debt regardless of our
operating results. Future equity financings could result in dilution to our
stockholders.
WE HAVE SIGNIFICANT BORROWINGS.
We have incurred significant indebtedness in connection with our growth
strategy. Our growth strategy has focused on restaurant acquisitions and
internal restaurant development. As of March 27, 2000, we had long-term debt of
approximately $41.9 million and a working capital deficit of $13.0 million. We
borrowed an
15
<PAGE>
additional $5.0 million in short-term debt in connection with the acquisition of
our Bamboo Club restaurants. This debt requires a $2.0 million payment of
principal plus interest on September 30, 2000, and the remaining unpaid
principal and interest will mature on December 31, 2000. If we complete this
offering prior to that date, we must use the first $5.0 million of proceeds to
repay the short-term debt. If we are unable to raise at least $5.0 million of
net proceeds in this rights offering, we will need to obtain adequate financing
from other sources to repay the short-term debt as it becomes due.
Our borrowings will result in interest expense of approximately $4.8
million in 2000 and $6.0 million in 2001, based on currently prevailing interest
rates and assuming the outstanding indebtedness is paid in accordance with the
existing payment schedules without any prepayments or additional borrowings. We
must make these interest payments regardless of our operating results.
Currently, 51 of our restaurants are pledged to secure our debt obligations. We
also may seek additional equity or debt financing in the future to provide funds
to develop or acquire additional restaurants. See "Risk Factors - We may need
additional capital."
WE WILL BE SUBJECT TO THE RISKS ASSOCIATED WITH FRANCHISING OPERATIONS IF WE
BEGIN FRANCHISING THE REDFISH OR BAMBOO CLUB CONCEPTS.
We will be subject to the risks associated with franchising if we begin
franchising activities in the future. If we develop a franchising program, our
success as a franchisor will depend upon our ability to
* develop and implement a successful system of concepts and operating
standards;
* attract and identify suitable franchisees with adequate business
experience and access to sufficient capital to enable them to open and
operate restaurants in a manner consistent with our concepts and
operating standards;
* monitor the operations of our franchisees to ensure compliance with
our concepts and operating standards;
* identify suitable sites for restaurant development; and
* negotiate favorable purchasing terms with national distribution
companies.
We cannot provide assurance that we would be able to successfully meet these
challenges as a franchisor. In addition, as a franchisor we would be subject to
a variety of federal and state laws and regulations, including Federal Trade
Commission regulations, governing the offer and sale of franchises. These laws
and regulations
* impose registration and disclosure requirements on franchisors in the
offer and sale of franchises, and
* regulate the termination of franchises, the refusal to renew
franchises, and other substantive aspects of the relationships between
franchisors and franchisees.
These laws and regulations could result in significant increased expenses and
potential liabilities for our company in the event we engage in franchising
activities in the future.
WE FACE RISKS THAT AFFECT THE RESTAURANT INDUSTRY IN GENERAL.
A variety of factors over which we have no control may affect the ownership
and operation of restaurants. These factors include the following:
* adverse changes in national, * changing consumer tastes,
regional, or local economic habits, and spending
or market conditions; priorities;
* increased costs of labor or * the cost and availability of
food products; insurance coverage;
* fuel and other price * management problems;
increases;
* competitive factors; * uninsured losses;
16
<PAGE>
* the number, density, and * limited alternative uses for
location of competitors; properties and equipment;
* changing demographics; * changes in government
regulation; and
* changing traffic patterns; * weather conditions.
Third parties may file lawsuits against us based on discrimination,
personal injury, claims for injuries or damages caused by serving alcoholic
beverages to an intoxicated person or to a minor, or other claims. As a
multi-unit restaurant operator, our business could be adversely affected by
publicity about food quality, illness, injury, or other health and safety
concerns or operating issues at one restaurant or a limited number of
restaurants operated under the same name, whether or not we actually own or
manage the restaurants in question. We cannot predict any of these factors with
any degree of certainty. Any one or more of these factors could have a material
adverse effect on our business.
WE FACE INTENSE COMPETITION.
The restaurant business is highly competitive with respect to price,
service, and food type and quality. Restaurant operators also compete for
attractive restaurant sites and qualified restaurant personnel and managers. Our
restaurants compete with a large number of other restaurants, including national
and regional restaurant chains and franchised restaurant systems, as well as
with locally owned, independent restaurants. Many of our competitors have
greater financial resources, more experience, and longer operating histories
than we have.
WE DEPEND UPON OUR SENIOR MANAGEMENT.
Our success depends, in large part, upon the services of our senior
management. The loss of the services of any members of our senior management
team could have a material and adverse effect on our business.
WE FACE RISKS ASSOCIATED WITH GOVERNMENT REGULATION.
Various federal, state, and local laws affect our business. The development
and operation of restaurants depend to a significant extent on the selection and
acquisition of suitable sites. These sites are subject to zoning, land use,
environmental, traffic, and other regulations of state and local governmental
agencies. City ordinances or other regulations, or the application of such
ordinances or regulations, could impair our ability to construct or acquire
restaurants in desired locations and could result in costly delays. In addition,
restaurant operations are subject to
* licensing and regulation by state and local departments relating to
health, sanitation, safety standards, and fire codes;
* federal and state labor laws, including applicable minimum wage
requirements, tip credit provisions, overtime regulations, workers'
compensation insurance rates, unemployment and other taxes, working
and safety conditions, and citizenship requirements; and
* state and local licensing of the sale of alcoholic beverages.
The delay or failure to obtain or maintain any licenses or permits
necessary for operations could have a material adverse effect on our business.
In addition, an increase in the minimum wage rate, employee benefit costs, or
other costs associated with employees could adversely affect our business. We
also are subject to the Americans with Disabilities Act of 1990 that, among
other things, may require us to install certain fixtures or accommodations in
new restaurants or to renovate existing restaurants to meet federally mandated
requirements.
Sales of alcoholic beverages represent an important source of revenue for
each of our restaurants. The temporary suspension or permanent loss or the
inability to maintain a liquor license for any restaurant would have an adverse
effect on the operations of that restaurant. We do not plan to open a restaurant
in any location for which we believe we cannot obtain or maintain a liquor
license.
17
<PAGE>
RISKS RELATED TO OUR COMMON STOCK
THE MARKET PRICE OF OUR COMMON STOCK MAY BE VOLATILE.
Historically, the market price of our common stock has been volatile. In
the future, the market price of our common stock will be subject to wide
fluctuations as a result of a variety of factors, including the following:
* quarterly variations in our operating results or those of other
restaurant companies;
* changes in analysts' estimates of our financial performance;
* changes in national and regional economic conditions, the financial
markets, or the restaurant industry;
* natural disasters; or
* other developments affecting our business or other restaurant
companies.
The trading volume of our common stock has been limited, which may increase
the volatility of the market price for our stock. In addition, the stock market
has experienced extreme price and volume fluctuation in recent years. This
volatility has had a significant effect on the market prices of securities
issued by many companies for reasons not necessarily related to the operating
performances of these companies.
OUR MANAGEMENT WILL CONTROL A SIGNIFICANT PORTION OF THE VOTING POWER OF OUR
COMMON STOCK FOLLOWING THE RIGHTS OFFERING.
Our directors and officers currently own, directly or indirectly,
approximately 3,237,124 shares, or 32.3%, of our outstanding common stock. These
directors and officers also hold options to purchase an aggregate of 1,167,000
shares of common stock at exercise prices ranging from $2.00 to $5.00 per share.
Four of our five directors have advised us that they intend to exercise their
basic subscription privileges in full. Three of these directors have further
advised us that they intend to exercise their over-subscription privileges for
at least an additional _______ shares of common stock. Assuming these directors
exercise the minimum amount of the over-subscription privileges that they have
indicated, our directors and officers would own approximately _______ shares of
common stock upon completion of this rights offering, excluding shares issuable
upon exercise of stock options. As a result, these persons voting together will
have significant voting power.
THE EXISTENCE OF STOCK OPTIONS AND WARRANTS MAY ADVERSELY AFFECT THE TERMS OF
FUTURE FINANCINGS.
Stock options to acquire an aggregate of 2,850,334 shares of common stock
currently are outstanding. An additional 2,119,466 have been reserved for
issuance upon exercise of options that may be granted under our existing stock
option plans. In addition, warrants to acquire 233,916 shares of common stock
currently are outstanding. During the terms of those options and warrants, the
holders of those securities will have the opportunity to profit from an increase
in the market price of our common stock. The existence of options and warrants
may adversely affect the terms on which we can obtain additional financing in
the future, and the holders of options and warrants can be expected to exercise
those options and warrants at a time when, in all likelihood, we would be able
to obtain additional capital by offering shares of common stock on terms more
favorable to it than those provided by the exercise of such options and
warrants.
SALES OF LARGE NUMBERS OF SHARES COULD ADVERSELY AFFECT THE PRICE OF OUR COMMON
STOCK.
Sales of substantial amounts of common stock in the public market, or even
the potential for such sales, could adversely affect prevailing market prices
for our common stock and could adversely affect our ability to raise capital. As
of July 21, 2000, there were outstanding 10,029,351 shares of our common stock.
Of these shares, 8,044,074 shares are freely transferable without restriction
under the securities laws, unless they are held by our "affiliates," as that
term is defined in the securities laws. The remaining 1,985,277 of common stock
currently outstanding are "restricted securities," as that term is defined in
Rule 144 under the securities laws, and may be sold only in compliance with Rule
144, pursuant to registration under the securities laws, or pursuant to
18
<PAGE>
an exemption from registration. Affiliates also are subject to certain of the
resale limitations of Rule 144. Generally, under Rule 144, each person that
beneficially owns restricted securities with respect to which at least one year
has elapsed since the later of the date the shares were acquired from us or one
of our affiliates may, every three months, sell in ordinary brokerage
transactions or to market makers an amount of shares equal to the greater of 1%
of our then-outstanding common stock or the average weekly trading volume for
the four weeks prior to the proposed sale of such shares. Currently, most of the
restricted shares are eligible for sale under Rule 144 or under registration
statements that we have filed to permit resales of the restricted shares.
WE DO NOT ANTICIPATE THAT WE WILL PAY DIVIDENDS.
We have never paid any dividends on our common stock, and we do not
anticipate that we will pay dividends in the foreseeable future. We intend to
apply any earnings to the expansion and development of our business. In
addition, the terms of our credit facilities limit our ability to pay dividends
on our common stock.
RISKS RELATED TO THIS RIGHTS OFFERING
IF YOU DO NOT EXERCISE ALL OF YOUR SUBSCRIPTION RIGHTS, YOU MAY SUFFER
SIGNIFICANT DILUTION OF YOUR PERCENTAGE OWNERSHIP OF OUR COMMON STOCK.
This rights offering is designed to allow all current stockholders to
purchase additional shares of common stock at a discount from the market price
of the stock on the date the rights are offered. The purpose of this structure
is to enable us to raise capital while allowing current stockholders to maintain
their relative proportionate voting and economic interest. Three of our
directors have advised us that they intend to exercise their basic subscription
privileges in full and that they intend to exercise their respective
over-subscription privileges for at least an additional _______ shares. To the
extent that current stockholders do not exercise their subscription rights and
shares are purchased by other stockholders in this rights offering, the
proportionate voting interest of the non-exercising stockholders will be
reduced, and the percentage of our expanded equity that their original shares
represent after exercise of the subscription rights will be disproportionately
diluted.
THE PRICE OF OUR COMMON STOCK MAY DECLINE BEFORE OR AFTER THE SUBSCRIPTION
RIGHTS EXPIRE.
We cannot assure you that the public trading market price of our common
stock will not decline after you exercise your subscription rights. If that
occurs, you will have committed to buy shares of common stock at a price above
the prevailing market price and you will have an immediate unrealized loss.
Moreover, we cannot assure you that, following the exercise of subscription
rights, you will be able to sell your shares of common stock at a price equal to
or greater than the subscription price. Until certificates are delivered upon
expiration of this rights offering, you may not be able to sell the shares of
our common stock that you purchase in this rights offering. Certificates
representing shares of our common stock purchased will be delivered as soon as
practicable after expiration of this rights offering. We will not pay you
interest on funds delivered to the Subscription Agent pursuant to the exercise
of rights.
ONCE YOU EXERCISE YOUR SUBSCRIPTION RIGHTS, YOU MAY NOT REVOKE THE EXERCISE.
Once you exercise your subscription rights, you may not revoke the
exercise, even if fewer than all of the shares that we are offering are actually
purchased. If we elect to withdraw or terminate this rights offering, neither we
nor the Subscription Agent will have any obligation with respect to the
subscription rights except to return, without interest, any subscription
payments.
THE SUBSCRIPTION PRICE IS NOT AN INDICATION OF THE VALUE OF OUR COMPANY.
Our Board of Directors set the subscription price after considering a
variety of factors, including the desire to encourage full stockholder
participation in this rights offering by setting an exercise price below the
current market price of the common stock. The subscription price does not
necessarily bear any relationship to the book value of our assets, past
operations, cash flows, losses, financial condition or any other established
criteria for value. You should not consider the subscription price as an
indication of the present or future value of
19
<PAGE>
our company. Our Board of Directors has established the subscription price at a
__% discount from the market price of the common stock on the date of the
offering of the subscription rights to encourage all stockholders to exercise
their subscription rights and thereby raise capital without diluting the
interests of current stockholders. We have neither sought nor obtained a
valuation opinion from an outside financial consultant or investment banker.
ACTUAL RESULTS MAY DIFFER FROM THE FORWARD LOOKING STATEMENTS CONTAINED IN THIS
PROSPECTUS
Certain statements and information contained in this prospectus concerning
our future, proposed, and anticipated activities; certain trends with respect to
our operating results, capital resources, and liquidity; the restaurant industry
in general; and other statements contained in this prospectus regarding matters
that are not historical facts are forward-looking statements, as that term is
defined under applicable securities laws. Forward-looking statements, by their
very nature, include risks and uncertainties. Accordingly, actual results may
differ, perhaps materially, from those expressed in or implied by such
forward-looking statements. Factors that could cause actual results to differ
materially include those discussed elsewhere under "Risk Factors."
USE OF PROCEEDS
Assuming that stockholders exercise subscription rights for all of the
common stock that we are offering, we will receive gross proceeds from the
rights offering of $_______. Since four of our directors have advised us that
they intend to exercise their basic subscription privileges in full and three of
those directors have further advised us that they intend to exercise their
respective over-subscription privileges for up to an additional _______ shares
of common stock, we expect to receive proceeds of at least $5.75 million from
the rights offering. We will pay estimated expenses of approximately $_______ in
connection with the rights offering.
We intend to use the net proceeds from the rights offering to repay
short-term indebtedness of $5.0 million that we incurred in connection with the
acquisition of our Bamboo Club restaurants. This debt bears interest at a
floating rate (currently 9.75% per annum) with interest payable monthly
beginning on August 13, 2000. The short-term debt requires a $2.0 million
payment of principal plus interest on September 30, 2000, and the remaining
principal and unpaid interest matures on December 31, 2000. If we complete this
offering prior to that date, we must use the first $5.0 million of the proceeds
to repay the debt. If the proceeds from the rights offering exceed the amount
needed to repay the short-term debt, we will use the remaining proceeds for
working capital to fund operations.
20
<PAGE>
CAPITALIZATION
The following table sets forth (a) our company's actual capitalization at
March 27, 2000, (b) our pro forma capitalization at March 27, 2000, which
reflects the acquisition of FWC and Ch. II, and (c) our pro forma capitalization
at March 27, 2000, as adjusted to reflect the sale of the maximum number of
shares offered in this rights offering at an assumed offering price of $_____
per share and the application of the estimated net proceeds therefrom, after
deducting estimated offering expenses of $_____.
MARCH 27, 2000
--------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
-------- -------- --------
(IN THOUSANDS)
Notes payable .............................. $ -- $ 7,000 $
Short-term debt ............................ -- 5,000
-------- -------- --------
Long-term debt, net of current portion ..... 41,861 41,861
-------- -------- --------
Other liabilities and deferred credits ..... 2,507 2,507
-------- -------- --------
Stockholders' equity
Preferred stock, 2,000,000 shares
authorized; no shares issued ........... -- --
Common Stock, 25,000,000 shares
authorized, 10,029,126 shares
outstanding ............................ 10 10
Additional paid-in capital ............... 44,200 44,200
Accumulated deficit ...................... (16,413) (16,413)
-------- -------- --------
27,797 27,797
-------- -------- --------
Total Capitalization ................. $ 72,165 $ 84,165 $
======== ======== ========
21
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
INTRODUCTION
On July 21, 2000, we acquired substantially all of the assets of FWC, Inc., or
FWC, and Chapter Two, Inc., or Ch. II, from the sole shareholder of FWC and Ch.
II. We also purchased and acquired from the sole shareholder, free and clear of
all encumbrances, all the shareholder's rights, title, and interest under, in,
and to the "Bamboo Club" name and restaurant concept. The following unaudited
pro forma condensed consolidated financial statements of our company for the
fiscal year ended December 27, 1999, and the three-month period ended March 27,
2000, gives effect to the acquisition of FWC and Ch. II. We paid a purchase
price of approximately $12,000,000, in the form of $7,000,000 of cash from
available cash resources and $5,000,000 from the proceeds of a short-term
financing. We anticipate that we will repay the short-term debt with proceeds
from this rights offering. The acquisition, related financing, and this rights
offering are herein referred to as the transactions.
The unaudited pro forma condensed consolidated balance sheet as of March 27,
2000, gives effect to the transactions as if they had occurred on March 27,
2000. The unaudited pro forma condensed consolidated statement of operations for
the fiscal year ended December 27, 1999, and the three-month period ended March
27, 2000, assumes that the acquisition was completed on December 29, 1998. The
unaudited pro forma financial information presented herein does not purport to
represent what our actual results of operations would have been had the
transactions occurred on those dates or to project our results of operations for
any future period.
The unaudited pro forma condensed consolidated balance sheet of our company as
of March 27, 2000, has been derived from unaudited historical financial
statements of our company as of March 27, 2000, and of FWC and Ch. II as of
March 31, 2000. The unaudited condensed consolidated pro forma statement of
operations for the three months ended March 27, 2000, has been derived from the
unaudited historical financial statements of our company as of March 27, 2000,
and of FWC and Ch. II for the three months ended March 31, 2000.
The unaudited pro forma condensed consolidated statement of operations for the
fiscal year ended December 27, 1999, has been derived from (a) the audited
financial statements of our company from December 29, 1998, to December 27,
1999, (b) the FWC and Ch. II audited historical financial statements for the
period from April 1, 1999, to December 31, 1999; and (c) the FWC and Ch. II
unaudited historical financial statements for the period from January 1, 1999 to
March 31, 1999.
The unaudited pro forma condensed consolidated financial statements contain
certain adjustments that are directly attributable to the transactions. The
unaudited pro forma condensed consolidated statements of operations above do not
include any adjustments related to potential selling, general and administrative
expense synergies as a result of the acquisitions of FWC and Ch. II.
22
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 27, 2000 (IN THOUSANDS)
<TABLE>
<CAPTION>
MAIN STREET
AND MAIN ACQUIRED
INCORPORATED ENTITIES
MARCH 27, MARCH 31, TOTAL PRO FORMA PRO FORMA
2000 2000 (1) COMBINED ADJUSTMENTS COMBINED
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 4,332 $ 120 $ 4,452 $ (120)(2) $ 4,332
Accounts receivable, net 2,955 57 3,012 (57)(2) 2,955
Inventories 1,636 41 1,677 (41)(2) 1,636
Prepaid expenses 563 -- 563 -- 563
--------- --------- --------- --------- ---------
Total current assets 9,486 218 9,704 (218) 9,486
Property and equipment, net 65,154 443 65,597 (14)(2)(3) 65,583
Other assets, net 2,007 -- 2,007 -- 2,007
Franchise costs, net 17,993 -- 17,993 -- 17,993
Goodwill -- -- -- 11,571(3) 11,571
--------- --------- --------- --------- ---------
$ 94,640 $ 661 $ 95,301 $ 11,339 $ 106,640
========= ========= ========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-tem debt $ 1,830 $ -- $ 1,830 $ -- $ 1,830
Accounts payable 8,271 274 8,545 (274)(2) 8,271
Accrued liabilities 12,374 750 13,124 (750)(2) 12,374
Short-term debt -- -- -- 5,000(4)(5) 5,000
Notes payable -- -- -- 7,000(4) 7,000
--------- --------- --------- --------- ---------
Total current liabilities 22,475 1,024 23,499 10,976 34,475
Long-Term Debt, net of current portion 41,861 -- 41,861 -- 41,861
Other liabilities and deferred credits 2,507 -- 2,507 -- 2,507
Commitments and Contingencies
Stockholders' Equity:
Stockholder's equity (acquired entities) -- (363) (363) 363(2) --
Preferred stock -- -- -- -- --
Common stock 10 -- 10 -- 10
Additional paid-in capital 44,200 -- 44,200 -- 44,200
Accumulated deficit (16,413) -- (16,413) -- (16,413)
--------- --------- --------- --------- ---------
Total stockholders' equity 27,797 (363) 27,434 363 27,797
--------- --------- --------- --------- ---------
Total liabilities and
stockholders' equity $ 94,640 $ 661 $ 95,301 $ 11,339 $ 106,640
========= ========= ========= ========= =========
</TABLE>
----------
(1) Reflects the historical combined balance sheet of FWC and Ch. II as of
March 31, 2000.
(2) Reflects the reversal of assets, liabilities, and equity not purchased or
assumed.
(3) Reflects the preliminary allocation of the purchase price to the net assets
of the business acquired.
(4) Reflects payment of consideration for the FWC and Ch. II acquisition,
including a $5 million short-term loan and $7 million from available cash
at July 21, 2000, which is reflected as a note payable at March 27, 2000.
(5) The short-term debt bears interest at the lender's prime rate plus 0.25%
and matures on December 31, 2000. We anticipate that we will repay the
short-term debt with proceeds from this rights offering.
23
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 27, 1999 (IN THOUSANDS)
<TABLE>
<CAPTION>
MAIN STREET
AND MAIN ACQUIRED
INCORPORATED ENTITIES
DECEMBER 27, DECEMBER 31, TOTAL PRO FORMA PRO FORMA
1999 1999(1) COMBINED ADJUSTMENTS COMBINED
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Revenue $ 140,294 $ 5,907 $ 146,201 $ -- $ 146,201
Restaurant operating expenses 125,952 5,198 131,150 -- 131,150
--------- --------- --------- --------- ---------
Income from restaurant operations 14,342 709 15,051 -- 15,051
Other operating expenses 10,550 -- 10,550 771(2) 11,321
--------- --------- --------- --------- ---------
Operating income 3,792 709 4,501 (771) 3,730
Interest expense and other, net 2,604 -- 2,604 487(3) 3,091
--------- --------- --------- --------- ---------
Income before income taxes,
cumulative effect of change in
accounting principle, and
extraordinary item 1,188 709 1,897 (1,258) 639
Provision (benefit) for income taxes 50 -- 50 --(4) 50
--------- --------- --------- --------- ---------
Net income before cumulative
effect of change in accounting
principle and extraordinary
item 1,138 709 1,847 (1,258) 589
Cumulative effect of change in
accounting principle (168) -- (168) -- (168)
--------- --------- --------- --------- ---------
Net income (loss) $ 970 $ 709 $ 1,679 $ (1,258) $ 421
========= ========= ========= ========= =========
Basic earnings per share
Net income before cumulative
effect of change in accounting
principle and extraordinary
item $ 0.11 $ 0.06
Cumulative effect of change in
accounting principle (0.02) (0.02)
--------- ---------
Net income $ 0.09 $ 0.04
========= =========
</TABLE>
24
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 27, 1999 (CONTINUED) (IN THOUSANDS)
<TABLE>
<CAPTION>
MAIN STREET
AND MAIN ACQUIRED
INCORPORATED ENTITIES
DECEMBER 27, DECEMBER 31, TOTAL PRO FORMA PRO FORMA
1999 1999 (1) COMBINED ADJUSTMENTS COMBINED
---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Diluted earnings per share
Net income before cumulative
effect of change in accounting
principle and extraordinary
item $ 0.11 $ 0.06
Cumulative effect of change in
accounting principle (0.02) (0.02)
---------- ----------
Net income $ 0.09 $ 0.04
========== ==========
Weighted average shares
outstanding - basic 10,008 10,008
========== ==========
Weighted average shares
outstanding - diluted 10,407 10,407
========== ==========
Supplemental Pro Forma Presentation(5)
Combined net income $ 421
----------
Pro forma adjustment to compensation
expense:
Reduction to be made in sole
shareholder salary 840
Related income taxes --(4)
----------
Pro forma net income after reduction
reduction to be made in sole
shareholder salary 1,261
----------
Earnings per share - basic $ .09 $ 0.13
========== ==========
Earnings per share - diluted $ .09 $ 0.12
========== ==========
</TABLE>
----------
(1) Reflects the combined historical statement of operations for the twelve
months ended December 31, 1999 of FWC and Ch. II.
(2) Reflects the amortization of deductible goodwill over 15 years.
(3) Reflects interest expense on the short-term debt incurred to finance the
acquisition.
(4) Reflects the provision for income taxes based on applying the statutory
income tax rates of each company and our available net operating loss
carryforwards.
(5) Supplemental Pro Forma Presentation reflects the reduction of salaries and
benefits of the sole shareholder of FWC and Ch. II, who is continuing with
the combined companies in a consulting capacity.
25
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 27, 2000 (IN THOUSANDS)
<TABLE>
<CAPTION>
MAIN STREET
AND MAIN ACQUIRED
INCORPORATED ENTITIES
MARCH 27, MARCH 31, TOTAL PRO FORMA PRO FORMA
2000 2000(1) COMBINED ADJUSTMENTS COMBINED
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Revenue $ 44,339 $ 1,717 $ 46,056 $ -- $ 46,056
Restaurant operating expenses 40,402 1,365 41,767 -- 41,767
--------- --------- --------- --------- ---------
Income from restaurant operations 3,937 352 4,289 -- 4,289
Other operating expenses 2,721 -- 2,721 193(2) 2,914
--------- --------- --------- --------- ---------
Operating income 1,216 352 1,568 (193)(2) 1,375
Interest expense and other, net 898 -- 898 122(3) 1,020
--------- --------- --------- --------- ---------
Income/(loss) before income taxes 318 352 670 (315) 355
Income tax (benefit) provision (86) -- (86) --(4) (86)
--------- --------- --------- --------- ---------
Net income $ 404 $ 352 $ 756 $ (315) $ 441
========= ========= ========= ========= =========
Basic earnings per share $ 0.04 $ 0.04
========= =========
Diluted earnings per share $ 0.04 $ 0.04
========= =========
Weighted average shares
outstanding - basic 10,028 10,028
========= =========
Weighted average shares
outstanding - diluted 10,346 10,346
========= =========
Supplemental Pro Forma Presentation(5)
Combined net income $ 441
---------
Pro forma adjustment to compensation
expense:
Reduction to be made in sole
shareholder salary 262
Related income taxes --(4)
---------
Pro forma net income after reduction to
be made in sole shareholder salary 703
---------
Basic earnings per share $ .04 $ .07
========= =========
Diluted earnings per share $ .04 $ .07
========= =========
</TABLE>
----------
(1) Reflects the combined historical statement of operations for the three
months ended March 31, 2000 of FWC and Ch. II.
(2) Reflects the amortization of deductible goodwill over 15 years.
(3) Reflects interest expense on the short term debt incurred to finance the
acquisition.
(4) Reflects the provision for income taxes based on applying the statutory
income tax rates of each company and our available net operating loss
carryforwards.
(5) Supplemental Pro Forma Presentation reflects the reduction of salaries and
benefits of the sole shareholder of FWC and Ch. II, who is continuing with
the combined companies in a consulting capacity.
26
<PAGE>
THE RIGHTS OFFERING
BEFORE EXERCISING OR SELLING ANY SUBSCRIPTION RIGHTS, YOU SHOULD READ CAREFULLY
THE INFORMATION SET FORTH UNDER "RISK FACTORS."
THE SUBSCRIPTION RIGHTS
We are distributing, at no cost to our stockholders, non-transferable
subscription rights to stockholders that owned shares of our common stock at the
close of business on July 31, 2000. We will issue to you one subscription right
for each 2.5 shares of common stock that you owned on July 31, 2000. You will
not receive fractional subscription rights during the rights offering, but
instead we will round your number of subscription rights down to the nearest
whole number. Each subscription right will entitle you to purchase one share of
common stock for $_________. If you wish to exercise your subscription rights,
you must do so before 5:00 p.m., Mountain Daylight Savings Time, on
____________, ______. After that date, the subscription rights will expire and
will no longer be exercisable.
BASIC SUBSCRIPTION PRIVILEGE
Each subscription right will entitle you to purchase one share of common
stock at a price of $_______ per share. You will receive certificates
representing the shares that you purchase pursuant to your basic subscription
privilege as soon as practicable after ____________, 2000, whether you exercise
your subscription rights immediately prior to that date or earlier.
OVER-SUBSCRIPTION PRIVILEGE
Subject to the allocation described below, each subscription right also
gives you an over-subscription privilege to purchase additional shares of common
stock that are not purchased by other stockholders. You are entitled to exercise
your over-subscription privilege only if you exercise your basic subscription
privilege in full. If you wish to exercise your over-subscription privilege, you
should indicate the number of additional shares that you would like to purchase
in the space provided on your subscription certificate. When you send in your
subscription certificate, you also must send the full purchase price for the
number of additional shares that you have requested to purchase, in addition to
the payment due for shares purchased through your basic subscription privilege.
If the number of shares remaining after the exercise of all basic
subscription privileges is not sufficient to satisfy all over-subscription
privileges, we will allocate the available shares among stockholders that
over-subscribed in proportion to the number of shares purchased by those
over-subscribing stockholders through the basic subscription privilege. However,
if your pro rata allocation exceeds the number of shares you requested, you will
receive only the number of shares that you requested, and the remaining shares
from your pro rata allocation will be divided among other stockholders
exercising their over-subscription privileges that have subscribed for
additional shares in proportion to the number of shares purchased by that group
of over-subscribing stockholders through the basic subscription privilege. In
certain circumstances, however, in order to comply with applicable state
securities laws, we may not be able to honor all over-subscription privileges
even if we have shares available.
The following examples illustrate how shares will be allocated among
stockholders that exercise their over-subscription privilege, depending on
whether or not there is a sufficient number of shares remaining to satisfy all
over-subscription exercises. For both examples, assume that Stockholders A, B,
and C are the only stockholders that exercise their over-subscription
privileges, as follows:
27
<PAGE>
# SHARES HELD PRIOR BASIC SUBSCRIPTION OVER-SUBSCRIPTION
TO RIGHTS OFFERING PRIVILEGE REQUESTS
--------- --------- ---------
Stockholder A: 1,000 400 1,000,000
Stockholder B: 10,000 4,000 850,000
Stockholder C: 100,000 40,000 150,000
--------- --------- ---------
Total: 111,000 44,400 2,000,000
========= ========= =========
EXAMPLE 1:
Assume that stockholders exercise their basic subscription rights for a
total of 2,000,000 shares, so that a total of 2,011,740 shares remain available
for over-subscription requests. Because that number exceeds the total number of
over-subscription exercises, each of Stockholders A, B, and C will receive the
full number of shares they subscribed for, as follows:
<TABLE>
<CAPTION>
# SHARES HELD BASIC
PRIOR TO RIGHTS SUBSCRIPTION OVER-SUBSCRIPTION TOTAL # SHARES HELD
OFFERING PRIVILEGE REQUESTS AFTER RIGHTS OFFERING
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Stockholder A: 1,000 400 1,000,000 1,001,400
Stockholder B: 10,000 4,000 850,000 864,000
Stockholder C: 100,000 40,000 150,000 290,000
--------- --------- --------- ---------
Total: 111,000 44,400 2,000,000 2,155,400
========= ========= ========= =========
</TABLE>
EXAMPLE 2:
Assume that stockholders exercise their basic subscription rights for a
total of 3,000,000 shares, so that a total of only 1,011,740 shares remain
available for over-subscription requests. Because the number of
over-subscription exercises exceeds the number available, the available shares
will be allocated among Stockholders A, B, and C as follows:
Stockholder A: 1,011,740 x 400/44,400 = 9,115
Stockholder B: 1,011,740 x 4,000/44,400 = 91,148
Stockholder C: 1,011,740 x 40,000/44,400 = 150,000
---------
Total: 250,263
=========
Because Stockholder C over-subscribed for only 150,000 shares, only 150,000
shares will be allocated to her, even though the calculation would have
permitted her to take up to 911,477 shares. The remaining 761,477 shares
(1,011,740 - 250,263 = 761,477) will be allocated between Stockholder A and B as
follows:
Total basic subscription rights exercised: Stockholder A: 400
Stockholder B: 4,000
---------
Total 4,400
Stockholder A: 761,477 x 400/4,400 = 69,225
Stockholder B: 761,477 x 4,000/4,400 = 692,252
---------
Total: 761,477
=========
28
<PAGE>
The total allocation of the over-subscription privilege will be as follows:
Stockholder A: 9,115 + 69,225 = 78,340
Stockholder B: 91,148 + 692,252 = 783,400
Stockholder C: 150,000 + 0 = 150,000
---------
Total: 1,011,740
=========
Following this allocation, Stockholders A, B, and C will own shares as follows:
<TABLE>
<CAPTION>
# SHARES HELD BASIC
PRIOR TO RIGHTS SUBSCRIPTION OVER-SUBSCRIPTION TOTAL # SHARES HELD
OFFERING PRIVILEGE REQUESTS AFTER RIGHTS OFFERING
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Stockholder A: 1,000 400 78,340 79,740
Stockholder B: 10,000 4,000 783,400 797,400
Stockholder C: 100,000 40,000 150,000 290,000
--------- --------- --------- ---------
Total: 111,000 44,400 1,011,740 1,167,140
========= ========= ========= =========
</TABLE>
INTENDED PURCHASES
John F. Antioco, Bart A. Brown, William G. Shrader, and John C. Metz are
directors of our company and currently own an aggregate of 3,237,124 shares of
our common stock, excluding shares issuable upon exercise of options that they
hold. These directors have advised us that they intend to exercise their basic
subscription rights in full. Messrs. Antioco, Brown, and Shrader have further
advised us that they intend to exercise their respective over-subscription
privileges for an aggregate of at least _______ additional shares of common
stock, which will assure that we receive gross proceeds of at least $5.75
million in this rights offering, as follows:
<TABLE>
<CAPTION>
JOHN F. ANTIOCO BART A. BROWN, JR. WILLIAM G. SHRADER
----------------------- ---------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Shares Currently Held: 2,245,600 952,009 24,015
Basic Subscription Privilege:
# Shares: 898,240 380,803 9,606
$ Amount: $ $ $
---------- ---------- --------
Over-Subscription Privilege:
# Shares: [_____] [_____] [_____]
$ Amount: $ $ $
---------- ---------- --------
Total:
# Shares: [_____] [_____] [_____]
$ Amount: $3,000,000 $2,500,000 $250,000
========== ========== ========
</TABLE>
NO RECOMMENDATION
Our company and our Board of Directors are not making any recommendations
as to whether or not you should exercise your subscription rights. You should
make your decision based on your own assessment of your best interests.
EXPIRATION DATE
The rights will expire at 5 p.m., Mountain Daylight Savings Time, on
_____________, 2000, unless we decide to extend this rights offering. If you do
not exercise your subscription rights prior to that time, your subscription
rights will be null and void. We will not be required to issue shares of common
stock to you if the Subscription Agent receives your subscription certificate or
your payment after that time, regardless of when you
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<PAGE>
sent the subscription certificate and payment, unless you send the documents in
compliance with the guaranteed delivery procedures described below.
WITHDRAWAL RIGHT
Our Board of Directors may withdraw this rights offering in its sole
discretion at any time prior to or on ____________, 2000, for any reason,
including, without limitation, a change in the market price of our common stock.
If we withdraw this rights offering, any funds you may have paid will be
promptly refunded to you, without interest or penalty.
DETERMINATION OF SUBSCRIPTION PRICE
Our Board of Directors chose the $___ per share subscription price after
considering a variety of factors, including the following:
* the historic and current market price of our common stock;
* our business prospects;
* our historical and anticipated results of operations;
* general conditions in the securities markets;
* our need for capital;
* alternatives available to us for raising capital;
* the amount of proceeds desired;
* pricing of similar transactions;
* the liquidity of our common stock;
* the level of risk to our investors; and
* the need to offer shares at a price that would be attractive to our
investors relative to the current trading price of our common stock.
The subscription price should not be considered an indication of the actual
value of our company or of our common stock. We cannot assure you that the
market price of our common stock will not decline during or after this rights
offering. We also cannot assure you that you will be able to sell shares of
common stock purchased during this rights offering at a price equal to or
greater than the subscription price.
TRANSFERABILITY OF SUBSCRIPTION RIGHTS
Both the basic subscription privileges and over-subscription privileges are
non-transferable and non-assignable. Only you may exercise these rights.
EXERCISE OF SUBSCRIPTION RIGHTS
You may exercise your subscription rights by delivering to the Subscription
Agent on or prior to _____________, 2000:
* A properly completed and duly executed subscription certificate;
* Any required signature guarantees; and
* Payment in full of $ ____ per share for the shares of common stock
subscribed for by exercising your basic subscription privileges and,
if desired, your over-subscription privilege.
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You should deliver your subscription certificate and payment to the
Subscription Agent at the address shown under the heading "Subscription Agent."
We will not pay you interest on funds delivered to the Subscription Agent
pursuant to the exercise of rights.
METHOD OF PAYMENT
You must make payment for the shares by check or bank draft (cashier's
check) drawn upon a United States bank or a postal, telegraphic or express money
order payable to the order of Computershare Trust Company, Inc. (formerly
American Securities Transfer & Trust, Inc.), as Subscription Agent. You also may
make payment for basic subscription rights and over-subscription rights through
wire transfer as follows:
Union Bank & Trust
100 Broadway
Denver, Colorado 80209
(303) 744-3221
ABA# 102000908
Credit Account # 85-02961
Account Name: Computershare Trust Company, Inc.
AST Escrow Agent
Payment will be deemed to have been received by the Subscription Agent only
upon:
* clearance of any uncertified check; or
* receipt by the Subscription Agent of any certified check or bank draft
drawn upon a U.S. bank or of any postal, telegraphic or express money
order; or
* receipt by the Subscription Agent of any funds transferred by wire
transfer; or
* receipt of funds by the Subscription Agent through an alternative
payment method approved by us.
Please note that funds paid by uncertified personal check may take at least
five business days to clear. Accordingly, if you wish to pay by means of an
uncertified personal check, we urge you to make payment sufficiently in advance
of _________________, 2000, to ensure that the payment is received and clears
before that date. We also urge you to consider payment by means of a certified
or cashier's check, money order, or wire transfer.
GUARANTEED DELIVERY PROCEDURES
If you want to exercise your subscription rights, but time will not permit
your subscription certificate to reach the Subscription Agent on or prior to
____________, 2000, you may exercise your subscription rights if you satisfy the
following guaranteed delivery procedures:
(1) You send, and the Subscription Agent receives, payment in full for
each share of common stock being subscribed for through the basic
subscription privilege and the over-subscription privilege, on or
prior to ____________, 2000;
(2) You send, and the Subscription Agent receives, on or prior to
_____________, 2000, a notice of guaranteed delivery, substantially in
the form set forth in the instructions accompanying the subscription
certificate, from a member firm of a registered national securities
exchange or a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office
or correspondent in the United States. The notice of guaranteed
delivery must state your name, the number of subscription rights that
you hold, the number of shares of common stock that you wish to
purchase pursuant to the basic subscription privilege and the number
of shares, if any, you wish to purchase pursuant to the
over-subscription privilege. The notice of guaranteed delivery must
guarantee the delivery of your subscription certificate to the
Subscription Agent within three over-the-counter trading days
following the date of the notice of guaranteed delivery; and
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(3) You send, and the Subscription Agent receives, your properly completed
and duly executed subscription certificate, including any required
signature guarantees, within three over-the-counter trading days
following the date of your notice of guaranteed delivery. The notice
of guaranteed delivery may be delivered to the Subscription Agent in
the same manner as your subscription certificate at the addresses set
forth under the heading "Subscription Agent," or may be transmitted to
the Subscription Agent by facsimile transmission, to facsimile number
(303) 986-2444. You can obtain additional copies of the form of notice
of guaranteed delivery by requesting them from the Subscription Agent
at the address set forth under the heading "Subscription Agent."
SIGNATURE GUARANTEE
Signatures on the subscription certificate do not need to be guaranteed if
either the subscription certificate provides that the shares of common stock to
be purchased are to be delivered directly to the record owner of such
subscription rights, or the subscription certificate is submitted for the
account of a member firm of a registered national securities exchange or a
member of the National Association of Securities Dealers, Inc., or a commercial
bank or trust company having an office or correspondent in the United States. If
a signature guarantee is required, signatures on the subscription certificate
must be guaranteed by an Eligible Guarantor Institution, as defined in Rule
17Ad-15 of the Securities Exchange Act of 1934, as amended, subject to the
standards and procedures adopted by the Subscription Agent. Eligible Guarantor
Institutions include banks, brokers, dealers, credit unions, national securities
exchanges, and savings associations.
SHARES HELD FOR OTHERS
If you are a broker, a trustee, or a depository for securities, or you
otherwise hold shares of common stock for the account of a beneficial owner of
common stock, you should notify the beneficial owner of such shares as soon as
possible to obtain instructions with respect to their subscription rights. If
you are a beneficial owner of common stock held by a holder of record, such as a
broker, trustee, or a depository for securities, you should contact the holder
and ask the holder to effect transactions in accordance with your instructions.
AMBIGUITIES IN EXERCISE OF SUBSCRIPTION RIGHTS
If you do not specify the number of subscription rights being exercised on
your subscription certificate, or if your payment is not sufficient to pay the
total purchase price for all of the shares that you indicated you wish to
purchase, you will be deemed to have exercised the maximum number of
subscription rights that could be exercised for the amount of the payment that
the Subscription Agent receives from you. If your payment exceeds the total
purchase price for all of the subscription rights shown on your subscription
certificate, your payment will be applied, until depleted, to subscribe for
shares of common stock in the following order:
(1) to subscribe for the number of shares, if any, that you indicated on
the subscription certificate that you wish to purchase through your
basic subscription privilege;
(2) to subscribe for shares of common stock until your basic subscription
privilege has been fully exercised;
(3) to subscribe for additional shares of common stock pursuant to the
over-subscription privilege, but subject to any applicable proration.
Any excess payment remaining after the foregoing allocation will be returned to
you as soon as practicable by mail, without interest or deduction.
REGULATORY LIMITATION
We will not be required to issue you shares of common stock pursuant to
this rights offering if, in our opinion, you would be required to obtain prior
clearance or approval from any state or federal regulatory
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authorities to own or control such shares if, at the time the subscription
rights expire, you have not obtained such clearance or approval.
STATE AND FOREIGN SECURITIES LAWS
We are not making this rights offering in any state or other jurisdiction
in which it is unlawful to do so, nor are we selling or accepting any offers to
purchase any shares of common stock to you if you are a resident of any such
state or other jurisdiction. We may delay the commencement of this rights
offering in certain states or other jurisdictions in order to comply with the
securities law requirements of such states or other jurisdictions. We do not
anticipate that there will be any changes in the terms of this rights offering.
In our sole discretion, we may decline to make modifications to the terms of
this rights offering requested by certain states or other jurisdictions, in
which case stockholders that live in those states or jurisdictions will not be
eligible to participate in this rights offering.
OUR DECISION WILL BE BINDING ON YOU
We will determine all questions concerning the timeliness, validity, form,
and eligibility of any exercise of subscription rights, and our determinations
will be final and binding. In our sole discretion, we may waive any defect or
irregularity, or permit a defect or irregularity to be corrected within such
time as we may determine, or reject the purported exercise of any subscription
right by reason of any defect or irregularity in such exercise. Subscriptions
will not be deemed to have been received or accepted until all irregularities
have been waived or cured within such time as we determine in our sole
discretion. Neither we nor the Subscription Agent will be under any duty to
notify you of any defect or irregularity in connection with the submission of a
subscription certificate or incur any liability for failure to give such
notification.
NO REVOCATION
After you have exercised your basic subscription privilege or
over-subscription privilege, YOU MAY NOT REVOKE THAT EXERCISE. You should not
exercise your subscription rights unless you are certain that you wish to
purchase additional shares of common stock.
SHARES OF COMMON STOCK OUTSTANDING AFTER THE RIGHTS OFFERING
There are 10,029,351 shares of common stock outstanding as of July 21,
2000. Assuming we issue all of the shares of common stock offered in the rights
offering, approximately 14,041,091 shares of common stock will be issued and
outstanding. This would represent a ____% increase in the number of outstanding
shares of common stock. IF YOU DO NOT EXERCISE YOUR BASIC SUBSCRIPTION RIGHTS IN
FULL, YOUR PERCENTAGE OWNERSHIP OF OUR COMMON STOCK WILL DECREASE IF OTHER
STOCKHOLDERS PURCHASE SHARES IN THE RIGHTS OFFERING.
FEES AND EXPENSES OF EXERCISES
We will pay all fees charged by the Subscription Agent. You are responsible
for paying any other commissions, fees, taxes or other expenses incurred in
connection with your exercise of the subscription rights. Neither we nor the
Subscription Agent will pay such expenses.
SUBSCRIPTION AGENT
We have appointed our transfer agent, Computershare Trust Company, Inc.
(formerly American Securities Transfer and Trust, Inc.), as Subscription Agent
for this rights offering. You may exercise your rights by forwarding the
attached subscription documents, with payment in full of the aggregate
subscription price, to the Subscription Agent prior to 5:00 p.m. Mountain
Daylight Savings Time at either of the following addresses:
By mail: Computershare Trust Company, Inc.
P.O. Box 1596
Denver, Colorado 80201-1596
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By hand or overnight courier: Computershare Trust Company, Inc.
12039 West Alameda Parkway
Suite Z-2
Lakewood, Colorado 80228
The Subscription Agent's telephone number is (303) 986-5400 and its
facsimile number is (303) 986-2444. You should deliver your subscription
certificate, payment of the subscription price and notice of guaranteed delivery
(if any) to the Subscription Agent. We will pay the fees and certain expenses of
the Subscription Agent, which we estimate will total $_____. We also have agreed
to indemnify the Subscription Agent from any liability that it may incur in
connection with the rights offering.
IMPORTANT
PLEASE CAREFULLY READ THE INSTRUCTIONS ACCOMPANYING THE SUBSCRIPTION CERTIFICATE
AND FOLLOW THOSE INSTRUCTIONS IN DETAIL. DO NOT SEND SUBSCRIPTION CERTIFICATES
DIRECTLY TO US. YOU ARE RESPONSIBLE FOR CHOOSING THE PAYMENT AND DELIVERY METHOD
FOR YOUR SUBSCRIPTION CERTIFICATE, AND YOU BEAR THE RISKS ASSOCIATED WITH SUCH
DELIVERY. IF YOU CHOOSE TO DELIVER YOUR SUBSCRIPTION CERTIFICATE AND PAYMENT BY
MAIL, WE RECOMMEND THAT YOU USE REGISTERED MAIL, PROPERLY INSURED, WITH RETURN
RECEIPT REQUESTED. WE ALSO RECOMMEND THAT YOU ALLOW A SUFFICIENT NUMBER OF DAYS
TO ENSURE DELIVERY TO THE SUBSCRIPTION AGENT AND CLEARANCE OF PAYMENT PRIOR TO
______________, 2000. BECAUSE UNCERTIFIED PERSONAL CHECKS MAY TAKE AT LEAST FIVE
BUSINESS DAYS TO CLEAR, WE STRONGLY URGE YOU TO PAY, OR ARRANGE FOR PAYMENT, BY
MEANS OF CERTIFIED OR CASHIER'S CHECK OR MONEY ORDER.
FEDERAL INCOME TAX CONSIDERATIONS
The following summarizes the material federal income tax considerations of
this rights offering to you and our company. This summary is based on current
law, which is subject to change at any time, possibly with retroactive effect.
This summary is not a complete discussion of all federal income tax consequences
of this rights offering, and, in particular, may not address federal income tax
consequences applicable to stockholders subject to special treatment under
federal income tax law. In addition, this summary does not address the tax
consequences of this rights offering under applicable state, local, or foreign
tax laws. This discussion assumes that you hold your shares of common stock and
the subscription rights and shares issued to you during this rights offering as
capital assets.
Receipt and exercise of the subscription rights distributed pursuant to
this rights offering is intended to be nontaxable to stockholders, and the
following summary assumes you will qualify for such nontaxable treatment. If,
however, the rights offering does not qualify as nontaxable, you would be
treated as receiving a taxable distribution equal to the fair market value of
the subscription rights on their distribution date. The distribution would be
taxed as a dividend to the extent made out of our current or accumulated
earnings and profits; any excess would be treated first as a return of your
basis (investment) in your common stock and then as a capital gain. Expiration
of the subscription rights would result in a capital loss.
WE HAVE INCLUDED THIS DISCUSSION FOR YOUR GENERAL INFORMATION ONLY. YOU
SHOULD CONSULT YOUR TAX ADVISOR TO DETERMINE THE TAX CONSEQUENCES TO YOU OF THIS
RIGHTS OFFERING IN LIGHT OF YOUR PARTICULAR CIRCUMSTANCES, INCLUDING ANY STATE,
LOCAL, AND FOREIGN TAX CONSEQUENCES.
TAXATION OF STOCKHOLDERS
RECEIPT OF A SUBSCRIPTION RIGHT. You will not recognize any gain or other
income upon receipt of a subscription right.
TAX BASIS AND HOLDING PERIOD OF SUBSCRIPTION RIGHTS. Your tax basis in each
subscription right will effectively depend on whether you exercise the
subscription right or allow the subscription right to expire.
If you exercise a subscription right, your tax basis in the subscription
right will be determined by allocating the tax basis of your common stock on
which the subscription right is distributed between the common
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stock and the subscription right, in proportion to their relative fair market
values on the date of distribution of the subscription right. However, if the
fair market value of your subscription rights is less than 15 percent of the
fair market value of your existing shares of common stock, then the tax basis of
each subscription right will be deemed to be zero, unless you elect, by
attaching an election statement to your federal income tax return for the
taxable year in which you receive the subscription rights, to allocate tax basis
to your subscription rights.
If you allow a subscription right to expire, it will be treated as having
no tax basis.
Your holding period for a subscription right will include your holding
period for the shares of common stock upon which the subscription right is
issued.
EXPIRATION OF SUBSCRIPTION RIGHTS. You will not recognize any loss upon the
expiration of a subscription right.
EXERCISE OF SUBSCRIPTION RIGHTS. You generally will not recognize a gain or
loss on the exercise of a subscription right. The tax basis of any share of
common stock that you purchase through the rights offering will be equal to the
sum of your tax basis, if any, in the subscription right exercised and the price
paid for the share. The holding period of the shares of common stock purchased
through the rights offering will begin on the date that you exercise your
subscription rights.
TAXATION OF OUR COMPANY
We will not recognize any gain, other income or loss upon the issuance of
the subscription rights, the lapse of the subscription rights, or the receipt of
payment for shares of common stock upon exercise of the subscription rights.
IF YOU HAVE QUESTIONS
If you have questions or need assistance concerning the procedure for
exercising subscription rights or if you would like additional copies of this
prospectus, the instructions, or the Notice of Guaranteed Delivery, you should
contact Duane Wilkes, our Secretary, at:
Main Street and Main Incorporated
5050 North 40th Street
Suite 200
Phoenix, Arizona 85018
Telephone: (602) 852-9000
E-mail: [email protected]
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DESCRIPTION OF SECURITIES
Our authorized capital consists of 25,000,000 shares of common stock,
$0.001 par value, and 2,000,000 shares of preferred stock, $.001 par value. As
of July 21, 2000, a total of 10,029,351 shares of common stock were issued and
outstanding. There are no shares of preferred stock outstanding. An additional
3,069,800 shares of common stock may be issued upon exercise of options
outstanding or available for issuance under our stock option plans and an
additional 233,916 shares of common stock may be issued upon exercise of certain
outstanding warrants.
COMMON STOCK
Holders of shares of common stock are entitled to one vote for each share
of common stock held of record on all matters submitted to a vote of the
stockholders. Subject to the preferences of any outstanding preferred stock,
holders of common stock are entitled to receive such dividends as may be
declared by the board of directors out of funds legally available. If our
company is liquidated or dissolved, the holders of common stock will be entitled
to share ratably in all assets remaining after we have paid our creditors in
full and paid the liquidation preferences of any outstanding shares of preferred
stock. Holders of common stock do not have preemptive rights to subscribe for
additional shares that we may issue. All of the outstanding shares of common
stock, including the shares of common stock to be sold in this offering, are
fully paid and nonassessable.
PREFERRED STOCK
Our board of directors may issue shares of preferred stock from time to
time in one or more series for such consideration and with such relative rights
and preferences as the board of directors may determine. Accordingly, the board
of directors has the power to fix the dividend rate and to establish the
provisions, if any, relating to voting rights, redemption rate, sinking fund,
liquidation preferences, and conversion rights for any series of preferred stock
issued in the future. We have no present plans, arrangements, or understandings
for the issuance or sale of any other shares of preferred stock. Any preferred
stock that may be issued in the future could be given voting and conversion
rights that could dilute the voting power and equity of holders of common stock.
WARRANTS
We have outstanding warrants to purchase 233,916 shares of common stock at
an exercise price of $8.98 per share. We issued these warrants to several
lenders in connection with term loans. The warrants expire in March 2004. We may
redeem the warrants under certain circumstances.
REPORTS TO STOCKHOLDERS
We furnish annual reports to our stockholders containing consolidated
financial statements of our company audited by independent public accountants.
We also distribute quarterly reports containing unaudited financial information.
SHARES ELIGIBLE FOR FUTURE SALE
As of July 21, 2000, we had 10,029,351 shares of common stock outstanding,
of which 8,044,074 shares are freely tradeable in the public market without
restriction under the securities laws unless held by one of our "affiliates," as
that term is defined in Rule 144 under the securities laws. Affiliates will be
subject to certain of the resale limitations of Rule 144. The 1,985,277
remaining shares of common stock currently outstanding are "restricted
securities," as that term is defined in Rule 144, and may be sold only in
compliance with Rule 144, pursuant to registration under the securities laws, or
pursuant to an exemption from registration. We have registered for resale an
aggregate of 5,252,750 shares of common stock covered by an effective
registration statement, which includes 1,482,500 shares issuable upon exercise
of outstanding options. These shares include "restricted securities" as well as
otherwise freely tradeable shares that are held by some of our affiliates.
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In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated), including a person who may be deemed to be an
"affiliate" of our company, is entitled to sell, within any three-month period,
a number of restricted shares beneficially owned by such person for at least one
year in an amount that does not exceed the greater of (a) one percent of the
then-outstanding shares of common stock (approximately 100,294 shares as of July
21, 2000) or (b) the average weekly trading volume of the common stock during
the four calendar weeks immediately preceding the date on which a notice of the
sale is filed with the SEC. Sales under Rule 144 also are subject to certain
other requirements relating to the manner of sale and the availability of
current public information about our company. However, a person who is not
deemed to have been an affiliate at any time within the three months immediately
prior to the date of sale and who has beneficially owned his or her shares for
at least two years is entitled to sell those shares without regard to the
volume, manner of sale, or notice requirements. Sales of substantial amounts of
common stock by our stockholders under Rule 144 or otherwise, or even the
potential for such sales, may have a depressive effect on the market price of
the common stock.
As of July 21, 2000, options to purchase a total of 2,850,334 shares of
common stock were outstanding under our stock option plans and various stock
option agreements with employees. We have filed registration statements under
the securities laws to register for offer and sale the shares of common stock
reserved for issuance pursuant to the exercise of stock options granted under
our stock option plans and option agreements. Shares issued upon the exercise of
such stock options generally will be eligible for sale in the public market.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for our common stock is Computershare
Trust Company, Inc. (formerly American Securities Transfer and Trust, Inc.),
Denver, Colorado.
DETERMINATION OF OFFERING PRICE
Our Board of Directors decided to set a $___ per share subscription price
after considering a variety of factors described elsewhere in this prospectus.
The $___ per share price should not be considered an indication of the actual
value of our company or of our common stock. We cannot assure you that the
market price of the common stock will not decline during or after the rights
offering. We also cannot assure you that you will be able to sell shares of
common stock purchased during the rights offering at a price equal to or greater
than $___ per share. We have neither sought, nor obtained, any valuation opinion
from outside financial advisors or investment bankers.
PLAN OF DISTRIBUTION
On or about ______________, 2000, we will distribute the subscription
rights, subscription certificates, and copies of this prospectus to persons that
owned shares of common stock on July 31, 2000. If you wish to exercise your
subscription rights and purchase shares of common stock, you should complete the
subscription certificate and return it with payment for the shares, to the
Subscription Agent, Computershare Trust Company, Inc. (formerly American
Securities Transfer and Trust, Inc.), at the address on page __. If you have any
questions, you should contact Duane Wilkes, our Secretary, at the telephone
number and address on page __.
We have agreed to pay the Subscription Agent a fee of $______ plus certain
expenses. We estimate that our total expenses in connection with the rights
offering will be approximately $_________.
LEGAL OPINIONS
Greenberg Traurig, LLP, Phoenix, Arizona will pass upon for us the validity
of the shares of common stock offered by this prospectus.
EXPERTS
The consolidated financial statements as of and for the year ended December
27, 1999, incorporated by reference in this prospectus and elsewhere in the
registration statement of which this prospectus forms a part have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect
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thereto, and are incorporated by reference herein in reliance upon the authority
of that firm as experts in giving the reports.
WHERE YOU CAN OBTAIN ADDITIONAL INFORMATION
We are subject to the informational requirements of the Securities Exchange
Act of 1934. Accordingly, we file reports, proxy statements, and other
information with the SEC. You may read and copy any materials that we file with
the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549 upon payment of the prescribed fees. You may obtain
information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The SEC also maintains an Internet site that contains reports,
proxy, and information statements and other materials that are filed through the
SEC's Electronic Data Gathering, Analysis, and Retrieval, or EDGAR, system. You
can access this web site at http://www.sec.gov.
We have filed a registration statement on Form S-3 with the SEC with
respect to this rights offering. This prospectus is a part of the registration
statement, but does not contain all of the information included in the
registration statement. You may wish to inspect the registration statement and
the exhibits to that registration statement for further information with respect
to our company and the securities offered in this prospectus. Copies of the
registration statement and the exhibits to such registration statement are on
file at the offices of the SEC and may be obtained upon payment of the
prescribed fee or may be examined without charge at the public reference
facilities of the SEC described above. Statements contained in this prospectus
concerning the provisions of documents are necessarily summaries of the material
provisions of such documents, and each statement is qualified in its entirety by
reference to the copy of the applicable document filed with the SEC.
The SEC allows us to "incorporate by reference" certain documents into the
registration statement and this prospectus, which means that we can disclose
important information to you by referring you to other documents. The documents
that are incorporated by reference are legally considered to be a part of this
prospectus. Accordingly, you should refer to those documents to obtain all the
information you should consider before exercising rights to purchase our common
stock. We hereby incorporate the following documents by reference into this
prospectus:
(1) our Annual Report on Form 10-K for the year ended December 27, 1999,
which we filed with the SEC on March 28, 2000;
(2) our Quarterly Report on Form 10-Q for the quarter ended March 27, 2000,
which we filed on May 15, 2000;
(3) our Form 8-K dated July 21, 2000, which we filed with the SEC on July
24, 2000; and
(4) the description of our common stock contained in the registration
statement on Form 8-A, which we filed with the SEC on June 29, 1990.
All reports and other documents that we file pursuant to Sections 13(a),
13(c), 14, or 15(d) of the Exchange Act after the date of this prospectus shall
be deemed to be incorporated by reference into and to be a part of this
prospectus from the date on which we file them. To the extent that any statement
in this prospectus or in any subsequently filed document that is incorporated by
reference modifies or supersedes any statement contained in a previously filed
document that is incorporated by reference, the more recent statement will
modify or supersede the earlier statement. Any modified or superseded statement,
to the extent that it is modified or superseded, is not part of this prospectus.
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You may contact us to obtain free copies of any or all of the documents
referred to above that have been incorporated by reference to this prospectus.
We will provide exhibits to such documents free of charge only if they are
specifically incorporated by reference into this prospectus.
You may contact us at: Main Street and Main Incorporated
Attn: Secretary
5050 North 40th Street, Suite 200
Phoenix, Arizona 85018
(602) 852-9000
e-mail: [email protected]
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4,011,740 SHARES
MAIN STREET AND MAIN INCORPORATED
COMMON STOCK
----------
P R O S P E C T U S
----------
__________, 2000
----------
YOU MAY RELY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE INFORMATION DIFFERENT FROM THAT CONTAINED IN
THIS PROSPECTUS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR THE
SALE OF COMMON STOCK MEANS THAT INFORMATION CONTAINED IN THIS PROSPECTUS IS
CORRECT AFTER THE DATE OF THIS PROSPECTUS. THIS PROSPECTUS IS NOT AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY THESE SHARES OF COMMON
STOCK IN ANY CIRCUMSTANCES UNDER WHICH THE OFFER OR SOLICITATION IS UNLAWFUL.
----------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses payable by the Registrant in
connection with the offering described in the Registration Statement. All of the
amounts shown are estimates except for the registration fee:
Amount to be Paid
-----------------
Registration Fee.......................................... $ 3,078.06
Nasdaq Listing Fee........................................
Subscription Agent Fees and Expenses......................
Blue Sky Fees and Expenses................................
Legal Fees and Expenses...................................
Accountants' Fees and Expenses............................
Printing and Engraving Expenses...........................
Miscellaneous Fees........................................
----------
Total..................................................... $
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Certificate of Incorporation and Bylaws of the Registrant provide that
the Registrant will indemnify and advance expenses, to the fullest extent
permitted by the Delaware General Corporation Law, to each person who is or was
a director, officer or agent of the Registrant, or who serves or served any
other enterprise or organization at the request of the Registrant (an
"Indemnitee").
Under Delaware law, to the extent that an Indemnitee is successful on the
merits in defense of a suit or proceeding brought against him or her by reason
of the fact that he or she is or was a director, officer or agent of the
Registrant, or serves or served any other enterprise or organization at the
request of the Registrant, the Registrant shall indemnify him or her against
expenses (including attorney's fees) actually and reasonably incurred in
connection with such action.
If unsuccessful in defense of a third-party civil suit or a criminal suit,
or if such a suit is settled, an Indemnitee may be indemnified under Delaware
law against both (i) expenses, including attorneys' fees, and (ii) judgments,
fines and amounts paid in settlement if he or she acted in good faith and in a
manner he or she reasonably believed to be in, or not opposed to, the best
interests of the Registrant, and, with respect to any criminal action, had no
reasonable cause to believe his or her conduct was unlawful.
Also under Delaware law, expenses incurred by an officer or director in
defending a civil or criminal action, suit or proceeding may be paid by the
Registrant in advance of the final disposition of the suit, action or proceeding
upon receipt of an undertaking by or on behalf of the officer or director to
repay such amount if it is ultimately determined that he or she is not entitled
to be indemnified by the Registrant. The Registrant also may advance expenses
incurred by other employees and agents of the Registrant upon such terms and
conditions, if any, that the Board of Directors of the Registrant deems
appropriate.
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ITEM 16. EXHIBITS
EXHIBIT
NUMBER EXHIBIT
------ -------
2.1 Asset Purchase Agreement dated July 10, 2000, among Main Street
and Main Incorporated, FWC, Inc., Chapter Two, Inc., and Debbie
Bloy(1)
5.1 Opinion of Greenberg Traurig, LLP
10.35 Credit Agreement dated April 2, 1999, between Main Street and
Main Incorporated and Imperial Bank(1)
10.35A First Amendment to Credit Agreement dated August 2, 1999, between
Main Street and Main Incorporated and Imperial Bank (1)
10.35B Second Amendment to Credit Agreement dated July 13, 2000, between
Main Street and Main Incorporated and Imperial Bank(1)
10.36 Revolving Promissory Note dated July 13, 2000, in the principal
amount of $5,000,000 from Main Street and Main Incorporated, as
Borrower, to Imperial Bank, as Lender(1)
10.37 Term Promissory Note dated July 13, 2000, in the principal amount
of $5,000,000 from Main Street and Main Incorporated, as
Borrower, to Imperial Bank, as Lender(1)
10.38 Unconditional Guarantee of Payment of Term Promissory Note
executed by John F. Antioco, as Guarantor, in favor of Imperial
Bank, as Lender(1)
10.39 Unconditional Guarantee of Payment of Term Promissory Note
executed by Bart A. Brown, Jr., as Guarantor, in favor of
Imperial Bank, as Lender(1)
23.1 Consent of Arthur Andersen LLP, independent public accountants
23.2 Consent of Arthur Andersen LLP, independent public accountants
23.3 Consent of Greenberg Traurig, LLP, is included in Exhibit 5.1
24.1 Power of Attorney is included on the signature page
27.1 Financial Data Schedule for the year ended December 27, 1999(2)
27.2 Financial Data Schedule for the quarter ended March 27, 2000(3)
99.1 Form of Subscription Certificate*
99.2 Instructions on Use of Main Street and Main Incorporated
Subscription Certificates*
99.3 Notice of Guaranteed Delivery*
99.4 Form of Letter to Stockholders*
99.5 Form of Letter to Brokers*
----------
* To be filed by amendment.
(1) Incorporated by reference to the Registrant's Form 8-K dated July 21, 2000,
as filed with the Securities and Exchange Commission on July 24, 2000.
(2) Incorporated by reference to the Registrant's Form 10-K for the year ended
December 27, 1999, as filed with the Securities and Exchange Commission on
March 28, 2000.
(6) Incorporated by reference to the Registrant's Form 10-Q for the quarter
ended March 27, 2000, as filed with the Securities and Exchange Commission
on May 15, 2000.
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.
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Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective 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 clauses (1)(i) and (1)(ii) 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 into the Registration Statement.
(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.
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 upon Rule 430A and contained in a 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.
(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.
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 described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange SEC 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.
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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 Phoenix, Arizona, on the 21st day of July, 2000.
MAIN STREET AND MAIN INCORPORATED
By: /s/ Bart A. Brown, Jr.
------------------------------------
Bart A. Brown, Jr.
President and Chief Executive Officer
KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints, jointly and severally, Bart A. Brown, Jr. and
Duane E. Wilkes, and each one of them, as his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all
amendments (including pre-effective and post-effective amendments) to this
registration statement, and to sign any registration statement and amendments
thereto for the same offering pursuant to Rule 462(b) under the Securities Act
of 1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all which said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do, or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Capacity Date
--------- -------- ----
/s/ John F. Antioco Chairman of the Board July 21, 2000
------------------------
John F. Antioco
/s/ Bart A. Brown, Jr. President, Chief Executive Officer,
------------------------ and Director (Principal Executive July 21, 2000
Bart A. Brown, Jr. Officer)
/s/ William G. Shrader Executive Vice President, Chief
------------------------ Operating Officer, and Director July 21, 2000
William G. Shrader
/s/ Duane E. Wilkes Corporate Controller and Secretary
------------------------ (Principal Financial and Accounting July 21, 2000
Duane E. Wilkes Officer)
/s/ Jane Evans Director July 21, 2000
------------------------
Jane Evans
/s/ John C. Metz Director July 21, 2000
------------------------
John C. Metz
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