As filed with the Commission on ________________ Registration No. ___________
- --------------------------------------------------------------------------------
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ELEPHANT & CASTLE GROUP INC.
(Name of Registrant as specified in its charter)
Province of British Columbia
(State or jurisdiction of incorporation or organization)
701 W. Georgia Street, Ste. 303
P.O. Box 10240 - Pacific Centre
Vancouver, BC V7Y 1E7 CANADA
(604) 684-6451
(Address and telephone number of principal executive offices, and
address of principal place of business or intended principal place of business)
Daniel DeBou With copies to:
Elephant & Castle Group Inc. D. David Cohen, Esq.
701 W. Georgia Street, Ste. 303 Jericho Atrium - Suite 133
P.O. Box 10240 - Pacific Centre 500 North Broadway
Vancouver, BC V7Y 1E7 CANADA Jericho, New York 11753
(604) 684-6451 (516) 933-1700
(Name, address and telephone number of agent for service)
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable
after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
in connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box /_/.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of each class of Amount to be Proposed maximum Proposed maximum Amount of
securities to be registered offering price per aggregate offering registration fee
registered share price
<S> <C> <C> <C> <C>
Common stock, no 175,000 $7.50(a) $1,312,000 $397.58
par value shares
(a) Calculated in accordance with Rule 457(c).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Cross-Reference Sheet
Between Items in Form S-8 and Prospectus
Pursuant to Item 501(b) of Regulation S-K
Item No. Form S-8 Caption Heading in Prospectus
- -------- ---------------- ---------------------
<S> <C> <C>
A. Information Required in the Section 10(a) Prospectus
1. Plan Information
(a) General Plan Information..................................Plan Information
(b) Securities to be Offered..................................The Stock Option Plan
(c) Employees who may Participate in Plan.....................The Stock Option Plan
(d) Purchase and Payment of Securities Pursuant to the Plan...The Stock Option Plan
(e) Resale Restrictions.......................................Resale of the Shares; Selling Shareholders
(f) Tax Effects of Plan Participation.........................Tax Effects
(g) Investment of Funds.......................................Not Applicable
(h) Withdrawal from Plan; Assignment of Interest..............Not Applicable
(i) Forfeitures and Penalties.................................Not Applicable
(j) Charges and Deductions of Liens therefor..................Not Applicable
2. Registrant Information........................................ Summary; Business of E&C; Selected Historical
Financial Data; Recent Developments; Additional
Information
B. Information Required in the Registration Statement
3. Incorporation of Documents
By Reference...................................................Incorporation by Reference; Additional Information
4. Description of Securities......................................Summary
5. Interests of Named Experts and
Counsel........................................................Legal Opinions
6. Indemnification of Directors and Officers......................Indemnification
7. Exemption from Registration Claimed............................Not Applicable
8. Exhibits.......................................................Exhibits
9. Undertakings...................................................Undertakings
</TABLE>
<PAGE>
INCORPORATION BY REFERENCE
Elephant & Castle Group Inc. ("E&C" or the "Company") is sub ject to
the informational requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and in accordance therewith files reports and other
information with the Securities and Exchange Commission (the "Commission")
relating to its business, financial position, results of operations and other
matters. Such reports and other information can be inspected and copied at the
Public Reference Section maintained by the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549 and its Regional Offices located at
The Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661, and 7
World Trade Center, 15th Floor, New York, New York 10048. Copies of such
material also can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Elephant & Castle Common Stock is listed on the Pacific Stock Exchange
("PSE") and the NASDAQ SmallCap Market. Such material can also be inspected at
the offices of PSE and NASDAQ. The offices of such exchange and NASDAQ are,
respectively: The Pacific Stock Exchange, 115 Sansome Street, Suite 1104, San
Francisco, California 94104 and the NASDAQ Stock Market, 1735 K Street, N.W.,
Washington, D.C. 20006.
The Company has filed with the Commission a registration statement on
Form S-8 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act") with respect to the Common Stock offered hereby.
This Prospectus does not contain all the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. Reference is made to the
Registration Statement and to the exhibits relating thereto for further
information with respect to Elephant & Castle and the Common Stock offered
hereby.
No person is authorized to give any information or to make any
representation not contained in this Prospectus and, if given or made, such
information or representation should not be relied upon as having been
authorized by the Company or any other person. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any securities
in any jurisdiction to any person to whom it is not lawful to make any such
offer or solicitation in such jurisdiction. Neither the delivery of this
Prospectus nor any distribution of the securities made under this Prospectus
shall, under any circumstances, create an implication that there has been no
change in the affairs of the Company since the date of this Prospectus. However,
if any material change occurs during the period that this Prospectus is required
to be delivered, this Prospectus will be amended or supplemented accordingly.
All information regarding E&C in this Prospectus has been supplied by E&C.
All documents and reports filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act whether before or after the date
of this Prospectus shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the dates of filing of such documents or
reports. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
<PAGE>
This Prospectus incorporates documents by reference which are not
presented herein or delivered herewith. Such documents (other than exhibits to
such documents unless such exhibits are specifically incorporated by reference)
are available without charge, to any person, including any beneficial owner, to
whom this Prospectus is delivered, on written or oral request, in the case of
documents relating to Elephant & Castle Group Inc., 701 West Georgia Street,
Suite 303, P.O. Box 10240, Pacific Centre, Vancouver, B.C. V7Y 1E7 CANADA
(telephone number (604) 684-6451, Attn: Daniel DeBou, Chief Financial Officer.
<PAGE>
Prospectus dated February 13, 1997
-----------
ELEPHANT & CASTLE GROUP INC.
PROSPECTUS
-----------
This Prospectus relates to certain Common Shares of Elephant &
Castle Group Inc. (the "Company") issuable by the Company pursuant to options
held by certain key employees pursuant to the Company's 1993 Employee Stock
Option Plan (the "Plan"), and pursuant to two separate warrants (the "Warrants")
to purchase the Company's Common Shares (the "Shares") held by two former
advisors to the Company, and to the reoffer or resale of such Shares from time
to time. Pursuant to the Plan, options have been issued to selected employees
from time to time since April of 1993 and additional options may be issued in
the future to such persons. The options are exercisable at various prices from
U.S. $4.75 to U.S. $7.75 per Share. The Warrants were issued in August of 1994
and in November of 1995, and are exercisable at U.S. $5.75 and U.S. $6.00,
respectively. A portion of the options, and all of the Warrants, are currently
exercisable.
-----------
On February 11, 1997 the reported closing sales price of a share
of E&C Common Stock on the NASDAQ Small Cap Market was $7.50 per share.
Investors are urged to obtain current price information for E&C Common Stock in
connection with their consideration of the transactions contemplated thereby.
-----------
THE SECURITIES TO BE ISSUED PURSUANT TO THIS PROSPECTUS HAVE NOT
BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is February 13, 1997.
<PAGE>
SUMMARY
General
This Prospectus relates to the offer, and prospective re-offer of
certain securities of Elephant & Castle Group Inc., a British Columbia
corporation ("E&C" or the "Company").
The Company. The Company is a publicly owned company, the Common
Stock of which is traded on NASDAQ - Small Cap Market (PUBSF) and the Pacific
Stock Exchange (PUB). The Company operates a chain of 16 full-service
English-style dining restaurants and pubs, 13 of which are located in Canada,
one in the Bellingham, Washington and one in Philadelphia, Pennsylvania and one
in San Diego, California. The Canadian restaurants are operated under the name
"The Elephant & Castle Pub & Restaurant" and are located in major shopping malls
and office complexes from Victoria, B.C. to Ottawa, Ontario. The Bellingham
restaurant is also operated under the name "The Elephant & Castle Pub &
Restaurant" and is located in a large suburban mall near the United
States/Canadian border. The Philadelphia Elephant & Castle, Winnipeg, Canada,
and San Diego, California restaurants are located within Holiday Inn hotels.
In addition to the 16 traditional style Elephant & Castle restaurants,
the Company recently developed a newly-owned New York style deli restaurant
known as "Rosie's on Robson" at the Rosedale Hotel in Vancouver, British
Columbia and a "University" restaurant: "Elephant on Campus" at the British
Columbia Institute of Technology in Vancouver, and has licensed an E&C Express
restaurant at the Vancouver International Airport. The Company also owns a one
unit "red meat" restaurant under the name "Alamo Grill." The restaurant is
located at the Mall of America, Bloomington, Minnesota.
E&C was incorporated in British Columbia on December 14, 1992, as a
holding corporation for its theretofore existing separate restaurant
corporations, which had been owned and operated by the founders of E&C for a
number of years. E&C's executive offices are located at 701 West Georgia Street,
Suite 303-701, Vancouver B.C., Canada V7Y 1E7; its
telephone number is (604) 684-6451.
The Offering. This Prospectus relates to the issuance of up to One
Hundred Seventy-Five Thousand (175,000) Common Shares, no par value (the "Common
Shares") of Elephant & Castle Group Inc. (the "Company").
Up to 100,000 shares being registered will be issued, if issued,
pursuant to the Company's 1993 Employee Stock Option Plan (the "Plan"), and up
to 75,000 of the shares will be issued, if issued, pursuant to two Warrants, one
relating to 50,000 Common Shares and the other relating to 25,000 Common Shares.
The Warrants were issued in August of 1994 and November of 1995,
respectively, to two consultants to the Company. The consultants are not
officers, directors, shareholders or affiliates of the Company, and previously
rendered financial consulting services to the Company. Neither consultant
rendered services in connection with the offer or sale of securities in a
capital raising transaction.
The Shares are voting securities of the Company. The Company has no
other class of securities outstanding. The Shares do not currently carry a
dividend, and management does not contemplate paying a dividend on Common Shares
at any time in the foreseeable future.
<PAGE>
PLAN INFORMATION
The Stock Option Plan
The Stock Option Plan was adopted on April 1, 1993 (the "Plan"). The
Plan is intended to provide additional incentive to certain key employees of the
Company by encouraging such employees to acquire shares of the Company. 100,000
of the Company's Common Stock were reserved for issuance pursuant to the Plan.
As of a current date, options relating to 89,500 shares are currently
outstanding, and are exercisable at various price ranging from U.S.$4.75 per
Share to U.S.$7.50 per Share. Approximately 62,000 Options are currently vested
and exercisable.
All employees of the Company are eligible for options pursuant to the
Plan with the exception of Messrs. Jeffrey Barnett, Peter Barnett and George
Pitman, each of whom is a founder, principal shareholder, and director of the
Company.
All Options have a fixed term, established by the Board of Directors or
the Compensation Committee of the Company. The fixed term as to all existing
options is five (5) years. The maximum term with respect to any future option
grant is five (5) years after the date on which the Option is granted or April
1, 2003, whichever is earlier.
Under the Plan, any Option is exercisable only in installments or upon
such other terms fixed by the Board of Directors or the Compensation Committee
of the Board. No member of the Compensation Committee is eligible for the grant
of Options pursuant to the Plan. All options granted to key employees to date
have provided for vesting as to 1/3 of the Option Shares after eighteen (18)
months, 1/3 of the Option Shares after thirty (30) months and the final 1/3 of
the Option Shares after Forty-Two (42) months.
Options may be granted by the Board of Directors in its discretion from
time to time. Options are neither assignable nor transferable and are
exercisable by the optionee only during his lifetime. However, if an optionee
dies or becomes permanently disabled while employed by the Company and holding
an option which is exercisable on the date of death or permanent disability, the
optionee's legal heirs or personal representatives may exercise such option
within one (1) year after the date of death or termination of employment due to
permanent disability.
All Options, when granted, are exercisable at the fair market value for
such shares at the date of grant. The shares are purchased and paid for in full
only when the Options are exercised. "Fair market value" as defined by the Plan
means the mean between the highest and lowest quoted selling price of the stock
on the date of grant.
Resale of the Shares.
The Plan currently provides that all shares issued pursuant to the
exercise of options under the Plan shall bear a restrictive legend and shall not
be re-transferred except in the absence of an effective Registration Statement
under the Securities Act of 1933, as amended (the "Act") or an exemption from
registration. The registration provided for herein is intended to satisfy said
requirement, permitting resale by persons who are not officers, directors or
affiliates of the Company.
<PAGE>
Tax Effects.
Under the provisions of the United States Internal Revenue Code,
Optionees do not realize income upon the grant of any Option priced at or above
fair market value, or upon the exercise of any such Options.
An optionee who sells the Option Shares will realize income to the
extent that the selling price exceeds the Option Exercise Price. Shares sales
made within one year of exercise of an Option will result in ordinary income to
the Optionee, and sales made after the shares are held more than one year will
result in capital gains.
In Canada, in general, when a Canadian based employee exercises an
option to acquire shares, the employee will be deemed to realize income equal to
the fair market value of the shares at the time of exercise less the option
exercise price and any amount paid to acquire the option. This income will be
taxed in the same (more favorable) basis as a capital gain, as long as certain
conditions are met. Essentially those conditions are that a) the shares are
normal common shares for which there is no reasonable expectation they will be
redeemed or canceled within two years and no dividend entitlement is limited or
guaranteed; b) the taxpayer was dealing at arms length with the corporation
(e.g. is not part of a control group); and c) the option exercise price is not
less than the fair market value of the shares at the time the option was
granted.
After the option is exercised, a subsequent sale of the shares by the
employee will be treated for tax purposes in the same manner as any sale of
shares. For most employees, this will be a taxable capital gain, although for
any employees who are traders in a sufficient volume of shares the gain or loss
would be on account of income.
All employees are cautioned to retain their own qualified tax advisors
with respect to any tax consequences impacting upon such persons individually.
Selling Shareholders.
An aggregate of up to 175,000 Shares of Common Stock may be offered for
resale by Optionees and Warrant Holders (collectively, the "Selling
Shareholders") from time to time. The Shares offered for sale constitute
approximately 6% of all shares of the Company's outstanding Common Stock,
without giving effect to the possible exercise of outstanding warrants or
options not covered by or otherwise referred to in this Prospectus.
<PAGE>
The following table sets forth certain information with respect to
persons for whom the Company is registering Shares for resale to the public. In
addition to the persons named below, other persons, each of whom may acquire
less than 1,000 Shares upon exercise of Options, may also reoffer Shares for
sale to the public. The table reflects the num bers of Shares acquirable by the
Selling Shareholders under their respective Options or Warrants. None of the
Selling Shareholders otherwise owns any Common Stock, except as noted. The
Company will not receive any proceeds from the resale of the Shares. Except as
noted, all Selling Shareholders are employees, but not executive officers,
directors or affiliates of the Company.
<TABLE>
<CAPTION>
Shares Acquirable
Under Options and Maximum to be
Warrants Resold to the
Selling Shareholder Amount Percent(1) Public
- ------------------- ------ ---------- ------
<S> <C> <C> <C>
Bell, Angel 1,000 * 1,000
Crawford, Greg 1,000 * 1,000
DeBou, Daniel, Chief Financial 13,000 * 13,000
Officer of the Company1
Florsham, Tony 3,000 * 3,000
Floody, Richard 1,000 * 1,000
Holmes, Duncan 1,000 * 1,000
Josie, Gordon1 1,000 * 1,000
Leinhardt, John 1,000 * 1,000
Lowrie, Wendy 7,700 * 7,700
Massoud, Serry 1,000 * 1,000
Oatman, Jack1 3,000 * 3,000
Ormandy, William 1,000 * 1,000
Palmer, Malcolm 3,000 * 3,000
Petrishen, Dave 2,000 * 2,000
Rubert, Shawn 2,000 * 2,000
Sanderson, Martin 2,000 * 2,000
Smolek, Karel 1,000 * 1,000
Securities Trading Services, Inc. 25,000 * 25,000
Tilbury, Paul, Vice President1 13,000 * 13,000
Tilbury, Richard 1,000 * 1,000
Thomas, Donna 1,000 * 1,000
Usher, Larry 1,000 * 1,000
Weckstein, Donald 50,000 1.8 50,000
Wong, Francis 1,000 * 1,000
Woods, Victor 3,000 * 3,000
* Less than one (1%) percent.
(1) Each of the persons noted owns a limited number of E&C Shares,
other than the Shares acquireable through the exercise as follows: DeBou (200);
Massoud(6,000); Oatman (3,500); and Tilbury (9,000). Such Shares are owned,
registered and publicly tradeable outside of this Registration Statement.
</TABLE>
<PAGE>
BUSINESS OF E&C
Introduction
E&C operates a chain of 16 full-service English-style dining
restaurants and pubs, 13 of which are located in Canada, one in the State of
Washington, one in Philadelphia, Pennsylvania and one in San Diego, California.
The Canadian restaurants are operated under the name "The Elephant & Castle Pub
& Restaurant" and are located in major shopping malls and office complexes from
Victoria, B.C. to Ottawa, Ontario. The Philadelphia, Winnipeg, and San Diego
restaurants are based inside of Holiday Inn hotel operations. In addition, E&C
currently operates a "Rosie's" deli-style restaurant at the Rosedale-on-Robson
Hotel in Vancouver, B.C., Canada and an English style "Elephant on Campus"
restaurant at the British Columbia Institute of Technology.
In the opinion of management, the Company is in the early stages of a
major expansion/refocusing of its restaurant operations. The expansion/
refocusing contemplates that the Company will ultimately operate a majority of
its restaurants at (i) major hotel locations; (ii) in the United States; and
(iii) with one or more alternative menu formats, not limited to the Elephant &
Castle English-pubs concept.
The expansion/refocusing also includes alternative venues (sites) for
the Company's restaurant facilities. To that end, in 1995, the Company opened
its first on-campus "University" restaurant, and arranged for the licensing of a
restaurant at the new international terminal at Vancouver International Airport.
On October 9, 1996, the Company acquired all of the capital stock of Alamo
Grill, Inc. ("Alamo"), theretofore a wholly-owned subsidiary of Alamo
Restaurants, Inc. ("ARI"). The Company paid 147,059 shares of Common Stock for
the business of Alamo, plus the assumption of certain debts of ARI aggregating
approximately U.S. $536,000. Alamo is a one-unit "red meat" restaurant located
in the Mall of American, Minneapolis, Minnesota. Further, on December 5, 1996,
E&C announced that it had entered into a Letter of Intent to forma joint venture
with Rainforest Cafe, Inc. ("RFC") (RAIN-NASDAQ National Market) to develop
Rainforest Cafes throughout Canada. See "Business - Recent Developments."
During 1995, the Company arranged for an investment of $4,000,000
(U.S.), of which $1,000,000 has been invested as equity, and $3,000,000 by way
of Subordinated Convertible Notes, by a major United States-based pension money
manager, GEIPPP, II, with an anticipated placement of an additional $6,000,000
of such Notes in future periods. The completion of this financing enhanced the
Company's ability to achieve the expan sion/refocusing. There is no assurance
that the balance of the Note financing will be available to the Company in
future periods.
During 1995, and 1996, the Company also experienced financial losses.
In 1995, such losses resulted in part from the termination of two Shilo Hotel
properties, in Yuma, Arizona and Pomona, California, which properties had
previously been occupied by Elephant & Castle under arrangements which turned
out to be unsuitable and unprofitable; the close-down of a Toronto, Canada mall
location which could not be renewed on acceptable terms; and generally
unfavorable business conditions which prevailed in Canada, particularly Eastern
Canada, due, in part, to the economic uncertainty related to the political
crisis concerning the separation of Quebec. The Company has also incurred
substantially increased general and administrative costs relating to its
expansion plans, and in 1995, to a decision not to build a restaurant at a
particular hotel site in San Francisco, after the investment of significant
management time and funds.
<PAGE>
Principal Operations
Elephant & Castle (Traditional Format). At the Elephant & Castle
restaurants, the Company seeks to distinguish itself from competitive
restaurants by its distinctive British style and Tudor decor, and by featuring a
wide variety of menu items including a large number of English-style dishes. The
Company's restaurants offer a broad menu at popular prices. The menu is
regularly updated to keep up with current trends in customers' tastes. The
average check per customer, including beverage, was approximately CDN $14 during
1995. Although all of the Company's restaurants provide full liquor service,
alcoholic beverages are primarily served to complement meals. Sales of alcoholic
beverages accounted for approximately 40% of restaurant sales during 1995.
The Company's restaurants average approximately 5,500 square feet in
size, with a typical seating capacity of 225. The restaurants are open 7 days a
week for lunch, dinner and late-night dining. Due to their location at major
downtown and suburban malls and office complexes, the Elephant & Castle
restaurants cater to a consistently high traffic flow of both shoppers and
office workers. More than 34,000 customers a week are currently serviced at the
Elephant & Castle chain. Repeat clientele make up a significant portion of the
Company's restaurants' patrons.
Hotel Restaurants. During late 1993 and 1994 the Company signed
agreements with Holiday Inn for the renovation and redevelopment of restaurants
at Holiday Inn hotels in Winnipeg, Manitoba, Canada and Philadelphia,
Pennsylvania in the United States. The Winnipeg Crowne Plaza Holiday Inn
Elephant & Castle restaurant was opened on May 18, 1994, and the Philadelphia
Holiday Inn unit was opened on February 28, 1995. Both Holiday Inn restaurants
have thus far produced revenues and store-operating profits. In July of 1996,
the Company opened an additional hotel restaurant at a Holiday Inn site in San
Diego, California, and is considering building a substantial number of
additional restaurant units at Holiday Inns and other similar first-class hotels
over the next five years.
In the opinion of management, the three critical ingredients for the
strategy for expansion at major hotel sites are:
(1) the control of occupancy costs;
(2) the capacity to work synergistically with a hotel management
seeking to divorce itself from direct involvement in food and
beverage operations; and
(3) Company control of the menu, kitchen and restaurant amenities.
The Company is currently engaged in continuing discussions with hotel
operators concerning additional locations.
In December of 1994, the Company entered into an agreement with an
international developer, the Chevalier Group of Hong Kong, to build a 200-seat,
5,000-square-foot restaurant in the developer's $40,000,000 280 room
Rosedale-on-Robson all-suites hotel. The hotel was completed, and
Rosie's-on-Robson opened for operations in August of 1995. The Company's
arrangements with the Chevalier Group are similar to those at the Holiday Inn
locations, current and planned. The Company provides all of the hotel's room
services, off-premise catering, and branded specialty products.
<PAGE>
The Company's restaurant at the Rosedale Hotel is significantly
different from the traditional Elephant & Castle format. Management operates
"Rosie's" as a New York-style deli and bar. "Rosie's" enables the Company to
have a second "branded" concept restaurant to provide to those hotel operators
in locations or with space requirements which may be unsuitable for the Elephant
& Castle traditional menu and decor.
The Company's limited experience with "Rosie's" to date has been
favorable. With "Rosie's", the Company was committed to starting from fresh,
with its own interior design and menu, under the direction of an experienced,
locally managed staff.
Previously, commencing in late 1992, the Company obtained the right to
operate all of the food and beverage services at the Shilo Hotel & Resort
complex in Yuma, Arizona. In addition, on July 1, 1993, the Company added the
food and beverage operations at a second Shilo Hotel in Pomona, California. The
style and menu at the Shilo Hotels was significantly different from that
followed at the traditional Elephant & Castle restaurants. The Company's
experience at the Shilo Hotels and with the management thereof was decisively
negative, resulting in termination and closing of those restaurants during 1995
and litigation which is continuing.
In its broadest terms, the Company's strategy for growth in the hotel,
food and beverage industry is as follows: Locations primarily at hotel sites
will be identified in select markets. The Company has identified four geographic
pockets of potential growth for all corporate brands. The intention is to
cluster restaurants in select locations within the chosen geographic regions.
Key points for consideration would include a high level of occupancy at a
prospective hotel; a hotel which is part of a chain large and sophisticated
enough to join in combined marketing activities; potential unique traffic
generators; and the potential for non-seasonal activity.
Recent Developments
On October 9, 1996, the Company acquired all of the capital stock of
Alamo Grill, Inc. ("Alamo"), theretofore a wholly-owned subsidiary of Alamo
Restaurants, Inc. ("ARI"). The Company paid 147,059 shares of Common Stock for
the business of Alamo, plus the assumption of certain debts of ARI aggregating
approximately U.S. $536,000.
Alamo is a one-unit "red meat" restaurant located in the Mall of
America, Minneapolis, Minnesota. E&C announced that it had acquired the unit for
potentially profitable continuation of the restaurant operations located at the
Mall of America, and for the use of the site as a test-market facility for
development of a "red meat" concept in the expansion of its hotel based
properties. E&C does not intend to create a chain of "Alamo" restaurants or
Alamo-type restaurants at malls or free standing locations. E&C has been
approached with respect to the possibility of a profitable resale of the Mall of
America unit, but no action has been taken to date with respect to that
proposal.
On December 5, 1996, E&C announced that it had entered into a Letter of
Intent to form a joint venture with Rainforest Cafe, Inc. ("RFC") (RAIN-NASDAQ
National Market) to develop Rainforest Cafes throughout Canada. The Letter of
Intent is subject to formal documentation which has not been completed or
consummated to date. The announced arrangement anticipates that the Canadian
<PAGE>
venture will develop a minimum of five Rainforest Cafes, the initial unit of
which will be open within twelve months of completing the definitive agreement.
Under the terms of the Letter of Intent, E&C will pay an initial fee of
U.S.$500,000 to RFC and will grant RFC a five year option to purchase up to
600,000 shares of E&C Common Stock at U.S.$8.00 per Share. It is currently
anticipated that the documentation implementing the Letter of Intent will be
formalized by on or before the end of February, 1997.
<PAGE>
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF
ELEPHANT & CASTLE GROUP INC.
The following selected financial information of Elephant & Castle Group
Inc. for each of the years ended December 31, 1995, 1994 and 1993 has been
derived from Elephant & Castle Group Inc.'s audited financial statements
contained in its Annual Reports on Form 10-KSB for the years then ended and is
qualified in its entirety by such documents. The selected unaudited financial
information of Elephant & Castle Group Inc., as of and for the nine months ended
September 30, 1996, includes all adjustments, deemed to be necessary for a fair
presentation of such information for the period then ended. The operating
results for the nine months ended September 30, 1996 are not necessarily
indicative of results for the full year. The Company has publicly announced its
expectation that it will incur a loss for the full year ending December 31,
1996. This information should be read in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations and the
Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
Update to Nine Months
ELEPHANT & CASTLE GROUP INC.
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
(Canadian Dollars)
Nine months
ended Sept. 30 Fiscal Year Ended December 31,
-------------- ------------------------------
1996 1995 1994 1993
---- ---- ---- ----
(Unaudited)
<S> <C> <C> <C> <C>
Sales...................................................... $ 20,539,983 $ 25,764,339 $ 25,414,275 $ 22,445,883
Net Income (Loss), before Other Item ...................... (924,626) (681,955) 213,166 163,789
Net Income (Loss), including Other Item ................... (924,626) (1,581,955) 213,166 163,789
Net Income (Loss) per Share, before
Other Item .............................................. (0.35) (0.27) 0.09 0.09
Net Income (Loss) per Share, including
Other Item .............................................. (0.35) (0.63) 0.09 0.09
Total Assets .............................................. $ 14,934,124 15,888,100 10,328,981 10,005,206
Shareholders' Equity ...................................... 6,162,512 7,087,138 7,345,905 7,307,236
Average Shares Outstanding ................................ 2,643,808 2,502,759 2,440,583 1,865,000
</TABLE>
<PAGE>
LEGAL OPINIONS
The validity of the securities offered hereby will be passed upon for
the Company by D. David Cohen, Esq., 500 No. Broadway, Suite 133, Jericho, NY
11753 who has acted as special counsel to the Company in connection with this
Offering. Mr. Cohen is the owner of 74,500 shares of the Company's Common Stock,
and in connection with the purchase of 59,500 shares is indebted to the Company
to the extent of $300,000 plus interest accrued thereon. Such loan is secured by
securities other than securities of the Company.
EXPERTS
The financial statements and schedules of the Company, incorporated by
reference in the Registration Statement of which this Prospectus is a part have
been audited by Pannell Kerr Forster, chartered accountants, for the periods
indicated in their report thereon. Such financial statements and schedules have
been incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
ADDITIONAL INFORMATION
For additional information concerning the Company, financial
statements, its operations, properties, facilities, employees, competitors,
management, executive compensation, legal proceedings, market for the Company's
Common Stock, security ownership of directors executive officers and certain
beneficial holders, this prospectus will be accompanied by the Company's Form
10-KSB for the fiscal year ended December 31, 1995, latest Form 10-Q and the
Company's proxy statement in connection with the election of directors at its
1996 Annual Meeting of Shareholders.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers
Article 21.1 of the Company's Articles of Association provides, with
respect to the indemnification of directors and officers, that the Company shall
indemnify, subject to the [Company Act], any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
proceeding, whether or not brought by the Company or by a corporation or other
legal entity or enterprise and whether civil, criminal or administrative, by
reason of the fact that such person is or was a director, manager, or officer of
the Company, against all costs, charges and expenses, including legal fees and
any amount paid to settle the action or proceeding or satisfy a judgment, if
such person acted honestly and in good faith with a view to the best interests
of the Company, if such person exercised the care, diligence and skill of a
reasonably prudent person, and, with respect to any criminal or administrative
action or proceeding, such person had reasonable grounds for believing that his
or her conduct was lawful. The provisions of Article 21.1 are deemed to be a
term of every contract of employment or office of every director, manager, and
officer of the Company.
Article 21.2 of the Company's Articles of Association provides that,
subject to the Company Act, the Company may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or proceeding, whether or not brought by the Company or by a
corporation or other legal entity or enterprise and whether civil, criminal or
administrative, by reason of the fact that he is or was an employee or agent of
the Company or is or was serving in any other capacity on behalf of the Company
at its request including, but without limiting the generality of the foregoing,
serving at the request of the Company as a director, manager, officer, employee
or agent of another corporation, a partnership, joint venture, trust or other
enterprise, against all costs, charges and expenses, including legal fees and
any amount paid to settle the action or proceeding or satisfy a judgment, if he
acted honestly and in good faith with a view to the best interests of the
Company or other corporation or other legal entity or enterprise as aforesaid,
and, with respect to any criminal or administrative action or proceeding, if he
had reasonable grounds for believing that his conduct was lawful. The provisions
of Article 21.2 shall not be part of any contract or agreement between any
aforesaid person and the Company unless expressly made so by the terms of the
contract or agreement with the Company.
Article 21.4 provides that the Company may indemnify any person, other
than a director, in respect of any losses, damages, costs or expenses whatsoever
incurred by him while acting as an officer, employee or agent for the Company,
unless such losses, damages, costs or expenses shall arise out of failure to
comply with instructions, willful act or default or fraud by such person, and in
any of such events the Company shall only indemnify such person if the
directors, in their absolute discretion, so decide. The provisions of this
Article 21.4 shall not be part of any contract or agreement between any
aforesaid person and the Company unless expressly made so by the terms of the
contract or agreement with the Company.
<PAGE>
Article 21.6 provides that the Company may give indemnities, on such
terms and conditions as it deems appropriate, to any director, officer,
employee, agent or other person who has undertaken or is about to undertake any
liability on behalf of the Company or any corporation controlled by it. The
provisions of Article 21.6 shall not be part of any contract or agreement
between any aforesaid person and the Company unless expressly made so by the
terms of the contract or agreement with the Company.
Article 21.7 provides that, subject to the Company Act and other
applicable laws and statutes, no director, officer, employee or agent for the
time being of the Company shall be liable for the acts, receipts, neglects or
defaults of any other director, officer, employee or agent or for joining in any
receipt or act for conformity, or for any loss, damage or expense happening to
the Company through the insufficiency or deficiency of title to any property
acquired by order of the Board, or for the insufficiency or deficiency of any
security in or upon which any of the moneys of or belonging to the Company shall
be invested or for any loss or damages arising from the bankruptcy, insolvency,
or tortious act of any person, firm or corporation with whom or with which any
moneys, securities or effects shall be lodged or deposited or for any loss
occasioned by any error of judgment or oversight on his part or for any other
loss, damage or misfortune whatever which may happen in the execution of the
duties of his respective office or trust or in relation thereto unless the same
shall happen by or through his own willful act or omission, default, negligence,
breach of trust or breach of duty.
Item 21. Exhibits and Financial Statements Schedules.
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
- ------ ----------------------
<S> <C> <C>
2.1 Agreement Relating to the Sale of All of the Capital Stock of a
Subsidiary Corporation in Exchange for Capital Stock of the
Acquiring Corporation dated as of April 9, 1996 by and among
Company, Alamo Restaurants, Inc. and Alamo Grill, Inc. (included as
Exhibit A to the Joint Proxy Statement and Prospectus which forms a
part of the Registration Statement (the "Proxy Statement") +
2.2 Form of Proxy to be utilized at the meeting of Shareholders of Alamo
Restaurants, Inc. to approve the Agreement +
3.1 Certificate of Incorporation and Certificate of Name Change of
Company *
3.2 Articles of Association of Company *
3.3 Certificate of Amalgamation, dated May 1, 1990, The Elephant and
Castle Canada Inc. *
4.1 Form of certificate evidencing shares of Common Stock *
4.2 Form of Underwriter's Warrant Agreement between Company and
Underwriter *
<PAGE>
<CAPTION>
<S> <C> <C>
4.3 Warrant Certificate relating to 50,000 Share Warrant issued to
Donald Weckstein on August 10, 1994. (y)
4.4 Agreement relating to 25,000 Share Warrant issued to Swiss Trading
Ltd. in November of 1995 (y)
10.1 Bank Loan Agreement, dated September 13, 1990, with Toronto Dominion
Bank *
10.2 Letter Agreement dated June 26, 1991, regarding expansion of
facilities at Edmonton Eaton Centre food court relocation *
10.3 Retailer Application dated May 23, 1992, and Specimen Agreement for
Alberta Lotteries and Alberta Gaming Control *
10.4 License Agreement dated July 9, 1992, with Servomation Inc. relating
to B.C. Place Stadium *
10.5 Restaurant lease dated November 10, 1992, with Shilo Management
Corporation, relating to the Shilo Inn, Yuma, Arizona *
10.6 Letter Agreement, with Shilo Management Corporation relating to
Shilo Hotel, Pomona, California *
10.7 Restaurant Lease Agreement with Holiday Inns of Canada, Ltd.,
relating to Holiday Inn Crowne Plaza at Winnipeg, Manitoba **
10.8 Restaurant Lease Agreement relating to Holiday Inn, Philadelphia,
Pennsylvania ***
10.9 Alamo Grill, Inc. lease agreement made as of the 30th day of April,
1993 +
10.10 Form of Accounting Services Agreement between Innovative Hospitality
Concepts, Inc. and Elephant & Castle Group, Inc. +
10.11 Form of Consulting Services Agreement between Jon P.Taffer, an
individual Innovative Hospitality Concepts, Inc. and Elephant &
Castle, Inc. +
11.1 Statement of computation regarding per share earnings *
22.1 Subsidiaries of Company *
23.2 Consent of D. David Cohen, Esq. (y)
24.1 Power of Attorney (included on the signature page of Part II of this
Registration Statement)
99.1 Canadian Declaration as of May 11, 1990, claiming the trade name
"The Elephant and Castle" *
99.2 Filing receipt dated February 5, 1993, for U.S. service mark
application "E&C" *
<PAGE>
<CAPTION>
<S> <C> <C>
99.3 Filing receipt dated February 5, 1993, for U.S. service mark
"Elephant Mug" *
* Incorporated by reference from the Exhibits filed with the Company's
Registration Statement on Form SB-2 (Registration No. 33-60612).
Modification of the numbering of the exhibits is in accordance with
Item 601 of Registration S-B
** Filed with Company's 10-K SB for the Fiscal year ended December 31,
1993.
*** Filed with Company's 10-K SB for the Fiscal year ended December 31,
1994.
+ Previously filed herewith.
(x) Incorporated by reference from the Exhibits filed with the Company's
Registration Statement on Form S-4 relating to the acquisition of
Alamo Grill, Inc.
(y) Filed herewith.
</TABLE>
(b) Financial Statement Schedules
All schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or not applicable, and therefore have
been omitted.
(c) Item 4(b) Information
Not applicable.
Item 22. Undertakings.
(a) (1) The Company undertakes that prior to any public offering
of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by
any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c), the issuer undertakes that such
reoffering prospectus will contain the information called
for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other items of
the applicable form; and
<PAGE>
(2) The Company undertakes that every prospectus (i) that is
filed pursuant to paragraph (1) immediately preceding, or (ii)
that purports to meet the requirements of Section 10(a)(3) of
the Securities Act, and is used in connection with an offering
of securities subject to Rule 415, will be filed as a part of
an amendment to the registration statement and will not be
used until such amendment is effective, and that, for purposes
of determining any liability under the Securities Act, 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) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities
(other than the payment of the Company of expenses incurred or
paid by a director, officer or controlling person of the
Company 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 Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the questions
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the
final adjudication of such issue.
(b) The undersigned Company hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first and to send the
incorporated documents by first class mail or other equally prompt means. This
includes information contained in documents filed subsequent to the effective
date of the registration statement through the date of responding to the
request.
(c) The undersigned Company hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
has duly caused this Registration Statement on Form S-8 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the Province of British
Columbia, Canada, on the 11th day of February, 1997.
ELEPHANT & CASTLE GROUP INC.
By: /s/ Jeffrey M. Barnett
----------------------
Jeffrey M. Barnett, President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Jeffrey M. Barnett and Daniel DeBou, and
each of them, with full power to act without the other, his true and lawful
attorney-in-fact and agent, 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 post-effective amendments) to this Registration
Statement, 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 or necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that 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:
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/Jeffrey M. Barnett Chairman of the Board February 4, 1997
- --------------------- President and
Jeffrey M. Barnett Director (Principal
Executive Officer)
/s/Peter J. Barnett Vice President February 4, 1997
- ------------------- and Director
Peter J. Barnett
/s/George W. Pitman Vice President February 4, 1997
- ------------------- and Director
George W. Pitman
/s/Daniel DeBou Principal Financial February 4, 1997
- --------------- Officer and Principal
Daniel DeBou Accounting Officer
/s/William McEwen Director February 4, 1997
- -----------------
William McEwen
/s/D. David Cohen Director February 4, 1997
- -----------------
D. David Cohen
/s/Martin O'Dowd Director , 1997
- ----------------
Martin O'Dowd
/s/David Wiederecht Director , 1997
- -------------------
David Wiederecht
/s/Anthony Mariani Director February 4, 1997
- ------------------
Anthony Mariani
</TABLE>
WARRANT CERTIFICATE
ELEPHANT & CASTLE GROUP, INC.
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT
OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATIN IS
NOT REQUIRED.
NO. W-007 WARRANT TO PURCHASE 50,000 SHARES OF
THE COMMON STOCK OF
ELEPHANT & CASTLE GROUP, INC.
WARRANT TO PURCHASE 50,000 SHARES
OF
THE COMPANY
Void after August 10, 1999
This certifies that, for value received, Donald Weckstein, or
registered assigns ("Holder") is entitled, subject to the terms set forth below,
to purchase from Elephant & Castle Group, Inc. (the "Company"), a corporation
organized under the laws of the province of British Columbia, Canada, Fifty
Thousant (50,000) shares of the Common Stock of the Company upon surrender
hereof, at the principal office of the Company referred to below, with the
subscription form attached hereto duly executed, and simultaneous payment
therefor.
WARRANT AGREEMENT
(Made June 10, 1994, Issued November, 1995)
ELEPHANT & CASTLE GROUP, INC.
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT
OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED.
NO. WARRANT TO PURCHASE 25,000 SHARES OF
THE COMMON STOCK OF
ELEPHANT & CASTLE GROUP, INC.
WARRANT TO PURCHASE 25,000 SHARES
OF
THE COMPANY
Void after Novebmer 25, 2000
This certifies that, for value received, Securities Trading Services,
Inc., a Swiss Corporation, or registered assign ("Holder") is entitled, subject
to the terms set forth below, to purchase from Elephant & Castle Group, Inc.
(the "Company"), a corporation organized under the laws of the province of
British Columbia, Canada, Twenty-Five Thousand (25,000) shares of the Common
Stock of the Company upon surrender hereof, at the principal office of the
Company referred to below, with the subscription form attached hereto duly
executed, and simultaneous payment therfor.
D. DAVID COHEN
ATTORNEY AT LAW
JERICHO ATRIUM
SUITE 133
500 NO. BROADWAY
JERICHO, NEW YORK 11753
ANDREW J. BRANOWER (516) 933-1700
OF COUNSEL (516) 933-7285
February 12, 1997 FAX: (516) 933-8454
VIA TELECOPIER
Elephant & Castle Group, Inc.
701 West Georgia Street
Vancouver, B.C. V7Y 1E7
CANADA
Attn: Daniel DeBou
RE: Elephant & Castle/Form S-8
Our File: 98046.022
Dear Dan:
The undersigned has served as counsel to Elephant & Castle Group, Inc.
(the "Company") in connection with the registration up to 175,000 Common Shares
(the "Shares") under the Securities Act of 1933 as amended ("Act"). The
registration relates to certain Shares (up to 100,000 Shares) issuable by the
Company pursuant to options held by key employees, and pursuant to two separate
warrants (75,000 Shares) held by two former advisors to the Company.
In my opinion, subject to exercise of the options and warrants referred
to in the Registration Statement, and the payment of the option and warrant
exercise prices respectively, the Shares will be, when issued, duly issued and
outstanding and without lien, charge or encumbrance thereon.
This shall also serve as a consent to the use of my name in the
Registration Statement filed pursuant to the Act under the heading "Experts."
Very truly yours,
/s/ D. David Cohen
------------------
D. David Cohen
DDC:cj
