Filed with the Securities and Exchange Commission on November 26, 1997.
Securities Act Registration No. 333-33005
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Post Effective Amendment No.1
to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
HARVEST RESTAURANT GROUP, INC.
(formerly CLUCKCORP INTERNATIONAL, INC.)
--------------------------------------
(Exact Name of Registrant
As Specified In Its Charter)
Texas 5812 76-0406417
- ------------------------------ --------------------------- ------------
(State or other (Primary Standard Industrial (IRS Employer
jurisdiction of incorporation Classification Code No.) I.D. Number)
or organization)
1250 N.E. Loop 410, Suite 335
San Antonio, Texas 78209
(210) 824-2496
------------------------------------------------------
(Address, including zip code, and telephone
number, including area code, of Registrant's principal
executive offices)
William J. Gallagher, Chief Executive Officer
Harvest Restaurant Group, Inc.
1250 N.E. Loop 410, Suite 335
San Antonio, Texas 78209
(210) 824-2496
--------------------------------------------------
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Copies of all communications to:
Gary A. Agron, Esq.
Law Office of Gary A. Agron
5445 DTC Parkway, Suite 520
Englewood, Colorado 80111
(303) 770-7254
(303) 770-7257 (fax)
Approximate date of commencement of proposed sale to public: As soon as
practicable after the effective date of the Offering.
<PAGE>
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, 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: [ ]
(ii)
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<TABLE>
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CALCULATION OF REGISTRATION FEE
==============================================================================================================
Title of each class of Amount to be Proposed Proposed Amount of
securities to be registered registered maximum maximum registration
offering price aggregate fee
per unit(1) offering
price(1)
- - --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par 2,300,000 $3.78 $ 8,694,000 $2,635
value, underlying IPO Shares
Common Stock Purchase
Warrants
- - --------------------------------------------------------------------------------------------------------------
Common Stock, no par 329,280 $3.78 $ 1,244,678 $ 377
value, underlying other Shares
Common Stock Purchase
Warrants
- - --------------------------------------------------------------------------------------------------------------
Common Stock, no par 100,000 $3.78 $ 378,000 $ 115
value per share, under- Shares
lying Representative's
Common Stock Purchase
Warrants
- - --------------------------------------------------------------------------------------------------------------
Common Stock Purchase 200,000 $1.16 $ 232,000 $ 71
Warrants Underlying Warrants
Representative's
Warrant to Purchase
Warrants
- - --------------------------------------------------------------------------------------------------------------
Common Stock, no par 200,000 $3.78 $ 756,000 $ 229
value, underlying Shares
Common Stock Purchase
Warrants underlying
Representative's Warrant to
Purchase Warrants
- ----------------------------------------------------------------------------------------------------------------
Totals ......................... $11,308,105 $3,427(2)
================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) based on the closing price per share of the Common
Stock and Common Stock Purchase Warrants on the NASDAQ SmallCap Market on
August 4, 1997 of $3.78 per share and $1.16 per Warrant, respectively.
(2) Previously paid.
(iii)
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
(iv)
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<TABLE>
<CAPTION>
CROSS REFERENCE SHEET
BETWEEN ITEMS OF FORM S-3 AND THE PROSPECTUS
<S> <C> <C>
Item
No. Prospectus Caption or Page
1 Forepart of the Registration Statement and Facing Page; Cross-Reference Sheet;
Outside Front Cover Page of Prospectus Outside Front Cover Page of
Prospectus
2 Inside Front and Outside Back Cover Pages Inside Front and Outside Back Cover
of Prospectus Pages of Prospectus
3 Summary Information, Risk Factors and Outside Front Cover Page of
Ratio of Earnings to Fixed Charges Prospectus; Risk Factors
4 Use of Proceeds Use of Proceeds
5 Determination of Offering Price *
6 Dilution *
7 Selling Security Holders Selling Stockholders
8 Plan of Distribution Plan of Distribution
9 Description of Securities to be Registered *
10 Interests of Named Experts and Counsel Legal Matters; Experts
11 Material Changes *
12 Incorporation of Certain Information by Inside Front Cover Page of Prospectus
Reference
13 Disclosure of Commission Position on Item 17(a)
Indemnification for Securities Act Liabilities
</TABLE>
* Not Applicable
(v)
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO THE REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
STATE.
SUBJECT TO COMPLETION, DATED NOVEMBER , 1997
PROSPECTUS
HARVEST RESTAURANT GROUP, INC.
2,672,000 Shares of Common Stock Upon
Exercise of Common Stock Purchase Warrants,
257,280 Shares of Common Stock and
200,000 Common Stock Purchase Warrants
This Prospectus covers the sale of an aggregate of 2,672,000 shares of the
no par value common stock ("Common Stock") of Harvest Restaurant Group, Inc.
(the "Company") comprised of (i) 2,300,000 shares upon exercise of Common Stock
Purchase Warrants ("IPO Warrants") issued by the Company in its initial public
offering ("IPO Offering") and (ii) 372,000 shares upon exercise of other common
stock purchase warrants ("Purchase Warrants") issued by the Company together
with 257,280 Shares of Common Stock previously issued upon exercise of Common
Stock Purchase Warrants and 200,000 Common Stock Purchase Warrants issued to the
Underwriter (the "IPO Underwriter") of the IPO Offering (the "Underwriter
Warrants"). Each IPO Warrant and Underwriter Warrant entitles the holder to
purchase one share of Common Stock at $2.00 per share for a period of 30 days
from the date hereof (which may be extended for an additional 30 day period upon
the mutual agreement of the Company and the IPO Underwriter) and thereafter at
$4.00 per share until July 9, 2001. The holders of these securities are
collectively referred to as the "Selling Stockholders." See "Selling
Stockholders." The Company will not receive any part of the proceeds from the
sale of securities by the Selling Stockholders, although it will receive any
funds tendered upon exercise of the IPO Warrants, the Purchase Warrants and the
Underwriter Warrants (collectively referred to as the "Warrants").
The Selling Stockholders may sell the Common Stock and Warrants from time
to time directly or indirectly through designated agents in open market
transactions, including block trades, on the NASDAQ SmallCap Market (the
"SmallCap Market"), in negotiated public or private transactions or in a
combination of such methods of sale or through dealers or underwriters to be
determined at the time of sale. To the extent required, the Common Stock or
Warrants to be sold, the name of the Selling Stockholders, purchase price,
offering price, the name of any agent, dealer or underwriter, and any applicable
commission or discount with respect to a particular offer or sale will be set
forth in an accompanying prospectus supplement. The aggregate proceeds to the
Selling Stockholders from sales of the Common Stock or Warrants will be the
purchase price of the Common Stock or Warrants sold less the aggregate agents'
commissions and underwriters' discounts, if any. All other distribution expenses
of the offering will be paid by the Company. See "Plan of Distribution."
The Selling Stockholders (excluding the holders of the IPO Warrants) and
any broker-dealers, agents or underwriters that participate with the Selling
Stockholders in the distribution of the Common Stock or Warrants may be deemed
to be "underwriters" within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"), and any commission received by them and any
profit on the resale of the Common Stock or Warrants purchased by them may be
deemed to be underwriting commissions or discounts under the Securities Act. See
"Plan of Distribution."
The Common Stock and Warrants are listed on the SmallCap Market under the
symbols "ROTI" and "ROTIW," respectively. On November 21, 1997, the closing
sales prices of the Common Stock and Warrants as reported on the SmallCap Market
were $2.25 per share and $.50 per Warrant, respectively.
PURCHASE OF THE COMMON STOCK AND WARRANTS IS SPECULATIVE, INVOLVES A HIGH
DEGREE OF RISK AND SHOULD BE CONSIDERED ONLY BY PERSONS WHO CAN AFFORD THE LOSS
OF THEIR ENTIRE INVESTMENT. SEE "RISK FACTORS."
THESE SECURITIES 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 , 1997.
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C., a Registration Statement on Form S-3 (the
"Registration Statement") under the 1933 Act with respect to the securities
offered hereby. This Prospectus does not contain all the information set forth
in the Registration Statement, certain items of which are omitted in accordance
with the rules and regulations of the Commission. For further information with
respect to the Company and the securities offered by this Prospectus, reference
is made to such Registration Statement and the exhibits thereto. Statements
contained in this Prospectus as to the contents of any contract or other
documents are not necessarily complete, and in each instance reference is made
to the copy of such contract or other document filed as an exhibit to the
Registration Statement for a full statement of the provisions thereof; each such
statement contained herein is qualified in its entirety by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "1934 Act") and, in accordance therewith, files
reports, proxy statements and other information with the Commission. Such
reports, proxy statements and other information may be inspected and copied at
public reference facilities of the Commission at 450 Fifth Street N.W.,
Washington, D.C. 20549; Northwest Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661; 7 World Trade Center, New York, New York 10048;
and 5670 Wilshire Boulevard, Los Angeles, California 90036. Copies of such
material can be obtained from the Public Reference Section of the Commission at
450 Fifth Street N.W., Washington, D.C. 20549 at prescribed rates and on the
Commission's Web site at http://www.sec.gov.
The Company furnishes annual reports to its stockholders which include
audited financial statements. The Company may also furnish quarterly financial
statements to its stockholders and such other reports as may be authorized by
its Board of Directors.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents which have been filed or will be filed with the
Commission are incorporated herein by reference:
(1) The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 29, 1996;
(2) The Company's Quarterly Report on Form 10-QSB for the twelve weeks
ended October 5, 1997.
(3) The Company's Quarterly Report on Form 10-QSB for the sixteen weeks
ended July 13, 1997;
(4) The Company's Quarterly Report on Form 10-QSB for the twelve weeks
ended April 20, 1997;
2
<PAGE>
(5) Proxy Statement for the Annual Meeting of Stockholders of the Company
held April 30, 1997;
(6) Description of the Common Stock contained in the Company's
Registration Statement on Form SB-2 declared effective under the
Securities Act, on July 9, 1996; File Number 33-95796;
(7) All other documents subsequently filed by the Company pursuant to
Sections 12, 13(a), 13(c), 14 and 15(d) of the 1934 Act.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering made hereby shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the date of the
filing of such documents. Any statement contained in this Prospectus, in a
supplement to this Prospectus or 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 subsequently filed supplement to this Prospectus or in any document
that also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, on the written or oral
request of any such person, a copy of any or all of the documents referred to
above which have been or may be incorporated in this Prospectus by reference,
other than exhibits to such documents unless such exhibits are specifically
incorporated by reference in such documents. Written or oral requests for such
copies should be directed to Joseph Fazzone, Chief Financial Officer, Harvest
Restaurant Group, Inc.,1250 N.E. Loop 410, Suite 335, San Antonio, TX 78209,
telephone (210) 824-2496.
3
<PAGE>
BUSINESS OF THE COMPANY
The Company owns, operates and franchises quick service restaurants under
the "Harvest Rotisserie" name, which feature marinated oak-roasted rotisserie
chicken, oak-roasted turkey breast, roast ham, meatloaf, an assortment of
sandwiches and other fresh homestyle food items. Harvest Rotisserie restaurants
(sometimes referred to as the "Restaurant(s)") emphasize rotisserie oak-roasted
chicken, turkey and fresh homestyle side dishes consistent with what the Company
believes to be (i) an increased consumer demand for take-home prepared foods,
(ii) an emphasis on lower fat foods such as chicken and turkey, and (iii) the
popularity of homestyle cooking. Harvest Rotisserie side dishes include cold
dishes such as coleslaws and salads and hot dishes such as baked beans,
stuffing, corn, parsley potatoes, macaroni and cheese, steamed fresh vegetables,
mashed potatoes and gravy, rice, creamed spinach, cheese rice and baked cinnamon
apples. The Company maintains strict quality standards in purchasing, storing,
preparing and serving its entrees, side dishes, desserts and other products.
To date, the Company has opened three Restaurants in San Antonio, Texas
(one of which is used as both a training facility and a public restaurant) and
one Restaurant in Corpus Christi, Texas. The Company has also franchised ten
restaurants, including nine restaurants in Florida, Indiana and North Carolina
which were purchased by the Company and assigned to an area developer for
operation as Harvest Rotisserie restaurant franchises. The Company has executed
leases to develop five additional Restaurants in San Antonio and Houston, Texas,
although it does not currently have the funds necessary to develop these
Restaurants.
The Company's executive offices are located at 1250 N.E. Loop 410, Suite
335, San Antonio, Texas 78209, telephone (210) 824-2496.
4
<PAGE>
RISK FACTORS
Investors should carefully consider the following risk factors and other
information contained in this Prospectus before making an investment in the
Common Stock or Warrants. Information contained in this Prospectus includes
"forward-looking statements" which can be identified by the use of
forward-looking terminology such as "believes", "expects", "may", "should" or
"anticipates" or the negative thereof or other variations thereon or comparable
terminology, or by discussions of strategy. No assurance can be given that the
future results addressed by the forward-looking statements will be achieved. The
following matters constitute cautionary statements identifying important factors
with respect to such forward-looking statements, including certain risks and
uncertainties, that could cause actual results to vary materially from the
future results addressed in such forward-looking statements. Other factors could
also cause actual results to vary materially from the future results addressed
in such forward-looking statements.
Limited Operating History; Negligible Revenues; Ongoing Substantial
Operating Losses. The Company has a limited operating history (commencing in
June 1993) upon which potential investors may base an evaluation of its
performance. The Company has operated at a loss since inception and has
accumulated a deficit of $7,161,907 at October 5, 1997. For the twelve weeks
ended October 5, 1997 and the fiscal years ended December 29, 1996, and December
31, 1995, the Company reported revenues of $621,243, $263,892 and $276,678 and
net losses of $1,889,061, $2,011,254 and $924,483, respectively. There can be no
assurance that the Company's operations will become profitable or that revenues
will increase. The Company's operating expenses are expected to increase due to
its expansion plans and, accordingly, it is anticipated that the Company will
incur additional losses unless revenues from additional Restaurants or franchise
fees offset ongoing operating and expansion costs, of which there can be no
assurance. The likelihood of the Company's success must be considered in light
of the problems, experiences, difficulties, complications and delays frequently
encountered in connection with the operation and development of a new business.
Four Restaurants in Operation; Operating Losses; Uncertainty of Market
Acceptance. The Company has only four Restaurants in operation (excluding ten
franchised restaurants) one of which is being used both as a training facility
and a public restaurant. All four Restaurants are currently operating at a loss.
The Company has not conducted any formal market studies regarding its Harvest
Rotisserie concept in Texas or any other markets and has engaged in limited
marketing activities.
Achieving consumer awareness and market acceptance for its Restaurants,
particularly as the Company seeks to penetrate new markets, will require
substantial efforts and expenditures by the Company. There can be no assurance
that the Restaurants will achieve market acceptance.
Potential Adverse Effect of Shares Issuable Upon Exercise of Stock Options
and Shares Eligible for Future Sale. The Company had 2,492,630 shares of Common
Stock outstanding as of October 5, 1997, and has reserved for issuance an
5
<PAGE>
aggregate of 9,701,680 shares of Common Stock upon exercise of outstanding stock
options and warrants including shares underlying the IPO Warrants, the Purchase
Warrants and the Underwriter's Warrants which are being registered hereby. An
aggregate of 1,000,000 shares issued in the Company's initial public offering
("IPO"), and 5,400,000 shares issuable upon conversion of Preferred Stock and
Preferred Stock issuable upon exercise of the Preferred Stock Warrants issued in
a subsequent public offering in June 1997 have been previously registered. Also,
540,000 shares issuable upon conversion of the Representative's Preferred Stock
Warrants are subject to demand registration rights. Finally, a total of 990,000
shares of the Company's Common Stock outstanding have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), are "restricted
securities" but may be sold at any time under Rule 144 of the Securities Act.
Exercise of the options and warrants could dilute the Company's net tangible
book value and/or prove to be a hindrance to future financing. The holders of
such optional warrants may exercise them at a time when the Company might
otherwise be able to obtain additional equity capital on terms more favorable to
the Company. Considering the current trading volume of the Common Stock and the
number of shares outstanding, the shares currently available for resale are
expected to have a significant depressive effect on the market price of the
Common Stock.
Dependence Upon Area Developers. The Company intends to acquire restaurant
properties to be subleased to and operated by area developers after conversion
to Harvest Rotisserie restaurants. The Company has and will continue to acquire
restaurant properties, sublease the properties to area developers (if area
developers are obtained by the Company) and provide funds (if funds are
available to the Company) to the area developers to convert the properties to
Harvest Rotisserie restaurants and for initial working capital. The Company will
then seek to recoup its costs through royalty payments and loan repayments from
the area developers. If the Company is unable to attract area developers willing
to operate the restaurant properties or if the area developers are unsuccessful
in the operation of the restaurant properties, the Company may be unable to
recoup any or all of its investments in the properties and would also be liable
on leases it executed with the property owners. In such event, the Company's
financial condition and results of operations would be severely adversely
affected.
Adverse Affect of Area Developer Operating Losses. A number of civil
actions have recently been filed against Boston Market alleging, among other
things, that the operating losses of Boston Market area developers should have
been reflected in Boston Market's financial statements or investors should
otherwise have been advised of the existence and scope of such area developer
losses, because Boston Market financed the operations of these area developers.
The Company has entered into similar arrangements with an area developer who
acquired nine restaurants from the Company and converted the restaurants to
Harvest Rotisserie restaurants, in the states of Florida, Indiana and North
Carolina. Although the Company has established a reserve for developer losses,
should losses exceed the reserve, the Company may be required to reflect in its
financial statements all or a portion of such additional losses. The reflection
of such reserves or additional area developer losses in the Company's financial
statements will significantly and adversely affect the Company's results of
operations which, in turn, may adversely affect the market price of its Common
Stock and the Company's ability to fund its operations on an ongoing basis in
the future.
6
<PAGE>
Intense Competition. The food service industry is intensely competitive
with respect to food quality, concept, location, service and price. There are
many well-established food service competitors with substantially greater
financial and other resources than the Company and with substantially longer
operating histories. The Company competes with takeout food service companies,
fast-food restaurants, casual full-service dine-in restaurants, delicatessens,
cafeteria-style buffets and prepared food stores, as well as with supermarkets
and convenience stores. The number of rotisserie-roasted chicken establishments
and the number of national restaurant chains, fast-food and grocery stores
offering rotisserie-roasted chicken and other homestyle food products have
increased in the past few years, providing direct competition for customers and
resulting in the sale or closing of a number of rotisserie-roasted chicken
establishments including establishments operated by some of the larger franchise
chains. Moreover, other national restaurant chains could introduce new
restaurants similar to Harvest Rotisserie.
Change of Management. Since August 1996, the Company's Chief Executive
Officer (who was also a director of the Company) and two of its outside
directors have resigned. Although the Company has added two new executive
officers and replaced the two directors who resigned, a lack of management
continuity may adversely affect the Company's operations in the near future.
Risks Associated with the Food Service Industry. Food service businesses
are often affected by changes in consumer tastes, national, regional and local
economic conditions, demographic trends, traffic patterns and the type, number,
and location of competing restaurants. Multi-unit food service chains may also
be affected by publicity resulting from poor food quality, illness, injury, or
other health concerns or operating issues stemming from individual restaurants.
Dependence upon frequent deliveries of fresh produce also subjects food service
businesses such as the Company to the risk that shortages or interruptions in
supply caused by adverse weather or other conditions could adversely affect the
availability, quality and cost of food ingredients. In addition, factors such as
inflation, increased food, labor and employee benefits costs, regional weather
conditions and the limited availability of experienced management and hourly
employees may also adversely affect the food service industry in general and the
Company's results of operations and financial condition in particular.
Risks Associated With Expansion. The Company intends to open additional
Company-owned Restaurants. Developing additional Restaurants will be dependent
upon, among other things, market acceptance for the Company's Harvest Rotisserie
concept, the availability of suitable Restaurant sites, timely development and
construction of the Restaurants, the hiring of skilled management and other
personnel, the Company's general ability to successfully manage growth
(including monitoring Restaurants, controlling costs and maintaining effective
quality controls), the availability of adequate financing and the Company's
ability to attract and retain qualified franchisees. In the case of franchised
restaurants, the Company will also be substantially dependent upon the
management skills of its franchisees. The Company operates only four
restaurants, and ongoing losses reported by these Restaurants or losses incurred
by future Restaurants developed by the Company would have an adverse effect upon
the Company's financial condition and results of operations.
7
<PAGE>
Need for Additional Capital. The Company requires additional capital in
order to develop new Restaurants. The Company has no commitments or arrangements
to obtain any additional capital, and no assurances can be given that such
capital will be available on terms satisfactory to the Company, if at all. The
Company's ability to open additional Restaurants for which leases have been
executed is also contingent upon the Company's ability to obtain construction
financing and equipment lease financing for such Restaurants. If it is unable to
obtain such financing, the Company will be required to delay the opening of
these and other Restaurants.
Importance of Attracting Competent Area Developers and Franchisees. The
Company's future success will be dependent upon its ability to attract and
retain Restaurant area developers and franchisees and the manner in which
Restaurant franchisees operate, develop and promote their Restaurants. There can
be no assurance that franchisees will have the business abilities or access to
financial resources necessary to open the Restaurants required by their
franchise agreements or that they will operate their Restaurants in a manner
consistent with the Company's concept and standards. The Company competes for
qualified franchisees with multinational fast-food chains, national and regional
restaurant chains and other regional and local restaurant franchisors. Many
restaurant franchisors have greater market recognition and greater financial,
marketing and human resources than the Company.
Adverse Effect of Government Regulation; Franchise Risks. The restaurant
industry is subject to numerous federal, state and local government regulations,
including those relating to the preparation and sale of food and those relating
to building and zoning requirements. The Company and future franchisees are also
subject to laws relating to employees, including minimum wage requirements,
overtime, working and safety conditions and citizenship requirements. In
addition, the Company is subject to regulation by the Federal Trade Commission
and must comply with many state laws which govern the offer, sale and
termination of franchises. Compliance with such laws is time-consuming and
expensive, and failure to comply could result in the Company being unable to
offer franchises and could subject the Company to significant liability to
franchisees. Developing a franchise program is costly and requires a significant
amount of ongoing management effort. The failure to obtain or retain food
licenses or approvals to sell franchises or an increase in the minimum wage
rate, employee benefits costs (including costs associated with mandated health
insurance coverage), or other costs associated with employees, could adversely
affect the operations of the Company and its franchisees.
Limited Menu. The Company's Harvest Rotisserie restaurants have limited
menus with chicken and turkey products accounting for a majority of sales. A
decline in consumer demand for poultry products or increased chicken or turkey
prices would have an adverse effect on the Company's operations. In addition,
the Company could be affected by health-related concerns, such as fear of
bacterial infection, relating to poultry. If the Company seeks to expand its
menu selections, there can be no assurance that new menu selections will achieve
market acceptance.
8
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Competitors Offer Discount Pricing. A number of quick service restaurant
companies (including chicken restaurants) have recently experienced lower growth
rates and declines in average sales per restaurant, in response to which certain
of these companies have adopted discount pricing strategies. Such strategies
could have the effect of drawing customers away from companies which do not
engage in discount pricing and could negatively impact the operating margins of
other competitors who do attempt to match these discount prices.
Possible Inadequacy of General Liability and Commercial Insurance; Product
Liability Insurance. Although the Company carries general liability, product
liability and commercial insurance of up to $2,000,000, there can be no
assurance that its coverage will be adequate to protect it against general,
commercial or product liability claims. Any general, commercial or product
liability claim which is not covered by such policy, or is in excess of the
limits of liability of such policy, could have a material adverse effect on the
financial condition of the Company. There can be no assurance that the Company
will be able to maintain its insurance on reasonable terms.
No Assurance of Trademark and Service Mark Protection; Limited Exclusivity.
The Company believes that its Harvest Rotisserie and Cluckers names, trademarks
and service marks ("Marks") have value and are important to the marketing of its
Restaurants and products. There can be no assurance, however, that the Company's
Marks do not or will not violate the propriety rights of others, that the
Company's Marks would be upheld if challenged or that the Company would not
otherwise be prevented from using its Marks. The Company has registered with the
United States Patent Office its Harvest Rotisserie name and service mark. The
Company's exclusive right to the Cluckers Marks is limited in the United States
to the state of Texas. There can be no assurance that the Company will obtain
sufficient protection for its Marks or that it will have the financial resources
to enforce or defend its Marks.
Dependence Upon Qualified Personnel and Executive Officers. The Company's
operations depend in part upon its ability to retain and hire qualified
personnel and the continued services of its executive officers. The loss of
services of any of the Company's executive officers, whether as a result of
death, disability or otherwise, could have a material adverse effect upon the
Company's operations. The Company does not have employment agreements with any
of its executive officers or employees (except Mr. Gallagher) and does not carry
key person insurance on any of their lives.
No Dividends on Common Stock; Dilution Caused by Issuance of Common Stock
to Pay Preferred Stock Dividends. The Company has not paid any dividends on its
Common Stock since its inception and does not anticipate paying any dividends in
the foreseeable future. The Company plans to retain earnings, if any, to finance
the development and expansion of its business.
Potential Adverse Effect of IPO Warrants. The IPO Warrantholders may
purchase up to 2,300,000 shares of Common Stock at $2.00 per share for a period
of 30 days from the date hereof (which may be extended for an additional 30 day
period upon the mutual agreement of the Company and the IPO Underwriter) and
thereafter at $4.00 per share until July 9, 2001. The exercise of the IPO
Warrants may have a depressive effect upon the market price of the Common Stock
by significantly increasing the number of shares outstanding.
9
<PAGE>
Maintenance Criteria for The NASDAQ SmallCap Market Securities. The
National Association of Securities Dealers, Inc. ("the NASD"), which administers
The NASDAQ SmallCap Market, sets the criteria for continued eligibility on The
NASDAQ SmallCap Market. In order to continue to be included on The NASDAQ
SmallCap Market, a company must maintain $2 million in net tangible assets, a
$1 million market value of its public float, two market-makers, at least 300
holders of the Common Stock, 500,000 shares in the public float and a minimum
bid price of $1.00 per share. The Company's failure to meet these maintenance
criteria in the future or future maintenance requirements imposed by The NASDAQ
SmallCap Market may result in the discontinuance of the inclusion of its
securities in The NASDAQ SmallCap Market. In such event, trading, if any, in the
securities may then continue to be conducted in the non-NASDAQ over-the-counter
market in what are commonly referred to as the electronic bulletin board and the
"pink sheets." As a result, an investor may find it more difficult to dispose of
or obtain accurate quotations as to the market value of the securities. In
addition, the Company would be subject to Rule 15g (the "Rule") promulgated
under the Exchange Act, which imposes various sales practice requirements on
broker-dealers who sell securities governed by the Rule to persons other than
established customers and accredited investors. For these types of transactions,
the broker-dealer must make a special suitability determination for the
Purchaser and have received the Purchaser's written consent to the transactions
prior to sale. Consequently, the Rule may have an adverse effect on the ability
of broker-dealers to sell the securities, which may affect the ability of
Purchasers in the Offering to sell the securities in the secondary market.
Disclosure Related to Penny Stocks. The Commission has adopted rules that
define a "penny stock" as equity securities priced at under $5.00 per share
which are not listed for trading on The NASDAQ SmallCap Market (unless (i) the
issuer has a net worth of $2,000,000 if in business for more than three years or
$5,000,000 if in business for less than three years or (ii) the issuer has had
average annual revenues of $6,000,000 for the prior three years. In the event
that any of the Company's securities are characterized in the future as penny
stock, broker-dealers dealing in the securities will be subject to the
disclosure rules for transactions involving penny stocks which require the
broker-dealer among other things to (i) determine the suitability of purchasers
of the securities and obtain the written consent of Purchasers to purchase such
securities and (ii) disclose the best (inside) bid and offer prices for such
securities and the price at which the broker-dealer last purchased or sold the
securities. The additional burdens imposed upon broker-dealers may discourage
them from effecting transactions in penny stocks, which could reduce the
liquidity of the securities offered hereby.
10
<PAGE>
Stockholder Approval Not Required for Issuance of Preferred Stock;
Prevention of Change in Control. The authorized capital stock of the Company
includes 5,000,000 shares of Preferred Stock (of which 515,000 Shares are
currently outstanding), which may be issued from time to time in one or more
series with such designations, voting powers, if any, preferences and relative,
participating, optional or other special rights, and such qualifications,
limitations and restrictions thereof, as are determined by resolution of the
Board of Directors of the Company without approval of the Company's common
stockholders. The issuance of Preferred Stock may have the effect of delaying,
deferring or preventing a change in control of the Company without further
action by stockholders and could adversely affect the rights and powers,
including voting rights, of the holders of Common Stock. In certain
circumstances, the issuance of Preferred Stock could depress the market price of
the Common Stock.
Limitation on Directors' Liability. The Company's Articles of Incorporation
provide for substantial limitations on the liability of the Company's directors
to its stockholders for monetary damages.
Possible Volatility of Securities Prices. The market price of the Company's
Common Stock has been highly volatile and may continue to be volatile in the
future. Factors such as the Company's operating results or public announcements
by the Company or its competitors may have a significant effect on the market
price of the Company's securities. In addition, market prices for securities of
many small capitalization companies have experienced wide fluctuations in
response to variations in quarterly operating results, general economic
indicators and other factors beyond the control of the Company. The registration
of the securities offered hereby could increase the volatility of the Common
Stock by increasing the number of shares of publicly traded Common Stock
outstanding.
11
<PAGE>
USE OF PROCEEDS
The Company will not receive proceeds from the sale of Common Stock by the
Selling Stockholders, although it will receive any funds tendered upon exercise
price of the Warrants, which will be added to the Company's working capital.
SELLING STOCKHOLDERS
This Prospectus covers the sale of an aggregate of 2,672,000 shares of
Common Stock comprised of (i) 2,300,000 shares upon exercise of Common Stock
Purchase Warrants ("IPO Warrants") issued by the Company in its initial public
offering ("IPO Offering") and (ii) 372,000 shares upon exercise of other common
stock purchase warrants ("Purchase Warrants") issued by the Company (including
100,000 Purchase Warrants issued to the Company's IPO Underwriter) together with
257,280 shares of Common Stock ("Shares") previously issued upon exercise of
common stock purchase warrants and 200,000 Common Stock Purchase Warrants issued
to the Company's IPO Underwriter (the "Underwriter Warrants"). Each IPO Warrant
and Underwriter Warrant entitles the holder to purchase one share of Common
Stock at $2.00 per share for a period of 30 days from the date hereof (which may
be extended for an additional 30 day period upon the mutual agreement of the
Company and the IPO Underwriter) and thereafter at $4.00 per share until July 9,
2001. The holders of these securities are collectively referred to as the
"Selling Stockholders." The Company will not receive any part of the proceeds
from the sale of securities by the Selling Stockholders, although it will
receive any funds tendered upon exercise of the IPO Warrants, the Purchase
Warrants and the Underwriter Warrants (collectively referred to as the
"Warrants").
The 2,300,000 IPO Warrants are estimated by the Company to be held by over
100 beneficial IPO Warrantholders who acquired the securities in the Company's
IPO Offering or in the aftermarket and are not listed below. Set forth below are
the names of all other Selling Stockholders (none of whom are officers,
directors or principal stockholders of the Company), the number of Purchase
Warrants, Underwriter Warrants and/or underlying shares of Common Stock owned by
each Selling Stockholder as of this date, the number of Purchase Warrants,
Underwriter Warrants and/or underlying shares of Common Stock which may be
offered by the Selling Stockholders pursuant to this Prospectus, and the number
of securities to be owned by each Selling Stockholder upon completion of the
offering. All securities are owned beneficially and of record. The address of
each Selling Stockholder is in care of the Company at 1250 N.E. Loop 410, Suite
335, San Antonio, Texas 78209. The underlying Common Stock and Warrants listed
below may be offered for sale by the Selling Stockholders from time to time in
open market transactions at prevailing market prices and at customary commission
rates. See "Plan of Distribution."
12
<PAGE>
<TABLE>
<CAPTION>
Number of
Securities
to be
Number of Securities Number of Owned
Number of Selling Owned Prior to the Securities Being After the
Stockholder Offering Offered Offering
----------- -------- ------- --------
<S> <C> <C>
Global Equities, Inc. 200,000 Underwriter 200,000 Underwriter -0-
Warrants and 300,000 Warrants and 300,000
Shares upon exercise of Shares upon exercise
the Underwriter Warrants of the Underwriter
and Purchase Warrants Warrants and
Purchase Warrants
Paul Bourke 20,000 Shares 20,000 Shares -0-
George Bruce 4,000 Shares 4,000 Shares -0-
Larry Bowman 6,000 Shares Upon 6,000 Shares Upon -0-
Exercise of Purchase Exercise of Purchase
Warrants Warrants
Robert Jones 20,000 Shares 20,000 Shares -0-
Jeffrey Morehouse 10,000 Shares Upon 10,000 Shares Upon -0-
Exercise of Purchase Exercise of Purchase
Warrants Warrants
Robert Presinger 20,000 Shares Upon 20,000 Shares Upon -0-
Exercise of Purchase Exercise of Purchase
Warrants Warrants
Henry H. Salzarulo 20,000 Shares Upon 20,000 Shares Upon -0-
Exercise of Purchase Exercise of Purchase
Warrants Warrants
Richard Wagner 30,480 Shares 30,480 Shares -0-
William R. Bennett 5,000 Shares 5,000 Shares -0-
James R. Clayton 4,000 Shares 4,000 Shares -0-
Brian Cosner 4,000 Shares Upon 4,000 Shares Upon -0-
Exercise of Purchase Exercise of Purchase
Warrants Warrants
13
<PAGE>
Robert J. Dillon, Jr. 9,800 Shares 9,800 Shares -0-
William Downey 4,000 Shares Upon 4,000 Shares Upon -0-
Exercise of Purchase Exercise of Purchase
Warrants Warrants
Don Drews, Sr. 10,000 Shares 10,000 Shares -0-
Norman Glatzes 10,000 Shares 10,000 Shares -0-
Michael Grear 10,000 Shares 10,000 Shares -0-
James Jacobazzi 2,000 Shares Upon 2,000 Shares Upon -0-
Exercise of Purchase Exercise of Purchase
Warrants Warrants
Robert A. Jones 7,200 Shares 7,200 Shares -0-
James P. Lighthizer 2,000 Shares Upon 2,000 Shares Upon -0-
Exercise of Purchase Exercise of Purchase
Warrants Warrants
William F. Mahon 10,000 Shares 10,000 Shares -0-
Bruce McGill 4,000 Shares Upon 4,000 Shares Upon -0-
Exercise of Purchase Exercise of Purchase
Warrants Warrants
Stanley G. Morton 10,000 Shares 10,000 Shares -0-
Lyle Priddy 7,200 Shares 7,200 Shares -0-
Edward P. Rindler 6,000 Shares 6,000 Shares -0-
David Robins 4,000 Shares 4,000 Shares -0-
Robert J. Rynarzewski 4,000 Shares 4,000 Shares -0-
Dieter F. Schulz 6,000 Shares 6,000 Shares -0-
Mike Staszak 4,000 Shares 4,000 Shares -0-
Robert B. Stoltz 10,000 Shares 10,000 Shares -0-
Richard Wagner 53,600 Shares 53,600 Shares -0-
John Wilhide 2,000 Shares 2,000 Shares -0-
Bhaguan Vaghani 10,000 Shares 10,000 Shares -0-
</TABLE>
14
<PAGE>
PLAN OF DISTRIBUTION
The Common Stock underlying the IPO Warrants, Purchase Warrants and
Underwriter Warrants (collectively, the "Warrants") and the Common Stock and
Underwriter Warrants may be sold from time to time by the Selling Stockholders
in open market transactions, including block trades on the SmallCap Market, in
negotiated public or private transactions or in a combination of such methods of
sale. Alternatively, the Selling Stockholders may from time to time upon
exercise or conversion offer the Common Stock through underwriters, dealers or
agents, who may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Stockholders or the purchasers of
the Common Stock or Warrants for whom they may act as agent. The Selling
Stockholders (excluding the holders of the IPO Warrants) and any such
underwriters, dealers or agents that participate in the distribution of the
Common Stock or Warrants may be deemed to be underwriters, and any profit on the
sale of the Common Stock or Warrants by them and any discounts, commissions or
concessions received by any such underwriters, dealers or agents might be deemed
to be underwriting discounts and commissions under the Securities Act. At the
time a particular offer of the Common Stock or Warrants is made, to the extent
required, a prospectus supplement will be distributed that will set forth the
aggregate amount of Common Stock or Warrants being offered and the terms of the
offering, including the name or names of any underwriters, dealers or agents,
any discounts, commissions and other items constituting compensation from the
Selling Stockholders and any discounts, commissions or concessions allowed or
reallowed or paid to dealers, including the proposed selling price to
purchasers. The Company will not receive any of the proceeds from the sale by
the Selling Stockholders of the Common Stock offered hereby, although it will
receive any funds tendered upon exercise of the Warrants, which will be added to
the Company's working capital. All of the distribution expenses of the offering
(other than sales commissions and discounts) will be paid by the Company.
The Common Stock and Warrants may be sold from time to time in one or more
transactions at a fixed offering price, which may be changed, or at varying
prices determined at the time of sale or at negotiated prices.
The Company has agreed to indemnify in certain circumstances the Selling
Stockholders (excluding the holders of the IPO Warrants) and any underwriter,
selling brokers, dealer managers or similar persons who participate in the
distribution of the Common Stock, if any, and certain persons related to the
foregoing persons, against certain liabilities, including liabilities under the
Securities Act. The Selling Stockholders (excluding the holders of the IPO
Warrants) have agreed to indemnify in certain circumstances the Company and
certain persons related to the Company against certain liabilities, including
liabilities under the Securities Act.
In order to comply with certain states' securities laws, if applicable,
the Common Stock and Warrants will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Common Stock may not be sold unless it has been registered or qualified for sale
in such state or an exemption from registration or qualification is available
and is complied with.
15
<PAGE>
LEGAL MATTERS
Gary A. Agron, Englewood, Colorado, has acted as counsel to the Company in
connection with the offering.
EXPERTS
The financial statements of the Company included in the Company's Annual
Report on Form 10-KSB for the year ended December 29, 1996 which are
incorporated by reference in the Registration Statement of which this Prospectus
forms a part, have been audited by Akin, Doherty, Klein & Feuge, P.C.,
independent auditors, as stated in their report appearing therein, and have been
so included herein in reliance upon such report given upon the authority of that
firm as experts in accounting and auditing.
16
<PAGE>
======================================== ======================================
No dealer, salesman or other person has
been authorized to give any information
or to make any representations other
than contained in this Prospectus in
connection with the Offering described
herein, and if given or made, such
information or representations must not
be relied upon as having been authorized
by the Company. This Prospectus does not
constitute an offer to sell, or the 2,672,000 Shares of
solicitation of an offer to buy, the Common Stock Upon Exercise of
securities offered hereby to any person Common Stock Purchase Warrants,
in any state or other jurisdiction in 257,280 Shares of Common Stock and
which such offer or solicitation is 200,000 Common Stock Purchase Warrants
unlawful. Neither the delivery of this
Prospectus nor any sale hereunder shall,
under any circumstances, create any
implication that there has been no
change in the affairs of the Company HARVEST RESTAURANT GROUP, INC.
since the date hereof.
Page
----
Available Information.............. 2
Incorporation of Certain
Documents by Reference........... 2 ---------------
Business of the Company............ 4
Risk Factors....................... 5 PROSPECTUS
Use of Proceeds.................... 12
Selling Stockholders............... 12 ---------------
Plan of Distribution............... 15
Legal Matters...................... 16
Experts............................ 16
, 1997
-------------
======================================== =====================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. Other Expenses of Issuance and Distribution.(1)
SEC Registration Fee............................. $ -0-
Printing Expenses................................ 2,000
Legal Fees and Expenses.......................... 15,000
Accounting Fees.................................. 1,000
Miscellaneous Expenses........................... 2,000
--------
TOTAL............................................ $20,000
(1) All expenses are estimated except the SEC Registration fee.
ITEM 15. Indemnification of Directors and Officers.
-----------------------------------------
Article Eleven of the Registrant's Articles of Incorporation provides as
follows:
"Section 1. Mandatory Indemnification and Advancement of Expenses. Each
person who was or is made a party or is threatened to be made a party to or is
involved in any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative, arbitrative or investigative, any
appeal in such action, suit or proceeding, and any inquiry or investigation that
could lead to such an action, suit or proceeding ("Proceeding"), by reason of
the fact that he is or was a Director or Officer of the Corporation, or who,
while a Director or Officer of the Corporation, is or was serving at the request
of the Corporation as a director, officer, partner, venturer, proprietor,
trustee, employee, agent, or similar functionary of another corporation,
partnership, joint venture, sole proprietorship, trust, employee benefit plan or
other enterprise, shall be indemnified and held harmless by the Corporation to
the fullest extent permitted by the Act against all judgments, penalties
(including excise and similar taxes), fines, settlements, and reasonable
expenses (including attorneys' fees) actually incurred by such person in
connection with such Proceeding. Such right shall be a contract right and shall
include the right to require advancement by the Corporation of reasonable
expenses (including attorneys' fees) incurred in defending any such Proceeding
in advance of the final disposition; provided, however, that the payment of such
expenses in advance of the final disposition of such Proceeding shall be made by
the Corporation only upon delivery to the Corporation of a written affirmation
by such person of his good faith belief that he has met the standard of conduct
necessary for indemnification under the Act and a written undertaking, by or on
behalf of such person, to repay all amounts so advanced if it should be
ultimately determined that such person has not satisfied such requirements.
Section 2. Nature of Indemnification. The indemnification and advancement
of expenses provided for herein shall not be deemed exclusive of any other
rights permitted by law to which a person seeking indemnification may be
entitled under any Bylaw, agreement, vote of Shareholders or disinterested
Directors or otherwise, and shall continue as to a person who has ceased to be a
Director or Officer of the Corporation and shall inure to the benefit of the
heirs, executors and administrators of such a person.
II-1
<PAGE>
Section 3. Insurance. The Corporation shall have power to purchase and
maintain insurance or other arrangements on behalf of any person who is or was a
director, Officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, partner, venturer,
proprietor, trustee, employee, agent, or similar functionary of another
corporation, partnership, joint venture, sole proprietorship, trust, employee
benefit plan or other enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of this Article Eleven or the Act."
ITEM 16. Exhibits.
(a) Exhibits
Exhibit No. Title
2.01 Articles of Incorporation of the Registrant as amended(1)
2.02 Bylaws of the Registrant (1)
5.04 Opinion of Gary A. Agron (including consent)
23.16 Consent of Gary A. Agron (See 5.03, above)
23.17 Consent of Akin, Doherty, Klein & Feuge, P.C.
(1) Incorporated by reference to the Registrant's Registration Statement on Form
SB-2, file number 33-95796, declared effective on July 9, 1996.
ITEM 17. Undertakings.
------------
The Registrant hereby undertakes:
(a) That insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission, such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
II-2
<PAGE>
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 of 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.
(b) That subject to the terms and conditions of Section 13(a) of the
Securities Exchange Act of 1934, it will file with the Securities and Exchange
Commission such supplementary and periodic information, documents and reports as
may be prescribed by any rule or regulation of the Commission heretofore or
hereafter duly adopted pursuant to authority conferred in that section.
(c) That any post-effective amendment filed will comply with the applicable
forms, rules and regulations of the Commission in effect at the time such
post-effective amendment is filed.
(d) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
(e) 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.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form S-3 and has caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in San Antonio, Texas, on November 20, 1997.
HARVEST RESTAURANT GROUP, INC.
By /s/ William J. Gallagher
------------------------------------
William J. Gallagher
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Chairman of the Board of November 20, 1997
By: /s/ William J. Gallagher Directors and Chief Executive
------------------------------ Officer
William J. Gallagher
November 20, 1997
By: /s/ Larry F. Harris President and Director
-------------------------------
Larry F. Harris
By: /s/ Sam Bell Steves Rosser Vice President - development, November 20, 1997
------------------------------- Secretary and Director
Sam Bell Steves Rosser
By: /s/ Michael M. Hogan Director November 20, 1997
-------------------------------
Michael M. Hogan
By: /s/ Theodore M. Heesch Director November 20, 1997
------------------------------
Theodore M. Heesch
By: /s/ Joseph Fazzone Chief Financial Officer and November 20, 1997
------------------------------- Principal Accounting Officer
Joseph Fazzone
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
Exhibit No. Title
- ----------- -----
5.04 Opinion of Gary A. Agron (including consent)
23.16 Consent of Gary A. Agron (See 5.04, above)
23.17 Consent of Akin, Doherty, Klein & Feuge, P.C.
EXHIBIT 5.04
November 28, 1997
Harvest Restaurant Group, Inc.
1250 N.E. Loop 410, Suite 335
San Antonio, TX 78209
Re: Registration Statement on Form S-3
Gentlemen:
We have assisted in the preparation and filing by Harvest Restaurant Group,
Inc. (formerly CluckCorp International, Inc.) (the "Company") of a Registration
Statement on Form S-3 (the "Registration Statement") with the Securities and
Exchange Commission relating to 2,929,280 shares of no par value Common Stock
underlying certain Common Stock Purchase Warrants (the "Purchase Warrant Stock")
and 200,000 Common Stock Purchase Warrants (the "Warrants").
We have examined such records and documents and have made such examination
of laws as we considered necessary to form a basis for the opinions set forth
herein. In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, and the
conformity with the originals of all documents submitted to us as copies
thereof.
Based upon and subject to the foregoing, we are of the opinion that the
Purchase Warrant Stock and Warrants have been duly authorized and reserved for
issuance, and such Purchase Warrant Stock and Warrants, when issued in
accordance with the terms thereof, against payment therefor, will be duly and
validly issued, fully paid and nonassessable.
The foregoing assumes that all requisite steps will be taken to comply with
the requirements of the Securities Act of 1933, as amended, and applicable state
laws relating to the offer and sales of securities.
We consent to the filing of a copy of this opinion in the Registration
Statement and the use of our opinion in connection therewith.
Very truly yours,
/s/ Gary A. Agron
---------------------------
Gary A. Agron
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-3 of Harvest Restaurant Group, Inc., of our report dated
February 6, 1997, except for Note I (third paragraph) and Note K (second
paragraph) as to which the date is May 12, 1997, relating to the financial
statements of CluckCorp International, Inc. for the years ended December 31,
1995 and December 29, 1996, and the reference to our firm under the caption
"Experts" in the Prospectus contained in said Registration Statement.
/s/ Akin, Doherty, Klein & Feuge, P.C.
-------------------------------------------
Certified Public Accountants
San Antonio, Texas
November 26, 1997
