U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT ON FORM 8-K
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 13, 2001
Commission File No. 0-22524
MENDOCINO BREWING COMPANY, INC.
(Exact name of small business issuer as specified in its charter)
California
(State or other jurisdiction of incorporation or organization)
68-0318293
(IRS Employer Identification Number)
13351 South Highway 101,
Hopland, California
(Address of principal executive offices)
95449
(Zip Code)
Registrant's telephone number, including area code: (707) 744-1015
Item 1. Change in Control
On August 13, 2001, Mendocino Brewing Company, Inc. (the "Company")
acquired United Breweries International (UK) Limited, a company organized under
the laws of England and Wales ("UBI"), in a related party transaction more fully
discussed in Item 2, below (the "Acquisition"). The Acquisition was consummated
pursuant to a Share Purchase Agreement, dated as of November 3, 2000, among the
Company, Golden Eagle Trust, a trust formed under the laws of the Isle of Man
(part of the United Kingdom) ("Golden Eagle"), and Inversiones Mirabel, S.A., a
Panamanian corporation ("Inversiones") which is a wholly-owned subsidiary of
Golden Eagle. The sole consideration paid by the Company to acquire UBI was
5,500,000 newly issued shares of its Common Stock, all of which were issued to
Inversiones.
Prior to the Acquisition, Golden Eagle had already held a controlling
interest in the Company through another subsidiary, United Breweries of America,
Inc. ("UBA"), which owned 3,087,818 shares, or 55.3%, of the Company's then
outstanding voting Common Stock. Also, UBA had the right (which it continues to
retain), under the terms of certain convertible promissory notes issued to it by
the Company, to convert the outstanding principal and interest under such notes
into additional shares of the Company's common stock. If such conversion rights
(the "Conversion Rights") had been exercised in full prior to the Acquisition,
UBA could have acquired 1,131,307 more shares of the Company's Common Stock,
representing an additional 16.9% of the shares which would have been outstanding
after the exercise of such conversion rights (but before the Acquisition). UBA
also has an agreement with certain of the Company's original founders under
which it holds rights of first refusal (the "Purchase Rights") to acquire from
them up to an additional 882,547 shares, or 15.8% of the Company's Common Stock
outstanding immediately prior to the Acquisition.
As a result of the Acquisition, the total amount of the Company's
outstanding Common Stock was increased to 11,080,498 shares, and Golden Eagle
now controls, through Inversiones and UBA, a total of 8,587,818 shares, or 77.5%
of the Company's currently outstanding Common Stock, in addition to the shares
it could acquire through exercise of the Purchase Rights (which constitute
approximately 8% of the currently outstanding shares) and the Conversion Rights
(which, if exercised, would constitute 9.3% of the Company's then-outstanding
shares).
Item 2. Acquisition or Disposition of Assets
Acquisition of United Breweries International (UK) Limited
As described in Item 1, above, on August 13, 2001 the Company consummated a
stock purchase transaction by which it acquired all of the outstanding shares of
United Breweries International (UK) Limited ("UBI"), a company organized under
the laws of England and Wales (the "Acquisition"). The Acquisition had been
approved by the Company's shareholders at its Annual Meeting held on June 28,
2001. The purchase price for UBI was 5,500,000 shares of the Company's to be
issued common stock (the "Purchase Shares"). The Company did not pay any cash or
other consideration, except for the Purchase Shares, to acquire UBI. The shares
of Company stock issued to Inversiones in exchange for its stock in UBI
constitute approximately 49.6% of the Company's outstanding Common Stock
following consummation of the Acquisition.
Because the Acquisition is regarded as a related-party transaction, a
Special Committee of disinterested Directors was created to review and approve
it. The Special Committee engaged the law firm of Baker & McKenzie to act as its
independent counsel and to advise it with respect to the terms and conditions of
the Share Purchase Agreement. The Company also obtained, from Sage Capital,
L.L.C., an independent opinion as to the fairness of the Acquisition, from a
financial point of view, to the Company's shareholders.
The only material asset of UBI is UBSN Ltd., a United Kingdom corporation
("UBSN") which is its wholly-owned subsidiary. UBSN markets, sells, and
distributes Kingfisher Lager beer, primarily in the United Kingdom and elsewhere
in the European Union. Currently, the Kingfisher beer is brewed for UBSN by a
third party, Shepherd Neame Limited, under a contract manufacturing agreement.
UBI is now a wholly-owned subsidiary of the Company, and UBSN will continue to
be a wholly owned subsidiary of UBI. The Company intends to continue operating
UBI and UBSN in the marketing, sale, and distribution of beer, including
Kingfisher Lager, in the United Kingdom and elsewhere in the European Union.
Kingfisher Lager Beer
As a result of the Acquisition, the Company holds the brewing and
distribution rights for Kingfisher Lager beer in the United States and Canada.
Previously, the distribution agent for Kingfisher Lager beer in the United
States had been American United Breweries International, Inc. ("AUBI"), a
company which is affiliated with Inversiones and Golden Eagle. Immediately
following the Acquisition, however, the Company terminated this relationship,
and going forward the Company will be brewing Kingfisher beer in-house
(primarily in its Saratoga Springs location) for distribution to the United
States and Canadian markets through its existing distribution channels.
Related Party Transaction
The principal trustee of Golden Eagle is CAS Nomines Ltd., a corporation
organized under the laws of the Isle of Man. Because CAS Nominees Ltd. has the
ability to act in favor of Dr. Vijay Mallya, the Company's Chairman of the Board
and Chief Executive Officer, Dr. Mallya may be deemed to have a beneficial
ownership interest, and therefore a material financial interest, in Golden
Eagle, the sole (100%) owner of Inversiones, which in turn owned UBI prior to
the Acquisition. Dr. Mallya is also the Chairman of the Board and Chief
Executive Officer of United Breweries of America, Inc., a Delaware corporation
("UBA") which is also the Company's principal shareholder (see Item 1, above,
for more information about UBA and the relationships of Golden Eagle to both the
Company and Inversiones).
In addition to the relationship of Dr. Mallya to all of the parties to the
Share Purchase Agreement, another of the Company's Directors, Mr. R.H.B. Neame,
may also be deemed to have an interest in the Acquisition. Mr. Neame has served
as the Chairman and Chief Executive Officer of Shepherd Neame Ltd. for over
twenty-five years. Shepherd Neame Ltd. is the sole brewer of Kingfisher Lager in
the United Kingdom, and has an agreement with UBSN to provide
it with distribution and other services in that country. That agreement is not
expected to be affected by the Acquisition.
Financial Statements
The Company intends to file an amendment to this Current Report, containing
the unaudited individual financial statements, and the combined pro forma
financial statements, for both the Company and UBI for the six month periods
which ended June 30, 2001, as well as the individual audited financial
statements, and the combined pro forma financial statements for both the Company
and UBI for the fiscal years ended December 31, 1999 and 2000.
Item 7. Exhibits
Exhibit
No. Description
--- -----------
1 Share Purchase Agreement among Inversiones Mirabel, S.A., Mendocino
Brewing Company, Inc., and Golden Eagle Trust, dated November 3,
2000.*
2 United Breweries International (UK) Limited Balance Sheet, Statement
of Income and Stockholder's Equity, and Statement of Cash Flows for
the years ended December 31, 1999 and 2000.**
3 Mendocino Brewing Company, Inc. and United Breweries International
(UK) Limited Pro Forma Balance Sheet and Income Statement for the
years ended December 31, 1999 and 2000.***
4 United Breweries International (UK) Limited Balance Sheet, Statement
of Income and Stockholder's Equity, and Statement of Cash Flows for
the six months ended July 30, 2000 and 2001****
5 Mendocino Brewing Company, Inc. and United Breweries International
(UK) Limited Pro Forma Balance Sheet and Income Statement for the six
months ended July 30, 2000 and 2001****
- ----------
* Previously filed as Supplement A to the Company's Proxy Statement, dated as
of May 11, 2001, for its 2001 Annual Meeting of Shareholders, and by this
reference incorporated herein.
** Previously filed as Exhibit 3 to the Company's Current Report on Form
8-K/A-2 dated November 3, 2000, and by this reference incorporated herein.
*** Previously filed as Exhibit 4 to the Company's Current Report on Form
8-K/A-2 dated November 3, 2000, and by this reference incorporated herein.
**** To be filed by amendment.
SIGNATURES
Pursuant to the requirements on the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MENDOCINO BREWING COMPANY, INC.
(Registrant)
Date: August 23, 2001 By:
-----------------------------------
N. Mahadevan, Secretary and
Chief Financial Officer
EXHIBIT INDEX
Exhibit Description Page
Number Number
1 Share Purchase Agreement among Inversiones Mirabel, S.A.,
Mendocino Brewing Company, Inc., and Golden Eagle Trust,
dated November 3, 2000.*
2 United Breweries International (UK) Limited Balance Sheet,
Statement of Income and Stockholder's Equity, and Statement
of Cash Flows for the years ended December 31, 1999 and
2000.**
3 Mendocino Brewing Company, Inc. and United Breweries
International (UK) Limited Pro Forma Balance Sheet and
Income Statement for the years ended December 31, 1999 and
2000.***
4 United Breweries International (UK) Limited Balance Sheet,
Statement of Income and Stockholder's Equity, and Statement
of Cash Flows for the six months ended July 30, 2000 and
2001****
5 Mendocino Brewing Company, Inc. and United Breweries
International (UK) Limited Pro Forma Balance Sheet and
Income Statement for the six months ended July 30, 2000 and
2001****
- --------
* Previously filed as Supplement A to the Company's Proxy Statement, dated as
of May 11, 2001, for its 2001 Annual Meeting of Shareholders, and by this
reference incorporated herein.
** Previously filed as Exhibit 3 to the Company's Current Report on Form
8-K/A-2 dated November 3, 2000, and by this reference incorporated herein.
*** Previously filed as Exhibit 4 to the Company's Current Report on Form
8-K/A-2 dated November 3, 2000, and by this reference incorporated herein.
**** To be filed by amendment.