1999 SEC No-Act. LEXIS 87
Securities Exchange Act of 1934 -- Section 2(a)(3)
January 27, 1999
American Brewing Company
SEC-REPLY-1:
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
January 27, 1999
RESPONSE OF THE OFFICE OF CHIEF COUNSEL
DIVISION OF CORPORATION FINANCE
Re: American Brewing Company
Incoming letter dated January 25, 1999
Based on the facts presented, the Division's view is that the issuance of American Brewing Company securities to purchasers of its beer would be an event of sale under the Securities Act of 1933. Section 2(a)(3) of the Act states in relevant part that "Any security given or delivered with, or as a bonus on account of, any purchase of securities or any other thing, shall be conclusively presumed to constitute a part of the subject of such purchase and to have been offered and sold for value." As a result, unless the offers and sales of securities you describe would be the subject of a registration statement or a valid exemption from registration, they would violate section 5 of the Securities Act.
This position is based on the representations made to the Division in your letter. Any different facts or conditions might require another result.
Sincerely,
Michael Hyatte
Special Counsel
INQUIRY-1:
AMERICAN BREWING COMPANY INCORPORATED
Creators of Hard Hat (tm).
1408 N. Killian Drive, Suite 106, Lake Park, FL 33403
Phone 561-882-9279 Fax 561-882-9280
www.hardhatbearer.com e mail:hardhat@hardhatbeer.com
FL JBDW License # BEV6011580 BATF Permit FL-P-2628
January 25, 1999
Office of the Chief Counsel
Securities and Exchange Commission
450 Fifth Street N.W.
Washington, DC 20549
Dear Sir:
I am writing to request a "no-action" letter concerning a proposed activity
our company wishes to take. If I have addressed this to the wrong person,
please be kind enough to forward this letter to the appropriate person at the
SEC.
American Brewing a Subchapter S corporation, incorporated in the state of
Florida, and is privately held. Our EID # is 65-0589860. All the stock is
owned by the undersigned. We are fully licensed by the Bureau of Alcohol,
Tobacco and Firearms as well as the State of Florida Bureau of Alcohol and
Tobacco to distribute beer and wine. (License information appears below.)
We own the brand of beer known as HARD HAT, and distribute the product in
south Florida. The beer was brought to market in October 1998. We are
expanding our sales territories and, in addition, have several brands on the
drawing board [*3]
for development and release.
Our plan would be to offer one free share of non-voting common stock for each
case of
American Brewing Company beer purchased at retail. The most practical
means would be to have a cut-out coupon with each six-pack, so that four
coupons would be redeemable for a share. The redeeming person would fill out
pertinent identification with submission, for our records. The shares would be
bearer owned, however.
We would envision a maximum ownership of 20% of our company through this
method, or approximately 400,000 shares. At that point the program would be
discontinued.
We would not be offering these shares for sale, as there would be no increase
in the price of our goods from pre-offering levels. This is easily documented,
as we are required by law post all price changes. These shares, then, would
truly be at no cost to the redeemer, and therefore should not constitute an
offering requiring public registration, in our view.
We believe you will concur and therefore are writing, as initially stated, to
request a "no-action" letter from the SEC in this matter.
Thank you very much for your attention.
Sincerely,
George Poncy
President