APPENDIX Hotch Pot's New Issue Prospectus10 Prospectus 800,000 Shares Hotch Pot Inc. Common Stock ($.01 par value) Of the 800,000 shares of Common Stock offered hereby, 500,000 shares are being sold by the Com- pany and 300,000 shares are being sold by the Selling Stockholders. See Principal and Selling Stockholders." The Company will not receive any of the proceeds from the sale of shares by the Sell- ing Stockholders. Before this offering there has been no public market for the Common Stock. These securities involve a high degree of risk. See Certain Factors." THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECU- RITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. Underwriting Proceeds to Proceeds to Selling Price to Public Discount Company Shareholders $12.00 $1.30 $10.70 $10.70 Totalt $9,600,000 $1,040,000 $5,350,000 $3,210,000 * Before deducting expenses payable by the Company estimated at $400.000, of which $250,000 will be paid by the Company and $150,000 by the Selling Stockholders. * The Company and the Selling Shareholders have granted to the Underwriters options to purchase up to 120,000 additional shares at the initial public offering price less the underwriting discount, solely to cover overallotment. The Common Stock is offered, subject to prior sale, when, as, and if delivered to and accepted by the Underwriters and subject to approval of certain legal matters by their counsel and by counsel for the Company and the Selling Shareholders. The Underwriters reserve the right to withdraw, cancel, or modify such offer and reject orders in whole or in part. Silverman Pinch Inc. April 1, 2019 No person has been authorized to give any information or to make any representations, other than as Per share in any jurisdiction where such an offer would be unlawiu. The delivery of this Prospectus at any time does not imply that information herein is correct as of any time subsequent to its date. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. Prospectus Summary The following summary information is qualified in its entirety by the detailed information and finan- cial statements appearing elsewhere in this Prospectus. The Company: Hotch Pot Inc. operates a chain of 140 fast-food outlets in the United States offer- unusual combinations of dishes. Real prospectuses would be much longer than our simple example. 10 bre13960_ch15_440-465.indd 461 29/10/18 5:38 pm MPS FIRST PAGES 462 Part Four Financing The Offering: Common Stock offered by the Company 500,000 shares; Common Stock offered by the Selling Stockholders 300,000 shares; Common Stock to be outstanding after this offer- Use of Proceeds The Company intends to use the net proceeds from the sale of 500,000 shares of Common Stock offered hereby, estimated at approximately $5 million, to open new outlets in midwest states and to provide additional working capital. It has no immediate plans to use any of the net proceeds of the offering for any other specific investment. Dividend Policy The Company has not paid cash dividends on its Common Stock and does not anticipate that divi- dends will be paid on the Common Stock in the foreseeable future. Certain Factors Investment in the Common Stock involves a high degree of risk. The following factors should be carefully considered in evaluating the Company: SUBSTANTIAL CAPITAL NEEDS The Company will require additional financing to continue its expansion policy. The Company believes that its relations with its lenders are good, but there can be no assurance that additional financing will be available in the future. COMPETITION The Company is in competition with a number of restaurant chains supplying fast food. Many of these companies are substantially larger and better capitalized than the Company Capitalization The following table sets forth the capitalization of the Company as of December 31, 2018, and as adjusted to reflect the sale of 500,000 shares of Common Stock by the Company. Actual As Adjusted (in thousands) $ $ 30 35 Long-term debt Stockholders' equity Common stock-$.01 par value, 3,000,000 shares outstanding, 3,500,000 shares outstanding, as adjusted Dair in ranital 1070 7215 Use of Proceeds The Company intends to use the net proceeds from the sale of 500,000 shares of Common Stock offered hereby, estimated at approximately $5 million, to open new outlets in midwest states and to provide additional working capital. It has no immediate plans to use any of the net proceeds of the offering for any other specific investment. Dividend Policy The Company has not paid cash dividends on its Common Stock and does not anticipate that divi- dends will be paid on the Common Stock in the foreseeable future. Certain Factors Investment in the Common Stock involves a high degree of risk. The following factors should be carefully considered in evaluating the Company: SUBSTANTIAL CAPITAL NEEDS The Company will require additional financing to continue its expansion policy. The Company believes that its relations with its lenders are good, but there can be no assurance that additional financing will be available in the future. COMPETITION The Company is in competition with a number of restaurant chains supplying fast food. Many of these companies are substantially larger and better capitalized than the Company Capitalization The following table sets forth the capitalization of the Company as of December 31, 2018, and as adjusted to reflect the sale of 500,000 shares of Common Stock by the Company. Actual As Adjusted (in thousands) $ $ 30 35 Long-term debt Stockholders' equity Common stock-$.01 par value, 3,000,000 shares outstanding, 3,500,000 shares outstanding, as adjusted Dair in ranital 1070 7215 Hotch Pot Inc. operates a chain of 140 fast-food outlets in Illinois, Pennsylvania, and Ohio. These restaurants specialize in offering an unusual combination of foreign dishes. 50% of company's reve- nues derived from sales of two dishes, sushi and sauerkraut and curry bolognese. All dishes are pre- pared in three regional centers and then frozen and distributed to the individual restaurants. Management The following table sets forth information regarding the Company's directors, executive officers, and key employees: Name Emma Lucullus Ed Lucullus Age 28 33 Position President, Chief Executive Officer, and Director Treasurer and Director Emma Lucullus Emma Lucullus established the Company in 2009 and has been its Chief Execu- tive Officer since that date. Ed Lucullus Ed Lucullus has been employed by the Company since 2009. Executive Compensation The following table sets forth the cash compensation paid for services rendered for the year 2018 by the executive officers: Name Emma Lucullus Ed Lucullus Capacity President and Chief Executive Officer Treasurer Cash Compensation $130,000 $ 95,000 Certain Transactions At various times between 2009 and 2018, First Cookham Venture Partners invested a total of $1.5 million in the Company. In connection with this investment, First Cookham Venture Partners was granted certain rights to registration under the Securities Act of 1933, including the right to have their shares of Common Stock registered at the Company's expense with the Securities and Exchange Commission Principal and Selling Stockholders The following table sets forth certain information regarding the beneficial ownership of the Compa- ny's voting Common Stock as of the date of this prospectus by (1) each person known by the Com- pany to be the beneficial owner of more than 5% of its voting Common Stock, and (2) each director of the Company who beneficially owns voting Common Stock. Unless otherwise indicated, each owner has sole voting and dispositive power over his shares. 29/10/ FIRST PAGES Part Two Value Shares Beneficially Owned after Offering Shares Beneficially Owned prior to Offering Number Percent 400,000 13.3 400,000 13.3 Shares to Be Sold Name of Beneficial Owner Emma Lucullus Ed Lucullus First Cookham Venture Partners Hermione Kraft Percent 25,000 25,000 Number 375,000 375,000 12.9 12.9 250,000 1,700,000 200.000 66.7 6.7 1,450,000 200,000 50.0 6.9 Lock-Up Agreements The holders of the Common Stock have agreed with the Underwriter not to sell, pledge, or otherwise dispose of their shares, other than as specified in this Prospectus, for a period of 180 days after the date of the Prospectus without the prior consent of Silverman Pinch. Description of Capital Stock The Company's authorized capital stock consists of 10,000,000 shares of voting Common Stock. As of the date of this Prospectus, there are four holders of record of the Common Stock. Under the terms of one of the Company's loan agreements, the Company may not pay cash divi- dends on Common Stock except from net profits without the written consent of the lender. Underwriting Subject to the terms and conditions set forth in the Underwriting Agreement, the Underwriter, Silverman Pinch Inc., has agreed to purchase from the Company and the Selling Stockholders 800,000 shares of Common Stock. There is no public market for the Common Stock. The price to the public for the Common Stock was determined by negotiation between the Company and the Underwriter and was based on, among other things, the Company's financial and operating history and condition, its prospects, and the prospects for its industry in general, the management of the Company, and the market prices of secu- rities for companies in businesses similar to that of the Company. Legal Matters The validity of the shares of Common Stock offered by the Prospectus is being passed on for the Company by Atticus and Finch and for the Underwriter by Stratton Oakmont. Legal Proceedings Hotch Pot was served in January 2019 with a summons and complaint in an action commenced by a customer who alleges that consumption of the Company's products caused severe nausea and loss of feeling in both feet. The Company believes that the complaint is without foundation. Experts The consolidated financial statements of the Company have been so included in reliance on the reports of Hooper Firebrand, independent accountants, given on the authority of that firm as experts in auditing and accounting. Look at the illustrative new-issue prospectus. a. Is this issue a primary offering, a secondary offering, or both? b. What are the direct costs of the issue as a percentage of the total proceeds? (Do not round intermediate calculations. Enter your answer as a whole percent.) c. Are these direct costs more than the average for an issue of this size? d. Suppose that on the first day of trading the price of Hotch Pot stock is $15 a share. What are the total costs of the issue as a percentage of the market price? (Do not round intermediate calculations. Enter your answer as a whole percent.) e. After paying her share of the expenses, how much will the firm's president, Emma Lucullus, receive from the sale? (Do not round intermediate calculations. Enter your answer in dollars not millions.) f. What will be the value of the shares that Emma Lucullus retains in the company? (Enter your answer in dollars not millions.) a. b. % C. Is this issue a primary offering, a secondary offering, or both? Costs as a percent of total proceeds Are these direct costs more than the average for an issue of this size? Costs as a percent of total proceeds Proceeds from the sale Value of the shares d. % e. f. APPENDIX Hotch Pot's New Issue Prospectus10 Prospectus 800,000 Shares Hotch Pot Inc. Common Stock ($.01 par value) Of the 800,000 shares of Common Stock offered hereby, 500,000 shares are being sold by the Com- pany and 300,000 shares are being sold by the Selling Stockholders. See Principal and Selling Stockholders." The Company will not receive any of the proceeds from the sale of shares by the Sell- ing Stockholders. Before this offering there has been no public market for the Common Stock. These securities involve a high degree of risk. See Certain Factors." THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECU- RITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. Underwriting Proceeds to Proceeds to Selling Price to Public Discount Company Shareholders $12.00 $1.30 $10.70 $10.70 Totalt $9,600,000 $1,040,000 $5,350,000 $3,210,000 * Before deducting expenses payable by the Company estimated at $400.000, of which $250,000 will be paid by the Company and $150,000 by the Selling Stockholders. * The Company and the Selling Shareholders have granted to the Underwriters options to purchase up to 120,000 additional shares at the initial public offering price less the underwriting discount, solely to cover overallotment. The Common Stock is offered, subject to prior sale, when, as, and if delivered to and accepted by the Underwriters and subject to approval of certain legal matters by their counsel and by counsel for the Company and the Selling Shareholders. The Underwriters reserve the right to withdraw, cancel, or modify such offer and reject orders in whole or in part. Silverman Pinch Inc. April 1, 2019 No person has been authorized to give any information or to make any representations, other than as Per share in any jurisdiction where such an offer would be unlawiu. The delivery of this Prospectus at any time does not imply that information herein is correct as of any time subsequent to its date. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. Prospectus Summary The following summary information is qualified in its entirety by the detailed information and finan- cial statements appearing elsewhere in this Prospectus. The Company: Hotch Pot Inc. operates a chain of 140 fast-food outlets in the United States offer- unusual combinations of dishes. Real prospectuses would be much longer than our simple example. 10 bre13960_ch15_440-465.indd 461 29/10/18 5:38 pm MPS FIRST PAGES 462 Part Four Financing The Offering: Common Stock offered by the Company 500,000 shares; Common Stock offered by the Selling Stockholders 300,000 shares; Common Stock to be outstanding after this offer- Use of Proceeds The Company intends to use the net proceeds from the sale of 500,000 shares of Common Stock offered hereby, estimated at approximately $5 million, to open new outlets in midwest states and to provide additional working capital. It has no immediate plans to use any of the net proceeds of the offering for any other specific investment. Dividend Policy The Company has not paid cash dividends on its Common Stock and does not anticipate that divi- dends will be paid on the Common Stock in the foreseeable future. Certain Factors Investment in the Common Stock involves a high degree of risk. The following factors should be carefully considered in evaluating the Company: SUBSTANTIAL CAPITAL NEEDS The Company will require additional financing to continue its expansion policy. The Company believes that its relations with its lenders are good, but there can be no assurance that additional financing will be available in the future. COMPETITION The Company is in competition with a number of restaurant chains supplying fast food. Many of these companies are substantially larger and better capitalized than the Company Capitalization The following table sets forth the capitalization of the Company as of December 31, 2018, and as adjusted to reflect the sale of 500,000 shares of Common Stock by the Company. Actual As Adjusted (in thousands) $ $ 30 35 Long-term debt Stockholders' equity Common stock-$.01 par value, 3,000,000 shares outstanding, 3,500,000 shares outstanding, as adjusted Dair in ranital 1070 7215 Use of Proceeds The Company intends to use the net proceeds from the sale of 500,000 shares of Common Stock offered hereby, estimated at approximately $5 million, to open new outlets in midwest states and to provide additional working capital. It has no immediate plans to use any of the net proceeds of the offering for any other specific investment. Dividend Policy The Company has not paid cash dividends on its Common Stock and does not anticipate that divi- dends will be paid on the Common Stock in the foreseeable future. Certain Factors Investment in the Common Stock involves a high degree of risk. The following factors should be carefully considered in evaluating the Company: SUBSTANTIAL CAPITAL NEEDS The Company will require additional financing to continue its expansion policy. The Company believes that its relations with its lenders are good, but there can be no assurance that additional financing will be available in the future. COMPETITION The Company is in competition with a number of restaurant chains supplying fast food. Many of these companies are substantially larger and better capitalized than the Company Capitalization The following table sets forth the capitalization of the Company as of December 31, 2018, and as adjusted to reflect the sale of 500,000 shares of Common Stock by the Company. Actual As Adjusted (in thousands) $ $ 30 35 Long-term debt Stockholders' equity Common stock-$.01 par value, 3,000,000 shares outstanding, 3,500,000 shares outstanding, as adjusted Dair in ranital 1070 7215 Hotch Pot Inc. operates a chain of 140 fast-food outlets in Illinois, Pennsylvania, and Ohio. These restaurants specialize in offering an unusual combination of foreign dishes. 50% of company's reve- nues derived from sales of two dishes, sushi and sauerkraut and curry bolognese. All dishes are pre- pared in three regional centers and then frozen and distributed to the individual restaurants. Management The following table sets forth information regarding the Company's directors, executive officers, and key employees: Name Emma Lucullus Ed Lucullus Age 28 33 Position President, Chief Executive Officer, and Director Treasurer and Director Emma Lucullus Emma Lucullus established the Company in 2009 and has been its Chief Execu- tive Officer since that date. Ed Lucullus Ed Lucullus has been employed by the Company since 2009. Executive Compensation The following table sets forth the cash compensation paid for services rendered for the year 2018 by the executive officers: Name Emma Lucullus Ed Lucullus Capacity President and Chief Executive Officer Treasurer Cash Compensation $130,000 $ 95,000 Certain Transactions At various times between 2009 and 2018, First Cookham Venture Partners invested a total of $1.5 million in the Company. In connection with this investment, First Cookham Venture Partners was granted certain rights to registration under the Securities Act of 1933, including the right to have their shares of Common Stock registered at the Company's expense with the Securities and Exchange Commission Principal and Selling Stockholders The following table sets forth certain information regarding the beneficial ownership of the Compa- ny's voting Common Stock as of the date of this prospectus by (1) each person known by the Com- pany to be the beneficial owner of more than 5% of its voting Common Stock, and (2) each director of the Company who beneficially owns voting Common Stock. Unless otherwise indicated, each owner has sole voting and dispositive power over his shares. 29/10/ FIRST PAGES Part Two Value Shares Beneficially Owned after Offering Shares Beneficially Owned prior to Offering Number Percent 400,000 13.3 400,000 13.3 Shares to Be Sold Name of Beneficial Owner Emma Lucullus Ed Lucullus First Cookham Venture Partners Hermione Kraft Percent 25,000 25,000 Number 375,000 375,000 12.9 12.9 250,000 1,700,000 200.000 66.7 6.7 1,450,000 200,000 50.0 6.9 Lock-Up Agreements The holders of the Common Stock have agreed with the Underwriter not to sell, pledge, or otherwise dispose of their shares, other than as specified in this Prospectus, for a period of 180 days after the date of the Prospectus without the prior consent of Silverman Pinch. Description of Capital Stock The Company's authorized capital stock consists of 10,000,000 shares of voting Common Stock. As of the date of this Prospectus, there are four holders of record of the Common Stock. Under the terms of one of the Company's loan agreements, the Company may not pay cash divi- dends on Common Stock except from net profits without the written consent of the lender. Underwriting Subject to the terms and conditions set forth in the Underwriting Agreement, the Underwriter, Silverman Pinch Inc., has agreed to purchase from the Company and the Selling Stockholders 800,000 shares of Common Stock. There is no public market for the Common Stock. The price to the public for the Common Stock was determined by negotiation between the Company and the Underwriter and was based on, among other things, the Company's financial and operating history and condition, its prospects, and the prospects for its industry in general, the management of the Company, and the market prices of secu- rities for companies in businesses similar to that of the Company. Legal Matters The validity of the shares of Common Stock offered by the Prospectus is being passed on for the Company by Atticus and Finch and for the Underwriter by Stratton Oakmont. Legal Proceedings Hotch Pot was served in January 2019 with a summons and complaint in an action commenced by a customer who alleges that consumption of the Company's products caused severe nausea and loss of feeling in both feet. The Company believes that the complaint is without foundation. Experts The consolidated financial statements of the Company have been so included in reliance on the reports of Hooper Firebrand, independent accountants, given on the authority of that firm as experts in auditing and accounting. Look at the illustrative new-issue prospectus. a. Is this issue a primary offering, a secondary offering, or both? b. What are the direct costs of the issue as a percentage of the total proceeds? (Do not round intermediate calculations. Enter your answer as a whole percent.) c. Are these direct costs more than the average for an issue of this size? d. Suppose that on the first day of trading the price of Hotch Pot stock is $15 a share. What are the total costs of the issue as a percentage of the market price? (Do not round intermediate calculations. Enter your answer as a whole percent.) e. After paying her share of the expenses, how much will the firm's president, Emma Lucullus, receive from the sale? (Do not round intermediate calculations. Enter your answer in dollars not millions.) f. What will be the value of the shares that Emma Lucullus retains in the company? (Enter your answer in dollars not millions.) a. b. % C. Is this issue a primary offering, a secondary offering, or both? Costs as a percent of total proceeds Are these direct costs more than the average for an issue of this size? Costs as a percent of total proceeds Proceeds from the sale Value of the shares d. % e. f