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                          SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, DC  20549

                                ---------------------

                                     FORM 10-KSB

/X/  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
     1934 FOR THE FISCAL YEAR ENDED DECEMBER 28, 1997

/ /  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934

                            COMMISSION FILE NUMBER 0-20845

                         BIG BUCK BREWERY & STEAKHOUSE, INC.
                    (Name of Small Business Issuer in Its Charter)

                MICHIGAN                                    38-3196031
     (State or Other Jurisdiction of                   (I.R.S. Employer
     Incorporation or Organization)                    Identification No.)

                550 SOUTH WISCONSIN STREET, GAYLORD, MICHIGAN  49735
            (Address of Principal Executive Offices, including Zip Code)

                                   (517) 731-0401
                  (Issuer's Telephone Number, including Area Code)

     SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE EXCHANGE ACT:  NONE

        SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE EXCHANGE ACT:

                           COMMON STOCK ($.01 PAR VALUE)
                                  (Title of Class)

     Check whether the issuer:  (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
  Yes /X/ No / /

     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. /X/

     The issuer's revenues for its most recent fiscal year were $9,096,580.

     The aggregate market value of the voting stock held by non-affiliates of
the issuer as of March 9, 1998 was approximately $15,897,066.

     The number of shares of the common stock of the issuer outstanding as of
March 9, 1998 was 5,285,000.

                         DOCUMENTS INCORPORATED BY REFERENCE

     None.

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<PAGE>


                                  TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                           PAGE
                                                                           ----
<S>                                                                        <C>
CAUTIONARY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

PART I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

     ITEM 1         DESCRIPTION OF BUSINESS. . . . . . . . . . . . . . . . . .8
     ITEM 2         DESCRIPTION OF PROPERTY. . . . . . . . . . . . . . . . . 14
     ITEM 3         LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . 15
     ITEM 4         SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. . . 15

PART II. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

     ITEM 5         MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER
                    MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . 16
     ITEM 6         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                    CONDITION AND RESULTS OF OPERATIONS. . . . . . . . . . . 18
     ITEM 7         FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. . . . . . . 22
     ITEM 8         CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                    ACCOUNTING AND FINANCIAL DISCLOSURE. . . . . . . . . . . 34

PART III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

     ITEM 9         DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
                    PERSONS;
                    COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT  . . . 35
     ITEM 10        EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . 37
     ITEM 11        SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                    MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . 38
     ITEM 12        CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS . . . . . 39
     ITEM 13        EXHIBITS, LIST AND REPORTS ON FORM 8-K . . . . . . . . . 39

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
INDEX TO EXHIBITS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
</TABLE>

                                          i
<PAGE>


                                 CAUTIONARY STATEMENT

     BIG BUCK BREWERY & STEAKHOUSE, INC. (THE "COMPANY"), OR PERSONS ACTING ON
BEHALF OF THE COMPANY, OR OUTSIDE REVIEWERS RETAINED BY THE COMPANY MAKING
STATEMENTS ON BEHALF OF THE COMPANY, OR UNDERWRITERS OF THE COMPANY'S
SECURITIES, FROM TIME TO TIME, MAY MAKE, IN WRITING OR ORALLY, "FORWARD-LOOKING
STATEMENTS" AS DEFINED UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995 (THE "LITIGATION REFORM ACT").  THIS CAUTIONARY STATEMENT, WHEN USED IN
CONJUNCTION WITH AN IDENTIFIED FORWARD-LOOKING STATEMENT, IS FOR THE PURPOSE OF
QUALIFYING FOR THE "SAFE HARBOR" PROVISIONS OF THE LITIGATION REFORM ACT AND IS
INTENDED TO BE A READILY AVAILABLE WRITTEN DOCUMENT THAT CONTAINS FACTORS WHICH
COULD CAUSE RESULTS TO DIFFER MATERIALLY FROM SUCH FORWARD-LOOKING STATEMENTS.
THESE FACTORS ARE IN ADDITION TO ANY OTHER CAUTIONARY STATEMENTS, WRITTEN OR
ORAL, WHICH MAY BE MADE, OR REFERRED TO, IN CONNECTION WITH ANY SUCH
FORWARD-LOOKING STATEMENT.

     THE FOLLOWING MATTERS, AMONG OTHERS, MAY HAVE A MATERIAL ADVERSE EFFECT ON
THE BUSINESS, FINANCIAL CONDITION, LIQUIDITY, RESULTS OF OPERATIONS OR
PROSPECTS, FINANCIAL OR OTHERWISE, OF THE COMPANY.  REFERENCE TO THIS CAUTIONARY
STATEMENT IN THE CONTEXT OF A FORWARD-LOOKING STATEMENT OR STATEMENTS SHALL BE
DEEMED TO BE A STATEMENT THAT ANY ONE OR MORE OF THE FOLLOWING FACTORS MAY CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN SUCH FORWARD-LOOKING STATEMENT
OR STATEMENTS.

LACK OF PROFITABILITY; LACK OF OPERATING HISTORY

     The Company had a net loss of $1,039,520 during the fiscal year ended 
December 28, 1997 ("1997") and a net loss of $703,592 during the fiscal year 
ended December 29, 1996 ("1996").  The Company had working capital of 
$255,296 at December 28, 1997 and working capital of $4,574,454 at December 
29, 1996.  The Company has opened Big Buck Brewery & Steakhouses-SM- (each a 
"Unit") in Gaylord, Michigan (May 1995), Grand Rapids, Michigan (March 1997) 
and Auburn Hills, Michigan (October 1997).  Prior to the opening of the 
Gaylord Unit, the Company had no operations or revenues.  Accordingly, the 
Company's operations are subject to all of the risks inherent in the 
establishment of a new business enterprise, including the lack of operating 
history.  The likelihood of success of the Company must be considered in 
light of the problems, expenses, difficulties, complications and delays 
frequently encountered in connection with the establishment of a business.  
There can be no assurance that future operations of any Unit will be 
profitable.  Future revenues and profits, if any, will depend upon various 
factors, including the quality of restaurant operations, the acceptance of 
the Company's beer and general economic conditions.  In general, restaurants 
experience a decline in revenue growth or in actual revenues following a 
period of excitement which accompanies their opening.  There is no assurance 
that the Company can operate profitably or that it will successfully 
implement its plans to open additional Units, in which case the Company will 
continue to depend on the revenues of the Gaylord, Grand Rapids and Auburn 
Hills Units.

DEVELOPMENT OF FUTURE UNITS; EXPANSION PLAN RISKS

     The total cost of developing, constructing and opening the Gaylord Unit was
approximately $5.8 million, including approximately $3.1 million for design and
construction, $1.3 million for equipment, furniture and fixtures relating to the
restaurant, $1.0 million for brewing and bottling equipment, and $400,000 for
land.  The Company purchased an existing structure for the Grand Rapids Unit.
The total cost of the land, building, remodeling, equipment, furniture and
fixtures for the Grand Rapids Unit was approximately $3.2 million.  The total
cost of developing, constructing and opening the Auburn Hills Unit was
approximately $9.7 million.  Management believes that each new Unit will be of a
building style and size suitable to its location.  Accordingly, the Company has
not developed a standardized layout.

     The Company plans to develop and open additional Units and it will need to
obtain additional financing to carry out such expansion plans.  The amount of
financing required for such expansion depends on the definitive locations, site
conditions, construction costs and size and type of Units to be built.  There
can be no assurance that financing will be available on terms acceptable or
favorable to the Company, or at all.  Without such financing, the Company's
development plans will be slower than planned or even unachievable.



<PAGE>


     Successful expansion of the Company's operations will be largely dependent
upon a variety of factors, some of which are currently unknown or beyond the
Company's control, including customer acceptance of Big Buck Brewery &
Steakhouses and Big Buck Beer-Registered Trademark-; the ability of the
Company's management to identify suitable sites and to negotiate purchases of
and financing for such sites; timely and economic development and construction
of Units; timely approval from local governmental authorities; the hiring of
skilled management and other personnel; the ability of the Company's management
to apply its policies and procedures to a larger number of Units; the
availability of adequate financing; the general ability to successfully manage
growth; and the general state of the economy.  There can be no assurance that
the Company will be able to open new Units.

     The Company's strategy includes operating a brewery at each Unit.
Successful operation of separate breweries will require the Company to overcome
various organizational challenges such as increasing and maintaining production
and establishing and maintaining quality control over numerous geographically
separated Units.  In attempting to expand beer distribution, the Company will be
required to establish and manage relationships with wholesale distributors,
retailers and consumers in new markets.  The Company is the sole promoter of
sales of its beer in new markets.  Consumer tastes and preferences may vary from
market to market.  There can be no assurance that the Company will be successful
in entering new markets.

NEED FOR FINANCING

     The Company's ability to execute its business strategy depends on its
ability to obtain substantial financing for the development of additional Units.
The Company anticipates that future development and expansion will be financed
through real estate sales and leasebacks, the public or private sale of equity
or debt securities, capital leases and credit facilities.  There can be no
assurance that any additional funds will be available or that such funds, if
available, will be on terms acceptable to the Company or its shareholders.  New
investors may seek and obtain substantially better terms than those available to
investors purchasing shares of Common Stock on the open market and the Company's
issuance of securities in the future may result in substantial dilution.

STATE LAWS MAY LIMIT GROWTH

     The Company is licensed under Michigan law as a "microbrewery."  A
microbrewery in Michigan is limited to the production of not more than 30,000
barrels of beer per year by all breweries owned or controlled by the same
person, whether within or outside Michigan.  Without a change in current law,
the Company will limit its sales of beer off-site so as to reserve its brewing
capacity for sales of beer on-site, which provide the Company higher margins,
but do not reach the same customer base.  There can be no assurance that
legislation raising the barrelage ceiling will pass, that any such legislation
will pass in a form which would facilitate the Company's expansion plans, or
that if such legislation is not passed, the Company will be able to become
licensed to brew in excess of 30,000 barrels of beer per year.

RISKS RELATED TO SALE/LEASEBACKS

     In April 1997, the Company sold the Grand Rapids site, including all
improvements thereto, to an unrelated third party pursuant to a real estate
purchase and leaseback agreement for $1.4 million.  Pursuant to a separate lease
agreement, the Company leases the Grand Rapids site at a minimum annual base
rent of $140,000 and a maximum annual base rent of $192,500 over a ten-year
term.  The lease may be extended at the option of the Company for two additional
five-year terms.  In addition to the annual base rent, the Company is obligated
to pay an annual percentage rent in the amount of 5% on gross sales at the site
in excess of $2.9 million per year.  In the event that such annual gross sales
do not exceed $2.9 million for any two consecutive years during the lease term,
the Company will be obligated to repurchase the Grand Rapids site for $1.4
million, plus $70,000 for each lease year on a pro rata basis.  The Company has
the option to purchase the property from the lessor after the seventh full lease
year for $1.4 million, plus $70,000 for each lease year on a pro rata basis.
The lessor has the option to require the Company to purchase the property after
the seventh full lease year at the same price.


                                          2
<PAGE>

     In August 1997, the Company entered into a real estate purchase and
leaseback agreement providing for the sale of the Auburn Hills site, including
all improvements thereto, to an unrelated third party, Michael G. Eyde, for $4.0
million.  In connection with this transaction, the Company granted a five-year
stock option, exercisable at $5.00 per share, for 50,000 shares of its Common
Stock to Mr. Eyde.  The Company leases the Auburn Hills site pursuant to a
separate lease agreement which provides for a minimum annual base rent of
$400,000, and a maximum annual base rent of $550,000.  The lease has a 25-year
term and the Company is able to extend such term for two additional ten-year
terms.  In addition to the annual base rent, the Company is obligated to pay an
annual percentage rent of 5.25% of gross sales at the site in excess of $8.0
million per year.  In the event that such annual gross sales do not exceed $8.0
million for any two consecutive years during the lease term, the Company will be
obligated to repurchase the Auburn Hills site for $4.0 million, plus $200,000
for each lease year on a pro rata basis.  The lessor has the ability to require
that the Company issue Common Stock (valued at $5.00 per share) in payment of
such repurchase price.  The Company has the option to purchase the property from
the lessor after the seventh full lease year for $4.0 million, plus $200,000 for
each lease year on a pro rata basis.  Independent of annual gross sales, the
lessor has the option to require the Company to purchase the property before the
third full lease year at the same price.

     The Grand Rapids and Auburn Hills lessors may terminate in the event of a
default which is not cured within the applicable grace period.  A default is
defined as (i) the Company's failure to make a rental payment within 30 days
after receipt of written notice that a payment is past due or (ii) the Company's
failure to perform its obligations under the lease (other than rent payments)
within 30 days after written notice of a curable violation, provided, however
that if such default cannot be cured within the 30-day period, a default will be
deemed to have occurred only if the Company has failed to commence a cure within
such 30-day period.

     Annual percentage rent is required whether the Units are profitable or not.
In the event that the Company is required to pay annual percentage rent, the
funds available to the Company for working capital and development plans will be
reduced.  In the event that annual percentage rent is not required over two
consecutive years, the Company may be forced to repurchase such sites at a
premium over their respective sale prices.  There can be no assurance that the
Company will have sufficient funds to repurchase the Grand Rapids site or the
Auburn Hills site.  In the event of a default and termination of either lease,
the Company would be unable to continue to operate the related Unit, which could
have a material adverse impact on the Company's operating results.

COMPETITION; CERTAIN FACTORS AFFECTING THE RESTAURANT AND BREWING INDUSTRIES

     The restaurant industry is highly competitive with respect to price,
service, food quality (including taste, freshness, and nutritional value) and
location.  New restaurants have a high failure rate.  The restaurant industry is
also generally affected by changes in consumer preferences, national, regional
and local economic conditions, and demographic trends.  The performance of
individual restaurants may also be affected by factors such as traffic patterns,
demographic considerations, and the type, number and location of competing
restaurants.  In addition, factors such as inflation, increased food, labor and
employee benefit costs, and the lack of availability of experienced management
and hourly employees may also adversely affect the restaurant industry in
general and the Company's restaurants in particular.  Restaurant operating costs
are further affected by increases in the minimum hourly wage, unemployment tax
rates and similar matters over which the Company has no control.  There are
numerous well-established competitors, including national, regional and local
restaurant chains, possessing substantially greater financial, marketing,
personnel and other resources than the Company.  The Company also competes with
a large variety of locally owned restaurants, diners and other establishments
that offer moderately priced food to the public and with other
microbrewery/restaurants in a highly competitive and developing microbrewery and
brewpub restaurant market.  Other restaurants and companies could utilize the
Big Buck Brewery & Steakhouse format or a related format.  There can be no
assurance that the Company will be able to respond to various competitive
factors affecting the restaurant industry.


                                          3
<PAGE>

     The domestic beer market is highly competitive due to the enormous
advertising and marketing expenditures by national and major regional brewers;
the continuing proliferation of microbreweries, regional craft breweries,
brewpubs and other small craftbrewers; the introduction of fuller-flavored
products by certain major national brewers; and a general surplus of domestic
brewing capacity, which facilitates existing contract brewer expansion and the
entry of new contract brewers.  Although domestic demand for craftbrewed beers
has increased dramatically over the past decade, there can be no assurance that
this demand will continue.  The Company anticipates intensifying competition in
the craftbrewed and fuller-flavored beer markets.  Most of the Company's brewing
competitors possess marketing, financial, personnel and other resources
substantially greater than those of the Company, and there can be no assurance
that the Company will be able to succeed against intensified competition in the
craftbrewed and fuller-flavored beer markets.

BREWERY OPERATING HAZARDS

     The Company's brewing operations are subject to certain hazards and
liability risks faced by all brewers, such as potential contamination of
ingredients or products by bacteria or other external agents that may be
wrongfully or accidentally introduced into products or packaging.  The Company's
products are not pasteurized.  While the Company has never experienced a
contamination problem in its products, the occurrence of such a problem could
result in a costly product recall and serious damage to the Company's reputation
for product quality.  The Company's operations are also subject to certain
injury and liability risks normally associated with the operation and possible
malfunction of brewing and other equipment.  Although the Company maintains
insurance against certain risks under various general liability and product
liability insurance policies, there can be no assurance that the Company's
insurance will be adequate.

BEER AND LIQUOR REGULATION

     A significant percentage of the Company's revenue is derived from beer
sales.  On-site sales of beer accounted for 20.6% of revenues and off-site sales
of beer accounted for an additional 3.2% of revenues during 1997.  The Company
must comply with federal licensing requirements imposed by the Bureau of
Alcohol, Tobacco and Firearms of the United States Department of Treasury, as
well as the licensing requirements of states and municipalities where its Units
are or will be located.  Failure to comply with federal, state or local
regulations could cause the Company's licenses to be revoked and force it to
cease the brewing and/or sale of its beer.  Typically, licenses must be renewed
annually and may be revoked or suspended for cause at any time.  Additionally,
state liquor laws may prevent or impede the expansion of the Company into
certain markets.  While the Company has not experienced and does not anticipate
any significant problems in obtaining required licenses, permits or approvals,
any difficulties, delays or failures in obtaining such required licenses,
permits or approvals could delay or prevent the opening of a Unit in a
particular area.  In addition, changes in legislation, regulations or
administrative interpretations of liquor laws after the opening of a Unit in a
jurisdiction may prevent or hinder the Company's expansion or operations in that
jurisdiction or increase operating costs.

RESTAURANT REGULATION

     The restaurant industry is subject to numerous federal, state and local
government regulations, including those relating to the preparation and sale of
food and to building and zoning requirements.  The Company is subject to
regulation by air and water pollution control divisions of the Environmental
Protection Agency of the United States and by certain states and municipalities
in which its Units are or will be located.  The Company is also subject to laws
governing its relationship with employees, including minimum wage requirements,
overtime, working and safety conditions and citizenship requirements.
Restaurant operating costs are affected by increases in the minimum hourly wage,
unemployment tax rates, sales taxes and similar matters, such as any government
mandated health insurance, over which the Company has no control.


                                          4
<PAGE>

     The Company is subject to "dram-shop" laws in Michigan and will be subject
to such statutes in other states into which it expands.  These laws generally
provide someone injured by an intoxicated person the right to recover damages
from the establishment which wrongfully served alcoholic beverages to such
person.  The Company carries liquor liability coverage as part of its existing
comprehensive general liability insurance.  However, a judgment against the
Company under a dram-shop statute in excess of the Company's liability coverage
could have a material adverse effect on the Company.

TAXES; SMALL BREWER'S EXCISE TAX CREDIT

     The federal government currently imposes an excise tax of $18.00 on each
barrel of beer produced for domestic consumption in the United States.  However,
each brewer with production under 2,000,000 barrels per year is granted a small
brewer's excise tax credit in the amount of $11.00 per barrel on its first
60,000 barrels produced annually.  No assurance can be given that the federal
government will not reduce or eliminate this credit.  To the extent Company-wide
production increases to amounts over 60,000 barrels per year, there will be an
increase in the average federal excise tax rate of the Company.

     Michigan currently imposes an excise tax of $6.30 per barrel on each barrel
of beer sold in Michigan.  However, each brewer which is a "microbrewery" under
Michigan law (presently with production of not more than 30,000 barrels per
year) is granted a microbrewer's excise tax credit in the amount of $2.00 per
barrel.  To the extent Company-wide production increases to amounts over 30,000
barrels per year, there will be an increase in the average Michigan excise tax
rate of the Company.

     Other states and municipalities into which the Company may expand also
impose excise or other taxes or special charges on alcoholic beverages in
varying amounts, which amounts are subject to change.  It is possible that in
the future the rate of excise taxation could be increased by either the federal
or state governments, or both.  Increased excise taxes on alcoholic beverages
have been considered by the United States Congress as an additional source of
tax revenue in connection with various proposals and could be included in future
legislation.  Future increases in excise taxes on alcoholic beverages, if
enacted, could adversely affect the Company.

DEPENDENCE ON KEY PERSONNEL; NEED FOR ADDITIONAL PERSONNEL

     The Company's future success will depend in large part upon the continued
service of its key management personnel including William F. Rolinski, Gary J.
Hewett and Anthony P. Dombrowski.  Given the Company's limited operating
history, the Company is dependent on its ability to identify, hire, train and
motivate qualified personnel necessary to enable it to continue operations.  The
Company does not have key person life insurance policies on any of its
employees.   The departure of key employees could have a material adverse effect
on the Company's business.  The Company's success will also be dependent upon
its ability to attract and retain qualified people, including additional
management personnel.  No assurance can be given that the Company's current
employees will continue to work for the Company or that the Company will be able
to obtain the services of additional personnel necessary for the Company's
growth.  To date, the Company has not entered into any employment agreements
with its personnel.

NO ASSURANCE AS TO LIQUIDITY ON THE NASDAQ SMALLCAP MARKET

     The Company's Common Stock, Class A Warrants and units (each consisting of
one share of Common Stock and one Class A Warrant) are currently listed on the
Nasdaq SmallCap Market.  There can be no assurance that an active public market
will develop or be sustained for the Company's securities.  In addition, if the
Company's securities do not continue to trade on the Nasdaq SmallCap Market, the
securities would become subject to certain rules of the Securities and Exchange
Commission (the "Commission") relating to "penny stocks."  Such rules require
broker-dealers to make a suitability determination for purchasers and to receive
the purchaser's prior written consent for a purchase transaction, thus
restricting the ability to purchase or sell the securities in the open market.


                                          5
<PAGE>

POSSIBLE REDEMPTION OF WARRANTS

     The Class A Warrants are subject to redemption at any time by the Company
at $0.01 per warrant, on 30 days prior written notice, if the high closing bid
price of the Common Stock exceeds $9.00 per share (subject to adjustment) for 20
consecutive trading days.  If the Class A Warrants are redeemed, warrantholders
will lose their right to exercise the Class A Warrants except during such 30-day
redemption period.  Redemption of the Class A Warrants could force the holders
to exercise the Class A Warrants at a time when it may be disadvantageous for
the holders to do so or to sell the Class A Warrants at the then market price or
accept the redemption price of $0.01 per warrant.

CONTROL BY MANAGEMENT

     As of March 1, 1998, the current officers and directors of the Company 
beneficially owned approximately 43.9% of the outstanding Common Stock.  
Assuming the exercise of all Class A Warrants, the current officers and 
directors of the Company would have beneficially owned approximately 29.8% of 
the outstanding Common Stock. Accordingly, such persons can exert substantial 
influence over the composition of the Company's Board of Directors and 
generally direct the affairs of the Company and may have the power to control 
the outcome of shareholder approvals of business acquisitions, mergers and 
combinations and other actions.

SEASONALITY AND FLUCTUATIONS IN QUARTERLY RESULTS

     The Company's sales and earnings are expected to fluctuate based on
seasonal patterns.  The Company anticipates that its highest earnings will occur
in the second and third calendar quarters due to the milder climate during those
quarters in Michigan.  In addition, quarterly results in the future are likely
to be substantially affected by the timing of new Unit openings.  Because of the
seasonality of the Company's business and the impact of new Unit openings,
results for any quarter are not necessarily indicative of the results for a full
fiscal year.

MICHIGAN ANTI-TAKEOVER LAWS

     The Company is subject to Michigan statutes regulating business
combinations and restricting voting rights of certain persons acquiring shares
of Common Stock which may hinder or delay a change in control of the Company.

VOLATILITY OF MARKET PRICE OF COMMON STOCK

     The market price of the Company's Common Stock has been subject to
significant fluctuations in response to numerous factors, including variations
in the annual or quarterly financial results of the Company or its competitors,
changes by financial research analysts in their estimates of the earnings of the
Company or its competitors, conditions in the economy in general or in the
brewing industry in particular, unfavorable publicity or changes in applicable
laws and regulations (or judicial or administrative interpretations thereof)
affecting the Company or the brewing industry.  During 1997, the Company's
Common Stock ranged from a high of $7.25 on October 22, 1997, to a low of $1.75
on March 24, 1997.  There can be no assurance that purchasers of shares of
Common Stock will be able to sell their shares at or above the prices at which
they were purchased.

IMPACT OF SALE OF SECURITIES; SECURITIES ELIGIBLE FOR FUTURE SALE

     The Company had 5,285,000 shares of Common Stock outstanding as of March 1,
1998, and had warrants and stock options outstanding to purchase an additional
3,578,500 shares of Common Stock, exercisable at prices ranging from $2.00 to
$8.00 per share.  The sale of shares of Common Stock which may become eligible
for sale in the public market from time to time upon the exercise of warrants
and stock options could have the effect of depressing the market price of the
Company's Common Stock.


                                          6
<PAGE>

ABSENCE OF DIVIDENDS

     The Company has never declared or paid cash dividends on its Common Stock
and does not intend to declare or pay cash dividends on its Common Stock in the
foreseeable future.  The Company presently expects to retain its earnings to
finance the development and expansion of its business.  The declaration or
payment by the Company of dividends, if any, on its Common Stock in the future
is subject to the discretion of the Board of Directors and will depend on the
Company's earnings, financial condition, capital requirements and other relevant
factors.  The declaration or payment by the Company of dividends is also subject
to the terms of the Company's credit facility with its bank.


                                          7
<PAGE>

                                        PART I

ITEM 1    DESCRIPTION OF BUSINESS

OVERVIEW

     The business of Big Buck Brewery & Steakhouse, Inc. is to develop, own and
operate microbrewery/restaurants under the name "Big Buck Brewery & Steakhouse."
In May 1995, the Company opened its first Unit in Gaylord, Michigan, adjoining
I-75 approximately 200 miles north of Detroit.  In March 1997, the Company
opened its second Unit in Grand Rapids, Michigan, and in October 1997, the
Company opened its third Unit in Auburn Hills, Michigan, a suburb of Detroit.

     Big Buck Brewery & Steakhouses offer casual dining featuring moderately
priced steaks, ribs, chicken and other food and a distinctive selection of beers
which are microbrewed on-site.  The Company also sells its microbrewed beer
off-site through wholesale distributors in order to promote customer interest in
Big Buck Brewery & Steakhouses.  The Company's selection of beers ranges from a
light golden ale to a dark full-bodied stout and is designed to satisfy the
tastes of a broad spectrum of consumers.  A key element of the Company's
strategy is to capitalize on the growing interest of consumers in high quality,
more flavorful microbrewed beer.  The Company believes it will generate customer
loyalty to its beers and its restaurant operations through customer
identification with each local Unit.

     Consumer interest in more flavorful beer has resulted in significant growth
in the craftbrewed beer market during the last several years, despite a decline
in per capita beer consumption.  The number of microbreweries in the United
States has grown from 21 in 1985 to approximately 442 as of January 1998.  From
1985 to 1996, the annual production of craftbrewed beer in the United States
grew from 75,000 barrels to approximately 5.4 million barrels.  Despite these
high levels of growth, sales of craftbrewed beers represented approximately 2.8%
of total beer sales in the United States at the end of 1996.

     The Company was incorporated under the Michigan Business Corporation Act in
November 1993.  The Company's executive office is located at 550 South Wisconsin
Street, Gaylord, Michigan 49735, and its telephone number is (517) 731-0401.
Its World Wide Web site address is www.bigbuck.com.

THE CRAFTBREWED AND SPECIALTY BEER MARKET

     The Company's brewing operations are in the relatively small but rapidly
growing craftbrewing segment of the United States brewing industry, which
includes microbreweries such as the Company, contract brewers, regional
specialty brewers and brewpubs (a field into which the Company may expand).
Craftbrewed beers are distinguishable from other domestically produced beers by
their flavor and brewing styles.  Consumer interest in higher quality, more
flavorful beer has resulted in significant growth in the craftbrewed beer market
during the last several years.  According to industry sources, the United States
craftbrewed beer segment increased at an annual growth rate of approximately
25.6% while the United States beer industry experienced no meaningful growth
during 1996.

BUSINESS STRATEGY -- EXPANSION PLANS

     The Company intends to develop and open Units throughout the upper midwest,
the southeast and eventually across the United States.

     The Company believes that one of the primary causes for the popularity to
date of its Big Buck Brewery & Steakhouse concept is the development of customer
loyalty to its craftbrewed beers.  The Company believes its patrons, who may
order a Big Buck beer with a meal or sample a Big Buck beer at the bar, have
developed a loyalty to one of the distinctive Big Buck beers for a variety of
reasons including (i) the opportunity to identify their favorite Big Buck beer
with their local Unit, (ii) the opportunity to sample any of the ten handcrafted
beers


                                          8
<PAGE>

available at the Units and to select a favorite beer, and (iii) the quality of
Big Buck beer.  Increased customer loyalty to Big Buck beers results in repeat
business at each Unit, thereby increasing revenues from restaurant operations
and off-site retail sales.

     Sites for future Units will be selected by management after consideration
of various strategic, regulatory, physical and demographic attributes.
Management believes that locations like that of the Gaylord Unit, adjacent to a
major expressway; the Grand Rapids Unit, located on a street with an average
daily vehicle count of approximately 52,000; and the Auburn Hills Unit,
accessible to Detroit metro area residents, significantly increase restaurant
patronage.  Management also reviews other demographic attributes of potential
communities into which it may expand.  These attributes include traffic counts,
population, sales tax revenues, alcohol consumption and hotel capacity and
occupancy rates.  In addition, management will consider the laws of each state
applicable to the Company before expanding into any new state.  It is expected
that Units located in metropolitan areas will be larger than those located
outside metropolitan areas and are expected to achieve higher revenues.

RESTAURANT OPERATIONS

     GENERAL.  A Big Buck Brewery & Steakhouse offers craftbrewed beer brewed
on-site along with a menu featuring steaks, ribs and chicken in a unique,
architecturally spacious setting.  The Units offer ten different types of beers
ranging from a light golden ale to a full-bodied stout.  The Company attempts to
create an exciting yet casual restaurant where patrons can have fun and feel
comfortable.

     DESIGN AND LAYOUT.  The Gaylord Unit features a large, open and visually
stimulating dining area which highlights the strategically placed array of
stainless steel and copper brewing equipment used to brew the Company's
craftbrewed beer.  This Unit features a 4,000 square foot dining area and a
1,600 square foot bar area, with combined seating capacity of approximately 420.
It is decorated with a rustic wood-finished interior, mounted deer racks,
36-foot high vaulted ceilings and warm lighting.  The specially commissioned
Amish hand-carved wooden furniture and overhead genuine Tennessee whisky barrel
lighting fixtures add character to the building's decor.  The layout is
flexible, permitting tables to be rearranged to accommodate customer demand.  A
wall of television sets, including a ten-foot screen television set, adjacent to
the bar area provides customers the opportunity to watch sporting and other
special events.  The friendly and attentive staff, on-site brewing, summertime
outdoor seating and live music are designed to create an appealing atmosphere
for lunch, dinner and bar customers.  The Grand Rapids Unit's seating capacity
is approximately 250 in the restaurant and bar combined.  The brewing and
fermenting tanks of this Unit front directly on 28th Street, a street with an
average daily vehicle count of approximately 52,000.  The Auburn Hills Unit,
which houses a 15-barrel brewing system, encompasses approximately 26,700 square
feet including brewery, bar and restaurant, with a total seating capacity of
approximately 650.  This Unit is accessible to Detroit metro area residents.
Each Unit's interior follows the Gaylord Unit's motif with a warm, cozy
atmosphere utilizing soft lighting and Amish furniture.  The menu and beer
styles are the same at each Unit.  The Company intends to use the Gaylord Unit
as a model for future Units.

     MENU AND PRICING.  The menu at each Unit consists of appetizers, soups,
meal-sized salads, and entrees, including steaks, ribs, hamburgers, chicken,
fish, pastas as well as a variety of desserts.  Management analyzes menu items
for popularity, profitability and ease of preparation.  The menu items are
selected to complement the Company's craftbrewed beers.  The menu is designed to
offer a broad range of prices that convey value to the customer.  Entrees range
in price from $4.95 to $28.00 with an average entree price of $12.00.  During
1997, the sale of beer accounted for 22.6%, 19.9% and 29.0% of the Gaylord,
Grand Rapids and Auburn Hills Unit sales, respectively.

     CUSTOMERS.  The Company believes its restaurants appeal to a wide range of
customers and will draw its clientele from throughout the region in which they
are located.  The Gaylord Unit is located approximately 200 miles north of
Detroit at exit 282 on I-75, allowing passersby to conveniently visit.  The
Gaylord Unit opens at 11:30 a.m. daily (noon on Sundays).  The Grand Rapids
Unit, located on 28th Street in Grand Rapids, opens at 11:00 a.m. daily (11:30
a.m. on Sundays).  The Auburn Hills Unit, located in a suburb of Detroit, opens
at 11:00 a.m. daily (noon on Sundays).

                                          9
<PAGE>

BREWING OPERATIONS

     GENERAL.  The brewery at the Gaylord Unit presently has the capacity to
brew 10,000 barrels of beer per year, and is designed to produce 20,000 barrels
per year with the installation of additional fermentation tanks.  The Grand
Rapids Unit features a 7.5-barrel brewing system which can produce 7,000 barrels
per year with the installation of additional fermentation tanks.  The Auburn
Hills Unit features a 15-barrel brewing system which can produce 15,000 barrels
per year with the installation of additional fermentation tanks.   Future Units
will be built with initial brewing capacities of 2,000 to 5,000 barrels of beer
per year and are expected to have production capacities of 7,000 to 15,000
barrels per year with the installation of additional fermentation tanks.  The
Company intends to purchase and install additional fermentation tanks as demand
for its beers requires increased production.  Each brewery will be
custom-designed to be integrated into the restaurant layout in the most
efficient and aesthetically pleasing manner possible.

     OFF-SITE DISTRIBUTION.  The Company sells its microbrewed beer off-site
through wholesale distributors in order to promote customer interest in the Big
Buck Brewery & Steakhouse concept.  The Company transports its beer from the
Gaylord Unit to each distributor for redistribution to retailers which include
bars, pubs, restaurants and supermarkets.  The beer is available by the keg to
be served on draft at restaurants, bars and pubs and is available in bottles for
retail sales.  Presently, off-site sales of the Company's beer are generally
limited to within 200 miles of the Gaylord Unit.  Off-site sales of beer
accounted for approximately 3.2% of revenues during 1997.  The Gaylord Unit
presently has the capacity to meet additional demand for off-site sales of beer.

     PROMOTION OF PRODUCTS WITHIN LOCAL MARKETS.  The Company markets its beer
locally with the use of point of sale materials as well as several forms of
other promotional materials including coasters, tap handles and color brochures.
These items are, for the most part, used by retailers to promote Big Buck beers
within their establishment.  In addition, the Company offers guided tours of its
Units to further increase consumer awareness of Big Buck beers.  The Company
believes that its educational and promotional methods are more effective in
communicating with consumers than broad-based, less flexible national beer
advertising campaigns.

     BREWING EQUIPMENT.  The Company's brewing equipment was designed and built
by J.V. Northwest, Inc. of Wilsonville, Oregon, and is automated wherever
possible.  The Gaylord Unit's system begins with a 47 foot tall, stainless steel
grain silo fabricated to replicate a giant beer bottle.  The silo is painted
"beer bottle brown" and the label was hand painted by a commissioned artist.
The Gaylord Unit houses a 20-barrel mash tun; lauter tun; a brew kettle;
50-barrel hot liquor tank; 50-barrel cold liquor tank; six 40-barrel fermenters;
three 80-barrel fermenters; two 40-barrel conditioning tanks and seven 10-barrel
bright beer serving tanks.  Filtering is done through a diatomaceous earth
filtering system which removes yeast and other naturally occurring material
resulting in a clear final product.  The brewery permits the production of a
wide range of beer styles which can be adapted to market demand for various beer
styles today and into the future.  The Grand Rapids Unit features a 7.5-barrel
brewing system with four 15-barrel fermenters and five 15-barrel conditioning
tanks which also serve as bright beer serving tanks.  The Auburn Hills Unit
features a 15-barrel brewing system with seven 30-barrel fermenters and twelve
15-barrel conditioning tanks which also serve as bright beer serving tanks.  It
is contemplated that the Company will use similar equipment at all breweries
built in future Units.

     BOTTLING, KEGGING AND PACKAGING.  The Company uses a technologically
advanced bottling line to bottle its beer for off-site retail sales at its
Gaylord Unit.  The bottle filler utilizes a carbon dioxide environment during
the bottling process to extend shelf life.  Kegs are filled by a keg rack system
and then stored pending shipment to wholesale distributors in a specially
designed cooler.  The Company's kegs have the Big Buck Brewery & Steakhouse name
and logo stamped onto the top rail for easy identification and a handsome
appearance.  The Company also sells its beer in a container called a "party
pig," a plastic pressurized unit holding 2.25 gallons (one case) of beer.  The
pressurization allows the beer to be served from the customer's refrigerator,
boat or golf cart.  Party pigs are sold through each Unit's gift shop.


                                          10
<PAGE>

     QUALITY CONTROL.  Quality control of each brewery is under the supervision
of the Company's Brewmaster.  As with the current Units, each future brewery
will contain a laboratory to monitor and maintain quality assurance in the
brewing and packaging processes.

     INGREDIENTS AND RAW MATERIALS.  The Company currently purchases its malted
barley from market sources on a competitive bid basis.  Raw materials such as
hops are available from multiple sources at competitive prices.  The Company
also uses competitive sources for its supply of packaging materials such as
bottles, labels, six pack carriers and shipping cases.

BREWING PROCESS

     Beer is made primarily from four natural ingredients: malted barley, hops,
yeast and water.  The Company uses only the finest barley, primarily two row, in
its production.  The universal spice of beer is hops.  Hops, like the grapes
used in wine, are varietal.  Brewers select hops based on specific varieties
grown in select areas around the world.  Some hop varieties are selected for
their bittering qualities, while others are chosen for their ability to impart
distinctive aromas to the beer.  Yeast is a uni-cellular organism whose
metabolism converts sugar into alcohol and carbon dioxide.  The Company uses
only specially selected yeast.  The entire brewing process from mashing through
filtration typically is completed in 14 to 21 days, depending on the formulation
and style of the beer being brewed.

BEER VARIETIES

     The Company believes that its diverse and high quality beer varieties
encourage the trial of new beer and, over time, help to create more
knowledgeable and sophisticated beer drinkers.  The Company's beers cover a full
range of flavors from very light, to medium, to very dark and heavy.

     BIG BUCK BEER: The Company's flagship brand and its top seller is a
standard American-style beer with a small amount of corn added to the grist to
give the brew a smooth, easy-drinking character that most American consumers
have come to expect in a beer.  Big Buck Beer has a rich golden color and a
light malt character balanced with a mild dose of hops.

     BUCK NAKED: This American-style, low-calorie or "light" beer is formulated
to appeal to those who prefer a low-calorie brew.  Buck Naked is an all malt
brew with a touch of imported Czechoslovakian Saaz hops.

     WOLVERINE WHEAT:  This American wheat beer is made from a blend of malted
barley and malted wheat.  The wheat imparts a unique, refreshing flavor to the
beer.  Wolverine Wheat is straw in color, lightly hopped, crisp and refreshing.

     RASPBERRY WHEAT:  A version of Wolverine Wheat, this beer is flavored with
pure fruit to impart a subtle raspberry nose, a delicate fruit flavor and a
slight pink hue.

     ANTLER ALE: This amber ale, formulated as a transitional flavor between
lighter and darker beers, has a light amber color while maintaining a mild,
clean flavor and a low hopping rate.

     REDBIRD ALE:  Similar to a traditional pale ale, Redbird Ale has a reddish
copper appearance, medium body and is well hopped.  This is a heartier beer with
a medium body and a pleasant hop bitterness.

     DOC'S ESB: This full-bodied bock beer gets its distinctive character from a
blend of four different grains and three hop varieties.  Doc's ESB has a deep
reddish brown color and is generously hopped to balance the full body and
complex character.


                                          11
<PAGE>

     BLACK RIVER STOUT:  This cream stout is slightly sweet with a moderate hop
bitterness.  The rich flavor and black color of this brew comes from six
different grains.  Deep flavors of coffee and caramel are present in this brew.

     BLACK'N BERRY:  A Black'n Tan is generally a stout mixed with pale or amber
ale.  Black'n Berry is a new twist, Black River Stout and Raspberry Wheat.  The
delicate fruit qualities are accented by the heavy stout flavor.

     CHERRY SHANDY:  Cherry Shandy is a uniquely blended mixture of our homemade
black cherry soda and Buck Naked.  This is a light, refreshing, low-alcohol
libation.

     The Company also brews various seasonal beers, including Winter Warmer,
Alpenfest, Oktoberfest and 10 pt. Porter.  Such beers are offered for limited
periods of time throughout the year.

SALES AND MARKETING

     The Company's primary sources of advertising include television, outdoor
billboards, radio and newspapers, which generally cover the local markets of
each Unit, with the exception of billboards which cover more distant
geographical areas of Michigan.  In addition to these sources, the Company uses
local travel publications, including golf and vacation planners which are
distributed free of charge, as well as inquiries via local travel information
centers and tourism bureaus.  The Company also distributes four-color brochures
promoting its Units to major corporations and various travel welcome centers
throughout Michigan as well as local hotels and resorts.  During 1997, the
Company incurred approximately $340,000 in advertising expenses.

     The Company strives to provide its customers with a dining experience that
will encourage repeat business and promote "word-of-mouth" advertising.  To
supplement its service-oriented marketing efforts, the Company sells merchandise
including hats, t-shirts, sweatshirts and other items bearing the Big Buck
Brewery & Steakhouse name and logo.

COMPETITION

     The restaurant industry is highly competitive with respect to price,
service, food quality (including taste, freshness and nutritional value) and
location.  New restaurants have a high failure rate.  The restaurant industry is
also generally affected by changes in consumer preferences, national, regional
and local economic conditions, and demographic trends.  The performance of
individual restaurants may also be affected by factors such as traffic patterns,
demographic considerations, and the type, number and location of competing
restaurants.  In addition, factors such as inflation, increased food, labor and
employee benefit costs, and the lack of availability of experienced management
and hourly employees may also adversely affect the restaurant industry in
general and the Company's restaurants in particular.  Restaurant operating costs
are further affected by increases in the minimum hourly wage, unemployment tax
rates and similar matters over which the Company has no control.  There are
numerous well-established competitors, including national, regional and local
restaurant chains, possessing substantially greater financial, marketing,
personnel and other resources than the Company.  The Company also competes with
a large variety of locally owned restaurants, diners, and other establishments
that offer moderately priced food to the public and with other
microbrewery/restaurants in a highly competitive and developing microbrewery and
brewpub restaurant market.

     The domestic beer market is highly competitive due to the enormous
advertising and marketing expenditures by national and major regional brewers;
the continuing proliferation of microbreweries, regional craft breweries,
brewpubs, and other small craftbrewers; the more recent introduction of
fuller-flavored products by certain major national brewers; and a general
surplus of domestic brewing capacity, which facilitates existing contract brewer
expansion and the entry of new contract brewers.  Although domestic demand for
craftbrewed beers has increased dramatically over the past decade, there can be
no assurance that this demand will continue.  The Company anticipates
intensifying competition in the craftbrewed and fuller-flavored beer markets.


                                          12
<PAGE>

GOVERNMENT REGULATION

     BEER AND LIQUOR REGULATION.  A significant percentage of the Company's
revenue is derived from beer sales.  On-site sales of beer accounted for 20.6%
of revenues and off-site sales of beer accounted for an additional 3.2% of
revenues during 1997.  The Company must comply with federal licensing
requirements imposed by the Bureau of Alcohol, Tobacco and Firearms of the
United States Department of Treasury, as well as the licensing requirements of
states and municipalities where its Units are or will be located.  Failure to
comply with federal, state or local regulations could cause the Company's
licenses to be revoked and force it to cease the brewing and/or sale of its
beer.  Typically, licenses must be renewed annually and may be revoked or
suspended for cause at any time.  Management believes the Company is operating
in substantial compliance with applicable laws and regulations governing its
operations.

     RESTAURANT REGULATION.  The restaurant industry is subject to numerous
federal, state and local government regulations, including those relating to the
preparation and sale of food and to building and zoning requirements.  The
Company is subject to regulation by air and water pollution control divisions of
the Environmental Protection Agency of the United States and by certain states
and municipalities in which its Units are or will be located.  The Company is
also subject to laws governing its relationship with employees, including
minimum wage requirements, overtime, working and safety conditions and
citizenship requirements.  Restaurant operating costs are affected by increases
in the minimum hourly wage, unemployment tax rates, sales taxes and similar
matters, such as any government mandated health insurance, over which the
Company has no control.  Management believes the Company is operating in
substantial compliance with applicable laws and regulations governing its
operations.

     The Company is subject to "dram-shop" laws in Michigan and will be subject
to such statutes in other states into which it expands.  These laws generally
provide someone injured by an intoxicated person the right to recover damages
from the establishment which wrongfully served alcoholic beverages to such
person.  The Company carries liquor liability coverage as part of its existing
comprehensive general liability insurance.  However, a judgment against the
Company under a dram-shop statute in excess of the Company's liability coverage
could have a material adverse effect on the Company.

     The federal government currently imposes an excise tax of $18.00 on each
barrel of beer produced for domestic consumption in the United States.  However,
each brewer with production under 2,000,000 barrels per year is granted a small
brewer's excise tax credit in the amount of $11.00 per barrel on its first
60,000 barrels produced annually.  To the extent Company-wide production
increases to amounts over 60,000 barrels per year, there will be an increase in
the average federal excise tax rate of the Company.  The Company is not aware of
any plans by the federal government to reduce or eliminate the small brewer's
credit.

     Michigan currently imposes an excise tax of $6.30 per barrel on each barrel
of beer sold in Michigan.  However, each brewer which is a "microbrewery" under
Michigan law (presently with production of not more than 30,000 barrels per
year) is granted a microbrewer's excise tax credit in the amount of $2.00 per
barrel.  To the extent Company-wide production increases to amounts over 30,000
barrels per year, there will be an increase in the average Michigan excise tax
rate of the Company.

     The Company is licensed under Michigan law as a "microbrewery."  A
microbrewery in Michigan is limited to the production of not more than 30,000
barrels of beer per year by all breweries owned or controlled by the same
person, whether within or outside Michigan.  Without a change in current law,
the Company will limit its sales of beer off-site so as to reserve its brewing
capacity for sales of beer on-site which provides the Company higher margins but
do not reach the same customer base.  Based on production at its Units during
1997, the Company believes it could operate up to approximately ten Units with
similar production levels without exceeding the 30,000 barrel production
ceiling.


                                          13
<PAGE>

EMPLOYEES

     At December 28, 1997, the Company employed 485 full-time persons at its
Units, 10 of whom served in executive and corporate administrative capacities,
24 of whom served as restaurant management personnel, and the remainder of whom
were hourly personnel.  No employee is covered by a collective bargaining
agreement and the Company has never experienced an organized work stoppage,
strike or labor dispute.  The Company considers relations with its employees to
be satisfactory.

TRADEMARKS AND SERVICE MARKS

     The Company claims trademark and service mark rights to, and ownership in,
a number of marks including, but not limited to, BIG BUCK BREWERY & STEAKHOUSE
and BIG BUCK BEER.  The Company's service mark for BIG BUCK BREWERY & STEAKHOUSE
expires in September 2007 and its trademark for BIG BUCK BEER expires in March
2007.  There can be no assurance that the Company's marks will be enforceable
against prior users in the areas where the Company conducts, or will conduct,
its operations.  The Company regards its marks as having substantial value and
as being an important factor in the marketing of its microbrewery/restaurants
and beer.  The Company's policy is to pursue registration of its marks whenever
possible and to oppose vigorously any infringement of its marks.

ITEM 2    DESCRIPTION OF PROPERTY

     The Company owns the Gaylord Unit, including the real property on which it
is located.  See "Description of Business -- Restaurant Operations" for a
description of the Gaylord Unit.

     The Company purchased the Grand Rapids site in December 1996.  The site
included an existing structure of approximately 8,200 square feet and is located
on 28th Street in Grand Rapids.  Seating capacity is approximately 250 for
restaurant and bar combined.  The Grand Rapids Unit opened in March 1997.

     In April 1997, the Company sold the Grand Rapids site, including all
improvements thereto, to an unrelated third party pursuant to a real estate
purchase and leaseback agreement for $1.4 million.  Pursuant to a separate lease
agreement, the Company leases the Grand Rapids site at a minimum annual base
rent of $140,000 and a maximum annual base rent of $192,500 over a ten-year
term.  The lease may be extended at the option of the Company for two additional
five-year terms.  In addition to the annual base rent, the Company is obligated
to pay an annual percentage rent in the amount of 5% on gross sales at the site
in excess of $2.9 million per year.  In the event that such annual gross sales
do not exceed $2.9 million for any two consecutive years during the lease term,
the Company will be obligated to repurchase the Grand Rapids site for $1.4
million, plus $70,000 for each lease year on a pro rata basis.  The Company has
the option to purchase the property from the lessor after the seventh full lease
year for $1.4 million, plus $70,000 for each lease year on a pro rata basis.
The lessor has the option to require the Company to purchase the property after
the seventh full lease year at the same price.  The Company pays average
effective annual base rent of $16.67 per square foot at the Grand Rapids Unit.

     The Company purchased the Auburn Hills site in August 1996.  The site is
just off of Interstate 75 at exit 79.  The Unit constructed on this site
encompasses approximately 26,700 square feet including brewery, bar and
restaurant.  Seating capacity is approximately 650 for the restaurant and bar
combined.  The Auburn Hills Unit opened in October 1997.

     In August 1997, the Company entered into a real estate purchase and
leaseback agreement providing for the sale of the Auburn Hills site, including
all improvements thereto, to an unrelated third party, Michael G. Eyde, for $4.0
million.  In connection with this transaction, the Company granted a five-year
stock option, exercisable at $5.00 per share, for 50,000 shares of its Common
Stock to Mr. Eyde.  The Company leases the Auburn Hills site pursuant to a
separate lease agreement which provides for a minimum annual base rent of
$400,000, and a maximum annual base rent of $550,000.  The lease has a 25-year
term and the Company is able to extend such term for two additional ten-year
terms.  In addition to the annual base rent, the Company is obligated to pay an


                                          14
<PAGE>

annual percentage rent of 5.25% of gross sales at the site in excess of $8.0
million per year.  In the event that such annual gross sales do not exceed $8.0
million for any two consecutive years during the lease term, the Company will be
obligated to repurchase the Auburn Hills site for $4.0 million, plus $200,000
for each lease year on a pro rata basis.  The lessor has the ability to require
that the Company issue Common Stock (valued at $5.00 per share) in payment of
such repurchase price.  The Company has the option to purchase the property from
the lessor after the seventh full lease year for $4.0 million, plus $200,000 for
each lease year on a pro rata basis.  Independent of annual gross sales, the
lessor has the option to require the Company to purchase the property before the
third full lease year at the same price.  The Company pays average effective
annual base rent of $15.00 per square foot at the Auburn Hills Unit.

     The Grand Rapids and Auburn Hills lessors may terminate in the event of a
default which is not cured within the applicable grace period.  A default is
defined as (i) the Company's failure to make a rental payment within 30 days
after receipt of written notice that a payment is past due or (ii) the Company's
failure to perform its obligations under the lease (other than rent payments)
within 30 days after written notice of a curable violation, provided, however
that if such default cannot be cured within the 30-day period, a default will be
deemed to have occurred only if the Company has failed to commence a cure within
such 30-day period.

     Annual percentage rent is required whether the Units are profitable or not.
In the event that the Company is required to pay annual percentage rent, the
funds available to the Company for working capital and development plans will be
reduced.  In the event that annual percentage rent is not required over two
consecutive years, the Company may be forced to repurchase such sites at a
premium over their respective sale prices.  There can be no assurance that the
Company will have sufficient funds to repurchase the Grand Rapids site or the
Auburn Hills site.  In the event of a default and termination of either lease,
the Company would be unable to continue to operate the related Unit, which could
have a material adverse impact on the Company's operating results.

     In the opinion of management, the Company's properties are adequately
covered by insurance.

ITEM 3    LEGAL PROCEEDINGS

     The Company is involved in routine legal actions in the ordinary course of
its business.  Although the outcomes of any such legal actions cannot be
predicted, in the opinion of management there is no legal proceeding pending
against or involving the Company for which the outcome is likely to have a
material adverse effect upon the financial position or results of operations of
the Company.

ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matter was submitted to a vote of security holders through the
solicitation of proxies or otherwise during the fourth quarter of the Company's
most recently completed fiscal year.


                                          15
<PAGE>

                                       PART II

ITEM 5    MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

     The Common Stock of the Company has been included in the Nasdaq SmallCap
Market under the symbol "BBUC" since the completion of the its initial public
offering in June 1996.  The following table sets forth the approximate high and
low closing prices for the Company's Common Stock for the periods indicated as
reported by the Nasdaq SmallCap Market.  Such quotations reflect inter-dealer
prices, without retail mark-up, mark-down or commission and may not represent
actual transactions.

<TABLE>
<CAPTION>

       PERIOD                                HIGH               LOW
       ------                                ----               ---
       <S>                                   <C>                <C>
       1996
         First Quarter  . . . . . . . . .    N/A                N/A
         Second Quarter . . . . . . . . .    $ 4-1/8            $ 3-3/4
         Third Quarter  . . . . . . . . .    $ 4-3/8            $ 2-1/2
         Fourth Quarter . . . . . . . . .    $ 4-3/8            $ 2-3/4
       1997
         First Quarter  . . . . . . . . .    $ 3-1/8            $ 1-3/4
         Second Quarter . . . . . . . . .    $ 4-1/2            $ 1-7/8
         Third Quarter  . . . . . . . . .    $ 4-3/4            $ 3-1/8
         Fourth Quarter . . . . . . . . .    $ 7-1/4            $ 4-3/4
</TABLE>

     As of March 16, 1998, the Company had 253 shareholders of record and
approximately 1,600 beneficial owners.

     The Company has never declared or paid cash dividends on its Common Stock
and does not intend to declare or pay cash dividends on its Common Stock in the
foreseeable future.  The Company presently expects to retain its earnings to
finance the development and expansion of its business.  The declaration or
payment by the Company of dividends, if any, on its Common Stock in the future
is subject to the discretion of the Board of Directors and will depend on the
Company's earnings, financial condition, capital requirements and other relevant
factors.  The declaration or payment by the Company of dividends is also subject
to the terms of the Company's credit facility with its bank.

SALES OF UNREGISTERED SECURITIES

     On August 1, 1997, the Company issued a five-year stock option, exercisable
at $5.00 per share, for 50,000 shares of its Common Stock, to Michael G. Eyde,
an unrelated third party.  This issuance was made in connection with the real
estate purchase and leaseback agreement between the Company and Mr. Eyde, which
provided the Company with financing of $4.0 million.  On October 15, 1997, the
Company issued 10,000 shares of its Common Stock to Tracy Stephenson, in
consideration of services rendered, or to be rendered, by Mr. Stephenson as the
Company's new restaurant project manager.  Both issuances were made in reliance
upon the exemption provided in Section 4(2) of the Securities Act of 1933, as
amended (the "Act").  The foregoing securities are restricted as to sale or
transfer, unless registered under the Act, and certificates representing such
securities contain restrictive legends preventing sale, transfer or other
disposition unless registered under the Act.  In addition, the recipients of
such securities received, or had access to, material information concerning the
Company, including, but not limited to, the Company's reports on Form 10-KSB,
Form 10-QSB and Form 8-K, as filed with the Commission. No underwriting 
commissions or discounts were paid with respect to the issuances of such 
securities.

                                          16
<PAGE>

USE OF PROCEEDS FROM INITIAL PUBLIC OFFERING

     The Company's Registration Statement on Form SB-2 (File No. 333-5883) was
declared effective by the Commission on June 12, 1996 and the initial public
offering commenced on June 13, 1996.  The Company closed on the sale of
2,450,000 units (each consisting of one share of Common Stock and one Class A
Warrant) on June 18, 1996 and held an overallotment closing, which involved the
sale of an additional 100,000 units, on July 30, 1996.  R.J. Steichen & Co.
served as the underwriter of the above-described securities.

     The Company registered an offering amount of 2,817,500 units, 2,817,500
shares of Common Stock (underlying Class A Warrants) and 75,000 shares of Common
Stock on behalf of a selling shareholder, with an estimated aggregate offering
price of $37,002,500 (based on an offering price of $5.00 per unit and an
exercise price of $8.00 per Class A Warrant).  The Company sold 2,550,000 units
at a price of $5.00 per unit, resulting in gross proceeds of $12,750,000.

     The Company incurred total offering expenses of $1,765,147 in connection
with its initial public offering.  Such expenses included: (i) $1,020,000 in
underwriting discounts and commissions paid to the above-named underwriter, (ii)
$318,750 in expenses paid to the above-named underwriter, (iii) $154,000 paid to
the Company's legal counsel; (iv) $105,000 paid to the Company's independent
public accountants, (v) $100,000 paid as a finder's fee to an unrelated third
party, and (vi) $67,397 in other expenses, including the sum paid to the
Company's financial printer.  After deducting total expenses of the initial
public offering, the net proceeds to the Company were $10,984,853.

     From the effective date of the Registration Statement on Form SB-2 through
December 28, 1997, the Company used approximately $4,050,000 for the purchase of
real estate, $5,053,120 for the construction of new Units, $1,686,426 for the
repayment of indebtedness and $195,307 for working capital.  Of such payments,
$318,715 of the repayment of indebtedness was directed to directors, officers,
persons owning 10% or more of the Company's Common Stock, and affiliates of the
Company.


                                          17
<PAGE>

ITEM 6    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

     THIS DISCUSSION AND ANALYSIS CONTAINS CERTAIN FORWARD-LOOKING TERMINOLOGY
SUCH AS "BELIEVES," "ANTICIPATES," "EXPECTS," AND "INTENDS," OR COMPARABLE
TERMINOLOGY.  SUCH STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES
THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED.
POTENTIAL PURCHASERS OF THE COMPANY'S SECURITIES ARE CAUTIONED NOT TO PLACE
UNDUE RELIANCE ON SUCH FORWARD-LOOKING STATEMENTS WHICH ARE QUALIFIED IN THEIR
ENTIRETY BY THE CAUTIONS AND RISKS DESCRIBED HEREIN.

OVERVIEW

     Big Buck Brewery & Steakhouse, Inc. (the "Company") develops, owns and
operates microbrewery/restaurants under the name "Big Buck Brewery & Steakhouse"
(each a "Unit").  Until May 1995 when the Company opened its first Unit in
Gaylord, Michigan, it had no operations or revenues and its activities were
devoted solely to development.  In March 1997, the Company opened its second
Unit in Grand Rapids, Michigan, and in October 1997, the Company opened its
third Unit in Auburn Hills, Michigan, a suburb of Detroit.

     Future revenues and profits will depend upon various factors, including
market acceptance of the Big Buck Brewery & Steakhouse concept and general
economic conditions.  The Company's present sources of revenue are the Gaylord,
Grand Rapids and Auburn Hills Units.  There can be no assurances that the
Company will successfully implement its expansion plans, in which case the
Company will continue to depend on  revenues from the existing Units.  The
Company also faces all of the risks, expenses and difficulties frequently
encountered in connection with the expansion and development of a new business.
Furthermore, to the extent that the Company's expansion strategy is successful,
it must manage the transition to multiple site, higher volume operations,
control increased overhead expenses and hire additional personnel.

     The Company has entered into two real estate purchase and leaseback
agreements.  In April 1997, the Company completed the sale and leaseback of the
Grand Rapids site to an unrelated third party for $1.4 million.  In August 1997,
the Company completed the sale and leaseback of the Auburn Hills site to the
same unrelated third party for $4.0 million.  As of December 28, 1997, $50,000
of the Auburn Hills sale was being held back in escrow subject to the Company's
completion of certain post-closing conditions.

     The Company uses a 52 or 53 week fiscal year ending on the Sunday nearest
December 31.  All references herein to "1997" and "1996" represent the 52-week
fiscal years ended December 28, 1997 and December 29, 1996, respectively.


                                          18
<PAGE>


RESULTS OF OPERATIONS

The operating results of the Company expressed as a percentage of total revenue
were as follows:

<TABLE>
<CAPTION>

                                                    DECEMBER 28,    DECEMBER 29,
                                                       1997            1996
                                                   -------------- --------------
<S>                                                <C>            <C>
REVENUE
     Restaurant sales. . . . . . . . . . . . . . .     93.5%          88.3%
     Wholesale and retail sales. . . . . . . . . .       6.5           11.7
                                                       -----          -----
          Total revenue. . . . . . . . . . . . . .     100.0          100.0
                                                       -----          -----

COSTS AND EXPENSES:
     Cost of sales . . . . . . . . . . . . . . . .      33.7           36.5
     Restaurant salaries and benefits. . . . . . .      27.8           28.0
     Operating expenses. . . . . . . . . . . . . .      21.2           25.3
     Depreciation and amortization . . . . . . . .       7.2           10.1
                                                       -----          -----
          Total costs and expenses . . . . . . . .      89.9           99.9
                                                       -----          -----

RESTAURANT OPERATING INCOME. . . . . . . . . . . .      10.1            0.1

GENERAL AND ADMINISTRATIVE EXPENSES. . . . . . . .      18.0           20.2
                                                       -----          -----

LOSS FROM OPERATIONS . . . . . . . . . . . . . . .      (7.9)         (20.1)
                                                       -----          -----

OTHER INCOME (EXPENSE):
     Interest expense. . . . . . . . . . . . . . .      (4.5)          (9.5)
     Interest income . . . . . . . . . . . . . . .       1.1            2.4
     Other . . . . . . . . . . . . . . . . . . . .      (0.2)          (0.3)
                                                       -----          -----
          Other income (expense), net. . . . . . .      (3.5)          (7.4)
                                                       -----          -----

NET LOSS   . . . . . . . . . . . . . . . . . . . .     (11.4%)        (27.5%)
                                                       -------        -------
                                                       -------        -------
</TABLE>

RESULTS OF OPERATIONS FOR THE FISCAL YEARS ENDED DECEMBER 28, 1997 AND DECEMBER
29, 1996

REVENUES

     Total revenues for the Company increased 110% to $9,096,580 in 1997 from
$4,338,832 in 1996.  The increase is primarily attributable to the opening of
the Grand Rapids Unit on March 17, 1997 and the opening of the Auburn Hills Unit
on October 1, 1997.

COSTS OF SALES

     Costs of sales which consist of food, merchandise and brewery supplies
increased 93.5% to $3,065,523 in 1997 compared to $1,584,483 in 1996.  The
increase is primarily due to the opening of the Grand Rapids and Auburn Hills
Units during 1997.  Costs of sales as a percentage of revenues decreased to
33.7% in 1997 from 36.5% in 1996.  The percentage decrease is the result of
purchasing efficiencies, increased menu pricing and improved kitchen management.


                                          19
<PAGE>

RESTAURANT SALARIES AND BENEFITS

     Restaurant salaries and benefits, which consist of restaurant management
and hourly employee wages and benefits, payroll taxes and workers' compensation
insurance, increased 108% to $2,526,586 in 1997 compared to $1,215,822 in 1996.
As a percentage of revenues, restaurant salaries and benefits decreased slightly
to 27.8% in 1997 compared to 28.0% in 1996 due to improved labor management at
the Unit level.

OPERATING EXPENSES

     Operating expenses, which include supplies, utilities, repairs and
maintenance, advertising and occupancy costs increased 75.2% to $1,925,938 in
1997 compared to $1,099,503 in 1996.  Operating expenses as a percentage of
revenues decreased to 21.2% as compared to 25.3% in 1996.  This decrease is due
to a continued emphasis on cost controls, improved management and a reduction in
insurance premiums.

GENERAL AND ADMINISTRATIVE EXPENSES

     General and administrative and development expenses increased 87.5% to 
$1,640,047 in 1997 compared to $874,498 in 1996.  As a percentage of revenue, 
these expenses decreased to 18.0% in 1997 as compared to 20.2% in 1996.  The 
decreased expenses as a percentage of revenues reflect increased total sales. 
As additional Units are opened by the Company, management believes that these 
expenses will continue to grow at a slower rate than total revenues, 
resulting in a continued decrease in these expenses as a percentage of 
revenues.

DEPRECIATION AND AMORTIZATION

     Depreciation and amortization expenses increased 50.2% to $655,474 in 1997
compared to $436,403 in 1996. As a percentage of revenues, these expenses
decreased to 7.2% in 1997 as compared to 10.1% in 1996.  The decrease resulted
from the full amortization in 1996 of financing costs related to the February
1996 bridge financing. The amount of this decrease in amortization more than
offset the increase in pre-opening costs and depreciation from the opening of
the Grand Rapids and Auburn Hills Units.

INTEREST EXPENSES/INTEREST INCOME

     Interest expense increased 20.2% to $410,964 during 1997 compared to 
$341,863 in 1996.  This increase is due to the sale and leaseback of the 
Grand Rapids and Auburn Hills sites, which are accounted for as long-term 
capital lease obligations.

     Interest income decreased 52.5% to $102,343 during 1997 compared to
$215,569 in 1996. The decrease in interest income is due to the sale of
short-term investments for use in the construction of the Grand Rapids and
Auburn Hills Units.

GAIN ON SALE OF FIXED ASSETS

     The gain on sale of fixed assets of $294,579 during 1996 resulted from the
sale of approximately 2.2 acres of the Gaylord property for $400,000 to a
national hotel chain for the construction of a 100 room hotel adjacent to the
Gaylord Unit.

LIQUIDITY AND CAPITAL RESOURCES

     The Company generated $101,309 in cash from operating activities during 
1997 and used $1.1 million in cash during 1996 for operating activities.  At 
December 28, 1997, the Company had working capital of $255,296.  Since 
inception, the Company's principal capital requirements have been the funding 
of (i) Company operations and promotion of the Big Buck Brewery & Steakhouse 
format and (ii) the construction of the Gaylord, Grand Rapids and Auburn 
Hills Units and the acquisition of furniture, fixtures and equipment for such 
Units.

                                          20
<PAGE>

Total capital expenditures for the Gaylord, Grand Rapids and Auburn Hills Units
were approximately $5.8 million, $3.2 million and $9.7 million, respectively.
The Company expects that it will continue to use a significant portion of its
capital resources to fund new Unit development and construction.

     The Company generated $4.4 million in cash from financing activities during
1997.  Such financing activities included the sales and leasebacks of the Grand
Rapids and Auburn Hills sites.  The Company used approximately $9.1 million in
cash for construction and equipment costs at the Grand Rapids and Auburn Hills
Units during 1997.  The Company plans to develop and open additional Units and
it will need to obtain additional financing to fulfill such expansion plans.
The amount of financing required for such expansion depends on the definitive
locations, site conditions, construction costs and size and type of Units to be
built.  There can be no assurance that financing will be available on terms
acceptable or favorable to the Company, or at all.  Without such financing, the
Company's development plans will be slower than planned or even unachievable.

     In June 1996, the Company's initial public offering of 2,450,000 units 
at $5.00 per unit, each unit consisting of one share of Common Stock and one 
redeemable Class A warrant, was declared effective by the Commission.  The 
Company received net proceeds of approximately $10.6 million in June 1996.  
In July 1996, the underwriters exercised a portion of their overallotment 
option for 100,000 additional units at $5.00 per unit.  The Company received 
net proceeds of approximately $400,000 in July 1996.  Total net proceeds have 
been reflected in the financial statements net of transaction related costs.

     Prior to the initial public offering, the Company met its capital
requirements through cash flow generated by capital contributions, loans from
its principal shareholders and officers, bank borrowings and certain private
placements.

SEASONALITY

     The Company's sales and earnings are expected to fluctuate based on
seasonal patterns.  The Company anticipates that its highest earnings will occur
in the second and third calendar quarters due to the milder climate during those
quarters in Michigan.


                                          21
<PAGE>

ITEM 7    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                            INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

                                                                           PAGE
                                                                           ----
<S>                                                                        <C>
BIG BUCK BREWERY & STEAKHOUSE, INC.
Report of Independent Public Accountants . . . . . . . . . . . . . . . . . . 23
Financial Statements
     Balance Sheets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
     Statements of Operations. . . . . . . . . . . . . . . . . . . . . . . . 25
     Statements of Shareholders' Equity. . . . . . . . . . . . . . . . . . . 26
     Statements of Cash Flows. . . . . . . . . . . . . . . . . . . . . . . . 27
     Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . 28
</TABLE>


                                          22
<PAGE>


                       REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To Big Buck Brewery & Steakhouse, Inc.:

     We have audited the accompanying balance sheets of Big Buck Brewery &
Steakhouse, Inc. (a Michigan corporation) as of December 28, 1997 and
December 29, 1996, and the related statements of operations, shareholders'
equity and cash flows for the years then ended.  These financial statements are
the responsibility of the Company's management.  Our responsibility is to
express an opinion on these financial statements based on our audits.

     We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Big Buck Brewery &
Steakhouse, Inc. as of December 28, 1997 and December 29, 1996, and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

                                        /s/ ARTHUR ANDERSEN LLP


Minneapolis, Minnesota,
February 19, 1998


                                          23
<PAGE>

                        BIG BUCK BREWERY & STEAKHOUSE, INC.

                                   Balance Sheets

<TABLE>
<CAPTION>


                                                                     December 28,   December 29,
                         ASSETS                                          1997           1996
                                                                     -----------    -----------
<S>                                                                  <C>            <C>
CURRENT ASSETS:
  Cash                                                               $   354,015    $    28,468
  Short-term investments                                                      --      4,910,000
  Sale and Leaseback Financing Receivable (Note 2)                       749,650             --
  Accounts receivable                                                    170,460         40,000
  Inventories                                                            289,805        155,785
  Preopening expenses, net                                               348,581          3,436
  Prepaids and other                                                     171,766        106,715
                                                                     -----------    -----------

     Total current assets                                              2,084,277      5,244,404

PROPERTY AND EQUIPMENT, net                                           18,340,043      9,881,603

OTHER ASSETS, net                                                        383,301        205,686
                                                                     -----------    -----------

                                                                     $20,807,621    $15,331,693
                                                                     -----------    -----------
                                                                     -----------    -----------

                  LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                                   $   843,430    $   286,871
  Accrued expenses                                                       735,727        132,299
  Current maturities of long-term obligations                            249,824        250,780
                                                                     -----------    -----------
     Total current liabilities                                         1,828,981        669,950

LONG-TERM OBLIGATIONS, less current maturities                         7,274,558      2,124,391
                                                                     -----------    -----------
     Total liabilities                                                 9,103,539      2,794,341

COMMITMENTS AND CONTINGENCIES (Notes 2 and 6)

SHAREHOLDERS' EQUITY:
  Common stock, $.01 par value, 10,000,000 shares authorized;
     5,285,000 shares in 1997 and 5,275,000 shares in 1996 issued
     and outstanding                                                      52,850         52,750
  Warrants                                                               153,650        153,650
  Additional paid-in capital                                          13,240,694     13,034,544
  Accumulated deficit                                                 (1,743,112)      (703,592)
                                                                     -----------    -----------

     Total shareholders' equity                                       11,704,082     12,537,352
                                                                     -----------    -----------

                                                                     $20,807,621    $15,331,693
                                                                     -----------    -----------
                                                                     -----------    -----------
</TABLE>


         The accompanying notes are an integral part of these balance sheets.


                                          24
<PAGE>

                         BIG BUCK BREWERY & STEAKHOUSE, INC.

                               Statements of Operations

<TABLE>
<CAPTION>


                                                                       For the Years Ended
                                                                    ---------------------------
                                                                    December 28,   December 29,
                                                                        1997           1996
                                                                    ------------   ------------
<S>                                                                  <C>            <C>
REVENUE:
  Restaurant sales                                                   $ 8,500,828    $ 3,830,748
  Wholesale and retail sales                                             595,752        508,084
                                                                     -----------    -----------
     Total revenue                                                     9,096,580      4,338,832
                                                                     -----------    -----------
COSTS AND EXPENSES:
  Cost of sales                                                        3,065,523      1,584,483
  Restaurant salaries and benefits                                     2,526,586      1,215,822
  Operating expenses                                                   1,925,938      1,099,503
  Depreciation and amortization                                          655,474        436,403
                                                                     -----------    -----------
     Total costs and expenses                                          8,173,521      4,336,211
                                                                     -----------    -----------

RESTAURANT OPERATING INCOME                                              923,059          2,621

GENERAL AND ADMINISTRATIVE EXPENSES                                    1,640,047        874,498
                                                                     -----------    -----------

LOSS FROM OPERATIONS                                                    (716,988)      (871,877)
                                                                     -----------    -----------

OTHER INCOME (EXPENSE):
  Interest expense                                                      (410,964)      (341,863)
  Interest income                                                        102,343        215,569
  Other                                                                  (13,911)       294,579
                                                                     -----------    -----------
     Other income (expense), net                                        (322,532)       168,285
                                                                     -----------    -----------

NET LOSS                                                             $(1,039,520)   $  (703,592)
                                                                     -----------    -----------
                                                                     -----------    -----------

BASIC AND DILUTED LOSS PER COMMON SHARE                              $     (0.20)   $     (0.17)
                                                                     -----------    -----------
                                                                     -----------    -----------

BASIC AND DILUTED WEIGHTED AVERAGE
  SHARES OUTSTANDING                                                   5,277,033      4,066,071
                                                                     -----------    -----------
                                                                     -----------    -----------
</TABLE>




      The accompanying notes are an integral part of these financial statements.


                                          25
<PAGE>

                         BIG BUCK BREWERY & STEAKHOUSE, INC.

                          Statements of Shareholders' Equity
                                 For the Years Ended

<TABLE>
<CAPTION>


                                                                                        
                                                    COMMON STOCK                         ADDITIONAL
                                             --------------------------                    PAID-IN       ACCUMULATED
                                                SHARES         AMOUNT       WARRANTS       CAPITAL         DEFICIT         TOTAL
                                             -------------   -----------   ------------  ------------   -------------   ----------
<S>                                          <C>             <C>           <C>           <C>            <C>            <C>
BALANCE, December 31, 1995 . . . . . . .      2,500,000         25,000         18,600      2,482,470     (1,116,416)     1,409,654
  Effects of conversion to 
      C Corporation  . . . . . . . . . .             --             --             --     (1,116,416)     1,116,416             --
  Sale of units for $5.00 per unit . . .        150,000          1,500          7,500        606,037             --        615,037
  Initial public offering of units for
     $5.00 per unit. . . . . . . . . . .      2,550,000         25,500        127,550     10,831,803             --     10,984,853
  Issuance of common stock upon conversion
     of debt (Note 2). . . . . . . . . .         75,000            750             --        230,650             --        231,400
  Net loss . . . . . . . . . . . . . . .             --             --             --             --       (703,592)      (703,592)
                                              ---------        -------       --------    -----------    -----------    -----------
BALANCE, December 29, 1996 . . . . . . .      5,275,000        $52,750       $153,650    $13,034,544    $  (703,592)   $12,537,352
                                              ---------        -------       --------    -----------    -----------    -----------
  Issuance of common stock for services
     rendered. . . . . . . . . . . . . .         10,000            100             --         56,150             --         56,250
  Issuance of stock options for services
     rendered. . . . . . . . . . . . . .             --             --             --        150,000             --        150,000
  Net loss . . . . . . . . . . . . . . .             --             --             --             --     (1,039,520)    (1,039,520)
                                              ---------        -------       --------    -----------    -----------    -----------
BALANCE, December 28, 1997 . . . . . . .      5,285,000        $52,850       $153,650    $13,240,694    $(1,743,112)   $11,704,082
                                              ---------        -------       --------    -----------    -----------    -----------
                                              ---------        -------       --------    -----------    -----------    -----------
</TABLE>



      The accompanying notes are an integral part of these financial statements.


                                          26
<PAGE>

                        BIG BUCK BREWERY & STEAKHOUSE, INC.

                              Statements of Cash Flows


<TABLE>
<CAPTION>


                                                                         For the Years Ended
                                                                    ---------------------------
                                                                    December 28,   December 29,
                                                                        1997           1996
                                                                    ------------   ------------
<S>                                                                 <C>            <C>
OPERATING ACTIVITIES:
  Net loss                                                          $ (1,039,520)  $   (703,592)
  Adjustments to reconcile net loss to cash flows used in
     operating activities--
       Depreciation and amortization                                     655,474        436,403
       Gain on sale of property                                               --       (294,579)
       Change in operating assets and liabilities:
          Accounts receivable                                           (130,460)       (40,000)
          Inventories                                                   (134,020)       (15,590)
          Prepaids and other                                            (410,206)       (73,915)
          Accounts payable                                               556,613       (440,361)
          Accrued expenses                                               603,428        (13,197)
                                                                    ------------   ------------

            Net cash provided by (used in) operating activities          101,309     (1,144,831)
                                                                    ------------   ------------

INVESTING ACTIVITIES:
  Purchases of property and equipment, net                            (9,084,325)    (4,692,015)
  Proceeds from sale of property                                              --        400,000
  Sale (purchase) of short-term investments, net                       4,910,000     (4,910,000)
                                                                    ------------   ------------

            Net cash used in investing activities                     (4,174,325)    (9,202,025)
                                                                    ------------   ------------

FINANCING ACTIVITIES:
  Proceeds from long-term debt and capital lease obligations           4,649,351        750,000
  Payments on long-term debt and capital lease obligations              (250,788)    (1,588,638)
  Payments on line-of-credit borrowings, net                                  --       (325,000)
  Payments on debt to shareholders                                            --       (300,000)
  Net proceeds from initial public offering of units                          --     10,984,853
  Net proceeds from sale of units                                             --        615,037
  Payment of deferred financing costs                                         --       (100,000)
                                                                    ------------   ------------

            Net cash provided by financing activities                  4,398,563     10,036,252
                                                                    ------------   ------------

INCREASE (DECREASE) IN CASH                                              325,547       (310,594)

CASH, beginning of year                                                   28,468        339,062
                                                                    ------------   ------------

CASH, end of year                                                   $    354,015   $     28,468
                                                                    ------------   ------------
                                                                    ------------   ------------

SUPPLEMENTAL CASH FLOW INFORMATION:
  Interest paid                                                     $    415,306   $    369,799
  Income taxes paid                                                           --             --
NONCASH TRANSACTION:
  Conversion of debt to common stock                                          --        250,000
  Issuance of common stock and stock options for property and services   206,150             --
</TABLE>



      The accompanying notes are an integral part of these financial statements.


                                          27
<PAGE>

                         BIG BUCK BREWERY & STEAKHOUSE, INC.

                            Notes to Financial Statements

                       December 28, 1997 and December 29, 1996

1.   NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES:

NATURE OF BUSINESS

Big Buck Brewery & Steakhouse, Inc. (f/k/a Michigan Brewery, Inc.) develops,
owns and operates microbrewery/restaurants under the name "Big Buck Brewery &
Steakhouse."  As of December 28, 1997, the Company owned and operated three
Units in the state of Michigan.  The first Unit opened in Gaylord, Michigan, on
May 26, 1995.  The Gaylord Unit is utilized for bottling and wholesale
distribution of its private label beer.  Subsequent Units opened on March 17,
1997 in Grand Rapids, Michigan, and on October 1, 1997 in Auburn Hills,
Michigan, a suburb of Detroit.

Prior to the opening of the Gaylord Unit, the Company was in the development 
stage. While in the development stage and up to June 1996, the Company met 
its capital requirements primarily through initial shareholder contributions, 
loans from its principal shareholders and officers, bank borrowings and 
certain private placement offerings.  During June 1996, the Company received 
net proceeds of $10,984,853 through an initial public offering (IPO) of 
2,550,000 units (see Note 4).

The Company incurred a net loss of $1,039,520 in 1997 and $703,592 in 1996.  The
losses for these periods are primarily attributable to costs and expenses
incurred in the completion of the development and start-up of operations at the
Grand Rapids and Auburn Hills Units and the costs associated with the hiring of
senior corporate management to position the Company for its future expansion
plans.  The Company has a limited operating history, and future revenues and
results from operations will depend upon various factors, including market
acceptance of the Big Buck Brewery & Steakhouse concept and general economic
conditions.  The Company's ability to meet its expansion plan and achieve
profitability depends on its ability to obtain substantial financing for the
development of additional Units.  There are no assurances that such financing
will be available on terms acceptable or favorable to the Company.

FISCAL YEAR

The Company has adopted a 52-/53-week fiscal year ending on the Sunday nearest
December 31 of each year.  All references herein to "1997" and "1996" represent
the 52-week fiscal years ended December 28, 1997 and December 29, 1996,
respectively.

INVENTORIES

Inventories consist primarily of restaurant food and beverage items, raw
materials used in the brewing process, finished goods, including beer in kegs
and beer held in fermentation prior to the filtration and packaging process, and
retail goods for resale.  Inventories are stated at the lower of cost or market
as determined by the first-in, first out inventory method and consisted of the
following at:

<TABLE>
<CAPTION>

                                                  December 28,   December 29,
                                                      1997           1996
                                                  ------------   ------------
<S>                                               <C>            <C>
Food . . . . . . . . . . . . . . . . . . . .       $  88,820      $  29,533
Brewery. . . . . . . . . . . . . . . . . . .          83,032         63,204
Retail goods . . . . . . . . . . . . . . . .         117,953         63,048
                                                   ---------      ---------
                                                   $ 289,805      $ 155,785
                                                   ---------      ---------
                                                   ---------      ---------
</TABLE>


                                          28
<PAGE>

PREOPENING EXPENSES

It is the Company's policy to capitalize the direct and incremental costs 
associated with opening a new Unit, which consist primarily of hiring and 
training the initial workforce, mock service and other direct costs.  These 
costs are amortized over the period from when the Unit opens until 
substantially all of the initial workforce is no longer employed (not to 
exceed 12 months). Preopening costs for the Gaylord Unit were charged to 
operations as incurred due to its developmental nature.  As of December 28, 
1997, total capitalized preopening costs were $522,342 with accumulated 
amortization of $173,761.

In April 1997, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants (AICPA) issued an exposure draft
entitled "Reporting on the Costs of Start-Up Activities."  The proposed
accounting standard contained in this draft would require entities to expense as
incurred all start-up and preopening costs that are not otherwise capitalizable
as long-lived assets.  The AICPA is expected to issue a final pronouncement on
this standard during the second quarter of 1998.  The accounting standard would
be effective for fiscal years beginning after December 15, 1998, with earlier
application encouraged.  If the new accounting principle is adopted by the
AICPA, the Company will choose early implementation during fiscal 1998.  This
implementation will involve the recognition of the cumulative effect of the
change in accounting principle required by the new standard as a one-time charge
against earnings, net of any related income tax effect, retroactive to the
beginning of fiscal 1998.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost.  Improvements are capitalized,
while repair and maintenance costs are charged to operations when incurred.
Property and equipment are depreciated using the straight-line method for
financial reporting purposes and accelerated methods for income tax reporting
purposes over their estimated useful lives of 5 to 40 years.

Property and equipment consisted of the following at:

<TABLE>
<CAPTION>

                                       December 28,   December 29,   Estimated
                                          1997          1996       Useful Lives
                                       -----------    -----------  ------------
<S>                                    <C>            <C>          <C>
Land and improvements. . . . . . .     $ 4,713,545    $ 4,132,941   20 years for
                                                                    improvements
Building and improvements. . . . .       9,245,345      3,131,108       40 years
Brewery equipment. . . . . . . . .       2,000,276      1,127,125    12-30 years
Restaurant equipment . . . . . . .       1,807,032        855,902       10 years
Furniture, fixtures and equipment.       1,479,898        524,298      5-7 years
Construction in progress . . . . .              --        555,249
                                       -----------    -----------
                                        19,246,096     10,326,623
Accumulated depreciation . . . . .        (906,053)      (445,020)
                                       -----------    -----------
                                       $18,340,043    $ 9,881,603
                                       -----------    -----------
                                       -----------    -----------
</TABLE>

INCOME TAXES

Deferred tax assets and liabilities are computed based on the difference between
the financial reporting and tax bases of the Company's assets and liabilities
using currently enacted tax rates.

LOSS PER SHARE

The Company adopted in 1997, Statement of Financial Accounting Standards (SFAS)
No. 128 "Earnings per Share" which requires disclosure of basic earnings per
share (EPS) and diluted EPS, which replaces the existing primary EPS and fully
diluted EPS, as defined by APB No. 15.  Basic EPS is computed by dividing net
income


                                          29
<PAGE>

by the weighted average number of shares of Common Stock outstanding during the
year.  Diluted EPS is computed similarly to EPS as previously reported provided
that, when applying the treasury stock method to common equivalent shares, the
Company must use its average share price for the period rather than the more
dilutive greater of the average share price or end-of-period share price
required by APB No. 15.

As a result of the adoption of SFAS No. 128, the Company's reported earning per
share for 1996 were restated.  The effect of this accounting change on
previously reported EPS data was as follows:

<TABLE>
<CAPTION>

                                                  1996
                                                 ------
<S>                                              <C>
Primary EPS as reported. . . . . . . . . . .     $(0.17)
Effect of SFAS No 128. . . . . . . . . . . .         --
                                                 ------
Basic EPS as restated. . . . . . . . . . . .     $(0.17)
                                                 ------
                                                 ------
Fully diluted EPS as reported. . . . . . . .     $   --
Effect of SFAS No. 128 . . . . . . . . . . .      (0.17)
                                                 ------
Diluted EPS as restated. . . . . . . . . . .     $(0.17)
                                                 ------
                                                 ------
</TABLE>

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Ultimate results could differ from those estimates.

RECLASSIFICATIONS

Certain amounts for 1996 have been reclassified to conform to the 1997 financial
statement presentation.  These reclassifications have no effect on previously
reported net loss or shareholders' equity.

2.   LONG-TERM OBLIGATIONS:

Long-term obligations consisted of the following as of:

<TABLE>
<CAPTION>


                                                                    December 28,     December 29,
                                                                        1997           1996
                                                                    ------------   ------------
<S>                                                                 <C>            <C>
Capital lease obligations (see below)                               $  5,400,000          $  --

Mortgage note payable to bank, monthly principal payments of
     $5,760 plus interest at 10.2%, remaining balance due on
     October 1, 2000, collateralized by all assets of the Company
     and guaranteed by certain shareholders                            1,635,239      1,704,359

Note payable to bank, monthly principal payments of $13,333
     plus interest at 10.2%, remaining balance due on October 1,
     2000, collateralized by all assets of the Company and
     guaranteed by certain shareholders                                  453,333        613,333

Notes payable to bank, due in monthly installments through
     1998 and 1999, interest at 10.95% to 13%, collateralized
     by certain equipment                                                 35,811         57,479
                                                                    ------------   ------------

                  Total                                                7,524,383      2,375,171

Less-Current maturities                                                  249,825        250,780
                                                                    ------------   ------------

                  Long-term obligations                             $  7,274,558   $  2,124,391
                                                                    ------------   ------------
                                                                    ------------   ------------
</TABLE>

                                          30
<PAGE>

In April 1997, the Company entered into a real estate purchase and leaseback 
agreement with an unaffiliated third party for the land and property of its 
Grand Rapids Unit.  The Company received proceeds of $1,400,000 and in 
return, entered into a ten year lease with a minimum annual base rent of 
$140,000 and a maximum annual base rent of $192,500 and percentage rent 
provisions.  In the event gross sales, as defined, do not exceed established 
levels for any two consecutive lease years, the Company is obligated to 
repurchase the land at a predefined price.  Subsequent to the seventh year, 
the Company has the option to purchase the land at a predefined price.

In August 1997, the Company entered into a second real estate purchase and 
leaseback agreement with the same unaffiliated third party for the land and 
property of its Auburn Hills Unit.  The Company received proceeds of 
$4,000,000 ($749,650 of which was received during February 1997) and in 
return, entered into a 25 year lease with a minimum annual base rent of 
$400,000 and percentage rent provisions.  In the event gross sales, as 
defined, do not exceed established levels for any two consecutive lease 
years, the Company is obligated to repurchase the land at a predefined 
established price.  Subsequent to the seventh year, the Company has the 
option to purchase the land at a predefined price.  In lieu of cash payment, 
the Company may be required to issue shares of common stock for all or part 
of the purchase price valued at $5.00 per share.

No gain or loss was recognized on the sale and leaseback transactions. 
Management expects that if the Company was required to purchase the land at 
these Units that these leases could be renewed or replaced by other leases.

In December 1995, the Company entered into a bridge loan with a limited
partnership which consisted of a $250,000 convertible promissory note
(Convertible Note), a $250,000 nonconvertible promissory note (Nonconvertible
Note) and warrants to purchase an aggregate of 62,500 shares of common stock at
$3.33 per share which expire  in December 2000.  During 1996, upon completion of
the IPO, the Convertible Note was converted into 75,000 shares common stock, and
the Nonconvertible Note was repaid in full.

Maturities of long-term obligations as of December 28, 1997 were as follows:

<TABLE>
<CAPTION>
     <S>                                               <C>
     1998                                              $  249,825
     1999                                                 244,226
     2000                                               1,630,331
     2001                                                      --
     2002                                                      --
     Thereafter                                         5,400,000
                                                       ----------
                                                       $7,524,303
                                                       ----------
                                                       ----------
</TABLE>

3.   INCOME TAXES:

Effective January 1, 1996, the Company converted from S Corporation status to a
C Corporation.  As of December 28, 1997 and  December 29, 1996, the Company's
deferred taxes consisted primarily of net operating loss carryforwards,
preopening costs not currently deductible and accelerated methods of
depreciation.  The Company has recorded a full valuation allowance against the
net deferred tax asset due to the uncertainty of realizing the related benefits.
As of December 28, 1997, the Company had net operating loss carryforwards of
approximately $2.8 million which expire through the year 2012.


                                          31

<PAGE>

4.   SHAREHOLDERS' EQUITY:

STOCK SPLIT

On January 19, 1996, the Company's Board of Directors effected a 112.51-for-1
stock split on its $.01 par value Common Stock.  All reference to earnings per
share, number of shares and share amount have been retroactively restated
throughout the accompanying financial statements.

PRIVATE PLACEMENT

During February 1996, the Company sold 60 units in a private placement offering
at an offering price of $25,000 per unit.  Each unit consisted of (i) 2,500
shares of common stock at $4.95 per share, (ii) a $12,500 principal amount
promissory note bearing interest at 10%, unsecured, repaid upon the completion
of the IPO, and (iii) warrants to purchase 2,500 shares of common stock at an
exercise price of $5.00 per share expiring in February 2001.  The Company
received net proceeds of $1,265,000 after the payment of $1,765,147 in related
offering costs.  The net proceeds were used to pay off certain debt and purchase
brewery equipment and was also used for working capital purposes.

INITIAL PUBLIC OFFERING

During June 1996, the Securities and Exchange Commission declared effective a
Registration Statement relating to the IPO of 2,550,000 units at an offering
price of $5.00 per unit, including 100,000 units from the exercise of the
underwriters' overallotment option.  Each unit consisted of one share of common
stock and one Redeemable Class A Warrant.  The Company received net proceeds of
$10,984,853, after the payment of $1,765,147 in related offering costs.  The net
proceeds were used to repay the Nonconvertible Note (Note 2), and the private
placement debt and the remaining proceeds were used to fund operating losses and
to finance a portion of the construction on the Grand Rapids and Auburn Hills
Units.

UNDERWRITERS WARRANT

In connection with its IPO, the Company issued a warrant to the underwriters 
to purchase 245,000 shares of common stock at $6.00 per share.  The warrant 
became exercisable in June 1997 and is exercisable until June 2000.

5.   STOCK OPTION PLANS:

During January 1996, the Company adopted the 1996 Stock Option Plan (the Plan),
pursuant to which options to acquire an aggregate of 600,000 shares, as amended
in June 1997, of the Company's common stock may be granted.  Under the Plan, the
board of directors may grant options to purchase shares of the Company's stock
to eligible employees, nonemployees and contractors at a price not less than
100% of the fair market value at the time of the grant for both incentive and
nonstatutory stock options.  Options granted under the Plan vest annually over
four years from date of grant and are exercisable for ten years, except that the
term may not exceed five years for incentive stock options granted to persons
who own more than 10% of the Company's outstanding voting stock.

Also, during January 1996, the Company adopted the 1996 Director Stock Option
Plan (the Director's Plan) pursuant to which options to acquire an aggregate of
100,000 shares of the Company's common stock may be granted to outside
directors.  Under the Director's Plan, 5,000 options were automatically granted
to each outside director upon the completion of the Company's IPO, and
thereafter 5,000 options are granted annually for each year of continued service
by the outside director.  Each option is granted at fair market value on the
date of grant, vests one year after the date of grant and is exercisable for ten
years.


                                          32
<PAGE>

A summary of the status of the Company's two stock option plans at December 28,
1997 and December 29, 1996 and changes during the fiscal years then ended is
presented in the table and narrative below:
<TABLE>
<CAPTION>
                                        Year Ended                     Year Ended
                                     December 28, 1997              December 29, 1996
                                ----------------------------   ---------------------------
                                            Weighted Average              Weighted Average
                                 Shares      Exercise Price     Shares     Exercise Price
                                --------    ----------------   --------   ----------------
<S>                             <C>         <C>                <C>        <C>
Outstanding, beginning of
   Period. . . . . . . . .       200,000        $  4.41              --       $    --
Granted. . . . . . . . . .       356,000           4.63         200,000          4.41
Exercised. . . . . . . . .            --             --              --            --
Forfeited. . . . . . . . .        10,000           2.00              --            --
Expired. . . . . . . . . .            --             --              --            --
                                --------        --------       --------       -------
Outstanding, end of
   Period. . . . . . . . .       546,000         $ 4.55         200,000       $  4.41
                                --------        --------       --------       -------
                                --------        --------       --------       -------
Exercisable, end of
   Period. . . . . . . . .       137,750                         35,000       $  4.13
                                --------                       --------       -------
                                --------                       --------       -------
Weighted average fair value
   Of options granted. . .      $   3.22                       $   2.63
                                --------                       --------
                                --------                       --------
</TABLE>
 

The Company accounts for these plans under APB Opinion No. 25, under which no
compensation cost has been recognized.  Had compensation cost for these plans
been determined consistent with SFAS No. 123, "Accounting for Stock-Based
Compensation," the Company's net loss and loss per share would have been
increased to the following pro forma amounts:
<TABLE>
<CAPTION>
                                                         1997           1996
                                                         ------         ------
<S>                                                 <C>              <C>
     Net Loss                As Reported            $(1,039,520)     $(703,592)
                             Pro Forma               (1,370,375)      (788,602)
     Diluted EPS             As Reported                  (0.20)         (0.17)
                             Pro Forma                    (0.26)         (0.19)
</TABLE>

The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option pricing model with the following weighted-average
assumptions used for grants in 1997 and 1996, respectively:  risk-free interest
rates of 6.01% and 6.96%; no expected dividend yields; expected lives of 7 and
5 years; and expected volatility of 85.06% and 60.73%.

6.   COMMITMENTS AND CONTINGENCIES:

LEGAL PROCEEDINGS

The Company is involved in various legal actions rising in the ordinary course
of business.  Although the outcomes of any such legal actions cannot be
predicted, in the opinion of management there is no legal proceeding pending
against or involving the Company for which the outcome is likely to have a
material adverse effect upon the financial position or results of operations of
the Company.


                                          33
<PAGE>


ITEM 8    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

          None.


                                          34
<PAGE>

                                       PART III

ITEM 9    DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
          COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

     The directors, executive officers and nominees for director of the Company
are as follows:
<TABLE>
<CAPTION>

Name                         Age      Position(s)
----                         ---      -----------
<S>                          <C>      <C>
William F. Rolinski           50      Chief Executive Officer, President and Director

Gary J. Hewett                35      Executive Vice President and Chief Operating Officer

Anthony P. Dombrowski         37      Chief Financial Officer and Treasurer

Blair A. Murphy, D.O.         44      Director

Henry T. Siwecki              53      Director

Casimer I. Zaremba            77      Director
</TABLE>
 

     William F. Rolinski is a founder of the Company and has been the Chief
Executive Officer, President and a director since its formation in 1993.  From
1987 to 1994, Mr. Rolinski was the founder, secretary and Corporate Counsel of
Ward Lake Energy, Inc. ("Ward Lake"), an independent producer of natural gas in
Michigan.  While Mr. Rolinski was at Ward Lake, the company drilled and produced
over 500 natural gas wells with combined reserves of over $200 million.

     Gary J. Hewett became the Chief Operating Officer and Executive Vice
President of the Company in April 1996.  From 1989 to March 1996, he served in
various capacities at Hooters of America, Inc., a national restaurant chain,
including Vice President of Franchise Operations in which Mr. Hewett was
responsible for the operational support of 84 franchised restaurants and Vice
President of Company Operations where he was responsible for the operation of 28
company-owned restaurants.  Mr. Hewett's responsibilities at Hooters included
supervision of site selection, restaurant design and layout, training and new
restaurant openings.  From 1986 to 1989, Mr. Hewett was employed by the Marriott
Corporation as a restaurant general manager.

     Anthony P. Dombrowski became the Chief Financial Officer of the Company in
May 1996.  He acted as a consultant to the Company, in the capacity of Chief
Financial Officer, from January 1996 to May 1996.  From February 1995 to May
1996, Mr. Dombrowski operated his own financial and consulting business.  Mr.
Dombrowski began his career with Price Waterhouse LLP in 1982.  From 1989 to
1995, Mr. Dombrowski was the Chief Financial Officer of Ward Lake.

     Blair A. Murphy, D.O. is a founder of the Company and has been a director
since its formation in 1993.  Dr. Murphy has been a urological surgeon since
1990 and is presently a self-employed physician.

     Henry T. Siwecki has been a director since August 1995.  For more than the
last five years, Mr. Siwecki has been the sole owner and president of Siwecki
Construction, Inc., a commercial and residential contractor.

     Casimer I. Zaremba, a founder of the Company who has been a director since
its formation in 1993, has decided not to seek reelection to the Board.  Mr.
Zaremba has been a private investor for more than the past five years.

     The Company's non-employee directors receive options pursuant to the 1996
Director Stock Option Plan.  Management members of the Board receive no
compensation as Board members.  Board members are paid their expenses, if any,
which are incurred solely to participate in meetings of the Board or Board
committees.


                                          35
<PAGE>

     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers, directors and persons who own more than 10% of a registered class of
the Company's equity securities to file reports of ownership and changes in
ownership with the Commission.  Such officers, directors and shareholders are
required by the Commission to furnish the Company with copies of all such
reports.  To the Company's knowledge, based solely on a review of copies of
reports filed with the Commission during 1997, all applicable Section 16(a)
filing requirements have been met.


                                          36
<PAGE>

ITEM 10   EXECUTIVE COMPENSATION

     The following table sets forth the aggregate cash compensation paid to or
accrued by each of the Company's executive officers who received in excess of
$100,000 for services rendered to the Company during 1997, 1996 and 1995.  The
Company has no formalized employment agreements with its executive officers.
 
                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
                                             ANNUAL COMPENSATION            LONG-TERM COMPENSATION AWARDS
                                         ----------------------------   -------------------------------------
                                                                              SHARES OF COMMON STOCK
      NAME AND PRINCIPAL POSITION          YEAR            SALARY               UNDERLYING OPTIONS
  -----------------------------------    ----------     -------------   -------------------------------------
<S>                                      <C>             <C>            <C>
William F. Rolinski                       1997           $  167,308                    75,000
  Chief Executive Officer                 1996              134,038                        --
                                          1995(1)            34,000                        --

Gary J. Hewett                            1997           $  152,061                   125,000
  Executive Vice President and            1996(2)           101,445                    55,000
  Chief Operating Officer                 1995                   --                        --

Anthony P. Dombrowski                     1997           $  102,615                    60,000
  Chief Financial Officer and             1996(3)           112,516                    33,000
  Treasurer                               1995               15,300                        --
</TABLE>

----------------------
(1)  Prior to May 26, 1995, Mr. Rolinski was not paid for his services.
(2)  Mr. Hewett's employment with the Company began on April 1, 1996.
(3)  Mr. Dombrowski's employment with the Company began on May 1, 1996.

     The following tables summarize stock option grants and exercises during
1997 to or by the executive officers set forth below and certain other
information relative to such stock options.

                       OPTION GRANTS IN FISCAL YEAR 1997
<TABLE>
<CAPTION>
                                    NUMBER OF
                                   SECURITIES              PERCENT OF TOTAL
                                   UNDERLYING               OPTIONS GRANTED                EXERCISE OR
                                     OPTIONS                TO EMPLOYEES IN                 BASE PRICE             EXPIRATION
            NAME                     GRANTED                  FISCAL YEAR                  ($/SHARE)(1)               DATE
----------------------------   ------------------   -------------------------------   ----------------------   -----------------
<S>                            <C>                  <C>                               <C>                      <C>
William F. Rolinski                  75,000                     25.9%                         $4.75                 9/29/07
Gary J. Hewett                      125,000                     43.1%                         $4.75                 9/29/07
Anthony P. Dombrowski                60,000                     20.7%                         $4.75                 9/29/07
</TABLE>

----------------------------
(1)  Fair market value per share on the date of grant, in accordance with the
     Company's 1996 Stock Option Plan.

       AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1997 AND FISCAL YEAR END
                                  OPTION VALUES
<TABLE>
<CAPTION>                                                           NUMBER OF SECURITIES                VALUE OF UNEXERCISED   
                                                                   UNDERLYING UNEXERCISED               IN-THE-MONEY OPTIONS   
                                SHARES                           OPTIONS AT FISCAL YEAR END             AT FISCAL YEAR END(1)  
                              ACQUIRED ON         VALUE       --------------------------------    --------------------------------
           NAME                EXERCISE         REALIZED        EXERCISABLE      UNEXERCISABLE      EXERCISABLE     UNEXERCISABLE
-------------------------  -----------------  -------------   ---------------   ---------------   ---------------  ---------------
<S>                        <C>                <C>             <C>               <C>               <C>              <C>
William F. Rolinski                  --              --               --            75,000                  --        $  56,250
Gary J. Hewett                       --              --           17,500           162,500           $  20,625        $  90,625
Anthony P. Dombrowski                --              --           10,500            82,500           $  12,375        $  46,875
</TABLE>

-------------------------
(1)  Market value of underlying securities at fiscal year end minus the exercise
     price.


                                          37
<PAGE>

ITEM 11   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table contains certain information as of March 1, 1998,
regarding the beneficial ownership of the Company's Common Stock by (i) each
person known by the Company to own beneficially more than 5% of its Common
Stock, (ii) each director, nominee for director, and executive officer named in
the "Summary Compensation Table" above and (iii) the directors and executive
officers as a group, and as to the percentage of the outstanding shares held by
them on such date.  Any shares which are subject to an option or a warrant
exercisable within 60 days are reflected in the following table and are deemed
to be outstanding for the purpose of computing the percentage of Common Stock
owned by the option or warrant holder but are not deemed to be outstanding for
the purpose of computing the percentage of Common Stock owned by any other
person.  Unless otherwise noted, each person identified below possesses sole
voting and investment power with respect to such shares.
<TABLE>
<CAPTION>
                                                      SHARES        PERCENT
                                                   BENEFICIALLY        OF
 NAME AND ADDRESS                                    OWNED(1)         CLASS
-----------------------------------                ------------   ------------
<S>                                                <C>            <C>
Perkins Capital Management, Inc.(2). . . . . .      1,031,600         17.8
     730 East Lake Street
     Wayzata, Minnesota 55391
William F. Rolinski(3) . . . . . . . . . . . .        840,608         15.9
Casimer I. Zaremba(3)(4)(5). . . . . . . . . .        685,007         12.9
Blair A. Murphy, D.O.(3)(4). . . . . . . . . .        645,007         12.2
The Perkins Opportunity Fund(6). . . . . . . .        600,000         10.7
     730 East Lake Street
     Wayzata, Minnesota 55391
Henry T. Siwecki(3)(4)(7). . . . . . . . . . .        146,989          2.7
Gary J. Hewett(8). . . . . . . . . . . . . . .         17,500            *
Anthony P. Dombrowski(9) . . . . . . . . . . .         15,500            *
All Directors and Executive Officers as a
  Group (6 persons)(7)(10) . . . . . . . . . .      2,350,611         43.9
</TABLE>

---------------
*Represents less than one percent.

(1)  Securities "beneficially owned" by a person are determined in accordance
     with the definition of "beneficial ownership" set forth in the regulations
     of the Commission and, accordingly, may include securities owned by or for,
     among others, the spouse, children or certain other relatives of such
     person as well as other securities as to which the person has or shares
     voting or investment power or has the option or right to acquire Common
     Stock within 60 days.
(2)  As set forth in Schedule 13G filed with the Commission by Perkins Capital
     Management, Inc. ("PCM") and The Perkins Opportunity Fund ("POF") on
     February 12, 1998.  Includes (i) 214,800 shares of Common Stock owned by
     the clients of PCM, (ii) 216,800 shares of Common Stock subject to
     currently exercisable warrants owned by the clients of PCM, (iii) 300,000
     shares of Common Stock owned by POF, and (iv) 300,000 shares of Common
     Stock subject to currently exercisable warrants owned by POF.  PCM has (i)
     sole power to vote 377,000 shares of Common Stock, including 300,000 shares
     of Common Stock owned by POF, and (ii) sole power to dispose of 1,031,600
     shares of Common Stock, including 300,000 shares of Common Stock owned by
     POF and 300,000 shares of Common Stock subject to currently exercisable
     warrants owned by POF.  PCM disclaims beneficial ownership of the
     securities owned by POF.
(3)  Substantially all of the shares beneficially owned by Messrs. Rolinski,
     Zaremba, Murphy and Siwecki are subject to a three-year escrow agreement
     with Norwest Bank Minnesota, National Association, the Company and the
     Commissioner of Commerce for the State of Minnesota dated June 7, 1996.
(4)  Includes 10,000 shares of Common Stock subject to currently exercisable
     options.
(5)  Beneficial ownership of 450,005 of these shares is shared with Walter
     Zaremba, Casimer Zaremba's brother.
(6)  As set forth in Schedule 13G filed with the Commission by PCM and POF on
     February 12, 1998.  Includes 300,000 shares of Common Stock subject to
     currently exercisable warrants.  Ownership of ten percent or more of the
     outstanding stock of the Company requires the prior approval of the
     Michigan Liquor Control Commission.  As a result, the warrants held by POF
     cannot be exercised in their entirety without such approval.


                                          38
<PAGE>

(7)  Includes 6,000 shares of Common Stock subject to currently exercisable
     warrants.
(8)  Represents shares of Common Stock subject to currently exercisable options.
(9)  Includes 10,500 shares of Common Stock subject to currently exercisable
     options.
(10) Includes 58,000 shares of Common Stock subject to currently exercisable
     options.

ITEM 12   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The Company issued a promissory note for $250,000, with annual interest
thereon at nine percent, to Casimer I. Zaremba, a director of the Company, on
March 17, 1995 which was due and payable on May 17, 1995.  A portion of the
proceeds of the December 1995 pre-bridge financing (the "Pre-Bridge Financing")
was used to repay $50,000 borrowed thereunder.  On April 10, 1996, the Company
and Casimer I. Zaremba agreed to replace such promissory note with a new
promissory note for $175,000, with annual interest thereon at nine percent.  A
portion of the proceeds of the February 1996 bridge financing (the "Bridge
Financing") was used to repay $50,000 borrowed thereunder.  The Company also
used a portion of the proceeds of its initial public offering to fully retire
this promissory note.  The Company believes the terms of its transactions with
Casimer I. Zaremba were no less favorable to the Company than those that could
be obtained from unaffiliated third parties.

     The Company entered into a $750,000 revolving credit facility with Gornick
Holdings Ltd. Partnership.  Prior to the Pre-Bridge and Bridge Financings, the
Company had borrowed $250,000 under this credit facility.  Messrs. Rolinski,
Murphy, Zaremba and Siwecki, shareholders of the Company, guaranteed repayment
of this facility.  A portion of the proceeds of the Pre-Bridge and Bridge
Financings was used to repay the $250,000 borrowed thereunder.  The revolving
credit facility was terminated by the Company on April 1, 1996.

     The Company has entered into a loan agreement with NBD Bank for three
separate loan facilities which aggregate $3.0 million.  Messrs. Rolinski, Murphy
and Zaremba, each a director of the Company, have personally guaranteed
repayment of all amounts under this loan agreement.  Messrs. Rolinski, Murphy
and Zaremba do not intend to personally guarantee future obligations of the
Company.

     The Company and its affiliates will only engage in other material
transactions with promoters if the transactions are (i) on terms no less
favorable to the Company or its affiliates than those that are generally
available from unaffiliated third parties and (ii) ratified by a majority of
independent outside members of the Company's Board who do not have an interest
in the transactions.

ITEM 13   EXHIBITS, LIST AND REPORTS ON FORM 8-K

     (a)  Exhibits

          3.1    Restated Articles of Incorporation (incorporated by reference
                 to the Company's Current Report on Form 8-K, filed on October
                 3, 1997 (File No. 0-20845)).
          3.2    Amended and Restated Bylaws (incorporated by reference to the
                 Company's Registration Statement on Form SB-2, filed on April
                 15, 1996 (File No. 333-3548)).
          4.1    Specimen Form of the Company's Common Stock Certificate
                 (incorporated by reference to the Company's Registration
                 Statement on Form SB-2, filed on April 15, 1996 (File No.
                 333-3548)).
          4.2    Form of Warrant Agreement (including Form of Redeemable Class
                 A Warrant) (incorporated by reference to the Company's
                 Registration Statement on Form SB-2, filed on April 15, 1996
                 (File No. 333-3548)).
          4.3    Form of Subscription and Investment Representation Agreement,
                 dated December 1995, between the Company and Pyramid Partners,
                 LP (including Form of Convertible Secured Promissory Note,
                 Form of Non-Convertible Secured Promissory Note and Form of
                 Warrant) (incorporated by reference to the Company's
                 Registration Statement on Form SB-2, filed on April 15, 1996
                 (File No. 333-3548)).
          10.1   1996 Stock Option Plan.


                                          39
<PAGE>

          10.2   1996 Director Stock Option Plan (incorporated by reference to
                 the Company's Registration Statement on Form SB-2, filed on
                 April 15, 1996 (File No. 333-3548)).
          10.3   Loan Agreement dated July 28, 1995, by and among the Company,
                 William F. Rolinski, Dr. Blair A. Murphy, Walter Zaremba,
                 Casimer I. Zaremba and NBD Bank (incorporated by reference to
                 the Company's Registration Statement on Form SB-2, filed on
                 April 15, 1996 (File No. 333-3548)).
          10.4   Escrow Agreement dated June 7, 1996, by and among the Company,
                 William F. Rolinski, Dr. Blair A. Murphy, Casimer I. Zaremba,
                 Henry T. Siwecki, Norwest Bank Minnesota, National
                 Association, and the Commissioner of Commerce for the State of
                 Minnesota (incorporated by reference to the Company's Annual
                 Report on Form 10-KSB, filed on March 31, 1997 (File No.
                 0-20845)).
          10.5   Real Estate Purchase and Leaseback Agreement by and between
                 Eyde Brothers Development Co., Landlord, and the Company,
                 Tenant, dated April 11, 1997 (incorporated by reference to the
                 Company's Quarterly Report on Form 10-QSB, filed on May 9,
                 1997 (File No.  0-20845)).
          10.6   Lease Agreement by and between Eyde Brothers Development Co.,
                 Landlord, and the Company, Tenant, dated April 11, 1997
                 (incorporated by reference to the Company's Quarterly Report
                 on Form 10-QSB, filed on May 9, 1997 (File No.  0-20845)).
          10.7   Real Estate Purchase and Leaseback Agreement by and between
                 Michael G. Eyde, Landlord, and the Company, Tenant, dated
                 August 1, 1997 (incorporated by reference to the Company's
                 Quarterly Report on Form 10-QSB, filed on August 12, 1997
                 (File No.  0-20845)).
          10.8   Lease Agreement by and between Michael G. Eyde, Landlord, and
                 the Company, Tenant, dated October 1, 1997.
          10.9   Stock Option Agreement dated August 1, 1997, between the
                 Company and Michael G. Eyde.
          23.1   Consent of Independent Public Accountants.
          24.1   Power of Attorney (included on signature page to Form 10-KSB).
          27.1   Financial Data Schedule.

     (b)  Reports on Form 8-K

          (1)    The Company's Current Report on Form 8-K, filed October 3,
                 1997 (File No. 0-20845), relating to (i) the Company filing
                 Restated Articles of Incorporation with the Michigan
                 Department of Commerce, (ii) the opening of a Big Buck Brewery
                 & Steakhouse in Auburn Hills, Michigan, and (iii) the Company
                 changing its name from Michigan Brewery, Inc. to Big Buck
                 Brewery & Steakhouse, Inc.


                                          40
<PAGE>

                                      SIGNATURES

     In accordance with Section 13 or 15(d) of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Gaylord, State of
Michigan on March 23, 1998.


                                  BIG BUCK BREWERY & STEAKHOUSE, INC.

                                  By  /s/ William F. Rolinski
                                    -------------------------------------------
                                          William F. Rolinski
                                          President and Chief Executive Officer
                                          (principal executive officer)


                                  POWER OF ATTORNEY

     KNOW ALL BY THESE PRESENT, that each person whose signature appears below
constitutes and appoints William F. Rolinski and Anthony P. Dombrowski as his or
her true and lawful attorney-in-fact and agent, with full powers of substitution
and resubstitution, for him or her and in his or her name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent, or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

     In accordance with the Securities Act of 1934, this report has been signed
below by the following persons on behalf of the registrant, and in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
             Signature                                      Title                              Date
             ---------                                      -----                              ----
<S>                                          <C>                                          <C>
     /s/ William F. Rolinski                 President, Chief Executive Officer and       March 23, 1998
---------------------------------------      Director (Principal Executive Officer)
         William F. Rolinski


     /s/ Anthony P. Dombrowski               Chief Financial Officer (Principal           March 23, 1998
---------------------------------------      Accounting Officer and Principal
        Anthony P. Dombrowski                Financial Officer)


     /s/ Blair A. Murphy                     Director                                     March 23, 1998
---------------------------------------
           Blair A. Murphy


     /s/ Henry T. Siwecki                    Director                                     March 23, 1998
---------------------------------------
          Henry T. Siwecki


                                             Director
---------------------------------------
         Casimer I. Zaremba
</TABLE>
 


                                          41
<PAGE>

                                  INDEX TO EXHIBITS
<TABLE>
<CAPTION>

Exhibit
Number         Description
------         -----------
<S>       <C>
  3.1     Restated Articles of Incorporation (incorporated by reference to the
          Company's Current Report on Form 8-K, filed on October 3, 1997 (File
          No. 0-20845)).
  3.2     Amended and Restated Bylaws (incorporated by reference to the
          Company's Registration Statement on Form SB-2, filed on April 15, 1996
          (File No. 333-3548)).
  4.1     Specimen Form of the Company's Common Stock Certificate (incorporated
          by reference to the Company's Registration Statement on Form SB-2,
          filed on April 15, 1996 (File No. 333-3548)).
  4.2     Form of Warrant Agreement (including Form of Redeemable Class A
          Warrant) (incorporated by reference to the Company's Registration
          Statement on Form SB-2, filed on April 15, 1996 (File No. 333-3548)).
  4.3     Form of Subscription and Investment Representation Agreement, dated
          December 1995, between the Company and Pyramid Partners, LP (including
          Form of Convertible Secured Promissory Note, Form of Non-Convertible
          Secured Promissory Note and Form of Warrant) (incorporated by
          reference to the Company's Registration Statement on Form SB-2, filed
          on April 15, 1996 (File No. 333-3548)).
  10.1    1996 Stock Option Plan.
  10.2    1996 Director Stock Option Plan (incorporated by reference to the
          Company's Registration Statement on Form SB-2, filed on April 15, 1996
          (File No. 333-3548)).
  10.3    Loan Agreement dated July 28, 1995, by and among the Company, William
          F. Rolinski, Dr. Blair A. Murphy, Walter Zaremba, Casimer I. Zaremba
          and NBD Bank (incorporated by reference to the Company's Registration
          Statement on Form SB-2, filed on April 15, 1996 (File No. 333-3548)).
  10.4    Escrow Agreement dated June 7, 1996, by and among the Company, William
          F. Rolinski, Dr. Blair A. Murphy, Casimer I. Zaremba, Henry T.
          Siwecki, Norwest Bank Minnesota, National Association, and the
          Commissioner of Commerce for the State of Minnesota (incorporated by
          reference to the Company's Annual Report on Form 10-KSB, filed on
          March 31, 1997 (File No. 0-20845)).
  10.5    Real Estate Purchase and Leaseback Agreement by and between Eyde
          Brothers Development Co., Landlord, and the Company, Tenant, dated
          April 11, 1997 (incorporated by reference to the Company's Quarterly
          Report on Form 10-QSB, filed on May 9, 1997 (File No.  0-20845)).
  10.6    Lease Agreement by and between Eyde Brothers Development Co.,
          Landlord, and the Company, Tenant, dated April 11, 1997 (incorporated
          by reference to the Company's Quarterly Report on Form 10-QSB, filed
          on May 9, 1997 (File No.  0-20845)).
  10.7    Real Estate Purchase and Leaseback Agreement by and between Michael G.
          Eyde, Landlord, and the Company, Tenant, dated August 1, 1997
          (incorporated by reference to the Company's Quarterly Report on Form
          10-QSB, filed on August 12, 1997 (File No.  0-20845)).
  10.8    Lease Agreement by and between Michael G. Eyde, Landlord, and the
          Company, Tenant, dated October 1, 1997.
  10.9    Stock Option Agreement dated August 1, 1997, between the Company and
          Michael G. Eyde.
  23.1    Consent of Independent Public Accountants.
  24.1    Power of Attorney (included on signature page to Form 10-KSB).
  27.1    Financial Data Schedule.
</TABLE>



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