<PAGE>   1
 
                               famous dave's logo
 
                         FAMOUS DAVE'S OF AMERICA, INC.
 
                                2,300,000 UNITS
 
                 Consisting of 2,300,000 Shares of Common Stock
                   and 2,300,000 Redeemable Class A Warrants
                           -------------------------
 
    Famous Dave's of America, Inc. (the "Company") is offering 2,300,000 units
(the "Offering"), each unit consisting of one share of Common Stock (a "Share")
and one redeemable Class A Warrant at an initial public offering price of $6.50
per unit (a "Unit"). The Class A Warrants are immediately exercisable and,
commencing ten trading days after the Effective Date (as hereinafter defined),
transferable separate from the Common Stock. Each Class A Warrant entitles the
holder to purchase at any time until four years following the date hereof (the
"Effective Date"), one share of Common Stock at an exercise price of $8.50 per
warrant, subject to adjustment. The Class A Warrants are subject to redemption
by the Company for $.01 per warrant at any time 90 days after the Effective
Date, on 30 days' written notice, provided that the average closing bid price of
the Common Stock exceeds 120% of the Exercise Price (subject to adjustment) for
any 10 consecutive trading days prior to such notice. See "Description of
Securities."
 
    Prior to this Offering, there has been no market for the Company's
securities. See "Underwriting" for information relating to the factors
considered in determining the Price to Public. The Company has applied for
listing its Common Stock, Class A Warrants and Units on the Nasdaq SmallCap
Market under the symbols DAVE, DAVEW, and DAVEU, respectively.
                           -------------------------
 
    THIS OFFERING INVOLVES A HIGH DEGREE OF RISK AND SUBSTANTIAL DILUTION. SEE
"RISK FACTORS" COMMENCING ON PAGE 6 AND "DILUTION" ON PAGE 12. THESE ARE
SPECULATIVE SECURITIES.
                           -------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
  EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
     SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
       PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
        REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
 

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
                                                                    UNDERWRITING
                                            PRICE TO PUBLIC         DISCOUNT(1)
                                                                                          PROCEEDS TO
                                                                                           COMPANY(2)
- -----------------------------------------------------------------------------------------------------------
<S>                                      <C>                   <C>                   <C>
Per Unit.................................         $6.50                $0.52                 $5.98
- -----------------------------------------------------------------------------------------------------------
Total (3)(4).............................      $14,950,000           $1,196,000           $13,754,000
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
</TABLE>

 
(1) The Underwriter will receive a sales commission equal to 8% of the Total
    Price to Public from the sale of the Units. The Company has also agreed to
    pay the Underwriter a nonaccountable expense allowance equal to 2% of the
    Total Price to Public. The Company has also agreed to sell to the
    Underwriter, for nominal consideration, a 5-year warrant to purchase up to
    230,000 shares at 140% of the Price to Public (the "Underwriter's Warrant").
    In addition, the Company has agreed to indemnify the Underwriter against
    certain liabilities. See "Underwriting."
 
(2) Before deducting expenses of the offering estimated at $220,000, which does
    not include the 2% nonaccountable expense allowance described in Note 1
    above and assumes no exercise of the Underwriter's over-allotment option.
 
(3) The Underwriter has been granted a 45-day option to purchase up to 345,000
    additional Units from the Company for the purpose of covering
    over-allotments. If the Underwriter purchases all of the Units under the
    over-allotment option, the Total Price to Public, Total Underwriting
    Discount and Total Proceeds to Company will be $17,192,500, $1,375,400 and
    $15,817,100, respectively. See "Underwriting."
 
(4) At the request of the Company, up to 15% of the Units offered hereby may be
    reserved for sale to persons designated by the Company at the Price to
    Public.
 
    The Units are offered by the Underwriter, subject to receipt and acceptance
by it, its right to reject orders in whole or in part and to certain other
conditions. It is expected that delivery of certificates representing the Class
A Warrants and the Common Stock underlying the Units will be made on or about
October 24, 1996 in Minneapolis, Minnesota.
 
                           RJ Steichen & Company Logo
 
                The date of this Prospectus is October 21, 1996.

<PAGE>   2
 
[Narrative description of photographs that appear on the inside front cover page
of prospectus]

Picture #1 -- In the foreground of this photograph taken inside the Company's
              Linden Hills Unit, David W. Anderson, the Chairman and Chief
              Executive Officer of the Company, is holding a large
              three-dimensional version of Wilbur(TM), the pink pig which is one
              of the Company's trademarks, behind a display of the Company's
              barbecued ribs, corn on the cob and wedges of watermelon. In the
              background can be seen the whimsically decorated counter where
              diners order their meals.  Caption: "Famous Dave and Wilbur." 

Picture #2 -- A photograph of the exterior of the Company's Roseville Unit taken
              at dusk. Caption: "Exceptional locations."

Picture #3 -- A photograph of two stainless-steel smoking ovens
              filled with ribs, beef brisket and chicken under a sign which
              reads, "Famous Dave's BBQ Pit." Caption: "Slow-smoked over
              smoldering-hickory."

Picture #4 -- An up-close photograph of steaming ribs over a flaming barbecue
              pit. Caption: "Award winning ribs made us famous."

Picture #5 -- A photograph of one of the Company's popular family-size entrees,
              the "garbage can lid," featuring a real garbage can lid loaded
              with ribs, herb-roasted chicken, fried chicken, beef brisket,
              french fries, corn bread muffins, and bowls of cole slaw and
              "Wilbur"(TM) beans, flanked by a bottle of Famous Dave's BBQ 
              Sauce.  Caption: "A mouth watering all-American feast."

Picture #6 -- A photograph of the interior of the Company's Linden Hills Unit
              which shows the typical roadhouse decor, with red and white plaid
              oilcloth tablecloths, casually mismatched wooden chairs, wooden
              floor, weathered barn timber walls, items of Americana from the
              '20s and '30s on the walls along with painted murals, and red and
              white gingham plaid cafe curtains. Caption: "Interiors are warm
              and friendly."


     IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK,
THE CLASS A WARRANTS AND/OR THE UNITS AT A LEVEL ABOVE THAT WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.

<PAGE>   3
 
                               PROSPECTUS SUMMARY
 
     The following summary is qualified in its entirety by the more detailed
information and financial statements (including the notes thereto) appearing
elsewhere in this Prospectus. Unless otherwise indicated, the information in
this Prospectus assumes no exercise of Class A Warrants offered hereby or of the
Underwriter's over-allotment option. Investors should carefully consider the
information set forth under the caption "Risk Factors."
 
                                  THE COMPANY
 
     The business of Famous Dave's of America, Inc. (the "Company") is to
develop, own and operate American roadhouse-style barbeque restaurants under the
name "Famous Dave's Bar-B-Que Shack." The Company presently owns and operates
three restaurants, one located in the Linden Hills neighborhood of Minneapolis
(the "Linden Hills Unit"), one in Roseville, Minnesota (the "Roseville Unit")
and the third in Calhoun Square in Minneapolis (the "Calhoun Blues Joint" and,
collectively with the Linden Hills and Roseville Units, the "Existing Units").
The Calhoun Blues Joint opened in early September 1996 and features live blues
music during certain evenings and an authentic Chicago blues decor. The Company
is planning to develop three additional restaurants, to be located in
Minnetonka, Minnesota (the "Minnetonka Unit"), on West 7th Street near the
Highland Park area of St. Paul (the "Highland Park Unit") and in Maple Grove,
Minnesota (the "Maple Grove Unit"). These three additional units are expected to
open in the first half of 1997.
 
     While the Company's primary theme for its restaurants is the
roadhouse-style decor, various other themes have been identified and developed.
The Linden Hills and Roseville Units were designed to be reminiscent of
roadhouse-style barbeque "joints." The Company's nostalgic roadside shack theme
is promoted by the abundant use of rustic antiques and items of Americana from
the '20s and '30s. Two additional themes have been developed, including the
larger Calhoun Blues Joint with live blues music several nights a week, and a
north woods lodge decor. Consistent in all themes is the use of recorded or live
blues music and award-winning barbeque.
 
     Each restaurant features an assortment of menu items, such as
hickory-smoked St. Louis-style spareribs, Texas beef brisket, herb-roasted
chicken, barbeque sandwiches, and char-grilled burgers, as well as honey-
buttered corn bread, potato salad, cole slaw and "Wilbur"(TM) beans. Homemade
desserts, including Famous Dave's homemade bread pudding, Kahlua(TM) brownies
and strawberry shortcake, are a specialty. The Company's Famous Dave's BBQ
Sauces, which are provided in four regional variations (Rich-N-Sassy(TM), Texas
Pit(TM), Georgia Mustard(TM) and Hot Stuff(TM)), represent signature items for
the Company.
 
     The Company opened the Linden Hills Unit, a 2,900-square-foot facility with
approximately 60 indoor and 40 patio seats, in June 1995 in the primarily
residential Linden Hills neighborhood of south Minneapolis. The Company opened
its second restaurant, a 4,800-square-foot facility with approximately 100
seats, in suburban Roseville, Minnesota, in June 1996. The Calhoun Blues Joint,
an approximately 250-seat, 10,500-square-foot live blues music facility, opened
in Calhoun Square in the Uptown area of Minneapolis in September 1996. Three
additional restaurants are being planned for development in the Minneapolis/St.
Paul area which are scheduled to open in the first half of 1997.
 
     The Company was incorporated in March 1994 as a Minnesota corporation. Its
executive offices are located at 12700 Industrial Park Boulevard, Suite 60,
Minneapolis, Minnesota 55441 and its telephone number is 612-557-5798.
 
                                        3

<PAGE>   4
 
                                  THE OFFERING
 
Securities Offered............   2,300,000 Units, each Unit consisting of one
                                 share of Common Stock and one redeemable Class
                                 A Warrant at an initial public offering price
                                 of $6.50 per Unit. Each Class A Warrant is
                                 immediately exercisable and, commencing ten
                                 trading days after the Effective Date,
                                 transferable separately from the Common Stock.
                                 Each Class A Warrant entitles the holder to
                                 purchase at any time until four years after the
                                 Effective Date, one share of Common Stock at an
                                 exercise price of $8.50 per Warrant, subject to
                                 adjustment. The Class A Warrants are subject to
                                 redemption by the Company for $.01 per Warrant
                                 at any time 90 days after the Effective Date,
                                 on 30 days written notice, provided that the
                                 average closing bid price of the Common Stock
                                 exceeds 120% of the Exercise Price (subject to
                                 adjustment) for any 10 consecutive trading days
                                 prior to such notice.
 
Common Stock Outstanding
  Before this Offering........   3,356,250 shares
 
Common Stock Outstanding
  After this Offering.........   5,656,250 shares(1)
 
Proposed Nasdaq SmallCap
Market
  Symbols:
  Common Stock................   DAVE
  Warrants....................   DAVEW
  Units.......................   DAVEU
 
Use of Proceeds...............   The Company intends to utilize the net proceeds
                                 to develop and open as few as eight or as many
                                 as ten new units.
- -------------------------
(1) Does not include (i) 345,000 Units subject to the Underwriter's
    over-allotment option; (ii) 230,000 shares of Common Stock issuable upon
    exercise of the Underwriter's Warrant at 140% of the Price to Public; (iii)
    2,300,000 shares of Common Stock which are issuable upon the exercise of the
    Class A Warrants at an exercise price of $8.50 per warrant; (iv) 700,000
    shares of Common Stock reserved for issuance under the Company's 1995 Stock
    Option and Compensation Plan, of which 338,000 have been granted; and (v)
    50,000 shares of Common Stock issuable upon exercise of directors' stock
    options at an exercise price of $4.33 per share.
 
FOR OREGON INVESTORS
 
     THE COMPANY WILL OFFER AND SELL SECURITIES TO: ANY PERSON WHO (A) HAS AN
INCOME OF $65,000 AND A NET WORTH OF $250,000, OR (B) HAS A NET WORTH OF
$500,000 (IN EACH CASE, EXCLUDING HOME, HOME FURNISHINGS AND PERSONAL
AUTOMOBILES).
 
                                        4

<PAGE>   5
 
                         SUMMARY FINANCIAL INFORMATION
 

<TABLE>
<CAPTION>
                                             MARCH 14, 1994                       TWENTY-SIX WEEKS ENDED
                                             (INCEPTION) TO     YEAR ENDED     ----------------------------
                                              DECEMBER 31,     DECEMBER 31,     JUNE 30,
                                                1994(1)          1995(1)        1995(1)      JUNE 30, 1996
                                             --------------    ------------    ----------    --------------
<S>                                          <C>               <C>             <C>           <C>
STATEMENT OF OPERATIONS DATA:
Sales.....................................     $        0       $  481,510     $   23,601      $1,015,856
Cost of sales.............................              0          169,789         13,278         336,600
                                               ----------       ----------     ----------      ----------  
  Gross profit............................              0          311,721         10,323         679,256
Restaurant operating expenses.............              0          302,217         45,991         391,232
Depreciation and amortization.............              0           17,009          2,000          36,289
General, administrative and development...              0          332,331         57,040         634,460
Other (income) expense....................              0          (33,646)             0           5,477
                                               ----------       ----------     ----------      ----------  
  Net loss................................     $        0       $ (306,190)    $  (94,708)     $ (388,202)
                                               ==========       ==========     ==========      ==========
Net loss per share........................     $     0.00       $    (0.14)    $    (0.04)     $    (0.18)
                                               ==========       ==========     ==========      ==========
Shares used in per share calculation......      2,135,417        2,135,417      2,135,417       2,135,417
                                               ==========       ==========     ==========      ==========
</TABLE>

 

<TABLE>
<CAPTION>
                                                                            JUNE 30, 1996
                                                           ------------------------------------------------
                                                                             PROFORMA        PROFORMA AS
                                                              ACTUAL           (2)         ADJUSTED(2)(3)
                                                           ------------     ----------    -----------------
<S>                                     <C>                <C>              <C>           <C>
BALANCE SHEET DATA:
Working capital (deficiency)..........................     $ (2,239,340)    $1,965,660       $15,282,984
Total assets..........................................        3,511,524      7,716,524        20,951,524
Total liabilities.....................................        3,205,916      3,205,916         3,205,916
Accumulated deficit...................................         (694,392)      (694,392)         (694,392)
Stockholders' equity..................................          305,608      4,510,608        17,745,608
</TABLE>

 
- -------------------------
(1) The Company began operations at the Linden Hills Unit in June 1995. Prior to
    such time, the Company had no operations.
 
(2) Assumes completion on June 30, 1996 of the sale of 1,356,250 shares of
    Common Stock at $3.50 per share for net proceeds of approximately $4,200,000
    that actually occurred in July 1996.
 
(3) As adjusted for the sale of the Units offered hereby and the anticipated
    application of the net proceeds therefrom. Does not include: (i) 345,000
    Units subject to the Underwriter's over-allotment option; (ii) 230,000
    shares of Common Stock issuable upon exercise of the Underwriter's Warrant
    at 140% of the Price to Public; (iii) 2,300,000 shares of Common Stock which
    are issuable upon the exercise of the Class A Warrants at an exercise price
    of $8.50 per warrant; (iv) 700,000 shares of Common Stock reserved for
    issuance under the Company's 1995 Stock Option and Compensation Plan, of
    which 338,000 have been granted; and (v) 50,000 shares of Common Stock
    issuable upon exercise of directors' stock options at an exercise price of
    $4.33 per share.
 
                                        5

<PAGE>   6
 
                                  RISK FACTORS
 
     An investment in the Units offered hereby is highly speculative and
involves a high degree of risk. Investors could lose their entire investment.
Prospective investors should carefully consider the following factors, along
with the other information set forth in this Prospectus, in evaluating the
Company, its business and prospects before purchasing the Units.
 
LACK OF PROFITABILITY; LACK OF OPERATING HISTORY
 
     The Company opened its first restaurant in June 1995. The Company had a net
loss of $388,202 during the 26 weeks of operations ended June 30, 1996, and a
net loss of $306,190 for the year ended December 31, 1995. The Company had a
working capital deficit of $2,239,340 and an accumulated deficit of $694,392 at
June 30, 1996. Prior to the opening of the Linden Hills 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 any company. There can be no assurance that future operations
of such restaurants, or any future restaurants, will be profitable. Future
revenues and profits, if any, will depend upon various factors, including the
market acceptance of the Company's roadhouse and other concepts, the quality of
restaurant operations, and general economic conditions. Frequently, restaurants,
particularly theme-oriented restaurants, experience a decline of revenue growth
or of actual revenues as the restaurant's "initial honeymoon" period expires and
consumers tire of the related theme. There is no assurance that the Company can
operate profitably or that it will successfully implement its expansion plans,
in which case the Company will continue to be dependent on the revenues of the
Existing Units. Furthermore, to the extent that the Company's expansion strategy
is successful, the Company must manage the transition to multiple site
operations, higher volume operations, the control of overhead expenses and the
addition of necessary personnel.
 
LIMITED MANAGEMENT EXPERIENCE/NEED FOR ADDITIONAL MANAGEMENT
 
     The success of the Company will depend upon the Company's ability to
attract and retain a highly qualified management team. David W. Anderson, the
Company's Chairman and Chief Executive Officer, has limited restaurant and
multi-location restaurant management experience. William L. Timm, the Company's
President, has no previous restaurant experience. Mark A. Payne, the Company's
Vice President, Finance and Chief Financial Officer, has significant financial
and accounting experience but has no prior restaurant-related experience. The
Company will also need to hire other corporate level and management employees to
help implement and operate its expansion plans, including a chief operating
officer with significant multi-unit restaurant experience. The failure to
obtain, or delays in obtaining, key employees could have a material adverse
effect on the Company. See "Management."
 
LIMITED BASE OF OPERATIONS
 
     The Company currently operates only three restaurants and plans to open at
least three additional restaurants in 1997. The combination of the relatively
small number of locations and the significant investment associated with each
new unit may cause the operating results of the Company to fluctuate
significantly and adversely affect the profitability of the Company. Due to this
relatively small number of current and planned locations, poor operating results
at any one unit or a delay in the planned opening of a unit could materially
affect the profitability of the entire Company. Future growth in revenues and
profits will depend to a substantial extent on the Company's ability to increase
the number of its restaurants. Additionally, the Company's history does not
provide any basis for prediction as to whether individual units will tend to
show increases or decreases in comparable unit sales.
 
                                        6

<PAGE>   7
 
LIMITED FINANCIAL RESOURCES; ADEQUACY OF PROCEEDS AND NEED FOR ADDITIONAL
FINANCING
 
     The Company's ability to execute its business strategy depends to a
significant degree on its ability to obtain substantial equity capital to
finance the development of additional restaurants. The proceeds of this Offering
will provide the Company with the financing required to develop and open eight
to ten additional restaurants and for working capital purposes. The total cost
of developing the Linden Hills Unit was approximately $425,000, which included
$282,000 for the design and construction, $131,000 for equipment, furniture and
fixtures, and $12,000 for other costs. The total cost of developing the
Roseville Unit was approximately $1,110,000, which included $734,000 for the
design and construction, $310,000 for equipment, furniture and fixtures, and
$66,000 for other costs. The Company estimates that the costs of developing
three additional restaurants presently planned for the Minneapolis/St. Paul area
will be approximately $4.5 million. Although the Company estimates that the
proceeds from this Offering will be sufficient to develop and open at least
eight additional units, there can be no assurance that such facilities can be
developed at such estimated costs. If the proceeds of this Offering are not
sufficient to develop such units, the Company may be required to seek additional
funds through an additional offering of the Company's equity securities. If
additional funds are required, there can be no assurance that any additional
funds will be available on terms acceptable to the Company or its shareholders.
New investors may seek and obtain substantially better terms than were granted
its present investors and the issuance of such securities would result in
dilution to the existing shareholders. Furthermore, as the Company prepares to
open additional units, it will expend a relatively higher amount on
administrative expenses than would a mature Company with such operations.
 
EXPANSION STRATEGY
 
     The Company's ability to open and successfully operate additional units
will also depend upon the hiring and training of skilled restaurant management
personnel and the general ability to successfully manage growth, including
monitoring restaurants and controlling costs, food quality and customer service.
The Company's present senior management has little experience developing and
operating multi-unit facilities. The Company anticipates that the opening of
additional units will give rise to additional expenses associated with managing
operations located in multiple markets. Furthermore, the Company believes that
competition for unit-level management has become increasingly intense as
additional restaurant chains expand to new markets. Achieving consumer awareness
and market acceptance will require substantial efforts and expenditures by the
Company. An extraordinary amount of management's time may be drawn to such
matters and negatively impact operating results. There can be no assurance that
the Company will be able to enter into any other contracts for development of
additional units on terms satisfactory to the Company. Accordingly, there can be
no assurance that the Company will be able to open new units or that, if opened,
those units can be operated profitably. See "Business -- Expansion Strategy."
 
THE RESTAURANT INDUSTRY AND COMPETITION
 
     The restaurant industry is highly competitive with respect to price,
service, quality and location and, as a result, has a high failure rate. 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. Furthermore, to the extent that
barbeque restaurants are frequently viewed as "local," the Company may
experience intense competition or lack of consumer acceptance if it expands into
areas with existing barbeque restaurants. There can be no assurance that the
Company will be able to respond to various competitive factors affecting the
restaurant industry. The restaurant industry is also generally affected by:
changes in consumer preferences, national, regional and local economic
conditions, and demographic trends. The performance of restaurant facilities may
also be affected by factors such as traffic patterns, demographic
considerations, and the type, number and location of competing facilities. In
addition, factors such as inflation, increased labor and employee benefit costs,
and a 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. Finally, by the nature of its business,
the Company would be subject to potential liability from serving contaminated or
improperly prepared food.
 
                                        7

<PAGE>   8
 
CONCEPT EVOLUTION
 
     The Company presently intends that most of its future restaurants will
feature the roadhouse theme similar to the Linden Hills and Roseville Units.
However, the Famous Dave's concept is evolving and a number of factors could
change this theme as applied in different locations. These factors include
demographic and regional differences, locations that have more or less traffic
than the areas in which those units are located, type of available floor space,
and the availability of specialty items such as antiques. Accordingly, future
units could be larger or smaller than those units, could vary in the mix of
retail/restaurant operations, and could have differences in the application of
the Famous Dave's theme.
 
LONG-TERM, NON-CANCELABLE LEASES
 
     The Company has entered into long-term leases or subleases with S&D Land
Holdings, Inc., a Minnesota corporation which is wholly-owned by David W.
Anderson relating to its Existing Units and certain planned units. These leases
and subleases are non-cancelable by the Company (except in limited
circumstances) and range in term from seven to ten years. The leases and
subleases do not permit assignment or subleasing without the prior approval of
S&D Land Holdings. Additional facilities developed by the Company are likely to
be subject to similar long-term, non-cancelable leases, although the Company
currently expects, subject to available financial resources, that such leases
will be entered into with unrelated parties. If an existing or future unit does
not perform at a profitable level, and the decision is made to close the
restaurant, the Company may nonetheless be committed to perform its obligations
under the applicable lease or sublease, which would include, among other things,
payment of the respective base rent for the balance of the respective lease
term. If such a restaurant closing were to occur at one of these locations, the
Company would lose a unit without necessarily receiving an adequate return on
its investment. See "Business -- Property and Unit Locations" and "Certain
Transactions."
 
TRANSACTIONS WITH MANAGEMENT; CONFLICTS OF INTEREST
 
     There are several transactions between the Company and David W. Anderson,
its Chairman and Chief Executive Officer, that present a conflict of interest.
In addition, Mr. Anderson is a director of Rainforest Cafe, Inc., a theme
restaurant with associated retail operations primarily located in high traffic
shopping malls and theme parks throughout the world. Martin J. O'Dowd, a
director of the Company, is also the President, Chief Operating Officer and a
director of Rainforest Cafe, Inc. and a director of Elephant & Castle Group,
Inc. In the future these two companies may potentially compete against the
Company when and if one of the Company's restaurants are developed in a market
that contains a restaurant operated by one of these two other companies or vice
versa. Therefore, the directorships of Messrs. Anderson and O'Dowd could
constitute a conflict of interest. See "Certain Transactions."
 
CONTROL OF THE COMPANY; DEPENDENCE ON KEY PERSONNEL
 
     Following this offering, David W. Anderson will control approximately 35.4%
of the Company's Common Stock. Therefore, Mr. Anderson will have the ability to
direct its operations and financial affairs and to substantially influence the
election of members of the Board of Directors of the Company. The Company is
also presently highly dependent upon the personal efforts and abilities of its
Chief Executive Officer, David W. Anderson. The Company has a two-year
employment agreement with Mr. Anderson. The loss of the services of Mr. Anderson
could have a substantial adverse effect on the Company's ability to achieve its
objectives. The Company currently has no key man insurance on Mr. Anderson.
 
USE OF PROCEEDS
 
     The Company intends to use the net proceeds of this offering to develop
from eight to ten new restaurants. See "Use of Proceeds." The Company has not
yet determined which of its three currently developed concepts will be used in
such new units. This factor, along with the other cost factors cited in "Use of
Proceeds," will have an impact on the number of restaurants that may be opened
with the proceeds of this offering. The Company will thus have broad discretion
regarding the use of such proceeds.
 
                                        8

<PAGE>   9
 
GOVERNMENT REGULATION
 
     The restaurant business is subject to various federal, state and local
government regulations, including those relating to the sale of food and
alcoholic beverages. The failure to maintain food and liquor licenses would have
a material adverse effect on the Company's operating results. In addition,
restaurant operating costs are affected by increases in the minimum hourly wage,
unemployment tax rates, sales taxes and similar costs over which the Company has
no control. Many of the Company's restaurant personnel will be paid at rates
based on the federal minimum wage. Recent increases in the minimum wage are not
expected to materially impact the Company's labor costs. The Company will be
subject to "dram shop" statutes in certain states, including Minnesota, which
generally allow a person injured by an intoxicated person to recover damages
from an establishment that served alcoholic beverages to such intoxicated
person. The Company has obtained liability insurance against such potential
liability.
 
TRADEMARKS
 
     The Company's ability to successfully implement its Famous Dave's concept
will depend in part upon its ability to protect its trademarks. The Company has
filed a trademark application with the United States Patent and Trademark Office
to register the "Famous Dave's" mark and design. There can be no assurance that
the Company will be granted trademark registration for any or all of the
proposed uses in the Company's applications. In the event the Company's mark is
granted registration, there can be no assurance that the Company can protect
such mark and design against prior users in areas where the Company conducts
operations. There is no assurance that the Company will be able to prevent
competitors from using the same or similar marks, concepts or appearance.
 
SUBSTANTIAL DILUTION
 
     Purchasers of the securities offered hereby will experience immediate
substantial dilution of $3.36 per Share in the net tangible book value per share
of Common Stock. See "Dilution."
 
ABSENCE OF DIVIDENDS
 
     At the present time, the Company intends to use any earnings which may be
generated to finance further growth of the Company's business. Accordingly,
investors should not purchase the shares with a view towards receipt of cash
dividends from any Shares.
 
LACK OF PUBLIC MARKET; DETERMINATION OF OFFERING PRICE
 
     Prior to this Offering, there has been no public market for the Company's
securities. Although the Units have been approved for listing on the Nasdaq
SmallCap Market, there can be no assurance that an active public market will
develop or be sustained. In addition, the SmallCap Market may be significantly
less liquid than the Nasdaq National Market. If the Company fails to maintain
the standards for quotation, the Company's securities could be removed from the
market and traded in the over-the-counter market. As a result, an investor would
find it more difficult to dispose of, or obtain accurate quotations as to the
price of, the securities.
 
     The offering price of the Units offered hereby has been arbitrarily
determined by negotiation between the Company and the Underwriter and bears no
relationship to the Company's current operating results, book value, net worth
or financial statement criteria of value. The factors considered in determining
the offering price included an evaluation by management of the history of and
prospects for the industry in which the Company competes and the prospects for
earnings of the Company. Such factors are largely subjective, and the Company
makes no representation as to any objectively determinable value of the Units
offered hereby. See "Underwriting."
 
     In addition, if the Company fails to maintain its qualification for its
Units to trade on the Nasdaq SmallCap Market, the Units will be subject to
certain rules of the Securities and Exchange Commission relating to "penny
stocks." Such rules require broker-dealers to make a suitability determination
for
 
                                        9

<PAGE>   10
 
purchasers and to receive the purchaser's prior written consent for a purchase
transaction, thus restricting the ability of purchasers and broker-dealers to
sell the stock in the open market.
 
CURRENT PROSPECTUS AND STATE REGISTRATION REQUIRED TO EXERCISE WARRANTS;
POSSIBLE REDEMPTION OF WARRANTS
 
     Purchasers of Units will be able to exercise the Class A Warrants only if a
current prospectus relating to the shares of Common Stock underlying the Class A
Warrants is then in effect and only if such securities are qualified for sale or
exempt from qualification under the applicable securities laws of the states in
which the various holders of Class A Warrants reside. Although the Company will
use its best efforts to (i) maintain the effectiveness of a current prospectus
covering the shares of Common Stock underlying the Class A Warrants and (ii)
maintain the registration of such Common Stock under the securities laws of the
states in which the Company initially qualifies the Units for sale in the
Offering, there can be no assurance that the Company will be able to do so. The
Company will be unable to issue shares of Common Stock to those persons desiring
to exercise their Class A Warrants if a current prospectus covering the shares
issuable upon the exercise of the Class A Warrants is not kept effective or if
such shares are not qualified nor exempt from qualification in the states in
which the holders of the Warrants reside. The Class A Warrants are subject to
redemption at any time by the Company at $.01 per Warrant 90 days after the
Effective Date, on 30 days prior written notice, if the average closing bid
price of the Common Stock shall exceed 120% of the Exercise Price (subject to
adjustment), for 10 consecutive trading days, at any time prior to such notice
and provided a current prospectus covering the shares is then effective under
federal securities laws. If the Class A Warrants are redeemed, Warrant holders
will lose their right to exercise the 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, which is likely to be substantially less than the
market value of the Class A Warrants at the time of redemption. See "Description
of Securities -- Class A Warrants."
 
UNDERWRITER'S WARRANT
 
     The Company has agreed to sell to the Underwriter, for nominal
consideration, a five-year warrant to purchase up to 230,000 shares of Common
Stock at 140% of the Price to Public. As long as the Underwriter's Warrant or
other outstanding warrants remain unexercised, the Company's ability to raise
additional capital may be adversely affected. See "Underwriting."
 
UNDESIGNATED STOCK
 
     The Company's authorized capital consists of 100,000,000 shares of capital
stock. The Board of Directors, without any action by the Company's stockholders,
is authorized to designate and issue shares in such classes or series (including
classes or series of preferred stock) as it deems appropriate and to establish
the rights, preferences and privileges of such shares, including dividends,
liquidation and voting rights. The Company currently has 3,356,250 shares of
Common Stock outstanding and has authorized the issuance of an additional
2,645,000 shares of Common Stock in contemplation of this Offering. A further
3,625,000 shares of Common Stock have been authorized for the following: (i)
2,300,000 shares issuable upon the exercise of the Class A Warrants being issued
as part of this Offering (2,645,000 if the Underwriter's over-allotment option
is exercised in full), (ii) 230,000 shares issuable upon the exercise of
warrants to purchase one share of Common Stock being issued to the Underwriter,
(iii) 700,000 shares for issuance under the Company's 1995 Stock Option and
Compensation Plan, of which 338,000 have been granted, and (iv) 50,000 shares of
Common Stock issuable upon exercise of Directors' Stock Options. No other class
of common stock or preferred stock is currently designated and there is no
current plan to designate or issue any such securities. The rights of holders of
preferred stock and other classes of common stock that may be issued may be
superior to the rights granted to the holders of the Shares. Further, the
ability of the Board of Directors to designate and issue such undesignated
shares could impede or deter an unsolicited tender offer or takeover proposal
regarding the Company and the issuance of additional shares having preferential
rights could adversely affect the voting
 
                                       10

<PAGE>   11
 
power and other rights of holders of Common Stock. See "Management -- Stock
Option and Compensation Plan" and "Description of Securities."
 
SHARES ELIGIBLE FOR FUTURE SALE
 
     The sale, or availability for sale, of substantial amounts of Common Stock
in the public market subsequent to this offering may adversely affect the
prevailing market price of Common Stock and may impair the Company's ability to
raise additional capital by the sale of its equity securities. David W.
Anderson, Chairman and Chief Executive Officer of the Company, has agreed that
he will not sell, grant any option for the sale of, or otherwise dispose of any
equity securities of the Company (or any securities convertible into or
exercisable or exchangeable for equity securities of the Company) for 365 days
after the Effective Date without the prior written consent of the Underwriter.
The Company's other executive officers and directors have agreed to be subject
to the same restrictions for a period of 180 days. See "Description of
Securities -- Shares Eligible for Future Sale." It is expected that 1,356,250
shares of the Company's Common Stock which were sold in reliance on "private
placement" exemptions under the Securities Act of 1933, as amended (the "Act")
will become eligible for sale as early as fourth quarter 1997. See "Description
of Securities -- Shares Eligible for Future Sale."
 
MINNESOTA ANTI-TAKEOVER LAW
 
     The Company is subject to Minnesota statutes regulating business
combinations and restricting voting rights of certain persons acquiring shares
of the Company, which may hinder or delay a change in control of the Company.
See "Description of Securities."
 
                                USE OF PROCEEDS
 
     The net proceeds to be received by the Company from this Offering, after
deducting estimated costs and expenses of the Offering, are estimated to be
approximately $13,235,000 ($15,253,250 if the Underwriter's over-allotment
option is exercised in full). The number of units the Company is able to develop
with the proceeds will depend on the per-unit development cost. Per-unit
development costs will be affected by: (i) whether the unit is developed on
leased or purchased land, (ii) the amount of landlord contributions, if any, and
(iii) the mix of developed units among the roadhouse, BBQ & Blues and north
woods lodge concepts.
 
     The Company intends to utilize the proceeds to develop units as follows:
 

<TABLE>
<CAPTION>
                                      UNIT                                 ESTIMATED COST
        ----------------------------------------------------------------   --------------
        <S>                                                                <C>
        Minnetonka, MN unit (north woods theme).........................     $1,000,000
        Highland Park, MN and
        Maple Grove, MN units (roadhouse theme).........................     $2,500,000
        Five additional roadhouse theme units...........................     $6,500,000
        One additional north woods theme unit...........................     $2,500,000
</TABLE>

 
     The Company intends to use the balance of the net proceeds of $735,000
($2,753,250 if the over-allotment option is exercised in full), to develop
additional units, the themes of which have not been selected among the Company's
roadhouse, BBQ & Blues and north woods lodge concepts.
 
     The Company currently intends and expects that it will utilize all the net
proceeds of this Offering within 24 months following completion of this
Offering. Pending the use of proceeds as described above, the net proceeds will
be invested in short-term, investment-grade, interest-bearing securities.
 
                                       11

<PAGE>   12
 
                                    DILUTION
 
     At June 30, 1996, the Company's net tangible book value was $269,621 or
approximately $0.13 per share of Common Stock. "Net tangible book value"
represents the tangible assets of the Company less all liabilities. Without
taking into account any further changes in net tangible book value after June
30, 1996, other than to give effect to (i) the sale of all of the Units offered
hereby and (ii) the application of the net proceeds therefrom, the proforma net
tangible book value as of such date would have been $13,504,621 or approximately
$3.14 per share, assuming the Units are sold. This represents an immediate
increase to existing shareholders in net tangible book value of approximately
$3.01 per share and an immediate dilution to new Shareholders of $3.36 per
share. "Dilution" represents the difference between the amount per share paid by
purchasers in this Offering and proforma net tangible book value per share of
the Common Stock after this Offering. The following table illustrates the
dilution in net tangible book value per share to new investors as of June 30,
1996.
 

<TABLE>
<CAPTION>
                                                                                   AMOUNT
                                                                                   ------
        <S>                                                               <C>      <C>
        Public offering price..........................................            $6.50
        Net tangible book value before offering........................   $0.13
        Increase in net tangible book value attributable to new
          investors....................................................    3.01
                                                                          -----
        Proforma net tangible book value after offering................             3.14
                                                                                   -----
        Dilution in net tangible book value to new investors(1)........            $3.36
                                                                                   =====
</TABLE>

 
- -------------------------
(1) The dilution in net tangible book value per share to new investors, assuming
    the Underwriter's over-allotment option is fully exercised, would be $3.16.
 
     The following tables summarize the differences between the existing
shareholders and the new investors with respect to the number of shares of
Common Stock purchased from the Company, the total cash consideration paid by
each group, and the average cash consideration per share of Common Stock paid by
each group (assuming the entire offering price of the Units is allocated to the
Common Stock).
 

<TABLE>
<CAPTION>
                                                 SHARES PURCHASED       TOTAL CONSIDERATION       AVERAGE
                                               --------------------    ----------------------      PRICE
                                                NUMBER      PERCENT      AMOUNT       PERCENT    PER SHARE
                                               ---------    -------    -----------    -------    ---------
<S>                                            <C>          <C>        <C>            <C>        <C>
Existing Shareholder........................   2,000,000      35.4%    $ 1,000,000       4.8%      $0.50
Private Placement Investors.................   1,356,250      24.0%      4,746,875      22.9%       3.50
New Investors...............................   2,300,000      40.6%     14,950,000      72.3%       6.50
                                               ---------     -----     -----------     -----
     Total(1)...............................   5,656,250     100.0%    $20,696,875     100.0%
                                               =========     =====     ===========     =====
</TABLE>

 
- -------------------------
(1) The foregoing table takes into account the July 1996 sale of 1,356,250
    shares of Common Stock at $3.50 per share but does not take into
    consideration: (i) 345,000 Units subject to the Underwriter's over-allotment
    option; (ii) 230,000 shares of Common Stock issuable upon exercise of the
    Underwriter's Warrant at 140% of the initial public offering price; (iii)
    2,300,000 shares of Common Stock (2,645,000 shares if the Underwriter's
    over-allotment option is exercised in full) which are issuable upon the
    exercise of the Class A Warrants at an exercise price of $8.50 per warrant;
    (iv) 700,000 shares of Common Stock which are reserved for issuance under
    the Company's 1995 Stock Option and Compensation Plan, of which 338,000 have
    been granted; and (v) 50,000 shares of Common Stock issuable upon exercise
    of directors' stock options at an exercise price of $4.33 per share.
 
                                       12

<PAGE>   13
 
                                DIVIDEND POLICY
 
     The Company has never declared or paid any cash dividends on its Common
Stock, and the Board of Directors presently intends to retain all earnings, if
any, for use in the Company's business for the foreseeable future. Any future
determination as to declaration and payment of dividends will be made at the
discretion of the Board of Directors.
 
                                 CAPITALIZATION
 
     The following table sets forth the capitalization of the Company as of June
30, 1996, as further adjusted to give effect to the sale of the Units offered
hereby and the anticipated application by the Company of the proceeds therefrom.
See the Consolidated Financial Statements.
 

<TABLE>
<CAPTION>
                                                                        AT JUNE 30, 1996
                                                           -------------------------------------------
                                                                                           PROFORMA
                                                            ACTUAL      PROFORMA(1)     AS ADJUSTED(2)
                                                           ---------    ------------    --------------
<S>                                                        <C>          <C>             <C>
Long-term debt(3).......................................   $ 251,981     $  251,981      $    251,981
Stockholders' equity:
  Common Stock, $.01 par value, 100,000,000 shares
     authorized, 2,000,000 shares issued and
     outstanding; 3,356,250 shares proforma; 5,656,250
     shares as adjusted.................................      20,000         33,563            56,563
  Additional paid-in capital............................     980,000      5,171,437        18,383,437
  Accumulated deficit...................................    (694,392)      (694,392)         (694,392)
                                                            --------     ----------       -----------
       Total stockholders' equity.......................     305,608      4,510,608        17,745,608
                                                            --------     ----------       -----------
       Total capitalization.............................   $ 557,589     $4,762,589      $ 17,997,589
                                                            ========     ==========       ===========
</TABLE>

 
- -------------------------
(1) Assumes completion on June 30, 1996 of the sale of 1,356,250 shares of
    Common Stock at $3.50 per share for net proceeds of approximately $4,200,000
    which was completed in July 1996.
 
(2) As adjusted for the sale of the Units offered hereby and the anticipated
    application of the net proceeds therefrom. Does not include (i) 345,000
    Units subject to the Underwriter's over-allotment option; (ii) 230,000
    shares of Common Stock issuable upon exercise of the Underwriter's Warrant
    at 140% of the Price to Public; (iii) 2,300,000 shares of Common Stock which
    are issuable upon the exercise of the Class A Warrants at an exercise price
    of $8.50 per warrant; (iv) 700,000 shares of Common Stock reserved for
    issuance under the Company's 1995 Stock Option and Compensation Plan, of
    which 338,000 have been issued; and (v) 50,000 shares of Common Stock
    issuable upon exercise of directors' stock options at an exercise price of
    $4.33 per share.
 
(3) Long-term debt does not include capital lease financing which was obtained
    in August 1996 for up to $1,100,000 for equipment, furniture, fixtures and
    leasehold improvements. As of September 30, 1996, approximately $950,000 of
    the $1,100,000 in lease financing had been funded.
 
                                       13

<PAGE>   14
 

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
OVERVIEW
 
     The Company was formed in March 1994 to develop, own and operate American
roadhouse-style barbeque restaurants under the name "Famous Dave's Bar-B-Que
Shack". The Company opened its first restaurant in the Linden Hills neighborhood
of Minneapolis in June 1995. Prior to opening the Linden Hills Unit, the Company
had no revenues and its activities were devoted solely to development.
 
     The Company opened its second unit in June 1996 in Roseville, Minnesota, a
suburb of Minneapolis/ St. Paul and is presently developing three additional
units in the Minneapolis/St. Paul area.
 
     Future revenues and profits, if any, will depend upon various factors,
including market acceptance of the Famous Dave's concept, the quality of the
restaurant operations, the ability to expand to multi-unit locations and general
economic conditions. The Company's present sources of revenue are limited to its
Existing Units. There can be no assurances the Company will successfully
implement its expansion plans, in which case it will continue to be dependent on
the 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 and expanding business. Furthermore, to the
extent that the Company's expansion strategy is successful, it must manage the
transition to multiple site operations, higher volume operations, the control of
overhead expenses and the addition of necessary personnel.
 
     At January 1, 1996, the Company elected a fiscal year ending on the Sunday
nearest December 31. Prior to January 1, 1996, the Company used a fiscal year
ending on December 31.
 
RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1995 AND
FOR THE TWENTY SIX WEEKS ENDED JUNE 30, 1996
 
     The Company had no revenues or operations during the period from March 14,
1994 (Inception) to June 19, 1995 (the opening of the Linden Hills Unit).
Accordingly, comparisons with periods prior to June 19, 1995 are not meaningful.
 
Total Revenues -- The Linden Hills Unit opened in June 1995. The Roseville Unit
opened in June 1996. For the year ended December 31, 1995, the Company had total
sales of $481,510 compared with $1,015,856 for the 26 weeks ended June 30, 1996.
Sales increases are largely attributed to increased guest counts and the June
1996 opening of the Roseville Unit.
 
Costs and Expenses -- For the year ended December 31, 1995, the Company had a
net loss of $306,190 compared with a net loss of $388,202 for the 26 weeks ended
June 30, 1996. The net loss for each period is largely attributable to
additional expenses incurred as the Company increases its Corporate overhead
structure for the development of additional locations supported by revenues from
primarily a single operating unit. On March 4, 1996, the Company entered into
employment agreements with two of its executive officers requiring the payment
of annual compensation totaling $200,000 per year. On August 12, 1996, the
Company entered into an employment agreement with an executive officer providing
for a base annual salary of $125,000 per year plus bonuses. These agreements
will impact general and administrative expenses on an ongoing basis.
 
Results of the Linden Hills Unit -- The following table sets forth the unit
level results from the Company's Linden Hills Unit. Unit level results include
food and beverage costs, unit operating expenses and unit level
 
                                       14

<PAGE>   15
 
depreciation and amortization, but do not include any portion of the Company's
general, administrative and development expenses or any allocation of interest
expense.
 

<TABLE>
<CAPTION>
                                                              PERIOD FROM
                                                             COMMENCEMENT
                                                             OF OPERATIONS
                                                            (JUNE 19, 1995)
                                                            TO DECEMBER 31,         26 WEEKS ENDED
                                                                 1995                JUNE 30, 1996
                                                          -------------------     -------------------
                                                           AMOUNT     PERCENT      AMOUNT     PERCENT
                                                          --------    -------     --------    -------
<S>                                                       <C>         <C>         <C>         <C>
Sales..................................................   $481,510     100.0%     $778,968     100.0%
Food and beverage costs................................    169,789      35.3       256,336      32.9
                                                          --------     -----      --------     -----
  Gross profit.........................................    311,721      64.7       522,632      67.1
Operating expenses.....................................    302,217      62.8       305,006      39.2
Depreciation and amortization..........................     17,009       3.5        16,760       2.2
                                                          --------     -----      --------     -----
Unit level income (loss)...............................   $ (7,505)     (1.6)%    $200,866      25.7%
                                                          ========     =====      ========     =====
</TABLE>

 
     During the period from the commencement of Linden Hills operations (June
19, 1995) to December 31, 1995, food and beverage costs were $169,789 or 35.3%
of sales compared with $256,336 or 32.9% of sales for the June 30, 1996 period.
The improvement in food and beverage costs as a percentage of sales is due
primarily to improved operating efficiencies.
 
     Restaurant operating expenses were $302,217 or 62.8% of sales during the
period from the commencement of Linden Hills operations (June 19, 1995) to
December 31, 1995 compared to $305,006 or 39.2% of sales during the 26 weeks
ended June 30, 1996. This improvement in restaurant operating expenses as a
percentage of sales is due primarily to improved labor management and other
operating efficiencies and increased sales.
 
     Although no assurances can be given, management believes that the Linden
Hills Unit's current level of sales, trained workforce and general operational
improvements will improve unit level income in future periods.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     The Company has met its capital requirements through revenues from
operations, the sale of Common Stock to and borrowings from its sole
shareholder, David W. Anderson, and the private placement of debt and common
stock. During the period from March 14, 1994 (Inception) through December 31,
1995, the Company sold to Mr. Anderson 2,000,000 shares of Common Stock at $.50
per share. Pursuant to the subscription agreement relating to such purchase,
payments were made totaling $425,270 during part-year 1994 and $574,730 during
the year ended December 31, 1995. Additionally, the Company entered into a
revolving promissory note with Mr. Anderson allowing for advances of up to
$2,000,000. As of June 30, 1996, the Company had outstanding advances totaling
$359,349 under this arrangement. This note was paid in full in August 1996.
 
     In July 1996, the Company completed a private placement of 1,356,250 shares
of Common Stock at $3.50 per share. The net proceeds to the Company were
approximately $4.2 million. Such proceeds have been, and will be, used for
additional unit development and working capital.
 
     For the year ended December 31, 1995, the Company used $227,069 in cash
flow for operating activities and during the 26 weeks ended June 30, 1996, the
Company used $163,899 in cash flow for operating activities.
 
     Since Inception, the Company's principal capital requirements have been the
funding of (i) the development of the Company and the Famous Dave's concept,
(ii) the construction of the Linden Hills and Roseville Units and the
acquisition of the furniture, fixtures and equipment therein and (iii) towards
the development of additional units as described below. Total capital
expenditures for the Linden Hills and Roseville Units were approximately
$425,000 and $1,110,000, respectively.
 
                                       15

<PAGE>   16
 
     The Company is developing additional restaurants in the Minneapolis/St.
Paul area. The Company had incurred approximately $995,000 in the development of
these units as of June 30, 1996. When completed, the Company estimates that
capital expenditures for these additional units will be approximately $7.0
million. The units are expected to be complete by the first half of 1997.
 
     In addition to construction in progress, the Company has capitalized
approximately $39,000 of direct costs relating to the Roseville Unit and units
under construction. It is the Company's policy to amortize the direct costs of
hiring and training the initial work force and other direct costs associated
with opening a new Unit over a twelve-month period, beginning when the facility
is opened, if the recoverability of such costs can be reasonably assured.
Accordingly, initial costs related to the Linden Hills Unit were expensed as
incurred due to the developmental nature of the Unit.
 
     In August 1996, the Company secured access to $1,100,000 of capital lease
financing. This lease financing will be used for equipment, furniture, fixtures
and leasehold improvements. As of September 30, 1996, approximately $950,000 of
the $1,100,000 in lease financing had been funded.
 
     After the completion of these expansion plans, future development and
expansion will be financed through cash flow from operations and other forms of
financing such as the sale of additional equity and debt securities, capital
leases and other credit facilities. There are no assurances that such financing
will be available on terms acceptable or favorable to the Company.
 
                                       16

<PAGE>   17
 
 
                                   BUSINESS
 
OVERVIEW
 
     The primary business of the Company is to develop, own and operate American
roadhouse-style barbeque restaurants under the name "Famous Dave's Bar-B-Que
Shack." The Company presently owns and operates three restaurants, one located
in the Linden Hills neighborhood of Minneapolis (the "Linden Hills Unit"), one
in Roseville, Minnesota (the "Roseville Unit") and the third in Calhoun Square
in Minneapolis (the "Calhoun Blues Joint" and, collectively with the Linden
Hills and Roseville Units, the "Existing Units"). The Calhoun Blues Joint opened
in early September 1996, and features live blues music during certain evenings
and an authentic Chicago blues decor. The Company is developing three additional
restaurants: in Minnetonka, Minnesota, on West 7th Street near the Highland Park
area of St. Paul, Minnesota and in Maple Grove, Minnesota. These last three
units are expected to open during the first half of 1997.
 
THE FAMOUS DAVE'S CONCEPT AND STRATEGY
 
Concept Development
 
     The Company was founded by David W. Anderson in March 1994. As a cooking
enthusiast, Mr. Anderson has spent more than 20 years analyzing seasonings,
barbeque sauces, rib recipes, cooking techniques and equipment in the
development of his barbeque. In addition, Mr. Anderson has traveled extensively
throughout the United States, visiting hundreds of barbeque restaurants for the
purposes of researching regional tastes, ambiance, decor, menu development,
plate presentation, and restaurant design before opening his first restaurant in
Hayward, Wisconsin in June 1994 (the "Hayward Facility"). The Hayward Facility,
which is part of a larger resort complex, is not owned by the Company but by a
company wholly-owned by David W. Anderson.
 
     Famous Dave's concept was developed around favorable memories associated
with backyard barbecues. In identifying a potential market niche, Mr. Anderson
has studied the development of certain restaurants that have capitalized on the
growing trend of home replacement meals taking the place of home cooked meals.
The Company hopes to capitalize on this trend, both for dine-in and take-out
meals. The Company believes that the comfortable, appealing decor of its
restaurants and the universal appeal of down-home cooking and barbecue will be
significant advantages in its attempts to penetrate this niche market.
 
Competitive Differentiation
 
     On a national scale, the Company believes that it faces two major
competitors, Tony Roma's and Damon's. Both restaurant chains feature baked, as
opposed to pit smoked, ribs on a white platter. The Company believes that the
setting of such restaurants is more formal and has a masculine ambiance.
 
     Famous Dave's specializes in real hickory pit smoked barbeque served in
colorful picnic-style baskets in a themed roadhouse-style restaurant with a warm
and inviting family atmosphere.
 
The Menu
 
     The Company's primary focus is its food. The Company's mission is to
deliver the best barbeque in America. Each restaurant features a limited
assortment of menu items, such as hickory-smoked St. Louis-style spareribs,
Texas beef brisket, herb-roasted chicken, barbeque sandwiches, and char-grilled
burgers, as well as honey-buttered corn bread, potato salad, cole slaw and
"Wilbur"(TM) beans. Homemade desserts, including Famous Dave's bread pudding,
Kahlua(TM) brownies and strawberry shortcake, are a specialty. The Company's
Famous Dave's BBQ Sauces, which are provided in four regional variations
(Rich-N-Sassy(TM), Texas Pit(TM), Georgia Mustard(TM) and Hot Stuff(TM)),
represent signature items of the Company. The Company's Rich-N-Sassy(TM) Famous
Dave's BBQ Sauce was awarded first place in the mild tomato division of the 1995
Kansas City American Royal Barbeque Contest.
 
     Lunch entrees range from $6 to $8 and dinner entrees from $10 to $12. The
average guest check for the five-week period ending September 29, 1996 was
approximately $11 per person. Food portions are generous to
 
                                       17

<PAGE>   18
 
increase the perceived value. Management believes that the Company's food,
together with each restaurant's distinctive decor, have resulted in a high level
of repeat business. Presently, approximately 34% of the Company's business is
take-out at the Linden Hills Unit.
 
     The Company intends to obtain a beer and wine license for most of its
restaurants, with the intention that such beverages will be served along with
meals. The Company does not intend to emphasize sales of beer and wine apart
from meals in most of its restaurants, primarily because the Company feels that
it reduces the number of table turns and therefore profitability. In addition to
a beer and wine license, the Company has obtained a liquor license for the
Calhoun Blues Joint.
 
Awards and Recognition
 
     The Company's food and restaurants have won the following awards during the
past year:
 

<TABLE>
<S>                                    <C>
First place (mild tomato category)     Best Ribs
American Royal Barbeque Contest        Critic's Choice Award
Kansas City, Missouri                  Minnesota Monthly
October 1995                           May 1996

Best Bar-B-Que Joint                   First Place Award,
Mpls/St. Paul Magazine                 Best Barbeque Beef Brisket
January 1996                           Rib Buddies Cookoff
                                       St. Paul, Minnesota
1996 Diner's Choice Award              May 1996
Best New Restaurant
Mpls/St. Paul Magazine
April 1996
</TABLE>

 
     In addition, Governor Arne Carlson of Minnesota proclaimed Wednesday,
September 4, 1996, to be "Famous Dave's BBQ & Blues Day," to coincide with the
Grand Opening of the Calhoun Blues Joint.
 
Food Preparation and Delivery
 
     The Company believes that ease of food preparation and delivery will be one
key to its success. While some restaurants require highly compensated and
extensively trained chefs, the food served at each restaurant is prepared in a
basic three-step process that requires minimal training time. Mr. Anderson has
developed prepared seasonings, sauces, bread mixes and other ingredients, which
allow each menu item to be served with minimal preparation. The Company views
this efficient and effective process as critical for its national expansion.
 
Focus on Customer Satisfaction
 
     The Company is committed to staffing each unit with an experienced
management team and providing its customers with prompt, friendly and efficient
service. The customer's experience is also enhanced by the attitude and
attention of restaurant personnel. The Company recognizes that, in order to
maintain a high level of repeat customers and to attract new business, it must
provide superior customer service.
 
     Famous Dave's maintains a mission statement that its goal is to strive for
"delighted" guests rather than just "satisfied" guests. The Company believes
that a customer establishes his or her opinion within the first seven seconds.
To this end, the Company has focused its property development to maximize first
impressions of sight, smell, sound, and feel. The Company accomplishes this
through the wonderful smell of hickory-smoked barbeque, the lively sounds of
juke joint blues music, the colorful and nostalgic decor, and the varied
textures of rough cut pine, corrugated tin roofs, and antiques.
 
                                       18

<PAGE>   19
 
Distinctive Roadhouse Decor
 
     The Linden Hills and Roseville Units are "real" barbeque joints,
reminiscent of the old country-style roadhouse barbeque "joints" that dotted
rural America 50 years ago. The Company's nostalgic roadside shack theme is
promoted by the use of antiques and items of Americana from the '20s and '30s in
a rustic environment. The weathered barn wood walls, cozy, antique-filled
Southern country shack decor, overhead tin roofing and blues tunes in the air
are intended to convey the feeling of a down-home backyard barbeque.
 
     Each restaurant table is covered with a red and white checkered oilcloth
and features salt, pepper and barbeque sauces stored in a six-pack beer
container. A large roll of paper towels accompanies every meal.
 
The Blues Component
 
     The roadhouse theme is further enhanced by the use of blues music which,
together with the restaurant's decor, provides an entertaining dining
environment. Each restaurant features taped blues music that contributes to the
roadhouse theme. Mr. Anderson's attention to detail includes personal selection
of all music that is played in the restaurants. In addition, the Company's Blues
Joint features live blues music featuring the Famous Dave's Blues All-Stars (the
"Blues Band"). The Company believes that the Blues Band, which will have music
on CD's available for sale at each restaurant, will provide significant
marketing exposure for the Company.
 
PROPERTY AND UNIT LOCATIONS
 
     The following table sets forth certain information about the Company's
existing and planned restaurants:
 

<TABLE>
<CAPTION>
                                    APPROXIMATE    APPROXIMATE
                                      SQUARE        RESTAURANT                            DATE OPENED OR
            LOCATION                  FOOTAGE         SEATS             THEME          PLANNED TO BE OPENED
- ---------------------------------   -----------    ------------   -----------------    --------------------
<S>                                 <C>            <C>            <C>                  <C>
Linden Hills.....................       2,900        60 + 40      roadhouse            June 1995
  Minneapolis, MN                                  patio seats
Roseville, MN....................       4,800          100        roadhouse            June 1996
Calhoun Square...................      10,500          250        BBQ & Blues          September 1996
  Minneapolis, MN
Maple Grove, MN..................       4,800         80-90       roadhouse            Spring 1997
Highland Park....................       4,800         80-90       roadhouse            Spring 1997
  St. Paul, MN
Minnetonka, MN...................       9,000        150-200      north woods lodge    Spring 1997
</TABLE>

 
     The following units are leased or subleased from S&D Land Holdings, Inc.,
("S&D") a Minnesota corporation wholly-owned by David W. Anderson, the Company's
Chairman and Chief Executive Officer, pursuant to the following terms:
 
1. Linden Hills. The Linden Hills site contains approximately 2,900 square feet
   of restaurant space, including the patio area. The site is subject to a lease
   from S&D effective January 1, 1996 for a 10-year term with base rent of
   $48,800 per year with annual increases based upon increases in the consumer
   price index ("CPI"). The Company also has the right to extend the term for
   two five-year periods. In addition to base rent, the Company is responsible
   for the payment of all operating costs and real estate taxes.
 
2. Roseville. S&D is the tenant under an Agreement of Lease and Agreement
   Concerning Sublease (collectively, "Lease"). S&D has subleased the Roseville
   site to the Company effective January 1, 1996 for $82,200 per year with
   annual increases based upon increases in the CPI. The initial term under the
   Sublease is seven years. The Company has the right to extend the term for an
   additional five-year period. Should the Company so elect to extend, the
   Company is obligated to pay percentage rent of 1% of gross sales as
   additional rent. The improvements located on the site may revert to the
   landlord at the termination of the Sublease. Assignment or subletting of any
   interest in the Sublease requires the prior written approval
 
                                       19

<PAGE>   20
 
   of the landlord. In addition to base rent and percentage rent, the Company is
   responsible for the payment of all operating costs and real estate taxes.
 
3. Minnetonka. The Minnetonka site is a former restaurant located on
   approximately 2.3 acres of land. The Minnetonka site has been leased
   effective January 15, 1996 from S&D for a 10-year term with base rent of
   $124,129 per year with annual increases based upon increases in the CPI. The
   Company has the right to extend the term for two five-year periods. The
   Company has the right to develop and/or remodel the existing building with
   the prior written consent of S&D. In addition to base rent, the Company is
   responsible for the payment of all operating costs and real estate taxes.
 
4. Highland Park. The Highland Park site contains approximately 2.3 acres of
   vacant land and was leased from S&D effective January 1, 1996 for a 10-year
   term with base rent of $44,900 per year with annual increases based upon
   increases in the CPI. The Company also has the right to extend the term for
   two five-year periods. The lease allows the Company to develop the site as a
   restaurant at the Company's cost and with the prior written consent of S&D.
   In addition to base rent, the Company is responsible for the payment of all
   operating costs and real estate taxes.
 
The above-mentioned leases are non-cancelable by the Company. The Company or a
subsidiary also has entered into leases or subleases for the following
properties:
 
5. Calhoun Square -- Lake and Hennepin BBQ & Blues, Inc., a Minnesota
   corporation and a wholly-owned subsidiary of the Company ("LHBB") has entered
   into a lease for the Calhoun Square site with Calhoun Square Associates dated
   January 5, 1996. The lease runs for a term of 15 years and LHBB has the right
   to extend the term for two five-year periods. LHBB is obligated to pay base
   rent of $13,293 per month plus percentage rent of 5% of gross sales over
   $3,190,320. In addition to base rent and percentage rent, the Company is
   responsible for the payment of its pro-rata share of operating costs and real
   estate taxes.
 
6. Corporate Office -- The Company has assumed a lease effective as of August
   31, 1996 for 7,800 square feet of office/warehouse space at 12700 Industrial
   Park Boulevard in Plymouth, Minnesota. Rent payments due under the lease are
   $3,951 per month, which exclude prorations for operating expenses and real
   estate taxes. The lease terminates on August 31, 1998.
 
     The Hayward Facility, which is part of a larger resort complex, is not
owned by the Company but by a company wholly-owned by David W. Anderson. See
"Business -- The Famous Dave's Concept and Strategy -- Concept Development."
 
EXPANSION STRATEGY
 
     The Company intends to identify sites to locate its restaurants based on a
variety of factors including local market demographics, site viability,
competition and projected economics of each unit. Initial plans are to continue
to identify and finalize future site opportunities in the Minneapolis/St. Paul
area via land purchases, building and land purchases, land leases and building
and land leases. The Company believes the Minneapolis/St. Paul area can support
up to approximately 10 units, and expects to open at least three additional
units in the Minneapolis/St. Paul area in 1997.
 
     Simultaneously, the Company intends to predominantly target additional
major metropolitan markets to broaden and enhance the recognition value of the
concept. Specific cities for expansion will be identified and analyzed as to
potential compatibility with the concept.
 
OPERATIONS, MANAGEMENT AND EMPLOYEES
 
     The Company's ability to manage multi-location units will be central to its
overall success. The Company's management has very limited restaurant and
multi-unit restaurant experience. See "Risk Factors -- Limited Management
Experience/Need for Additional Management." The Company believes that its
management must include skilled personnel at all levels. The Company also
intends to hire other corporate level and management employees to help implement
and operate its expansion plans, including a chief operating officer with
significant multi-unit restaurant experience. At the unit level, the Company
places
 
                                       20

<PAGE>   21
 
specific emphasis on the position of general manager ("General Manager") and
seeks employees with significant restaurant experience and management expertise.
The General Manager of each restaurant reports directly to the President. The
Company strives to maintain quality and consistency in each of its units through
the careful training and supervision of personnel and the establishment of, and
adherence to, high standards relating to personnel performance, food and
beverage preparation, and maintenance of facilities. The Company believes that
it has been able to attract high quality, experienced restaurant and retail
management and personnel with its competitive compensation and bonus programs.
Staffing levels vary according to the time of day and size of the restaurant. In
general, each unit has between 30 and 50 employees.
 
     All managers must complete a training program, during which they are
instructed in areas such as food quality and preparation, customer service, and
employee relations. The Company has also prepared operations manuals relating to
food and beverage quality and service standards. New staff members participate
in approximately three weeks of training under the close supervision of Company
management. Management strives to instill enthusiasm and dedication in its
employees, regularly solicits employee suggestions concerning Company
operations, and endeavors to be responsive to employees' concerns. In addition,
the Company has extensive and varied programs designed to recognize and reward
employees for superior performance. As of September 22, 1996, the Company had
approximately 300 employees, 60 of which were full-time. The Company believes
that its relationship with its employees is good.
 
PURCHASING
 
     The Company strives to obtain consistent quality items at competitive
prices from reliable sources. Any discontinuance of such favorable pricing could
negatively impact the Company's purchasing abilities. In order to maximize
operating efficiencies and to provide the freshest ingredients for its food
products while obtaining the lowest possible prices for the required quality,
each unit's management team determines the daily quantities of food items needed
and orders such quantities from major suppliers at prices often negotiated
directly with the Company's corporate office. Food and supplies are shipped
directly to the restaurants, although the Company may develop a centralized food
preparation commissary. The Company purchases perishable food products locally.
 
MARKETING AND PROMOTION; THE RIBMOBILE
 
     To date, the Company has relied primarily upon advertising, publicity and
"word of mouth" advertising to attract customers to its restaurants. The Company
also utilizes distinctive exterior signage and off-site billboards. In addition,
the Company has attempted to create equity in its "Famous Dave's" name by
offering items such as Famous Dave's Bar-B-Que sauces for retail sale at its
restaurants and in approximately 50 grocery stores in the Twin Cities area. The
Company also sells T-shirts, caps and sweatshirts bearing its logo in its
restaurants.
 
     The Company utilizes the Famous Dave's Ribmobile to participate in local
rib festivals and barbeque contests. The Company currently participates in seven
or eight "ribfests" a year. The Company has found that such festivals and
concepts result in favorable publicity.
 
TRADEMARKS
 
     The Company's ability to successfully implement its Famous Dave's concept
will depend in part upon its ability to protect its trademarks. The Company has
filed a trademark application with the United States Patent and Trademark Office
to register the mark "Famous Dave's" and design. There can be no assurance that
the Company will be granted trademark registration for any or all of the
proposed uses in the Company's applications. In the event the Company's mark is
granted registration, there can be no assurance that the Company can protect
such mark and design against prior users in areas where the Company conducts
operations. There is no assurance that the Company will be able to prevent
competitors from using the same or similar marks, concepts or appearance. In
October 1996, the Company received correspondence alleging that the Company's
use of a pig and guitar design in connection with its BBQ & Blues concept (the
"Design")
 
                                       21

<PAGE>   22
 
infringed an existing trademark. The Company does not believe the Design
infringes such other trademark and intends to vigorously defend its use of the
Design against the holder of such other trademark.
 
LEGAL PROCEEDINGS
 
     The Company is not a party to any material litigation and is not aware of
any threatened litigation that would have a material adverse effect on its
business.
 
COMPETITION
 
     The food service industry is intensely competitive with respect to food
quality, concept, location, service and price. In addition, there are many
well-established food service competitors with substantially greater financial
and other resources than the Company and with substantially longer operating
histories. The Company believes that it competes with other full-service dine-in
restaurants, take-out food service companies, fast-food restaurants,
delicatessens, cafeteria-style buffets, and prepared food stores, as well as
with supermarkets and convenience stores. Competitors include national,
regional, and local restaurants, purveyors of carry-out food, and convenience
dining establishments.
 
     Primary national and regional competitors of the Company include such other
"family-oriented" comparable restaurants as Applebee's, TGI Friday's, Chili's,
Ground Round, Bennigan's and barbeque-related restaurants such as Tony Roma's,
Red Hot & Blue, Damon's and Sonny's. The Company believes that it can
effectively compete in this market by offering superior food taste, an
attractive highly-themed family atmosphere, and superior ambiance provided by
carefully chosen blues music and an "open kitchen" smell of real barbeque.
 
     Competition in the food service business is often affected by changes in
consumer tastes, national, regional, and local economic and real estate
conditions, demographic trends, traffic patterns, the cost and availability of
labor, purchasing power, availability of product, and local competitive factors.
The Company attempts to manage or adapt to these factors, but it should be
recognized that some or all of these factors could cause the Company to be
adversely affected.
 
     In addition, to the extent that barbeque restaurants are frequently viewed
as "local," the Company may experience intense competition or lack of consumer
acceptance if it expands into areas with existing barbeque restaurants.
 
REGULATION
 
     Restaurants are subject to licensing and regulation by state and local
health, sanitation, safety, fire, and other authorities and are also subject to
state and local licensing and regulation of the sale of alcoholic beverages and
food. Difficulties in obtaining or failure to obtain required licenses and
approvals will result in delays in, or cancellation of, the opening of
restaurants. The food and liquor licenses are also subject to suspension or
non-renewal if the granting authority determines that the conduct of the holder
does not meet the standards for initial grant or renewal. The Company believes
that it is in compliance with all licensing and other regulations.
 
     The federal Americans With Disabilities Act prohibits discrimination on the
basis of disability in public accommodations and employment. The Company could
be required to expend funds to modify its restaurants in order to provide
service to or make reasonable accommodations for disabled persons. The Company's
restaurants are currently designed to be accessible to the disabled. The Company
believes it is in substantial compliance with all current applicable regulations
relating to accommodations for the disabled.
 
                                       22

<PAGE>   23
 
                                   MANAGEMENT
 
DIRECTORS AND EXECUTIVE OFFICERS
 
     The following table sets forth certain information with respect to each of
the directors and executive officers of the Company.
 

<TABLE>
<CAPTION>
               NAME                   AGE                     POSITION(S) HELD
- -----------------------------------   ---    ---------------------------------------------------
<S>                                   <C>    <C>
David W. Anderson..................   43     Chairman of the Board and Chief Executive Officer
William L. Timm....................   36     President
Mark A. Payne......................   37     Vice President, Finance, Chief Financial Officer,
                                             Secretary and Treasurer
Martin J. O'Dowd...................   48     Director
Thomas J. Brosig...................   47     Director
</TABLE>

 
     David W. Anderson, founder of the Company, has been the Chairman of the
Board since its formation. Mr. Anderson is also a founder and a director of
Rainforest Cafe, Inc. In October 1990, Mr. Anderson co-founded Grand Casinos,
Inc. and through March 1996 served as a director and Executive Vice President.
 
     William L. Timm has been President of the Company since March 1996. From
February 1987 to December 1995, Mr. Timm was a self-employed, independent
contractor working as a National Marketing Director for National Safety
Associates International, Inc., an international distribution network of
consumer products, including water and air filtration systems and nutritional
products. In this position, Mr. Timm was appointed to the Executive President's
Advisory Council as one of the top 1% earners for National Safety Associates.
 
     Mark A. Payne has been Vice President, Finance, Chief Financial Officer,
Secretary and Treasurer since August 1996. Previously, and since August 1995 he
was Senior Vice President, Business Development and Acquisitions of ValueVision
International, Inc., a television home shopping network. Prior to that and since
December 1990, he served as Vice President, Finance and Chief Financial Officer
at ValueVision.
 
     Martin J. O'Dowd has been a director of the Company since August 1996.
Since May 1995, Mr. O'Dowd has served as President and Chief Operating Officer
of Rainforest Cafe, Inc. In June 1995 he became a director and Secretary of
Rainforest Cafe, Inc. From July 1987 to May 1995, Mr. O'Dowd was Corporate
Director, Food and Beverage Services, for Holiday Inn Worldwide. From August
1985 to July 1987, Mr. O'Dowd was Vice President and General Operations Manager
for the Hard Rock Cafe in New York. Mr. O'Dowd is also a director of Elephant &
Castle Group, Inc.
 
     Thomas J. Brosig has been a director of the Company since August 1996.
Since August 1994, Mr. Brosig has served as Executive Vice President - Investor
Relations and Special Projects of Grand Casinos, Inc. From its inception until
May 1995, Mr. Brosig served as Secretary of Grand Casinos, Inc., and from May
1993 until August 1994, Mr. Brosig served as its President. Mr. Brosig also
served as Grand Casinos, Inc.'s Chief Operating Officer from October 1991 until
May 1993, and as its Chief Financial Officer from its inception until January
1992. Mr. Brosig is also a director of G-III Apparel Group Ltd., a manufacturer
and distributor of leather apparel, and Game Financial, Inc., which provides
funds transfer services to casino customers.
 
EXECUTIVE COMPENSATION
 
     The following table sets forth all cash and non-cash compensation paid by
the Company for the period from March 14, 1994 (Inception) through December 31,
1995 to the Company's executive officer:
 

<TABLE>
<CAPTION>
                                                                                             LONG-TERM
                                                                 ANNUAL COMPENSATION       COMPENSATION
                                                                ----------------------    ---------------
                                                                          OTHER ANNUAL         AWARD
     NAME OF INDIVIDUAL                   POSITION              SALARY    COMPENSATION    OPTIONS GRANTED
- -----------------------------   -----------------------------   ------    ------------    ---------------
<S>                             <C>                             <C>       <C>             <C>
David W. Anderson............   Chairman of the Board and         $0           $0                --
                                Chief Executive Officer
</TABLE>

 
                                       23

<PAGE>   24
 
EMPLOYMENT AGREEMENTS
 
     David W. Anderson has been retained pursuant to a two-year employment
agreement dated as of March 4, 1996, subject to early termination for variety of
reasons, including voluntary termination by Mr. Anderson. Mr. Anderson will
receive a base salary of $100,000 per year during the first year of employment,
and such subsequent amounts as may be determined by the Company's Board of
Directors. Such agreement also provides that Mr. Anderson will receive six
months' severance if terminated by the Company for a reason other than "cause,"
as defined therein. Mr. Anderson will also receive medical, dental and other
customary benefits. The employment agreement provides that Mr. Anderson will not
compete with the Company for two years if he resigns or is terminated for cause.
 
     William L. Timm has been retained pursuant to a two-year employment
agreement dated as of March 4, 1996, subject to early termination for a variety
of reasons. Mr. Timm will receive a base salary of $100,000 during the first
year of employment and such subsequent amounts as may be determined by the
Company's Board of Directors. Such agreement also provides that Mr. Timm will
receive six months' severance if terminated by the Company for a reason other
than "cause," as defined therein. Mr. Timm will also receive medical, dental and
other customary benefits. The employment agreement provides that Mr. Timm will
not compete with the Company for two years if he resigns or is terminated for
cause.
 
     Mark A. Payne has been retained pursuant to a three-year employment
agreement dated as of August 12, 1996, subject to early termination for a
variety of reasons. Mr. Payne will receive a base salary of $125,000 during the
first year of employment and such subsequent amounts as may be determined by the
Company's Board of Directors. Mr. Payne will also receive $25,000 upon the
closing of the Company's initial public offering. Such agreement also provides
that Mr. Payne will receive six months severance if terminated by the Company
for a reason other than "cause," as defined therein, within the first year of
his employment and 12 months severance if terminated by the Company for a reason
other than cause after the first year of employment. Mr. Payne will also receive
medical, dental and other customary benefits. The employment agreement provides
that Mr. Payne will not compete with the Company for two years if he resigns or
is terminated for cause.
 
     The Company intends to retain other management employees pursuant to
employment and consulting agreements. The Company intends to offer stock options
to such employees. The Company has no current plans to pay cash compensation to
its directors.
 
STOCK OPTION AND COMPENSATION PLAN
 
     The Company has reserved for issuance 700,000 shares of Common Stock
pursuant to its 1995 Stock Option and Incentive Compensation Plan (the "Stock
Option Plan"). As of the date of this Prospectus, the Company has granted an
aggregate of 338,000 options, 167,500 of which were granted subsequent to June
30, 1996. Of these options, 234,761 were granted pursuant to Rule 701 under the
Securities Act of 1933 (the "Act") and the remainder were granted pursuant to
Section 4(2) of the Act.
 
     The Plan is administered by a stock option committee (the "Stock Option
Committee") which has the discretion to determine the number and purchase price
of shares subject to stock options (which price may not be below 85% of the fair
market value of the Common Stock on the date granted), the term of each option,
and the time or times during its term when the option becomes exercisable.
 
     For a one-year period following the Effective Date, the Company will not
grant options to promoters, employees or affiliates of the Company which,
together with options previously granted to such persons, would in the aggregate
exceed 15% of the then outstanding shares of Common Stock.
 
BOARD OF DIRECTORS
 
     Each of the Company's directors has been elected to serve until the next
annual meeting of shareholders. The Company's executive officers are appointed
annually by the Company's directors. Each of the Company's directors continues
to serve until his or her successor has been designated and qualified. Directors
currently receive no fees.
 
                                       24

<PAGE>   25
 
DIRECTOR STOCK OPTIONS
 
     As of the Effective Date, the Company granted options to acquire an
aggregate of 50,000 shares of Common Stock at an exercise price of $4.33 per
share to Messrs. O'Dowd and Brosig, the Company's two outside directors. These
options vest on a pro-rata basis on the first, second and third anniversaries of
the Effective Date and are exercisable for ten years from the date of grant.
 
                              CERTAIN TRANSACTIONS
 
     On January 1, 1996, the Company transferred the real estate, excluding
improvements, of its Linden Hills Unit and the site of the proposed unit in the
Highland Park area of St. Paul, Minnesota to David W. Anderson, Chairman and
Chief Executive Officer of the Company, in exchange for amounts due to Mr.
Anderson and assumption of bank debt totaling $781,023. These properties were
transferred to Mr. Anderson at the Company's cost which, due to the short amount
of time which elapsed between the transfer and the Company's original
acquisition, the Company believes approximated the fair market values of the
real estate exchanged. Mr. Anderson concurrently transferred the real estate to
S&D Land Holdings, Inc. ("S&D"), a Minnesota company wholly owned by Mr.
Anderson, and entered into leases with the Company for such real estate. See
Note (7) to the Consolidated Financial Statements. The Company also leases the
Roseville Unit and the real estate for the Minnetonka Unit from S&D. The Company
does not currently intend to enter into any additional leases with S&D. See
"Business -- Property and Unit Locations."
 
     The Company has a $2,000,000 revolving note with David W. Anderson. The
note bears interest at 8%, is unsecured and due on demand. The outstanding
balance on the note was $359,349 at June 30, 1996. This note was paid in full in
October 1996.
 
     Pursuant to a license and trademark agreement between the Company and Grand
Pines Resort, Inc., a Minnesota corporation wholly-owned by David W. Anderson
("Grand Pines"), the Company licenses its trademarks and recipes to Grand Pines
in exchange for a 4% annual royalty fee on gross food sales. Also, pursuant to a
management agreement between the Company and Grand Pines Resort, Inc., the
Company has agreed to provide certain management services relative to the
Hayward Facility in exchange for a fee of 3% of gross food sales.
 
     It is the Company's belief that each transaction referred to in this
section was on terms no less favorable to the Company than could have been
obtained from non-affiliated parties. Any future transactions and loans with
officers, directors or 5% shareholders of the Company's Common Stock will be on
terms no less favorable to the Company than could be obtained from unaffiliated
third parties. All future material affiliated transactions and loans, and any
forgiveness of loans, must be approved by a majority of the independent outside
members of the Company's Board of Directors who do not have an interest in the
transactions.
 
                             PRINCIPAL SHAREHOLDERS
 
     There are presently 100,000,000 shares of the Company's Common Stock
authorized, of which 3,356,250 shares are issued and outstanding. The following
table sets forth certain information regarding beneficial ownership of the
Company's Common Stock as of the date of this Prospectus, as adjusted to give
effect to the issuance of the securities offered hereby, by (i) each person
known by the Company to be the beneficial owner of more than 5% of the
outstanding Common Stock, (ii) each director of the Company, (iii) each
executive officer of the Company, and (iv) all executive officers and directors
of the Company as a group. See "Description of Securities -- Conversion of
Notes." Unless otherwise indicated, each of the following persons has sole
voting and investment power with respect to the shares of Common Stock set forth
opposite their
 
                                       25

<PAGE>   26
 
respective names. The address of directors and executive officers is 12700
Industrial Boulevard, Suite 60, Minneapolis, Minnesota 55441.
 

<TABLE>
<CAPTION>
                                                                                        PERCENT
                                                                                -----------------------
                                                               SHARES OF        PRIOR TO       AFTER
                           NAME                               COMMON STOCK      OFFERING    OFFERING(1)
- -----------------------------------------------------------   ------------      --------    -----------
<S>                                                           <C>               <C>         <C>
David W. Anderson..........................................     2,000,000(2)      59.6%         35.4%
William L. Timm............................................       600,000(3)      17.9          10.6
Mark A. Payne..............................................        25,000(4)       0.7           0.4
Martin J. O'Dowd...........................................        13,000          0.4           0.2
Thomas J. Brosig...........................................        20,000          0.6           0.4
OKABENA Partnership K......................................       292,750(5)       8.7           5.2
All officers and directors as a group (5 persons)..........     2,058,000         60.9          36.4
</TABLE>

 
- -------------------------
(1) Does not include any Shares that may be purchased in the offering by the
    listed persons.
 
(2) Owned in joint tenancy with his spouse, Kathryn Anderson. Includes 100,000
    shares owned by Grand Pines Resorts, Inc., a corporation wholly-owned by Mr.
    Anderson. 600,000 of such Shares are subject to an option to purchase for
    $1.00 per share held by William L. Timm, the Company's President. Such
    options vest over a five-year period in equal increments beginning March 1,
    1997. Giving effect to such options, Mr. Anderson's percentage ownership
    would be 41.7% prior to the offering and 26.1% after the offering.
 
(3) Includes 600,000 shares beneficially owned by David W. Anderson subject to
    an option held by Mr. Timm to purchase for $1.00 per share. Such options
    vest over a five-year period in equal increments beginning March 1, 1997.
 
(4) Represents shares issuable upon exercise of stock options to be vested on
    the Effective Date that will be exercisable within 60 days. Does not include
    100,000 shares pursuant to options granted to Mr. Payne on August 12, 1996
    which vest and become exercisable ratably over a four-year period.
 
(5) Includes 10,000 shares owned by Gary S. Kohler, an affiliate. The address of
    both such persons is 5140 Norwest Center, 90 South Seventh Street,
    Minneapolis, Minnesota 55402. None of the Partnership nor any person who may
    be deemed to be an ultimate beneficial owner of the shares held by the
    Partnership is otherwise affiliated with the Company, the Underwriter or any
    of their affiliates.
 
                                       26

<PAGE>   27
 
                           DESCRIPTION OF SECURITIES
 
UNITS
 
     Each Unit offered hereby consists of one share of Common Stock and one
redeemable Class A Warrant. Warrants are immediately exercisable and, commencing
ten trading days after the Effective Date, separately transferable from the
Common Stock. Each Class A Warrant entitles the holder to purchase at any time,
until the earlier of redemption by the Company or four years following the
Effective Date, one share of Common Stock at an exercise price of $8.50 per
warrant, subject to adjustment.
 
CAPITAL STOCK
 
     The Company's authorized capital stock consists of 100,000,000 undesignated
shares, $.01 par value per share in the case of Common Stock, and a par value as
determined by the Board of Directors in the case of Preferred Stock. After the
closing of this Offering, there will be issued and outstanding 6,001,250 shares
of Common Stock (if the Underwriter's over-allotment option is exercised in
full).
 
COMMON STOCK
 
     There are no preemptive, subscription, conversion or redemption rights
pertaining to the Common Stock. The absence of preemptive rights could result in
a dilution of the interest of existing shareholders should additional shares of
Common Stock be issued. Holders of the Common Stock are entitled to receive such
dividends as may be declared by the Board of Directors out of assets legally
available therefor, and to share ratably in the assets of the Company available
upon liquidation.
 
     Each share of Common Stock is entitled to one vote for all purposes and
cumulative voting is not permitted in the election of directors. Accordingly,
the holders of more than 50% of all of the outstanding shares of Common Stock
can elect all of the directors. Significant corporate transactions such as
amendments to the articles of incorporation, mergers, sales of assets and
dissolution or liquidation require approval by the affirmative vote of the
majority of the outstanding shares of Common Stock. Other matters to be voted
upon by the holders of Common Stock normally require the affirmative vote of a
majority of the shares present at the particular shareholders' meeting. The
Company's directors and officers as a group beneficially own approximately 60.9%
of the outstanding Common Stock of the Company. Upon completion of this
Offering, such persons will beneficially own approximately 36.4% of the
outstanding shares (34.3% if the Underwriter's over-allotment option is
exercised in full). See "Principal Shareholders." Accordingly, such persons will
continue to be able to substantially control the Company's affairs, including,
without limitation, the sale of equity or debt securities of the Company, the
appointment of officers, the determination of officers' compensation and the
determination whether to cause a registration statement to be filed. There are
119 holders of record of the Company's Common Stock as of the date of this
Prospectus.
 
     The rights of holders of the shares of Common Stock may become subject in
the future to prior and superior rights and preferences in the event the Board
of Directors establishes one or more additional classes of Common Stock, or one
or more additional series of Preferred Stock. The Board of Directors has no
present plan to establish any such additional class or series.
 
CLASS A WARRANTS
 
     The Class A Warrants included as part of the Units being offered hereby
will be issued under and governed by the provisions of a Warrant Agreement (the
"Warrant Agreement") between the Company and Firstar Trust Company, Milwaukee,
Minnesota, as Warrant Agent (the "Warrant Agent"). The following summary of the
Warrant Agreement is not complete, and is qualified in its entirety by reference
to the Warrant Agreement, a copy of which has been filed as an exhibit to the
Registration Statement of which this Prospectus is a part.
 
     Commencing ten days after the Effective Date, the shares of Common Stock
and the Class A Warrants offered as part of the Units will be detachable and
separately transferable. One Class A Warrant entitles the
 
                                       27

<PAGE>   28
 
holder ("Warrantholder") thereof to purchase one share of Common Stock during
the four years following the Effective Date, subject to earlier redemption,
provided that at such time a current prospectus relating to the shares of Common
Stock issuable upon exercise of the Class A Warrants is in effect and the
issuance of such shares is qualified for sale or exempt from qualification under
applicable state securities laws. Each Class A Warrant will be exercisable at an
exercise price of $8.50 per warrant, subject to adjustment in certain events.
 
     The Class A Warrants are subject to redemption by the Company beginning 90
days after the Effective Date, on not less than 30 days written notice, at a
price of $.01 per warrant at any time following a period of 10 consecutive
trading days where the per share average closing bid price of the Common Stock
exceeds 120% of the Exercise Price (subject to adjustment), provided that a
current prospectus covering the shares issuable upon the exercise of the Class A
Warrants is then effective under federal securities laws. For these purposes,
the closing bid price of the Common Stock shall be determined by the closing bid
price as reported by Nasdaq so long as the Common Stock is quoted on Nasdaq and,
if the Common Stock is listed on a national securities exchange, shall be
determined by the last reported sale price on the primary exchange on which the
Common Stock is traded. Holders of Class A Warrants will automatically forfeit
all rights thereunder except the right to receive the $.01 redemption price per
warrant unless the Class A Warrants are exercised before they are redeemed.
 
     The Warrantholders are not entitled to vote, receive dividends, or exercise
any of the rights of holders of shares of Common Stock for any purpose. The
Class A Warrants are in registered form and may be presented for transfer,
exchange or exercise at the office of the Warrant Agent. Although the Company
has applied for listing of the Class A Warrants on the Nasdaq SmallCap Market,
there is currently no established market for the Class A Warrants, and there is
no assurance that any such market will develop.
 
     The Warrant Agreement provides for adjustment of the exercise price and the
number of shares of Common Stock purchasable upon exercise of the Class A
Warrants to protect Warrantholders against dilution in certain events, including
stock dividends, stock splits, reclassification, and any combination of Common
Stock, or the merger, consolidation, or disposition of substantially all the
assets of the Company.
 
     The Class A Warrants may be exercised upon surrender of the certificate
therefor on or prior to the expiration date (or earlier redemption date) at the
offices of the Warrant Agent, with the form of "Election to Purchase" on the
reverse side of the certificate properly completed and executed as indicated,
accompanied by payment of the full exercise price (by certified or cashier's
check payable to the order of the Company) for the number of Class A Warrants
being exercised.
 
SHARES ELIGIBLE FOR FUTURE SALE
 
     Upon completion of this Offering, there will be 5,656,250 shares of Common
Stock issued and outstanding (6,001,250 if the Underwriter's over-allotment
option is exercised in full). The shares purchased in this Offering will be
freely tradeable without registration or other restriction under the Act, except
for any shares purchased by an "affiliate" of the Company (as defined in the
Act).
 
     All the currently outstanding shares were issued in reliance upon the
"private placement" exemptions provided by the Act and are deemed restricted
securities within the meaning of Rule 144 ("Restricted Shares"). Restricted
Shares may not be sold unless they are registered under the Act or are sold
pursuant to an applicable exemption from registration, including an exemption
under Rule 144. It is expected that 1,356,250 Restricted Shares, which were sold
in July 1996 in an offering pursuant to Rules 505 and 506 of Regulation D, will
become eligible for sale in July 1998, assuming all of the other requirements of
Rule 144 have been satisfied. In addition, the Company has agreed to file a
registration statement relating to these shares one year following the Effective
Date, provided that the Company is then eligible to use Form S-3.
 
     In general, under Rule 144 as currently in effect, any person (or persons
whose shares are aggregated) including persons deemed to be affiliates, whose
restricted securities have been fully paid for and held for at least two years
from the later of the date of issuance by the Company or acquisition from an
affiliate, may sell such securities in broker's transactions or directly to
market makers, provided that the number of shares sold
 
                                       28

<PAGE>   29
 
in any three month period may not exceed the greater of 1% of the
then-outstanding shares of Common Stock or the average weekly trading volume of
the shares of Common Stock in the over-the-counter market during the four
calendar weeks preceding the sale. Sales under Rule 144 are also subject to
certain notice requirements and the availability of current public information
about the Company. After three years have elapsed from the later of the issuance
of restricted securities by the Company or their acquisition from an affiliate,
such securities may be sold without limitation by persons who are not affiliates
under the rule.
 
     In general, under Rule 701 as currently in effect, any employee, consultant
or advisor of the Company who purchases shares from the Company by exercising a
stock option outstanding on the date of the Offering is eligible to resell such
shares 90 days after the date of the Prospectus in reliance on Rule 144, but
need not comply with certain restrictions contained in Rule 144, including the
holding period requirement. As soon as practicable after the Offering, the
Company intends to register 700,000 shares of Common Stock that are reserved for
issuance under the Stock Option Plan. See "Management." After the effective date
of such registration statement, shares issued upon exercise of outstanding
options would generally be eligible for immediate resale in the public market,
subject to vesting under the applicable option agreements.
 
     Following this Offering, the Company cannot predict the effect, if any,
that sales of the Common Stock or the availability of such Common Stock for sale
will have on the market price prevailing from time to time. Nevertheless, sales
by existing shareholders of substantial amounts of Common Stock could adversely
affect prevailing market prices for the Common Stock if and when a public market
exists. David W. Anderson, Chairman and Chief Executive Officer of the Company,
has agreed that he will not sell, grant any option for the sale of, or otherwise
dispose of any shares of Common Stock for 365 days after the Effective Date
without the prior written consent of the Underwriter. The Company's other
executive officers and directors have agreed to be subject to the same
restrictions for a period of 180 days.
 
MINNESOTA ANTI-TAKEOVER LAW
 
     The Company is governed by the provisions of Sections 302A.671 and 302A.673
of the Minnesota Business Corporation Act. In general, Section 302A.671 provides
that the shares of a corporation acquired in a "control share acquisition" have
no voting rights unless voting rights are approved in a prescribed manner. A
"control share acquisition" is an acquisition, directly or indirectly, of
beneficial ownership of shares that would, when added to all other shares
beneficially owned by the acquiring person, entitle the acquiring person to have
voting power of 20% or more in the election of directors. In general, Section
302A.673 prohibits a publicly-held Minnesota corporation from engaging in a
"business combination" with an "interested shareholder" for a period of four
years after the date of the transaction in which the person became an interested
shareholder, unless the business combination is approved in a prescribed manner.
"Business combination" includes mergers, asset sales and other transactions
resulting in a financial benefit to the interested shareholder. An "interested
shareholder" is a person who is the beneficial owner, directly or indirectly, of
10% or more of the corporation's voting stock or who is an affiliate or
associate of the corporation and at any time within four years prior to the date
in question was the beneficial owner, directly or indirectly, of 10% or more of
the corporation's voting stock.
 
TRANSFER AGENT AND REGISTRAR
 
     Firstar Trust Company is the transfer agent and registrar for the Common
Stock, the Class A Warrants and the Units.
 
                                       29

<PAGE>   30
 
                                  UNDERWRITING
 
     Subject to the terms and conditions of the Underwriting Agreement between
the Company and R.J. Steichen and Company (the "Underwriter"), the Underwriter
has agreed to purchase from the Company, and the Company has agreed to sell to
the Underwriter, 2,300,000 Units.
 
     The Underwriting Agreement provides that the obligations of the Underwriter
are subject to approval of certain legal matters by counsel and to various other
conditions. The nature of the Underwriter's obligations are such that they are
committed to purchase and pay for all of the Units if any are purchased.
 
     The Underwriter proposes to offer the Units directly to the public at the
public offering price set forth on the cover page of this Prospectus, and at
such price less a concession not in excess of $.31 per Unit to certain other
dealers who are members of the National Association of Securities Dealers, Inc.
After the public offering, the initial offering price and other selling terms
may be changed by the Underwriter. The Underwriter has advised the Company that
it does not intend to confirm sales of Units to any accounts over which it
exercises discretionary authority.
 
     The Company has granted the Underwriter a 45-day over-allotment option to
purchase up to an aggregate of 345,000 additional Units exercisable at the
public offering price less the underwriting discount. The Underwriter may
exercise such option only to cover over-allotments made in connection with the
sale of the Units offered hereby.
 
     David W. Anderson, Chairman and Chief Executive Officer of the Company, has
agreed that he will not sell, grant any option for the sale of, or otherwise
dispose of any equity securities of the Company (or any securities convertible
into or exercisable or exchangeable for equity securities of the Company), for a
period of 365 days after the date hereof without the prior written consent of
the Underwriter. The Company's other executive officers and directors have
agreed to be subject to the same restrictions for a period of 180 days.
 
     Each of the Company and the Underwriter has agreed to indemnify the other
(including officers, directors and control persons of each other) against
certain liabilities, losses and expenses, including liabilities under the Act,
or to contribute to payments that the Underwriter may be required to make in
respect thereof. Insofar as indemnification for liabilities arising under the
Act may be permitted to directors, officers and controlling persons of the small
business issuer pursuant to the foregoing provisions, or otherwise, the small
business issuer has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.
 
     The Company has agreed to sell to the Underwriter, for $50.00, five-year
warrants to purchase up to 230,000 shares of Common Stock (the "Underwriter's
Warrant") at 140% of the Price to Public. The Underwriter's Warrant may be
exercised commencing one year after the Effective Date. The exercise price and
the number of shares may, under certain circumstances, be subject to adjustment
pursuant to anti-dilution provisions. The Underwriter's Warrant contains certain
participatory and demand registration rights. The Underwriter's Warrant contains
a cashless exercise provision.
 
     The Company has agreed to pay the Underwriter a nonaccountable expense
allowance equal to 2.0% of the aggregate offering price of the shares or
$299,000 ($343,850 if the Underwriter's over-allotment option is exercised in
full).
 
     In July 1996, the Company sold an aggregate of 1,356,250 shares of Common
Stock in a private placement in which the Underwriter acted as selling agent.
The Underwriter received agent's commissions of approximately $427,000. The
Underwriter was given a one-year right of first refusal with respect to the
Company's initial public offering.
 
     At the request of the Company, up to 15% of the Units offered hereby (the
"Designated Units") were reserved for sale to persons designated by the Company.
The price of the Designated Units was the Price to Public set forth on the cover
of this Prospectus.
 
     Prior to the Offering, there exists no public market for the securities of
the Company. The initial public offering price of the Units and the exercise
price of the Warrants have been arbitrarily determined by
 
                                       30

<PAGE>   31
 
negotiation between the Company and the Underwriter and bear no relationship to
the Company's current operating results, book value, net worth, financial
statement criteria of value, the history of and prospects for the industry in
which the Company principally competes or the capability of the Company's
management. There can be no assurance, however, that the price at which the
Common Stock, the Class A Warrants or the Units will sell in the public market
after this Offering will not be lower than the price at which they are sold by
the Underwriter.
 
                                 LEGAL MATTERS
 
     The validity of the securities offered hereby will be passed upon for the
Company by Maslon Edelman Borman & Brand, a Professional Limited Liability
Partnership, Minneapolis, Minnesota. Certain legal matters relating to the sale
of the shares of Common Stock will be passed upon for the Underwriter by
Doherty, Rumble & Butler, P.A., Minneapolis, Minnesota.
 
                                    EXPERTS
 
     The financial statements for the periods ended December 31, 1994 and 1995
included herein have been audited by Lund Koehler Cox & Company, PLLP,
independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said report.
 
                             ADDITIONAL INFORMATION
 
     The Company is not a reporting company under the Securities Exchange Act of
1934, as amended. The Company has filed with the Washington, D.C. Office of the
Securities and Exchange Commission (the "Commission") a Registration Statement
on Form SB-2 under the Act with respect to the Common Stock offered hereby. This
Prospectus filed as a part of the Registration Statement does not contain all of
the information contained in the Registration Statement and the exhibits
thereto, certain portions of which have been omitted in accordance with the
rules and regulations of the Commission. For further information with respect to
the Company and the securities offered hereby, reference is made to such
Registration Statement including the exhibits and schedules thereto. Statements
contained in this Prospectus as to the contents of any contract, agreement or
other documents are not necessarily complete, and in each instance, reference is
made to such contract or other document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference. The Registration Statement and exhibits may be inspected without
charge and copied at the Washington office of the Commission, 450 Fifth Street,
N.W., Washington, DC 20549, and copies of such material may be obtained at
prescribed rates from the Commission's Public Reference Section at the same
address.
 
                                       31

<PAGE>   32
 
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 

<TABLE>
<CAPTION>
                                                                                         PAGE
                                                                                         ----
<S>                                                                                      <C>
Report of Independent Public Accountants..............................................   F-2
Consolidated Financial Statements:
  Balance Sheets......................................................................   F-3
  Statements of Operations............................................................   F-4
  Statements of Stockholder's Equity..................................................   F-5
  Statements of Cash Flows............................................................   F-6
Notes to Consolidated Financial Statements............................................   F-7

</TABLE>

 
                                       F-1

<PAGE>   33
 

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
 
To Famous Dave's of America, Inc.:
 
     We have audited the accompanying consolidated balance sheet of Famous
Dave's of America, Inc. and Subsidiary as of December 31, 1995 and the related
consolidated statements of operations, stockholder's equity and cash flows for
the period from March 14, 1994 (inception) to December 31, 1994 and the year
ended December 31, 1995. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated 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 consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Famous
Dave's of America, Inc. and Subsidiary as of December 31, 1995 and the results
of their operations and their cash flows for the period from March 14, 1994
(inception) to December 31, 1994 and the year ended December 31, 1995 in
conformity with generally accepted accounting principles.
 
                                                LUND KOEHLER COX & COMPANY, PLLP
Minneapolis, Minnesota
August 2, 1996

 
                                       F-2

<PAGE>   34
 
                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARY
 
                          CONSOLIDATED BALANCE SHEETS
 

<TABLE>
<CAPTION>
                                                                                         JUNE 30,
                                                                                           1996
                                                                        DECEMBER 31,    -----------
                                                                            1995
                                                                        ------------    (UNAUDITED)
<S>                                                                     <C>             <C>
                               ASSETS
CURRENT ASSETS:
  Cash and cash equivalents..........................................    $  100,297     $   252,137
  Inventories........................................................        10,921          53,049
  Prepaids and other current assets..................................        69,176         409,409
                                                                         ----------      ----------
     Total current assets............................................       180,394         714,595
                                                                         ----------      ----------
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET..................     1,203,265       1,682,654
                                                                         ----------      ----------
OTHER ASSETS:
  Construction in progress...........................................        73,487         995,964
  Prepaid equity issuance costs......................................             0          82,324
  Pre-opening expenses, net of accumulated amortization of $3,081....             0          35,987
                                                                         ----------      ----------
     Total other assets..............................................        73,487       1,114,275
                                                                         ----------      ----------
                                                                         $1,457,146     $ 3,511,524
                                                                         ==========      ==========
                LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
  Note payable -- bank...............................................    $        0     $ 1,000,000
  Mortgage note payable -- bank......................................       347,823               0
  Note payable -- stockholder........................................       276,046         359,349
  Current portion of capital lease obligation........................             0          50,224
  Accounts payable...................................................       109,974       1,312,154
  Accrued rent -- S&D Land Holdings, Inc. (related party)............             0          82,729
  Accrued interest -- stockholder....................................             0          22,492
  Accrued payroll -- stockholder.....................................             0          32,527
  Accrued payroll and related withholdings...........................        13,412          42,474
  Other current liabilities..........................................        16,081          51,986
                                                                         ----------      ----------
     Total current liabilities.......................................       763,336       2,953,935
CAPITAL LEASE OBLIGATION, NET OF CURRENT PORTION.....................             0         251,981
                                                                         ----------      ----------
     Total liabilities...............................................       763,336       3,205,916
                                                                         ----------      ----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER'S EQUITY:
  Common stock, $.01 par value, 100,000,000 shares authorized,
     2,000,000 shares issued and outstanding.........................        20,000          20,000
  Additional paid-in capital.........................................       980,000         980,000
  Accumulated deficit................................................      (306,190)       (694,392)
                                                                         ----------      ----------
     Total stockholder's equity......................................       693,810         305,608
                                                                         ----------      ----------
                                                                         $1,457,146     $ 3,511,524
                                                                         ==========      ==========
</TABLE>

 
          See accompanying notes to consolidated financial statements.
 
                                       F-3

<PAGE>   35
 
                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARY
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
 

<TABLE>
<CAPTION>
                                                                                  TWENTY-SIX WEEKS ENDED
                                              MARCH 14, 1994                     ------------------------
                                              (INCEPTION) TO     YEAR ENDED       JUNE 30,      JUNE 30,
                                               DECEMBER 31,     DECEMBER 31,        1995          1996
                                                   1994             1995         ----------    ----------
                                              --------------    -------------    (UNAUDITED)   (UNAUDITED)
<S>                                           <C>               <C>              <C>           <C>
SALES:
  Restaurant...............................     $        0       $   481,510     $   23,601    $1,001,055
  Retail...................................              0                 0              0        14,801
                                                ----------        ----------     ----------    ----------
     Total sales...........................              0           481,510         23,601     1,015,856
                                                ----------        ----------     ----------    ----------
COSTS AND EXPENSES:
  Food and beverage costs -- restaurant....              0           169,789         13,278       326,451
  Cost of sales -- retail..................              0                 0              0        10,149
  Restaurant operating expenses............              0           302,217         45,991       391,232
  Depreciation and amortization............              0            17,009          2,000        36,289
  General, administrative and
     development...........................              0           332,331         57,040       634,460
                                                ----------        ----------     ----------    ----------
     Total costs and expenses..............              0           821,346        118,309     1,398,581
                                                ----------        ----------     ----------    ----------
     Loss from operations..................              0          (339,836)       (94,708)     (382,725)
                                                ----------        ----------     ----------    ----------
OTHER INCOME (EXPENSE):
  Royalty income -- related party..........              0            33,646              0        17,015
  Interest expense.........................              0                 0              0       (22,492)
                                                ----------        ----------     ----------    ----------
     Total other income (expense)..........              0            33,646              0        (5,477)
                                                ----------        ----------     ----------    ----------
NET LOSS...................................     $        0       $  (306,190)    $  (94,708)   $ (388,202)
                                                ==========        ==========     ==========    ==========
PROFORMA DATA -- UNAUDITED (SEE NOTE 9)
  Historical net loss......................     $        0       $  (306,190)    $  (94,708)   $ (388,202)
  Proforma provision for income taxes......              0                 0              0             0
                                                ----------        ----------     ----------    ----------
  Proforma net loss........................     $        0       $  (306,190)    $  (94,708)   $ (388,202)
                                                ==========        ==========     ==========    ==========
  Proforma net loss per common share.......     $     0.00       $     (0.14)    $    (0.04)   $    (0.18)
                                                ==========        ==========     ==========    ==========
  Shares used in per share calculations....      2,135,417         2,135,417      2,135,417     2,135,417
                                                ==========        ==========     ==========    ==========
</TABLE>

 
          See accompanying notes to consolidated financial statements.
 
                                       F-4

<PAGE>   36
 
                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARY
 
                CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
 

<TABLE>
<CAPTION>
                                    COMMON STOCK       ADDITIONAL      STOCK
                                 -------------------    PAID-IN     SUBSCRIPTION   ACCUMULATED
                                  SHARES     AMOUNT     CAPITAL      RECEIVABLE      DEFICIT       TOTAL
                                 ---------   -------   ----------   ------------   -----------   ---------
<S>                              <C>         <C>       <C>          <C>            <C>           <C>
BALANCE -- MARCH 14, 1994
            (INCEPTION).........         0   $     0    $       0   $          0    $       0    $       0
  Issuance of common stock for
     $.50 per share............. 2,000,000    20,000      980,000     (1,000,000)          --            0
  Payments received on stock
     subscription...............        --        --           --        425,270           --      425,270
  Net loss......................        --        --           --             --            0            0
                                 ---------   -------     --------    -----------    ---------    ---------
BALANCE -- DECEMBER 31, 1994.... 2,000,000    20,000      980,000       (574,730)           0      425,270
  Payments received on stock
     subscription...............        --        --           --        574,730           --      574,730
  Net loss......................        --        --           --             --     (306,190)    (306,190)
                                 ---------   -------     --------    -----------    ---------    ---------
BALANCE -- DECEMBER 31, 1995.... 2,000,000    20,000      980,000              0     (306,190)     693,810
  Net loss (unaudited)..........        --        --           --             --     (388,202)    (388,202)
                                 ---------   -------     --------    -----------    ---------    ---------
BALANCE -- JUNE 30, 1996
            (UNAUDITED)......... 2,000,000   $20,000    $ 980,000   $          0    $(694,392)   $ 305,608
                                 =========   =======     ========    ===========    =========    =========
</TABLE>

 
              See accompanying notes to consolidated financial statements.
 
                                       F-5

<PAGE>   37
 
                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARY
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 

<TABLE>
<CAPTION>
                                                                                  TWENTY-SIX WEEKS ENDED
                                              MARCH 14, 1994                    --------------------------
                                              (INCEPTION) TO     YEAR ENDED      JUNE 30,       JUNE 30,
                                               DECEMBER 31,     DECEMBER 31,       1995           1996
                                                   1994             1995        -----------    -----------
                                              --------------    ------------    (UNAUDITED)    (UNAUDITED)
<S>                                           <C>               <C>             <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss..................................    $        0       $ (306,190)     $ (94,708)    $  (388,202)
  Adjustments to reconcile net loss to cash
     flows from operating activities:
     Depreciation and amortization..........             0           17,009          2,000          36,289
     Changes in working capital items --
       Inventories..........................             0          (10,921)        (3,500)        (42,128)
       Prepaids and other current assets....        (2,742)         (66,434)       (11,889)       (340,233)
       Accounts payable.....................             0          109,974        134,652         367,660
       Accrued rent -- S&D Land Holdings,
          Inc. .............................             0                0              0          82,729
       Accrued interest -- stockholder......             0                0              0          22,492
       Accrued payroll -- stockholder.......             0                0              0          32,527
       Accrued payroll and related
          withholdings......................             0           13,412          7,912          29,062
       Other current liabilities............             0           16,081            938          35,905
                                                 ---------       ----------      ---------     -----------
          Cash flows from operating
            activities......................        (2,742)        (227,069)        35,405        (163,899)
                                                 ---------       ----------      ---------     -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property, equipment and
     leasehold improvements.................      (411,905)        (808,369)      (369,804)       (991,415)
  Payment of construction in progress.......             0          (73,487)             0         (87,957)
  Payment of pre-opening expenses...........             0                0              0         (39,068)
                                                 ---------       ----------      ---------     -----------
          Cash flows from investing
            activities......................      (411,905)        (881,856)      (369,804)     (1,118,440)
                                                 ---------       ----------      ---------     -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from note payable -- bank........             0                0              0       1,000,000
  Proceeds from mortgage note payable --
     bank...................................             0          375,000              0               0
  Payments on mortgage note payable --
     bank...................................             0          (27,177)             0               0
  Advances on note payable -- stockholder,
     net....................................             0          276,046              0         516,503
  Payments received on stock subscription...       425,270          574,730        429,879               0
  Prepaid equity issuance costs paid........             0                0              0         (82,324)
                                                 ---------       ----------      ---------     -----------
          Cash flows from financing
            activities......................       425,270        1,198,599        429,879       1,434,179
                                                 ---------       ----------      ---------     -----------
INCREASE IN CASH AND CASH EQUIVALENTS.......        10,623           89,674         95,480         151,840
CASH AND CASH EQUIVALENTS, BEGINNING........             0           10,623         10,623         100,297
                                                 ---------       ----------      ---------     -----------
CASH AND CASH EQUIVALENTS, ENDING...........    $   10,623       $  100,297      $ 106,103     $   252,137
                                                 =========       ==========      =========     ===========
</TABLE>

 
          See accompanying notes to consolidated financial statements.
 
                                       F-6

<PAGE>   38
 
                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARY
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 1994 AND 1995
                (INCLUDING DATA APPLICABLE TO UNAUDITED PERIODS)
 
(1) NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
 
     NATURE OF BUSINESS -- Famous Dave's of America, Inc. (formerly known as
Famous Dave's of Minneapolis, Inc.) (the Company) was incorporated in the State
of Minnesota on March 14, 1994. The Company develops, owns and operates American
roadhouse style barbeque restaurants (the Units) under the name "Famous Dave's
Bar-B-Que Shack". The Company opened its first Unit in the Linden Hills area of
Minneapolis (the Linden Hills Unit) in June 1995. Prior to opening the Linden
Hills Unit, the Company had no revenues and its activities were devoted solely
to development.
 
     The Company opened its second Unit in June 1996 in Roseville, Minnesota, a
Minneapolis/St. Paul suburb and is presently developing three additional Units
in the Minneapolis/St. Paul area.
 
     PRINCIPLES OF CONSOLIDATION -- The consolidated financial statements
include the accounts of Famous Dave's of America, Inc. and its wholly owned
subsidiary Lake & Hennepin BBQ and Blues, Inc. Lake & Hennepin BBQ and Blues,
Inc. had no operating activity through June 30, 1996. All significant
intercompany transactions have been eliminated in consolidation.
 
     FISCAL YEAR -- Beginning January 1, 1996, the Company adopted a 52/53 week
accounting period ending on the Sunday nearest December 31 of each year. Prior
periods using a calendar year end have not been restated for comparative
purposes as the differences are immaterial.
 
     CASH AND CASH EQUIVALENTS -- The Company includes as cash equivalents
certificates of deposit and all other investments with original maturities of
three months or less which are readily convertible into known amounts of cash.
 
     INVENTORIES -- Inventories are recorded at the lower of cost (first-in,
first-out) or market value.
 
     DEPRECIATION -- Property, equipment and leasehold improvements are recorded
at cost. Improvements are capitalized while repair and maintenance costs are
charged to operations when incurred. Furniture, fixtures and equipment are
depreciated using the straight-line method over their estimated useful lives of
five to seven years. Leasehold improvements are amortized using the
straight-line method over the shorter of their estimated useful lives or the
lease term including option periods.
 
     PREPAID EQUITY ISSUANCE COSTS -- Direct costs of obtaining equity capital
by issuing stock are deducted from the related proceeds, and the net amount is
recorded as contributed stockholders' equity. Costs paid or incurred prior to
the completion of an equity sale are recorded as a prepaid asset until the
completion of the equity offering.
 
     PRE-OPENING 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 and other direct costs. These costs
are amortized over the first twelve months of the Unit's operations if the
recoverability of such costs can be reasonably assured. Expenses incurred prior
to opening the Company's first Unit were charged to operations when incurred due
to the developmental nature of the Unit.
 
     MUSIC PRODUCTION COSTS -- In accordance with Financial Accounting Standards
Board Statement No. 50 "Financial Reporting in the Record and Music Industry",
the Company has expensed all amounts related to music production costs in the
period incurred.
 
     RIB PROMOTIONAL ACTIVITY -- The Company incurs expenses for participation
in rib festivals and other events and records these expenses in the period
incurred net of any related revenues generated by the activity.
 
     INCOME TAXES -- Through March 3, 1996 the Company, with the consent of its
sole stockholder, had elected under the Internal Revenue Code to be an S
Corporation. In lieu of corporation income taxes, a
 
                                       F-7

<PAGE>   39
 
                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARY
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
 
stockholder of an S Corporation is taxed on his proportionate share of the
company's taxable income. See Note 9.
 
     RECENTLY ISSUED ACCOUNTING STANDARD -- During fiscal year 1996 the Company
adopted Financial Accounting Standards Board Statement No. 121 "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of"
(Statement 121). Statement 121 establishes accounting standards for the
recognition and measurement of impairment of long-lived assets, certain
identifiable intangibles, and goodwill either to be held or disposed of. The
adoption of Statement 121 did not have a material impact on the Company's
financial position or results of operations.
 
     MANAGEMENT'S 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. Actual results could differ from those estimates.
 
     NET LOSS PER COMMON SHARE -- Net loss per common share is computed by
dividing net loss by the weighted average number of common shares outstanding
and dilutive common equivalent shares assumed to be outstanding during each
period. Common equivalent shares consist of dilutive options to purchase common
stock. However, pursuant to certain rules of the Securities and Exchange
Commission, the calculation also includes equity securities, including options
and warrants, issued within one year of an initial public offering with an issue
price less than the initial public offering price, even if the effect is
anti-dilutive. The treasury stock method was used in determining the dilutive
effect of such issuances.
 
(2) INVENTORIES
 
     Inventories consisted of the following at:
 

<TABLE>
<CAPTION>
                                                                   DECEMBER 31,     JUNE 30,
                                                                       1995           1996
                                                                   -------------    ---------
        <S>                                                        <C>              <C>
        Food and beverage.......................................      $ 4,950        $ 19,279
        Retail goods............................................        5,971          33,770
                                                                      -------         -------
                                                                      $10,921        $ 53,049
                                                                      =======         =======
</TABLE>

 
(3) PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS
 
     Property, equipment and leasehold improvements consisted of the following
at:
 

<TABLE>
<CAPTION>
                                                                 DECEMBER 31,      JUNE 30,
                                                                     1995            1996
                                                                 -------------    ----------
        <S>                                                      <C>              <C>
        Land, buildings and improvements......................    $ 1,066,447     $1,008,095
        Furniture, fixtures and equipment.....................        153,827        584,751
        Portable kitchen equipment............................              0        136,141
        Less: accumulated depreciation........................        (17,009)       (46,333)
                                                                   ----------     ----------
                                                                  $ 1,203,265     $1,682,654
                                                                   ==========     ==========
</TABLE>

 
                                       F-8

<PAGE>   40
 
                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARY
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
 
(4) CONSTRUCTION IN PROGRESS
 
     Construction in progress consists of direct and indirect costs related to
the Company's uncompleted development of three additional Units in the
Minneapolis/St. Paul area. Total costs incurred were $73,487 and $995,964
(including capitalized interest of $9,067 and $9,067) as of December 31, 1995
and June 30, 1996.
 
(5) NOTES PAYABLE
 
     NOTE PAYABLE -- BANK -- The Company has a $1,000,000 revolving note due
June 26, 1997, accruing interest at the prime rate (effective rate of 8.25%),
and secured by all the assets of the Company and the personal guaranty of the
sole stockholder. The balance outstanding at June 30, 1996 was $1,000,000.
 
     MORTGAGE NOTE PAYABLE -- BANK -- The Company had a mortgage note maturing
September 1996, accruing interest at 1% over the prime rate (effective rate of
9.75%), secured by a real estate mortgage on the site of its proposed St. Paul,
Minnesota Unit. The balance outstanding at December 31, 1995 was $347,823. This
note was assumed by S&D Land Holdings, Inc. on January 1, 1996. See Note 7.
 
     NOTE PAYABLE -- STOCKHOLDER -- The Company has a $2,000,000 revolving note
with its sole stockholder. The note bears interest at 8%, is unsecured and is
due on demand. Outstanding balances on the note were $276,046 and $359,349 at
December 31, 1995 and June 30, 1996.
 
(6) CAPITAL LEASE OBLIGATION
 
     The Company leases certain equipment under an agreement that expires June
2001. Interest is provided for at a rate of 11%. The obligation is secured by
the equipment under lease. Prior to signing the lease, the Company made deposits
for this equipment of approximately $156,500 that will be refunded to the
Company by the lessor. In addition, the Company has made, and will be reimbursed
by the lessor for, deposits of $100,000 for equipment to be leased under pending
lease commitments.
 
     Future minimum lease payments for the years ending December 31 are as
follows:
 

<TABLE>
        <S>                                                                   <C>
        1996...............................................................   $ 39,130
        1997...............................................................     78,259
        1998...............................................................     78,259
        1999...............................................................     78,259
        2000...............................................................     78,259
        Thereafter.........................................................     39,129
                                                                              --------
        Total..............................................................    391,295
        Less: amount representing interest.................................    (89,090)
                                                                              --------
        Present value of future minimum lease payments.....................    302,205
        Less: current portion..............................................    (25,840)
                                                                              --------
        Obligation under capital lease, net of current portion.............   $276,365
                                                                              ========
</TABLE>

 
(7) RELATED PARTY TRANSACTIONS
 
     S&D LAND HOLDINGS, INC. -- On January 1, 1996, the Company transferred the
real estate, excluding improvements, of its Linden Hills Unit and the site of a
proposed Unit in St. Paul, Minnesota to its sole stockholder in exchange for
amounts due to the stockholder and assumption of bank debt (see Note 5) totaling
$781,023. The Company believes the exchange prices approximated the fair market
values of the real estate exchanged. The stockholder concurrently transferred
the real estate to S&D Land Holdings, Inc. (S&D), a company wholly owned by the
stockholder, and entered into leases with the Company for the real estate (see
Note 11). At June 30, 1996, the Company owed S&D $82,729 for rent through June
30, 1996.
 
                                       F-9

<PAGE>   41
 
                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARY
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
 
     GRAND PINES RESORTS, INC. -- Grand Pines Resorts, Inc. (Grand Pines), is a
company wholly owned by the sole stockholder of the Company. The Company charges
Grand Pines a royalty of 4% of its food sales. Royalty income was $33,646 and
$17,015 for the year ended December 31, 1995 and the twenty-six weeks ended June
30, 1996. The Company also provides certain management services to Grand Pines
for 3% (4% in 1995) of its food sales. Management services income is netted with
general, administrative and development expenses in the Company's consolidated
statements of operations and was $33,646 and $12,761 for the year ended December
31, 1995 and the twenty-six weeks ended June 30, 1996.
 
(8) STOCKHOLDER'S EQUITY
 
     STOCK SPLIT -- On June 11, 1996, the Company declared a 2,000-for-1 stock
split. The stock split has been retroactively reflected in the accompanying
consolidated financial statements.
 
     STOCK OPTION PLAN -- The Company adopted a Stock Option and Compensation
Plan (the "Plan") in 1995, pursuant to which options and other awards to acquire
an aggregate of 700,000 shares of the Company's common stock may be granted.
Stock options, stock appreciation rights, restricted stock, other stock and cash
awards may be granted under the Plan. In general, options vest over a period of
five years and expire ten years from the date of grant.
 
     Stock option transactions during 1995 and 1996 were as follows:
 

<TABLE>
<CAPTION>
                                                                  SHARES     PRICE PER SHARE
                                                                  -------    ---------------
        <S>                                                       <C>        <C>
        Outstanding at December 31, 1994.......................         0     $           0
          Granted..............................................   150,000              1.00
          Canceled.............................................         0                 0
                                                                  -------        ----------
        Outstanding at December 31, 1995.......................   150,000              1.00
          Granted..............................................    25,000              3.50
          Canceled.............................................         0                 0
                                                                  -------        ----------
        Outstanding at June 30, 1996...........................   175,000     $ 1.00 - 3.50
                                                                  =======        ==========
</TABLE>

 
(9) INCOME TAXES -- UNAUDITED PROFORMA DATA
 
     The Company was an S Corporation through March 3, 1996. Accordingly, losses
incurred through March 3, 1996 have been recognized by the Company's sole
stockholder.
 
     The unaudited proforma data in the accompanying consolidated financial
statements accounts for income taxes as if the Company had been subject to
federal and state income taxes at regular marginal corporate tax rates. The
Company generated net losses for both financial reporting and income tax
purposes.
 
     From March 4, 1996 through June 30, 1996 the Company generated a net
operating loss of approximately $200,000 which, if not used, will expire in
2011. Future changes in the ownership of the Company may place limitations on
the use of this net operating loss carryforward. The Company has recorded a full
valuation allowance against its deferred tax asset due to the uncertainty of
realizing the related benefit.
 
                                      F-10

<PAGE>   42
 
                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARY
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
 
(10) SUPPLEMENTAL CASH FLOWS INFORMATION
 

<TABLE>
<CAPTION>
                                                                         DECEMBER 31,    JUNE 30,
                                                                             1995          1996
                                                                         ------------    --------
<S>                                                                      <C>             <C>
Cash paid for interest................................................      $9,067       $      0
                                                                            ======       ========
Non cash investing and financing activities:
Equipment purchased under capital lease obligation....................      $    0       $302,205
                                                                            ======       ========
Real estate exchanged to retire debt..................................      $    0       $781,023
                                                                            ======       ========
Construction purchased with accounts payable..........................      $    0       $834,520
                                                                            ======       ========
</TABLE>

 
(11) COMMITMENTS AND CONTINGENCIES
 
     OPERATING LEASES -- The Company has entered into various operating leases
as follows:
 
     LEASES WITH S&D LAND HOLDINGS, INC. -- The Company leases the real estate
for certain of its current or proposed Units from S&D Land Holdings, Inc., a
company wholly owned by the Company's sole stockholder. Each lease generally has
a ten-year term with two five-year options to extend and requires the payment of
base rent plus the payment of real estate taxes and operating expenses as
follows:
 
          Linden Hills Unit -- Base rent of $48,800 per year payable monthly,
     adjusted annually for inflation. Expires in 2005 with two five-year
     extensions available.
 
          Roseville Unit -- Base rent of $82,200 per year payable monthly,
     adjusted annually for inflation. Expires in 2002 with one five-year
     extension available.
 
          Proposed St. Paul, Minnesota Unit -- Base rent of $44,900 per year
     payable monthly, adjusted annually for inflation. Expires in 2005 with two
     five-year extensions available.
 
          Proposed Minnetonka, Minnesota Unit -- Base rent of $124,129 per year
     payable monthly, adjusted annually for inflation. Expires in 2005 with two
     five-year extensions available.
 
     CORPORATE OFFICE -- The Company has a lease for its corporate office space
that expires in 1998. Base rent is $3,951 per month. The Company also is
required to pay its pro rata share of real estate taxes and operating expenses.
 
     PROPOSED MINNEAPOLIS, MINNESOTA UNIT -- The Company leases space for its
proposed Minneapolis, Minnesota Unit under a lease that expires in 2011, but may
be terminated at the Company's election after the first five years. The lease
requires initial base rent of $159,516 per year payable monthly, plus a
percentage rent of 5% of annual gross sales in excess of $3,190,320, payable
annually. The Company has the right to extend the term for two five-year
periods. The Company may receive approximately 18 months of base rent credit and
certain other incentives if it completes its improvements and opens for business
on or before October 1, 1996. In addition to the base and percentage rents, the
lease requires the Company to pay real estate taxes and operating expenses.
 
                                      F-11

<PAGE>   43
 
                 FAMOUS DAVE'S OF AMERICA, INC. AND SUBSIDIARY
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
 
     Future minimum rental payments (excluding percentage rents) for the
operating leases described above are as follows for the years ending December
31:
 

<TABLE>
        <S>                                                                  <C>
        1996..............................................................   $  395,591
        1997..............................................................      506,957
        1998..............................................................      491,153
        1999..............................................................      459,545
        2000..............................................................      459,545
        Thereafter........................................................    1,367,553
                                                                             ----------
        Total.............................................................   $3,680,344
                                                                             ==========
</TABLE>

 
     EMPLOYMENT AGREEMENTS -- The Company has employment agreements with three
of its officers. The agreements require minimum annual compensation of $100,000
to $125,000 and have terms of two to three years. All of the contracts require
at least six month severance payments with resulting two year non-competes with
one of the contracts requiring up to twelve months severance.
 
(12) SUBSEQUENT EVENTS (UNAUDITED)
 
     PRIVATE PLACEMENT OF COMMON STOCK -- In July 1996, the Company sold
1,356,250 shares of its common stock in a private placement for $3.50 per share,
and received net proceeds of approximately $4,200,000. The Company has used and
plans to use the net proceeds from this private placement of common stock to
complete the development of its Units and for working capital.
 
     STOCK OPTIONS -- Subsequent to June 30, 1996, the Company granted options
to acquire 167,500 shares of common stock at exercise prices ranging from $3.50
to $4.33 per share and cancelled 4,500 options to acquire shares of common stock
at $3.50 per share.
 
                                      F-12

<PAGE>   44
[Narrative description of photographs that appear on the inside back cover page
of prospectus]


Picture #1 -- A photograph of the interior of the Company's Linden Hills Unit,
              with several oilcloth-covered tables in the foreground and the
              counter where customers place their meal orders in the background.
              The order counter features a tin roof, brightly painted timbers
              and signs highlighting various menu items, shelves containing
              bottles of Famous Dave's BBQ Sauce and items of rustic Americana,
              and self-serve beverage fountains. Caption: "'May you always be
              surrounded by good friends and great barbeque.'(SM) -- Famous
              Dave."

Picture #2 -- One of the restaurant's cooks holds a large platter of barbecued
              ribs while standing behind a large table laden with platters of
              food served at the Company's restaurants. Caption: "BBQ platters,
              sandwiches, and desserts."

Picture #3 -- A photograph of diners seated around a table, on which is
              displayed the Company's "garbage can lid" entree. Caption: "St.
              Louis style ribs are a specialty."

Picture #4 -- A photograph of diners seated around a table in the process of
              eating their meal. Caption: "Plenty of sauce, napkins, and
              friends."

Picture #5 -- Two of the Company's employees are shown bringing seated diners
              their meals. Caption: "Down-home friendly service."

Picture #6 -- Two diners seated at a table are shown having a conversation with
              a restaurant employee. Caption: "Like a good ol' backyard
              barbeque."

<PAGE>   45
 
             ------------------------------------------------------
             ------------------------------------------------------
 
     NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITER. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED
OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO
SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
 
                          ---------------------------
 
 
                              TABLE OF CONTENTS
 

<TABLE>
<CAPTION>
                                          PAGE
                                          -----
<S>                                       <C>
Prospectus Summary.....................       3
Risk Factors...........................       6
Use of Proceeds........................      11
Dilution...............................      12
Dividend Policy........................      13
Capitalization.........................      13
Management's Discussion and Analysis of
  Financial Condition and Results of
  Operations...........................      14
Business...............................      17
Management.............................      23
Certain Transactions...................      25
Principal Shareholders.................      25
Description of Securities..............      27
Underwriting...........................      30
Legal Matters..........................      31
Experts................................      31
Additional Information.................      31
Index to Consolidated Financial
  Statements...........................     F-1
</TABLE>

 
                          ----------------------------
 
     UNTIL NOVEMBER 15, 1996 (25 DAYS AFTER THE DATE OF THE PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
 
             ------------------------------------------------------
             ------------------------------------------------------
             ------------------------------------------------------
             ------------------------------------------------------
                                 FAMOUS DAVE'S
 
                                OF AMERICA, INC.
 
                             [FAMOUS DAVE'S LOGO]

                                2,300,000 UNITS
                         CONSISTING OF 2,300,000 SHARES
                         OF COMMON STOCK AND 2,300,000
                          REDEEMABLE CLASS A WARRANTS
                         ------------------------------
 
                                   PROSPECTUS
                         ------------------------------
                         [RJ STEICHEN & COMPANY LOGO]
                                OCTOBER 21, 1996
 
             ------------------------------------------------------
             ------------------------------------------------------