Drewrys Brewing 10-Q 2014 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(Mark One)

Form 10-Q

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended  March 31, 2014

or

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

For the transition period from __________________ to __________________________

Commission file number: 333-173309

DREWRYS BREWING COMPANY

(Name of registrant as specified in its charter)

Nevada	27-2153794
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

5402 Brittany Drive,   Mc  Henry, IL	60050
(Address of principal executive offices)	(Zip Code)

(815) 575-4815

(Registrant's telephone number, including area code)

NOTE APPLICABLE

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

[x] Yes [ ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

[ ] Yes [x] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	[ ]	Accelerated filer	[ ]
Non-accelerated filer	[ ]	Smaller reporting company	[x]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

[ ] Yes [x] No

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 12,100,500 shares of common stock are issued and outstanding as of May 20, 2014.

	TABLE OF CONTENTS	PageNo.
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements.	1
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	10
Item 3.	Quantative and Qualitative Disclosures About Market Risk.	12
Item 4.	Controls and Procedures.	12
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings.	14
Item 1A.	Risk Factors.	14
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	14
Item 3.	Defaults Upon Senior Securities.	14
Item 4.	Mine Safety Disclosure	14
Item 5.	Other Information.	14
Item 6.	Exhibits.	15

DREWRYS BREWING COMPANY
CONDENSED BALANCE SHEETS
	As of March 31, 2014			As of December 31, 2013
	(Unaudited)			(Audited)
ASSETS
CURRENT ASSETS:
Cash and equivalents	$	1,838		$	10,596
Accounts Receivable-Net		994			1,879
Inventory		4,048			6,708
Total Current Assets		6,880			19,183
OTHER ASSETS:
Trademarks		560			560
Total Other Assets		560			560
Total Assets	$	7,440		$	19,743
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities	$	44,474		$	36,899
Advances from related parties		14,948			13,598
Note Payable		79,148			85,000
Total Liabilities		138,570			135,497
STOCKHOLDERS' DEFICIENCY
Common stock , par value $.001; 75,000,000 shares authorized; 12,100,500 shares issued as of March 31, 2014 and 12,100,500 as of December 31, 2013	$	12,101		$	12,101
Additional paid in capital		307,008			307,008
Deficit Accumulated During Development Stage		(434,863	)		(434, 863	)
Accumulated Deficit		(15,376	)		—
Total Stockholders' Deficiency		(131,130	)		(115,754	)
Total Liabilities and Stockholders' Deficiency	$	7,440		$	19,743

See accompanying notes to condensed unaudited financial statements.

Table of Contents 1

DREWRYS BREWING COMPANY
CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
	For the			For the
	three month			three month
	period ended			period ended
	March 31, 2014			March 31, 2013
REVENUES	$	3,849		$	—
Cost of Goods Sold		3,610			—
Gross Profit		239			—
EXPENSES
Advertising and Promotion		1,295			6,666
General and Administrative		3,462			611
Professional Fees		8,230			2,750
Total Operating Expenses		12,987			10,027
Loss from Operations		(12,748	)		(10,027	)
OTHER EXPENSES
Interest		(2,628	)		—
Total Operating Expenses		(2,628	)		—
Income (Loss) Before Income Taxes		(15,376	)		(10,027	)
Provision for Income Taxes		—			—
Net (loss)	$	(15,376	)	$	(10,027	)
Basic and diluted net loss per common share		**			**
Weighted average number of common shares outstanding		12,100,500			9,025,883
** Less than $.01

See accompanying notes to condensed unaudited financial statements.

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DREWRYS BREWING COMPANY
CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIENCY
MARCH 31, 2014
					Additional					Total
	Common Stock				Paid in		Accumulated			Stockholders'
Par Value of $0.001		Shares		Amount		Capital		(Deficit)		Deficiency
Balance at December 31, 2013		12,100,500	$	12,101	$	307,008	$	(434,863	)	$	(115,754	)
Net Loss for the quarter ended March 31, 2014		—		—		—		(15,376	)		(15,376	)
Balance at March 31, 2014 (UNAUDITED)		12,100,500	$	12,101	$	307,008	$	(450,239	)	$	(131,130	)

 See accompanying notes to condensed unaudited financial statements.

Table of Contents 3

DREWRYS BREWING COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
	For the			For the
	three month			three month
	period ended			period ended
	March 31, 2014			March 31, 2013
OPERATING ACTIVITIES:
Net loss		(15,376	)		(10,027	)
Adjustments to reconcile net loss to net cash used in operating activities:
Changes in operating assets and liabilities:
Accounts Receivable		885			—
Inventory		2,660			—
Accounts Payable and Accrued Expenses		7,575			3,732
Net cash used in operating activities		(4,256	)		(6,295	)
INVESTING ACTIVITIES:
Net cash provided by (used in) investing activities		—			—
FINANCING ACTIVITIES:
Advances from related parties		1,350			5,873
Proceeds from Issuance of Stock		—			550
Payment on Note Payable		(5,852	)		—
Net cash provided by (used in) financing activities		(4,502	)		6,423
NET INCREASE IN CASH		(8,758	)		128
CASH BEGINNING BALANCE		10,596			128
CASH ENDING BALANCE		1,838			256
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Taxes paid		—			—
Interest paid	$	1,700			—

See accompanying notes to condensed unaudited financial statements.

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DREWRYS BREWING COMPANY

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2014

(UNAUDITED) 

NOTE 1. GENERAL ORGANIZATION AND BUSINESS

Drewrys Brewing Company (“the Company”) is a development stage company, incorporated in the State of Nevada on, October 11, 2010, to develop and market a line of low-priced and craft beers. We currently provide consumers with malt beverages that appeal to their price point. The Company sells their product mainly on the wholesale market, targeting select regional wholesalers and distributors in the Midwest and Atlantic/New England regions. However, in select states, we also sell direct to retailers and bars.

The Company’s fiscal year ends on December 31^st. As of the end of the fourth quarter of 2013, the Company was no longer considered to be a Developmental Stage Company.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES

Basis of Presentation

The unaudited financial statements included in this report have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting and include all adjustments (consisting only of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation. These financial statements have not been audited.

Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations for interim reporting. The Company believes that the disclosures contained herein are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the financial statements and notes for the year ended December 31, 2013 included in the Company’s annual report on Form 10-K. The financial data for the three months ended March 31, 2014, may not necessarily reflect the results to be anticipated for the complete year ended December 31, 2014.

Accounting Basis

These financial statements are prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America.

Cash and Cash Equivalents

For the purpose of the financial statements cash equivalents include all highly liquid investments with maturity of three months or less. As of March 31, 2014 and December 31, 2013, the Company has no cash equivalents.

Earnings (Loss) per Share

In accordance with accounting guidance now codified as FASB ASC Topic 260, “Earnings per Share,” the basic earnings (loss) per share are calculated by dividing the Company's net income available to common shareholders by the weighted average number of common shares outstanding during the year. The diluted earnings (loss) per share are calculated by dividing the Company's net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted as of the first of the year for any potentially dilutive debt or equity. There are no diluted shares outstanding for any periods reported.

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DREWRYS BREWING COMPANY

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2014

(UNAUDITED)

Dividends

The Company has not adopted any policy regarding payment of dividends. No dividends have been paid during the periods shown, and none are contemplated in the near future.

Income Taxes

The Company adopted FASB ASC 740, Income Taxes, at its inception. Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carry forwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates are recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. No deferred tax assets or liabilities were recognized as of March 31, 2014 or December 31, 2013.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

The Company recognizes revenue when:

• Persuasive evidence of an arrangement exists;

• Shipment has occurred;

• Price is fixed or determinable; and

• Collectability is reasonably assured

The Company closely follows the provisions of Staff Accounting Bulletin No. 104 as described above. For the three and nine month periods ended March 31, 2014 and 2013, the Company has recognized revenue of $3,849 and $0, respectively.

Cost of Goods Sold

Cost of goods sold includes cost of inventories sold.

Property

The company does not own any real estate or other properties. The company's office is located 5402 Brittany Drive, McHenry Illinois 60050. Our contact number is 815- 575-4815. The business office is located at the home of Francis Manzo, the CEO of the company at no charge to the company.

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DREWRYS BREWING COMPANY

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2014

(UNAUDITED) 

Recently Issued Accounting Pronouncements

The Company has adopted all recently issued accounting pronouncements. The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.

Identifiable Intangible Assets

As of March 31, 2014 and December 31, 2013, $560 and $560, respectively of costs related to registering our trademarks, have been capitalized. It has been determined that the trademarks have an indefinite useful life and are not subject to amortization. However, the trademark will be reviewed for impairment annually or more frequently if impairment indicators arise.

Impairment of Long-Lived Assets

The Company accounts for its long-lived assets in accordance with ASC Topic 360-10-05, “Accounting for the Impairment or Disposal of Long-Lived Assets.” ASC Topic 360-10-05 requires that long-lived assets, such as our trademarks, be reviewed for impairment annually, or whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value. No impairments were recorded for the three months ended March 31, 2014 and 2013.

Stock-Based Compensation

In December 2004, the FASB issued FASB Accounting Standards Codification No. 718, Compensation – Stock Compensation.  Under FASB Accounting Standards Codification No. 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans.  As such, compensation cost is measured on the date of grant at their fair value.  Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.  The Company applies this statement prospectively.

Equity instruments (“instruments”) issued to other than employees are recorded on the basis of the fair value of the instruments, as required by FASB Accounting Standards Codification No. 718.  FASB Accounting Standards Codification No. 505, Equity Based Payments to Non-Employees defines the measurement date and recognition period for such instruments.  In general, the measurement date is when either a (a) performance commitment, as defined, is reached or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the FASB Accounting Standards Codification.

Fair value of Financial Instruments

The Company considers that the carrying amount of financial instruments, including accounts payable and accrued liabilities, and advances from related parties approximate fair value because of the short maturity of these instruments.

Table of Contents 7

DREWRYS BREWING COMPANY

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2014

(UNAUDITED) 

Related Parties

Related parties, which can be a corporation, individual, investor or another entity are considered to be related if the party has the ability, directly or indirectly, to control the other party or exercise significant influence over the Company in making financial and operation decisions. Companies are also considered to be related if they are subject to common control or common significant influence. The Company has these relationships.

Business Segments

The Company operates in one segment and therefore segment information is not presented.

Reclassification

Certain amounts from prior periods have been reclassified to conform to the current period presentation. These reclassifications had no impact on the Company's net loss or cash flows.

Subsequent Events

We evaluated subsequent events through the date and time our financial statements were issued for potential recognition or disclosure in the accompanying financial statements. Other than the disclosures included in these financial statements, we did not identify any events or transactions that should be recognized or disclosed in the accompanying financial statements.

NOTE 3. INCOME TAXES

The Company adopted FASB ASC 740, Income Taxes, at its inception. Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carry forwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates are recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. No deferred tax assets or liabilities were recognized as of March 31, 2014 or December 31, 2013.

NOTE 4. STOCKHOLDERS' EQUITY

Common Stock

There are 75,000,000 Common Shares at $0.001 par value authorized with 12,100,500 issued and outstanding as of March 31, 2014. The sole officer and director of the Company owns 9,000,000 of these shares.

Table of Contents 8

DREWRYS BREWING COMPANY

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2014

(UNAUDITED)

NOTE 5. RELATED PARTY TRANSACTIONS

Advances from related parties represent advances granted by Francis Manzo, III. Mr. Manzo pays for certain administrative expenses and is reimbursed by the Company. These advances have no fixed terms of repayment, are unsecured, and bear no interest. During the three months ended March 31, 2014, Mr. Manzo advanced the company $1,350 net, for purposes of paying operating expenses on behalf of the Company. As of March 31, 2014 and December 31, 2013, the Company has a loan from Mr. Manzo with an outstanding balance of $14,948 and $13,598 respectively.

The officer and director of the Company is involved in other business activities and may, in the future, become involved in other business opportunities that become available. They may face a conflict in selecting between the Company and other business interests. The Company has not formulated a policy for the resolution of such conflicts.

NOTE 6. NOTE PAYABLE

On June 3, 2013, the Company acquired a $85,000 note payable secured by the Company’s total assets. The note bears a fixed interest rate of 12% per annum, compounded annually, and matures on December 1, 2014. Interest shall accrue for the first 6 months and be due and payable in one lump sum installment in the amount of $4,750 on December 1, 2013. Thereafter, principal and accrued interest shall be due and payable in 12 consecutive monthly installments in the amount of $7,552.15 beginning on January 1, 2014 and ending on December 1, 2014. As of March 31, 2014, the note balance, including accrued interest, totaled $80,926 and in default.

NOTE 7. GOING CONCERN

As reflected in the accompanying financial statements, the Company has minimal operations, has an accumulated deficit of $450,239 as of March 31, 2014, and has negative cash flow from operations of $4,256. As the Company continues to incur losses, transition to profitability is dependent upon the successful commercialization of its products and achieving a level of revenues adequate to support the Company’s cost structure. The Company may never achieve profitability, and until it does, the Company will continue to need to raise additional cash. Management intends to fund future operations through additional private or public debt or equity offerings. Based on the Company’s operating plan, existing working capital at March 31, 2014 was not sufficient to meet the cash requirements to fund planned operations through December 31, 2014 without additional sources of cash. This raises substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty.

NOTE 8. TRADEMARKS AND LABEL DESIGNS

The Company owns trademarks for its’ various brands of beer. These costs provide future benefit to the Company and are considered to have an infinite life at this time. The life of these assets will be reevaluated when they are placed into service.

The trademarks were purchased from Francis Manzo, Chief Executive Officer of Drewrys (a related party), for $560. These intangible assets are being valued at cost, and are not considered to be impaired at this time.

NOTE 9. SUBSEQUENT EVENTS

In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure as follows: none.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

FORWARD LOOKING INFORMATION 

The following discussion and analysis of the Company’s financial condition and results of operations should be read with the condensed financial statements and related notes contained in this quarterly report on Form 10-Q (“Form 10-Q”). All statements other than statements of historical fact included in this Form 10-Q are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, levels of activity, performance or achievements to be materially different than any expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue," or the negative of these terms or other comparable terminology. Important factors that could cause actual results to differ materially from those discussed in such forward-looking statements include: 1. General economic factors including, but not limited to, changes in interest rates and trends in disposable income; 2. Information and technological advances; 3. Cost of products sold; 4. Competition; and 5. Success of marketing, advertising and promotional campaigns. The Company is subject to specific risks and uncertainties related to its business model, strategies, markets and legal and regulatory environment. You should carefully review the risks described in this Form 10-Q and in other documents the Company files from time to time with the SEC. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this Form 10-Q. The Company undertakes no obligation to publicly release any revisions to the forward-looking statements to reflect events or circumstances after the date of this document.

OVERVIEW

Business

We were incorporated in Nevada on October 11, 2010, and subsequently acquired the registered trademarks to the names DREWRYS, HOLIHAN and CANADIAN ACE from the President and Founder of the Company, Francis Manzo and from corporate entities owned by him. Ownership was transferred by a ‘Bill of Sale’ Document on October 15, 2010 and in February, 2012. We are an early entry stage company in a very competitive market. We have limited operating history upon which an evaluation of our future success or failure can be made.

We were formed to develop and market craft beers. While we expect to continue producing our products and selling into the marketplace, we cannot assure you that we will have profitable operations.

Results of Operations

In the three months ended March 31, 2014, the Company had $3,849 in sales of products and $3,610 in Cost of Sales. Selling, general and administrative expenses were $12,987. Sales continue to be low as a result of our limited capital to produce product to sell. Our increase in selling and administrative expense were a result of additional consulting fees. As a result, the Company lost $15,376 in the three months ended March 31, 2014.

In the three months ended March 31, 2013 the Company had $0 in sales of products and $0 in Cost of Sales. Selling, general and administrative expenses were $10,027. As a result the Company lost $10,027 in the three months ended March 31, 2013.

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Liquidity and Capital Resources

During the three months ended March 31, 2014, working capital decreased $15,376 to a deficit of $131,690 from a deficit of $116,314. The primary reason for the decrease was the decrease in cash of $ 8,758 and offset by an increase in due to shareholder of $1,350 decrease in note payable of $5,852 and an increase in accounts payable of $7,575. During this same period, stockholders’ equity decreased $15,376.

Cash flows

Net cash used in operating activities was $4,256 for the three months ended March 31, 2014. In the 2014 period cash was used by our loss from operations and offset by cash provided by decrease in accounts receivable and inventory and our increase in due to shareholder and accounts payable

Net cash used in operating activities was $6,295 for the three months ended March 31, 2013, due to shareholder offset by cash provided by our increase in accounts payable.

Net cash used by financing activities for the three months ended March 31, 2014, was $4,502 and reflects payment on note payable and net advances from related party.

Net cash provided by financing activities for the three months ended March 31, 2013, was $6,473 which resulted from $5,873 in advances from our related party, and $500 from the issuance of stock.

Recent Financing Transactions

None

Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that we are required to disclose pursuant to these regulations. In the ordinary course of business, we enter into operating lease commitments, purchase commitments and other contractual obligations. These transactions are recognized in our financial statements in accordance with generally accepted accounting principles in the United States.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of its financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to the reported amounts of revenues and expenses and the valuation of our assets and contingencies. We believe our estimates and assumptions to be reasonable under the circumstances. However, actual results could differ from those estimates under different assumptions or conditions. Our financial statements are based on the assumption that we will continue as a going concern. If we are unable to continue as a going concern we would experience additional losses from the write-down of assets.

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Going Concern

As reflected in the accompanying financial statements, the Company has minimal operations, has an accumulated deficit of $450,239 as of March 31, 2014, and has negative cash flow from operations of $4,256. As the Company continues to incur losses, transition to profitability is dependent upon the successful commercialization of its products and achieving a level of revenues adequate to support the Company’s cost structure. The Company may never achieve profitability, and until it does, the Company will continue to need to raise additional cash. Management intends to fund future operations through additional private or public debt or equity offerings. Based on the Company’s operating plan, existing working capital at March 31, 2014 was not sufficient to meet the cash requirements to fund planned operations through December 31, 2014 without additional sources of cash. This raises substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty.

New Accounting Pronouncements

The company has adopted all recently issued accounting pronouncements. The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

Not applicable for a smaller reporting company.

Item 4. Controls and Procedures.

We maintain disclosure controls and procedures that are designed to ensure that the information required to be disclosed in the reports that we file under the Securities Exchange Act of 1934 (the "Exchange Act") is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our President and Treasurer, as appropriate, to allow timely decisions regarding required disclosures.  In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including our President and Treasurer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of our fourth fiscal quarter covered by this report. Based on the foregoing, our President and Treasurer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.  It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management of is responsible for establishing and maintaining adequate internal control over financial reporting.  Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company’s principal executive and financial officer and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

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• Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of March 31, 2014.  In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework.  The COSO framework is based upon five integrated components of control: control environment, risk assessment, control activities, information and communications and ongoing monitoring.

Based on the assessment performed, management has concluded that the Company’s internal control over financial reporting, as of March 31, 2014, is effective and provides reasonable assurance regarding the reliability of its financial reporting and the preparation of its financial statements in accordance with generally accepted accounting principles.  Further, management has not identified any material weaknesses in internal control over financial reporting as of March 31, 2014.

Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer has concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were not effective as of March 31, 2014 (the “Evaluation Date”), to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.   Each of the following is deemed a material weakness in our internal control over financial reporting:

• We do not have an audit committee. While we are not currently obligated to have an audit committee, including a member who is an “audit committee financial expert,” as defined in Item 407 of Regulation S-K, under applicable regulations or listing standards; however, it is management’s view that such a committee is an important internal control over financial reporting, the lack of which may result in ineffective oversight in the establishment and monitoring of internal controls and procedures.

• We did not maintain proper segregation of duties for the preparation of our financial statements. We currently have only one officer overseeing all transactions. This has resulted in several deficiencies, including the lack of control over preparation of financial statements and proper application of accounting

Management believes that the material weaknesses set forth in the two items above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

Management's Remediation Initiatives

In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we plan to initiate the following series of measures once we have the financial resources to do so:

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We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. And, we plan to appoint one or more outside directors to an audit committee resulting in a fully functioning audit committee, which will undertake the oversight in the establishment and monitoring of required internal controls and procedures, such as reviewing and approving estimates and assumptions made by management when funds are available to us.

Management believes that the appointment of outside directors to a fully functioning audit committee, would remedy the lack of a functioning audit committee.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the period covered by this report, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

This quarterly report does not include an attestation report of the Company’s registered independent public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this quarterly report.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The Company is not a party to, and its property is not the subject of, any material pending legal proceedings.

Item 1A. Risk Factors

Not Required

Item 2. Unregistered Sale of Equity Securities and Use of Proceeds.

None

Item 3. Defaults Upon Senior Securities

We are in default on our note payable of $80,926

Item 4. Mine Safety Disclosure

None

Item 5. Other Information

None

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Item 6. Exhibits

31.1Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a)

32.1Certification pursuant to 18 U.S.C. Section 1350

101*  XBRL data files of Financial Statements and Notes contained in this Quarterly Report on Form 10-Q.

* In accordance with Regulation S-T, the Interactive Data Files in Exhibit 101 to the Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed.”

101.INS XBRL Instance Document.**

101.SCH XBRL Taxonomy Extension Schema Document.**

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document.**

101.DEF XBRL Taxonomy Extension Definition Linkbase Document.**

101.LAB XBRL Taxonomy Extension Labels Linkbase Document.**

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document.**

** Pursuant to Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be part of any registration statement or other document filed under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Drewrys Brewing Company
May 20, 2014	By: /s/ Francis P. Manzo III
	Francis P. Manzo III, President (Principal Executive Officer and Principal Accounting Officer)

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