Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 07, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'American Brewing Company, Inc. | ' |
Entity Central Index Key | '0001579823 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 12,637,720 |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2014 | ' |
CONDENSED_BALANCE_SHEETS_Unaud
CONDENSED BALANCE SHEETS (Unaudited) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Current Assets: | ' | ' |
Cash and cash equivalents | $115,849 | $428,574 |
Accounts receivable, net of allowance for doubtful accounts of $0 and $0, respectively | 50,985 | 30,166 |
Inventories | 52,429 | 30,688 |
Prepaid Expense | 99,875 | 94,250 |
Total current assets | 319,138 | 583,678 |
Property and equipment, net | 1,017,368 | 420,836 |
Other assets | 12,817 | 132,163 |
Total assets | 1,349,323 | 1,136,677 |
Current Liabilities: | ' | ' |
Accounts payable | 37,316 | 3,317 |
Current portion of notes payable and capital leases | 12,753 | 24,182 |
Due to Related Party | 150,000 | ' |
Accrued expenses and other current liabilities | 634,462 | 543,129 |
Total current liabilities | 834,531 | 570,628 |
Note payable and capital leases, less current portion | 5,768 | 4,942 |
Total liabilities | 840,299 | 575,570 |
Stockholders' (Deficit) Equity: | ' | ' |
Preferred Stock, $0.001 par value: 1,000,000 shares authorized, 250,000, and 0 shares issued and outstanding, respectively | 250 | 250 |
Common Stock, $0.001 par value; 50,000,000 shares authorized; 12,570,720, and 10,616,854 shares issued and outstanding, respectively | 12,638 | 10,617 |
Additional paid-in capital | 2,500,822 | 1,425,610 |
Accumulated deficit | -2,004,686 | -875,370 |
Total stockholders' (deficit) equity | 509,024 | 561,107 |
Total liabilities and stockholders' (deficit) equity | $1,349,323 | $1,136,677 |
CONDENSED_BALANCE_SHEETS_Paren
CONDENSED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Preferred Stock, par value | $0.00 | $0.00 |
Preferred Stock, shares authorised | 1,000,000 | 1,000,000 |
Preferred Stock, shares issued | 250,000 | 250,000 |
Preferred Stock, shares outstanding | 250,000 | 250,000 |
Common Stock, par value | $0.00 | $0.00 |
Common Stock, shares authorised | 50,000,000 | 50,000,000 |
Common Stock, shares issued | 12,637,720 | 10,616,854 |
Common Stock, shares authorised | 12,637,720 | 10,616,854 |
CONDENSED_STATEMENTS_OF_OPERAT
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Income Statement [Abstract] | ' | ' | ' | ' |
Revenue | $306,110 | $266,340 | $814,504 | $750,606 |
Less excise taxes | -5,538 | -5,813 | -15,030 | -15,671 |
Net revenue | 300,572 | 260,527 | 799,474 | 734,935 |
Cost of goods sold | 131,334 | 81,546 | 368,448 | 290,762 |
Gross profit | 169,238 | 178,981 | 431,026 | 444,173 |
Operating expenses: | ' | ' | ' | ' |
Advertising, promotional and selling | 79,512 | 90,483 | 273,165 | 251,666 |
Amortization of stock based compensation | 13,625 | ' | 707,875 | ' |
Director Compensation | 150,000 | ' | 150,000 | ' |
General and administrative | 170,423 | 102,380 | 447,030 | 298,496 |
Total operating expenses | 413,560 | 192,863 | 1,578,070 | 550,162 |
Operating loss | -244,322 | -13,882 | -1,147,044 | -105,989 |
Other (expense) income, net: | ' | ' | ' | ' |
Interest, net | -3,240 | -12,778 | -11,298 | -21,470 |
Gain on sale of property and equipment | 290 | 3,351 | 29,026 | 3,351 |
Total other income (expense), net | -2,950 | -9,427 | 17,728 | -18,119 |
Net loss | ($247,272) | ($23,309) | ($1,129,316) | ($124,108) |
Net loss per share | ($0.02) | $0 | ($0.09) | ($0.02) |
Weighted-average number of shares | 12,591,253 | 8,139,891 | 12,152,194 | 8,047,143 |
CONDENSED_STATEMENTS_OF_CASH_F
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Cash flows from operating activities: | ' | ' |
Net loss | ($1,129,316) | ($124,108) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ' | ' |
Depreciation and amortization | 113,573 | 76,805 |
Amortization of prepaid stock based compensation | 707,875 | ' |
Stock based compensation | 14,500 | ' |
(Gain) loss on the disposition of property and equipment | -29,026 | -3,351 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -20,819 | 4,697 |
Inventories | -21,741 | -4,947 |
Other assets | ' | -32,674 |
Accounts payable | 33,999 | -13,086 |
Due to related party | 150,000 | ' |
Accrued expenses | 91,333 | 72,538 |
Net cash (used in) operating activities | -89,622 | -24,126 |
Cash flows from investing activities: | ' | ' |
Purchases of property and equipment | -617,934 | -25,700 |
Proceeds from sale of property and equipment | 65,376 | 8,936 |
Net cash (used in) investing activities | -552,558 | -16,764 |
Cash flows from financing activities: | ' | ' |
Issuance of stock for cash, net of commissions paid | 345,233 | ' |
Contributed Capital by Shareholder | 4,000 | ' |
Proceeds received from notes payable and related party notes | ' | 85,700 |
Repayment of notes payable and capital lease payments | -19,778 | -58,548 |
Net cash provided by financing activities | 329,455 | 27,152 |
Change in cash and cash equivalents | -312,725 | -13,738 |
Cash and cash equivalents at beginning of period | 428,574 | 47,311 |
Cash and cash equivalents at end of period | 115,849 | 33,573 |
Supplemental disclosure of cash flow information: | ' | ' |
Interest paid | 11,314 | 8,970 |
Noncash transactions: | ' | ' |
Issuance of Common Stock for Prepaid Consulting Services | 713,500 | ' |
Transfer of deposit on equipment to property and equipment for equipment placed in service | 119,346 | 188,500 |
Capitalization of property and equipment from notes payable and capital leases | $9,175 | $28,195 |
Organization_and_Basis_of_Pres
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Organization and Basis of Presentation | ' |
NOTE A – Organization and Basis of Presentation | |
American Brewing Company, Inc. (the “Company”) is engaged in the business of selling alcohol beverages throughout Western Washington state and in selected domestic and international markets. The Company produces beer under trade names including, among others, Breakaway IPA, Flying Monkey Pale Ale, Caboose Oatmeal Stout, American Blonde, Piper’s Scotch Ale, Brave American Brown Ale and Winter Classic. | |
In June 2013, pursuant to a unanimous written consent of voting shareholders’ and Board of Directors of the Company, the Company reorganized by way of a recapitalization of its capital structure on a tax free basis. In connection with the reorganization, the voting and nonvoting stock then outstanding was exchanged for an aggregate of 8,000,000 shares of Common Stock and 250,000 shares of Preferred Stock, respectively. | |
The Company’s original articles of incorporation authorized the issuance of 100 shares of nonvoting and voting shares of stock each. On October 11, 2011, the articles of incorporation were amended to increase the authorized number of nonvoting and voting shares to 100,000 each. | |
For earnings per share information, the Company has retroactively restated the outstanding shares for weighted average shares used in the basic and diluted earnings per share calculations for all periods presented, as a result of the reorganizations. | |
The accompanying (a) condensed balance sheet at December 31, 2013 has been derived from audited statements and (b) unaudited interim condensed financial statements as of September 30, 2014 and 2013 of American Brewing Company, Inc. (the “Company”), have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Form S-1 (Amendment No. 3) originally filed with the SEC on April 10, 2014. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for future quarters or for the full year. Notes to the financial statements which substantially duplicate the disclosure contained in the audited financial statements for fiscal 2013 as reported in the Form S-1(Amendment No. 3) have been omitted. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Summary of Significant Accounting Policies | ' |
NOTE B – Summary of Significant Accounting Policies | |
This summary of significant accounting policies is presented to assist the reader in understanding and evaluating the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements. | |
Use of Estimates | |
The preparation of the financial statements in conformity with U.S. 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 revenue and expenses during the reporting period. Actual results could differ from those estimates. The more significant estimates and assumptions made by management include allowance for doubtful accounts, provision for excess or expired inventory, depreciation of property and equipment, refundable keg deposits and fair market value of equity instruments issued for goods or services. The current economic environment has increased the degree and uncertainty inherent in these estimates and assumptions. | |
Concentrations of Credit Risk | |
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash equivalents and trade receivables. The Company places its cash equivalents with high credit quality financial institutions. | |
The Company sells primarily to independent beer distributors across Western Washington State as well as self distributing to local businesses. Sales outside of Washington State are insignificant. Receivables arising from these sales are not collateralized; however, credit risk is minimized by continuing to diversify the Company’s customer base. The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. As of September 30, 2014 there were four customers that represented 86% of Accounts Receivable. As of December 31, 2013 there were four customers that represented 78% of Accounts Receivable. For the three months period ended September 30, 2014 and 2013 three customers represented approximately 61% and 58% of revenue, respectively. For the nine months period ended September 30, 2014 and 2013, three customers represented approximately 59% and 55% of revenue, respectively. For the three months period ended September 30, 2014 and 2013, two suppliers of grain and bottling services represented approximately 82% and 100% of the cost of goods sold, respectively, and 86% and 92% of the cost of goods sold for the nine months period ending September 30, 2014 and 2013, respectively. | |
Refundable Deposits on Kegs | |
The Company distributes its draft beer in kegs to wholesalers. All kegs are leased or owned by the Company. Purchased kegs are reflected in the Company’s balance sheets in property and equipment at cost of approximately $134,000 and $134,000 as of September 30, 2014 and December 31, 2013, respectively. Upon shipment of beer to wholesalers, the Company collects a refundable deposit on the kegs which are included in the accrued expenses in current liabilities in the Company’s balance sheets. Refundable keg deposits were approximately $58,000 and $52,000 as of September 30, 2014 and December 31, 2013, respectively. Upon return of the kegs to the Company, the deposit is refunded to the wholesaler. | |
The Company has experienced some loss of kegs and anticipates that some loss will occur in future periods due to the significant volume of kegs handled by each wholesaler and retailer, the homogeneous nature of kegs owned by most brewers and the relatively small deposit collected for each keg when compared with its market value. The Company believes that this is an industry-wide issue and that the Company’s loss experience is not atypical. The Company believes that the loss of kegs, after considering the forfeiture of related deposits, has not been material to the financial statements. The Company uses internal records, records maintained by wholesalers, records maintained by other third party vendors and historical information to estimate the physical count of kegs held by wholesalers. These estimates affect the amount recorded as property, plant and equipment and current liabilities as of the date of the financial statements. The actual liability for refundable deposits could differ from these estimates. | |
Revenue Recognition | |
The Company recognizes revenue on product sales at the time when the product is shipped and the following conditions are met: persuasive evidence of an arrangement exists, title has passed to the customer according to the shipping terms, the price is fixed and determinable, and collection of the sales proceeds is reasonably assured. If the conditions for revenue recognition are not met, the Company defers the revenue until all conditions are met. Sales taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from revenues in the statements of operations. Revenue recognized was approximately $306,000 and $266,000 for the three months period ended September 30, 2014 and 2013, respectively and approximately $815,000 and $751,000 for the nine months period ended September 30, 2014 and 2013, respectively. | |
Excise Taxes | |
The Company is responsible for compliance with the Alcohol and Tobacco Tax and Trade Bureau of the U.S. Treasury Department (the “TTB”) regulations which includes making timely and accurate excise tax payments. The Company is subject to periodic compliance audits by the TTB. Individual states also impose excise taxes on alcohol beverages in varying amounts. The Company calculates its excise tax expense based upon units produced and on its understanding of the applicable excise tax laws. Excise taxes were approximately $6,000 and $6,000 for the three months period ended September 30, 2014 and 2013, respectively. Similarly, excise taxes were approximately $15,000 and $16,000 for the nine months period ended September 30, 2014 and 2013, respectively. | |
Net Income (Loss) Per Share | |
Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted-average common shares outstanding. Diluted net income per share is calculated by dividing net income by the weighted-average common shares outstanding during the period using the treasury stock method or the two-class method, whichever is more dilutive. As the Company incurred net losses for the three and nine months period ended September 30, 2014 and 2013, respectively no potentially dilutive securities were included in the calculation of diluted earnings per share as the impact would have been anti-dilutive. Therefore, basic and dilutive net income (loss) per share were the same. | |
Segment Information | |
The Company operates in two segments in accordance with accounting guidance Financial Accounting Standards Board (“FASB”) ASC Topic 280, Segment Reporting. Our Chief Executive Officer has been identified as the chief operating decision maker as defined by FASB ASC Topic 280. See additional discussion at Note K. | |
Going Concern | |
The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had an accumulated deficit of approximately $2,005,000 and $875,000 at September 30, 2014 and year ended December 31, 2013, respectively, has a history or recurring net losses and negative working capital. These matters, among others, raise substantial doubt about our ability to continue as a going concern. | |
While the Company is attempting to increase operations and generate additional revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public offering. In addition, the Company had offered a private placement memorandum for the placement of 2,000,000 shares of common stock at $0.50 per share, for a total of approximately $890,000, net of approximately $110,000 in placement fees. The subscription period has terminated. As of the closing of the private placement memorandum on March 31, 2014 the Company raised approximately $715,000 in aggregate (of which approximately $86,800, net of $13,200 of commissions, was received in the three months period ended March 31, 2014) and issued 1,430,000 shares of common stock in aggregate (of which 200,000 shares of common stock were issued during the three months period ended March 31, 2014) related to this private placement. | |
In addition, the Company has registered for sale 570,000 shares of common stock at a price of $0.50 per share of which 516,866 shares had been sold during the nine months period ended September 30, 2014 raising approximately $258,000. The offering is being conducted on a self underwritten and best efforts basis. There is no assurance that the offering will be successful or that the maximum number of shares or amounts will be attained. Management believes that the actions presently being taken to further implement its business plan and generate additional revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate additional revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate additional revenues. | |
The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. | |
Recent Accounting Pronouncements | |
The Company has evaluated new accounting pronouncements that have been issued and are not yet effective for the Company and determined that there are no such pronouncements expected to have an impact on the Company’s future financial statements. |
Inventories
Inventories | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventories | ' | ||||||||
NOTE C – Inventories | |||||||||
Inventories consist of raw materials, work in process and finished goods. Raw materials, which principally consist of hops, other brewing materials, are stated at the lower of cost, determined on the first-in, first-out basis, or market. Inventories are generally classified as current assets. The Company has yearly contracts with vendors to supply essential hop varieties on-hand in order to limit the risk of an unexpected reduction in supply or price fluctuations. The cost elements of work in process and finished goods inventory consist of raw materials. | |||||||||
Inventories consisted of the following as of: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Raw materials | $ | 14,490 | $ | 7,040 | |||||
Work in progress | 25,990 | 22,400 | |||||||
Finished goods | 11,949 | 1,248 | |||||||
$ | 52,429 | $ | 30,688 |
Other_Assets
Other Assets | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' | ||||||||
Other Assets | ' | ||||||||
NOTE D – Other Assets | |||||||||
Other assets consisted of the following as of: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Rent deposit | $ | 12,817 | $ | 12,817 | |||||
Equipment deposit | - | 119,346 | |||||||
$ | 12,817 | $ | 132,163 | ||||||
During the nine months ended September 30, 2014, the Company received and placed into service equipment which related to equipment deposit at December 31, 2013, therefore the Company has reclassed the deposits to property and equipment in the accompanying condensed balance sheet as of September 30, 2014. |
Property_and_Equipment
Property and Equipment | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Property and Equipment | ' | ||||||||
NOTE E – Property and Equipment | |||||||||
Property and equipment consisted of the following as of: | |||||||||
30-Sep-14 | December 31, | ||||||||
2013 | |||||||||
Machinery and equipment | $ | 978,749 | $ | 444,752 | |||||
Kegs | 134,345 | 134,345 | |||||||
Trucks | 21,401 | 21,401 | |||||||
Office equipment and furniture | 60,381 | 17,071 | |||||||
Leasehold improvements | 130,040 | 62,707 | |||||||
1,324,916 | 680,276 | ||||||||
Less accumulated depreciation | (307,548 | ) | (259,440 | ) | |||||
$ | 1,017,368 | $ | 420,836 | ||||||
Property and equipment at September 30, 2014 and December 31, 2013, included fixed assets acquired under capital lease agreements of approximately $169,000 and $160,000, respectively, and accumulated depreciation on these assets was approximately $90,000 and $67,000 respectively | |||||||||
Depreciation expense was approximately $46,000 and $26,000 for the three months period ended September 30, 2014 and 2013, respectively and approximately $113,000 and $77,000 in depreciation expense for the nine months period ended September 30, 2014 and 2013, respectively. |
Accrued_Expenses_and_Other_Cur
Accrued Expenses and Other Current Liabilities | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
Accrued Expenses and Other Current Liabilities | ' | ||||||||
NOTE F – Accrued Expenses and Other Current Liabilities | |||||||||
Accrued expenses and other current liabilities consisted of the following as of: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Accrued officer compensation | $ | 565,000 | $ | 460,000 | |||||
Refundable deposits on kegs | 57,994 | 52,689 | |||||||
Accrued payroll and payroll taxes | 3,872 | 22,791 | |||||||
Due to Related Party | 150,000 | - | |||||||
Other accrued liabilities | 7,596 | 7,649 | |||||||
$ | 784,462 | $ | 543,129 | ||||||
On or about August 14, 2014 the Company granted 75,000 shares of stock to a Board of Director due immediately. The Company valued these shares at the trading day closing price on the date of grant. As the Company did not issue these shares as of October 2, 2014, a liability to a related party was recognized. |
Notes_Payable_and_Capital_Leas
Notes Payable and Capital Lease | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Notes to Financial Statements | ' | ||||||||
Notes Payable and Capital Lease | ' | ||||||||
NOTE G – Notes Payable and Capital Leases | |||||||||
Notes payable and capital leases consisted of the following as of: | |||||||||
30-Sep-14 | December 31, | ||||||||
2013 | |||||||||
Notes payable | $ | - | $ | 1,459 | |||||
Capital leases | 18,521 | 27,665 | |||||||
18,521 | 29,124 | ||||||||
Less current portion | (12,753 | ) | (24,182 | ) | |||||
$ | 5,768 | $ | (4,942 | ) | |||||
Capital Leases | |||||||||
The Company has entered into various capital lease agreements to obtain property and equipment for operations. These agreements range from 2 to 3 years with interest rates ranging from 5% to 6%. These leases are secured by the underlying leased property and equipment. | |||||||||
In 2012, the Company entered into one capital lease agreement for machinery and equipment. Monthly payments are approximately $1,600, the lease terminates in March 2015. The lease provides for a bargain purchase option at the termination of the lease. As of September 30, 2014, total remaining payments under this lease is approximately $9,900. The Company accounts for this arrangement as a capital lease. | |||||||||
During the nine months period ended September 30, 2014 the Company entered into a capital lease for security cameras and monitoring equipment with a third party. The initial rental period is a term of 39 months, with the first 3 months payments waived. The agreement provides for a bargain purchase price at the termination of the lease. Monthly lease fees are $275 per month for the 36 months in which payments are due with a remaining balance of approximately $8,700 on September 30, 2014 | |||||||||
As of September 30, 2014, the capitalized amount of the equipment, truck, office equipment and accumulated depreciation was approximately $139,000, $21,000, $9,000 and $90,000, respectively. | |||||||||
As of December 31, 2013, the capitalized amount of the equipment, truck and accumulated depreciation was approximately $139,000, $21,000, and $67,000, respectively. | |||||||||
The minimum lease payments are as follows: | |||||||||
Remaining 2014 | $ | 5,808 | |||||||
2015 | 8,283 | ||||||||
2016 | 3,300 | ||||||||
2017 | 1,925 | ||||||||
Less amount representing interest | (795 | ) | |||||||
$ | 18,521 | ||||||||
Current Portion | $ | 12,753 | |||||||
Long-term Portion | $ | 5,768 | |||||||
Common_Stock
Common Stock | 9 Months Ended |
Sep. 30, 2014 | |
Notes to Financial Statements | ' |
Common Stock | ' |
NOTE H – Common Stock | |
Common and Preferred Stock | |
The Company issued 1,200,000 shares of common stock to third party service providers for services rendered or to be rendered by June 30, 2014. The Company estimated the fair market value to be $0.50 per share (based on the then current private placement memorandum price) for a total value of $600,000 (see Note J). The amount has been fully amortized to stock based compensation in the accompanying condensed statement of operations as of September 30, 2014. | |
During the period ended March 31, 2014, the Company issued 200,000 shares of common stock in connection with the private placement memorandum that was open during October 2013 thru March 2014 and was closed during the period ended March 31, 2014. The Company received approximately $86,800, net of commissions of approximately $13,200 during the period ended March 31, 2014. | |
In addition, the Company has registered for sale 570,000 shares of common stock at a price of $0.50 per share of which 516,866 shares had been sold in the nine months period ended September 30, 2014 raising approximately $258,000. The offering is being conducted on a self underwritten and best efforts basis. | |
The Company issued 4,000 shares to two employees as bonus during the three months period ending June 30, 2014. The Company valued these shares at $0.50 per share and recorded $2,000 in payroll expense under general and administrative expenses in the accompanying condensed statement of operations during the period ended June 30, 2014. | |
The Company issued 25,000 shares in exchange for professional fees during the three months period ended June 30, 2014. The Company valued these shares at $0.50 per share and recorded $12,500 in professional fees under general and administrative expenses in the accompanying condensed statement of operations during the period ended June 30, 2014. | |
During the nine months period ended September 30, 2014, the Company issued a total of 75,000 shares of common stock to third party service providers for services received or to be received (See Note J). The Company estimated the fair value to be $2.00 per share for 25,000 shares of common stock and $1.27 per share for 50,000 shares of common stock, for a total of $113,500. The Company has amortized approximately $14,000 to share based compensation expense in the accompanying condensed statement of operations for the three and nine months period ended September 30, 2014 with the remaining unamortized amount of approximately $100,000 recorded under prepaid expense in the accompanying condensed balance sheet at September 30, 2014. |
Earnings_Per_Share
Earnings Per Share | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Earnings Per Share | ' | ||||||||
NOTE I – Earnings Per Share | |||||||||
FASB ASC Topic 260, Earnings Per Share, requires a reconciliation of the numerator and denominator of the basic and diluted earnings (loss) per share (EPS) computations. | |||||||||
Basic earnings (loss) per share are computed by dividing net income (loss) available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. | |||||||||
The Company had no potential dilutive securities issued or outstanding for the three and nine months period ended September 30, 2014 and 2013. Therefore, there was no difference in the basic and dilutive earnings (loss) per share. | |||||||||
The following table sets forth the computation of basic and diluted net income per share: | |||||||||
For the Three months Period | |||||||||
Ended September 30, | |||||||||
2014 | 2013 | ||||||||
Net loss attributable to common stockholders | $ | (247,272 | ) | $ | (23.309 | ) | |||
Basic weighted average outstanding shares of common stock | 12,591,253 | 8,139,891 | |||||||
Dilutive effect of common stock equivalents | - | - | |||||||
Dilutive weighted average common stock equivalents | 12,591,253 | 8,139,891 | |||||||
Net loss per share of | |||||||||
common stock Basic and Diluted | $ | (0.02 | ) | $ | (0.00 | ) | |||
For the Nine months Period | |||||||||
Ended September 30, | |||||||||
2014 | 2013 | ||||||||
Net loss attributable to common stockholders | $ | (1,129,316 | ) | (124,108 | ) | ||||
Basic weighted average outstanding shares of common stock | 12,152,194 | 8,047,143 | |||||||
Dilutive effect of common stock equivalents | - | - | |||||||
Dilutive weighted average common stock equivalents | 12,152,194 | 8,047,143 | |||||||
Net loss per share of | |||||||||
common stock Basic and Diluted | $ | (0.09 | ) | $ | (0.02 | ) | |||
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Commitments and Contingencies | ' | ||||
NOTE J – Commitments and Contingencies | |||||
Purchase Commitments | |||||
The Company entered into contracts for the supply of a portion of its hops requirements. These purchase contracts extend through crop year 2018 and specify both the quantities and prices to which the Company is committed. As of September 30, 2014, hops purchase commitments outstanding was approximately $1,051,000. As of September 30, 2014, projected cash outflows under hops purchase commitments for each of the remaining years under the contracts are as follows: | |||||
Remaining 2014 | $ | 157,000 | |||
2015 | 177,000 | ||||
2016 | 226,000 | ||||
2017 | 220,000 | ||||
2018 | 271,000 | ||||
Total | $ | 1,051,000 | |||
These commitments are not accrued in the balance of the Company at September 30, 2014. In addition, the Company has elected not to recognize the purchase contracts as cash flow hedges in accordance with ASC Topic 815, Derivatives and Hedges. | |||||
Lease Commitments | |||||
On or about December 1 2013, the Company entered into a facilities lease with a third party. The lease term is 25 months. The monthly base rent of $4,709 increases annually based on the Consumer Price Index All Urban Consumers U.S. City Average. Monthly rent payments also include common area maintenance charges, taxes, and other charges. As of September 30, 2014, the minimum monthly lease payment was $4,709. Rent expense was approximately $43,000 and $27,000 for the nine months period ended September 30, 2014 and 2013 respectively and approximately $19,000 and $7,000 for the three months period ended September 30, 2014 and 2013, respectively. | |||||
On or about September 28, 2011, the Company entered into a keg rental supply and services agreement with a third party. The initial rental period is a term of 36 months, and began on the date of delivery of the kegs. The agreement automatically extends on month-to-month basis for an additional 36 months, unless terminated by either party with a 30 day notice. Monthly keg rental fees are $512 and $476 for the initial and extended rental period, respectively. A deposit of $4,000 was made prior to delivery. | |||||
On or about October 21, 2011, the Company entered into a keg rental supply and services agreement with a third party. The initial rental period is a term of 36 months, and began on the date of delivery of the kegs. The agreement automatically extends on month-to-month basis for an additional 36 months. After the 72nd month, the Company can elect to enter into a final 24 month rental period. At the conclusion of the final rental period the Company can purchase the kegs between $40 to $50 each. Monthly keg rental fees are $670, $622, and $500 for the initial, extended and final rental period. | |||||
On or about January 24, 2012, the Company entered into a keg rental supply and services agreement with a third party. The initial rental period is a term of 36 months, and began on the date of delivery of the kegs. The agreement automatically extends on month-to-month basis for an additional 36 months. After the 72nd month, the Company can elect to enter into a final 24 month rental period. At the conclusion of the final rental period the Company can purchase the kegs between $40 to $50 each. Monthly keg rental fees are $670, $622, and $500 for the initial, extended and final rental period. A deposit of $4,000 was made prior to delivery. | |||||
During the nine months ended September 30, 2014, the Company entered into a capital lease for security cameras and monitoring equipment with a third party. The initial rental period is a term of 39 months, with the first 3 months payments waived. The agreement provides for a bargain purchase price at the termination of the lease. Monthly lease fees are $275 per month for the 36 months in which payments are due with a remaining balance of approximately $8,700 on September 30, 2014 | |||||
Aggregate minimum annual rental payments for all operating lease agreements as of September 30, 2014, are as follows: | |||||
Remaining 2014 | $ | 15,000 | |||
2015 | 59,000 | ||||
$ | 74,000 | ||||
Keg lease expense was approximately $5,500 and $5,500 for the three months period ended September 30, 2014 and 2013, respectively and approximately $17,000 and $18,000 for the nine months period ended September 30, 2014 and 2013 respectively. | |||||
Consulting Agreement | |||||
The Company has entered into various consulting and professional services agreements with third party providers. Because the services are to be provided over a period of time, the Company recognizes the estimated fair value of the shares of common stock in prepaid expenses and amortizes the amount over the respective service periods (see Note H). The consulting agreements terminate on various dates ranging from January 1, 2014 to September 30, 2015. | |||||
As of September 30, 2014, and December 31, 201, prepaid expense was $99,875 and $94,250, respectively in the accompanying condensed balance sheet. | |||||
During the nine month period ended September 30, 2014, the Company issued a total of 1,275,000 shares of common stock (see Note H) with an estimated fair value of $713,500. | |||||
During the three month period ended September 30, 2014 and 2013 the Company amortized $13,625 and $0, respectively to amortization of stock based consulting compensation expense in the accompanying condensed statement of operations. | |||||
During the nine month period ended September 30, 2014 and 2013 the Company amortized $707,875 and $0, respectively to amortization of stock based consulting compensation expense in the accompanying condensed statement of operations. |
Segment_Information
Segment Information | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||
Segment Information | ' | ||||||||||||
NOTE K – Segment Information | |||||||||||||
The Company’s operations are classified into the sale of alcohol to retail customers through the Company’s tasting room, and wholesale sales to distributors. Our retail division is located in the greater Seattle, Washington area and serves walk-in customers seven days a week. Our wholesale division sells to distributors primarily in the greater Seattle, Washington area. Although both segments are involved in the sale and distribution of alcohol, they serve different customers and are managed separately, requiring specialized expertise. We determined our operating segments in accordance with FASB ASC Topic 280, Segment Reporting. | |||||||||||||
Results of the operating segments are as follows: | |||||||||||||
Three Months Period Ended September 30, 2014 | |||||||||||||
Retail | Wholesale | Total | |||||||||||
Sales | $ | 82,455 | $ | 223,655 | $ | 306,110 | |||||||
Less excise taxes | 1,492 | 4,046 | 5,538 | ||||||||||
Net revenue | 80,963 | 219,609 | 300,572 | ||||||||||
Cost of goods sold | 35,376 | 95,958 | 131,334 | ||||||||||
Gross profit | $ | 45,587 | $ | 123,651 | $ | 169,238 | |||||||
Three Months Period Ended September 30, 2013 | |||||||||||||
Retail | Wholesale | Total | |||||||||||
Sales | $ | 109,485 | $ | 156,855 | $ | 266,340 | |||||||
Less excise taxes | 2,343 | 3,470 | 5,813 | ||||||||||
Net revenue | 107,142 | 153,385 | 260,527 | ||||||||||
Cost of goods sold | 39,077 | 42,469 | 81,546 | ||||||||||
Gross profit | $ | 68,065 | $ | 110,916 | $ | 178,981 | |||||||
Nine Months Period Ended September 30, 2014 | |||||||||||||
Retail | Wholesale | Total | |||||||||||
Sales | $ | 231,055 | $ | 583,449 | $ | 814,504 | |||||||
Less excise taxes | 4,265 | 10,765 | 15,030 | ||||||||||
Net revenue | 226,790 | 572,684 | 799,474 | ||||||||||
Cost of goods sold | 104,681 | 263,767 | 368,448 | ||||||||||
Gross profit | 122,109 | 308,917 | 431,026 | ||||||||||
Property and equipment net of accumulated depreciation | 139,664 | 877,704 | 1,017,368 | ||||||||||
Accounts Receivable | $ | - | $ | 50,985 | $ | 50,985 | |||||||
Nine Months Period Ended September 30, 2013 | |||||||||||||
Retail | Wholesale | Total | |||||||||||
Sales | $ | 190,030 | $ | 560,576 | $ | 750,606 | |||||||
Less excise taxes | 3,990 | 11,681 | 15,671 | ||||||||||
Net revenue | 186,040 | 548,895 | 734,935 | ||||||||||
Cost of goods sold | 74,034 | 216,728 | 290,762 | ||||||||||
Gross profit | $ | 112,006 | $ | 332,167 | $ | 444,173 | |||||||
INCOME_TAX
INCOME TAX | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Income Tax Disclosure [Abstract] | ' | ||||
INCOME TAX | ' | ||||
NOTE L – INCOME TAX | |||||
For the period January 1, 2013 to June 30, 2013, the Company was taxed as a subchapter S-Corporation and therefore did not have a material federal or state tax liability. In June 2013, the Company, in contemplation of an initial public offering of the Company’s common stock, issued preferred stock. In accordance with Internal Revenue Service regulations, the issuance of preferred stock automatically terminated the Company’s subchapter S status, resulting in the conversion of the Company to a C-Corporation. The financial statements as of September 30, 2013, herein, have been presented as subchapter S-Corporation for the period through June 30, 2013. The Company’s net loss before income taxes totaled approximately $1,129,000 and $124,000 for the nine months period ended September 30, 2014 and 2013, respectively. | |||||
The Company files federal and state income tax returns in jurisdictions with varying statutes of limitations. Income taxes are computed using the asset and liability method in accordance with FASB ASC 740 under which deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. Deferred taxes are measured using provisions of currently enacted tax laws. A valuation allowance against deferred tax assets is recorded when it is more likely than not that such assets will not be fully realized. The Company has recorded a full valuation allowance against its net deferred tax assets as it is more likely than not that the benefit of the deferred tax assets will not be recognized in future periods. Tax credits are accounted for as a reduction of income taxes in the year in which the credit originates. The Company does not expect any significant unrecognized tax benefits to arise over the next twelve months and is fully reserved. | |||||
The Company’s provision for income taxes for continuing operations in interim periods is computed by applying its estimated annual effective rate against its loss before income tax (expense) benefit for the period. In addition, non-recurring or discrete items are recorded during the period in which they occur. The effective tax rate for the three and nine months period ended September 30, 2014 and 2013 was nil. | |||||
The Company has not had to accrue any interest and penalties related to unrecognized income tax benefits. However, when or if the situation occurs, the Company will recognize interest and penalties within the income tax expense (benefit) line in the accompanying Condensed Statements of Operations and within the related tax liability line in the Condensed Balance Sheets. | |||||
The reconciliation of the results of applying the Company’s effective statutory federal income tax rate of 34% for the quarter ended September 30, 2014 to the company’s income tax and the Company’s provision for income tax is as follows: | |||||
Federal income taxes | 34 | % | |||
State income tax | - | ||||
Effect of change in income tax status | ( 8 | %) | |||
Change in deferred tax asset | ( 26 | %) | |||
Total income tax | - | ||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Use of Estimates | ' |
Use of Estimates | |
The preparation of the financial statements in conformity with U.S. 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 revenue and expenses during the reporting period. Actual results could differ from those estimates. The more significant estimates and assumptions made by management include allowance for doubtful accounts, provision for excess or expired inventory, depreciation of property and equipment, refundable keg deposits and fair market value of equity instruments issued for goods or services. The current economic environment has increased the degree and uncertainty inherent in these estimates and assumptions. | |
Concentrations of Credit Risk | ' |
Concentrations of Credit Risk | |
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash equivalents and trade receivables. The Company places its cash equivalents with high credit quality financial institutions. | |
The Company sells primarily to independent beer distributors across Western Washington State as well as self distributing to local businesses. Sales outside of Washington State are insignificant. Receivables arising from these sales are not collateralized; however, credit risk is minimized by continuing to diversify the Company’s customer base. The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. As of September 30, 2014 there were four customers that represented 86% of Accounts Receivable. As of December 31, 2013 there were four customers that represented 78% of Accounts Receivable. For the three months period ended September 30, 2014 and 2013 three customers represented approximately 61% and 58% of revenue, respectively. For the nine months period ended September 30, 2014 and 2013, three customers represented approximately 59% and 55% of revenue, respectively. For the three months period ended September 30, 2014 and 2013, two suppliers of grain and bottling services represented approximately 82% and 100% of the cost of goods sold, respectively, and 86% and 92% of the cost of goods sold for the nine months period ending September 30, 2014 and 2013, respectively. | |
Refundable Deposits on Kegs | ' |
Refundable Deposits on Kegs | |
The Company distributes its draft beer in kegs to wholesalers. All kegs are leased or owned by the Company. Purchased kegs are reflected in the Company’s balance sheets in property and equipment at cost of approximately $134,000 and $134,000 as of September 30, 2014 and December 31, 2013, respectively. Upon shipment of beer to wholesalers, the Company collects a refundable deposit on the kegs which are included in the accrued expenses in current liabilities in the Company’s balance sheets. Refundable keg deposits were approximately $58,000 and $52,000 as of September 30, 2014 and December 31, 2013, respectively. Upon return of the kegs to the Company, the deposit is refunded to the wholesaler. | |
The Company has experienced some loss of kegs and anticipates that some loss will occur in future periods due to the significant volume of kegs handled by each wholesaler and retailer, the homogeneous nature of kegs owned by most brewers and the relatively small deposit collected for each keg when compared with its market value. The Company believes that this is an industry-wide issue and that the Company’s loss experience is not atypical. The Company believes that the loss of kegs, after considering the forfeiture of related deposits, has not been material to the financial statements. The Company uses internal records, records maintained by wholesalers, records maintained by other third party vendors and historical information to estimate the physical count of kegs held by wholesalers. These estimates affect the amount recorded as property, plant and equipment and current liabilities as of the date of the financial statements. The actual liability for refundable deposits could differ from these estimates. | |
Revenue Recognition | ' |
Revenue Recognition | |
The Company recognizes revenue on product sales at the time when the product is shipped and the following conditions are met: persuasive evidence of an arrangement exists, title has passed to the customer according to the shipping terms, the price is fixed and determinable, and collection of the sales proceeds is reasonably assured. If the conditions for revenue recognition are not met, the Company defers the revenue until all conditions are met. Sales taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from revenues in the statements of operations. Revenue recognized was approximately $306,000 and $266,000 for the three months period ended September 30, 2014 and 2013, respectively and approximately $815,000 and $751,000 for the nine months period ended September 30, 2014 and 2013, respectively. | |
Excise Taxes | ' |
Excise Taxes | |
The Company is responsible for compliance with the Alcohol and Tobacco Tax and Trade Bureau of the U.S. Treasury Department (the “TTB”) regulations which includes making timely and accurate excise tax payments. The Company is subject to periodic compliance audits by the TTB. Individual states also impose excise taxes on alcohol beverages in varying amounts. The Company calculates its excise tax expense based upon units produced and on its understanding of the applicable excise tax laws. Excise taxes were approximately $6,000 and $6,000 for the three months period ended September 30, 2014 and 2013, respectively. Similarly, excise taxes were approximately $15,000 and $16,000 for the nine months period ended September 30, 2014 and 2013, respectively. | |
Net Income (Loss) Per Share | ' |
Net Income (Loss) Per Share | |
Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted-average common shares outstanding. Diluted net income per share is calculated by dividing net income by the weighted-average common shares outstanding during the period using the treasury stock method or the two-class method, whichever is more dilutive. As the Company incurred net losses for the three and nine months period ended September 30, 2014 and 2013, respectively no potentially dilutive securities were included in the calculation of diluted earnings per share as the impact would have been anti-dilutive. Therefore, basic and dilutive net income (loss) per share were the same. | |
Segment Information | ' |
Segment Information | |
The Company operates in two segments in accordance with accounting guidance Financial Accounting Standards Board (“FASB”) ASC Topic 280, Segment Reporting. Our Chief Executive Officer has been identified as the chief operating decision maker as defined by FASB ASC Topic 280. See additional discussion at Note K. | |
Going Concern | ' |
Going Concern | |
The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had an accumulated deficit of approximately $2,005,000 and $875,000 at September 30, 2014 and year ended December 31, 2013, respectively, has a history or recurring net losses and negative working capital. These matters, among others, raise substantial doubt about our ability to continue as a going concern. | |
While the Company is attempting to increase operations and generate additional revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public offering. In addition, the Company had offered a private placement memorandum for the placement of 2,000,000 shares of common stock at $0.50 per share, for a total of approximately $890,000, net of approximately $110,000 in placement fees. The subscription period has terminated. As of the closing of the private placement memorandum on March 31, 2014 the Company raised approximately $715,000 in aggregate (of which approximately $86,800, net of $13,200 of commissions, was received in the three months period ended March 31, 2014) and issued 1,430,000 shares of common stock in aggregate (of which 200,000 shares of common stock were issued during the three months period ended March 31, 2014) related to this private placement. | |
In addition, the Company has registered for sale 570,000 shares of common stock at a price of $0.50 per share of which 516,866 shares had been sold during the nine months period ended September 30, 2014 raising approximately $258,000. The offering is being conducted on a self underwritten and best efforts basis. There is no assurance that the offering will be successful or that the maximum number of shares or amounts will be attained. Management believes that the actions presently being taken to further implement its business plan and generate additional revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate additional revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate additional revenues. | |
The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
The Company has evaluated new accounting pronouncements that have been issued and are not yet effective for the Company and determined that there are no such pronouncements expected to have an impact on the Company’s future financial statements. |
Inventories_Tables
Inventories (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventories | ' | ||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Raw materials | $ | 14,490 | $ | 7,040 | |||||
Work in progress | 25,990 | 22,400 | |||||||
Finished goods | 11,949 | 1,248 | |||||||
$ | 52,429 | $ | 30,688 |
Other_Assets_Tables
Other Assets (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' | ||||||||
Other Assets | ' | ||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Rent deposit | $ | 12,817 | $ | 12,817 | |||||
Equipment deposit | - | 119,346 | |||||||
$ | 12,817 | $ | 132,163 |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Property and Equipment | ' | ||||||||
30-Sep-14 | December 31, | ||||||||
2013 | |||||||||
Machinery and equipment | $ | 978,749 | $ | 444,752 | |||||
Kegs | 134,345 | 134,345 | |||||||
Trucks | 21,401 | 21,401 | |||||||
Office equipment and furniture | 60,381 | 17,071 | |||||||
Leasehold improvements | 130,040 | 62,707 | |||||||
1,324,916 | 680,276 | ||||||||
Less accumulated depreciation | (307,548 | ) | (259,440 | ) | |||||
$ | 1,017,368 | $ | 420,836 |
Accrued_Expenses_and_Other_Cur1
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
Accrued Expenses and Other Current Liabilities | ' | ||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Accrued officer compensation | $ | 565,000 | $ | 460,000 | |||||
Refundable deposits on kegs | 57,994 | 52,689 | |||||||
Accrued payroll and payroll taxes | 3,872 | 22,791 | |||||||
Due to Related Party | 150,000 | - | |||||||
Other accrued liabilities | 7,596 | 7,649 | |||||||
$ | 784,462 | $ | 543,129 |
Notes_Payable_and_Capital_Leas1
Notes Payable and Capital Lease (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Notes to Financial Statements | ' | ||||||||
Notes Payable and Capital Leases | ' | ||||||||
Notes payable and capital leases consisted of the following as of: | |||||||||
30-Sep-14 | December 31, | ||||||||
2013 | |||||||||
Notes payable | $ | - | $ | 1,459 | |||||
Capital leases | 18,521 | 27,665 | |||||||
18,521 | 29,124 | ||||||||
Less current portion | (12,753 | ) | (24,182 | ) | |||||
$ | 5,768 | $ | (4,942 | ) | |||||
Minimum lease payment | ' | ||||||||
The minimum lease payments are as follows: | |||||||||
Remaining 2014 | $ | 5,808 | |||||||
2015 | 8,283 | ||||||||
2016 | 3,300 | ||||||||
2017 | 1,925 | ||||||||
Less amount representing interest | (795 | ) | |||||||
$ | 18,521 | ||||||||
Current Portion | $ | 12,753 | |||||||
Long-term Portion | $ | 5,768 |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Basic and Diluted net income per share | ' | ||||||||
The following table sets forth the computation of basic and diluted net income per share: | |||||||||
For the Three months Period | |||||||||
Ended September 30, | |||||||||
2014 | 2013 | ||||||||
Net loss attributable to common stockholders | $ | (247,272 | ) | $ | (23.309 | ) | |||
Basic weighted average outstanding shares of common stock | 12,591,253 | 8,139,891 | |||||||
Dilutive effect of common stock equivalents | - | - | |||||||
Dilutive weighted average common stock equivalents | 12,591,253 | 8,139,891 | |||||||
Net loss per share of | |||||||||
common stock Basic and Diluted | $ | (0.02 | ) | $ | (0.00 | ) | |||
For the Nine months Period | |||||||||
Ended September 30, | |||||||||
2014 | 2013 | ||||||||
Net loss attributable to common stockholders | $ | (1,129,316 | ) | (124,108 | ) | ||||
Basic weighted average outstanding shares of common stock | 12,152,194 | 8,047,143 | |||||||
Dilutive effect of common stock equivalents | - | - | |||||||
Dilutive weighted average common stock equivalents | 12,152,194 | 8,047,143 | |||||||
Net loss per share of | |||||||||
common stock Basic and Diluted | $ | (0.09 | ) | $ | (0.02 | ) |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Purchase Commitments for each year | ' | ||||
Remaining 2014 | $ | 157,000 | |||
2015 | 177,000 | ||||
2016 | 226,000 | ||||
2017 | 220,000 | ||||
2018 | 271,000 | ||||
Total | $ | 1,051,000 | |||
Minimum Annual Rental Payment | ' | ||||
Aggregate minimum annual rental payments for all operating lease agreements as of September 30, 2014, are as follows: | |||||
Remaining 2014 | $ | 15,000 | |||
2015 | 59,000 | ||||
$ | 74,000 |
Segment_Information_Tables
Segment Information (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||
Operating Segment | ' | ||||||||||||
Results of the operating segments are as follows: | |||||||||||||
Three Months Period Ended September 30, 2014 | |||||||||||||
Retail | Wholesale | Total | |||||||||||
Sales | $ | 82,455 | $ | 223,655 | $ | 306,110 | |||||||
Less excise taxes | 1,492 | 4,046 | 5,538 | ||||||||||
Net revenue | 80,963 | 219,609 | 300,572 | ||||||||||
Cost of goods sold | 35,376 | 95,958 | 131,334 | ||||||||||
Gross profit | $ | 45,587 | $ | 123,651 | $ | 169,238 | |||||||
Three Months Period Ended September 30, 2013 | |||||||||||||
Retail | Wholesale | Total | |||||||||||
Sales | $ | 109,485 | $ | 156,855 | $ | 266,340 | |||||||
Less excise taxes | 2,343 | 3,470 | 5,813 | ||||||||||
Net revenue | 107,142 | 153,385 | 260,527 | ||||||||||
Cost of goods sold | 39,077 | 42,469 | 81,546 | ||||||||||
Gross profit | $ | 68,065 | $ | 110,916 | $ | 178,981 | |||||||
Nine Months Period Ended September 30, 2014 | |||||||||||||
Retail | Wholesale | Total | |||||||||||
Sales | $ | 231,055 | $ | 583,449 | $ | 814,504 | |||||||
Less excise taxes | 4,265 | 10,765 | 15,030 | ||||||||||
Net revenue | 226,790 | 572,684 | 799,474 | ||||||||||
Cost of goods sold | 104,681 | 263,767 | 368,448 | ||||||||||
Gross profit | 122,109 | 308,917 | 431,026 | ||||||||||
Property and equipment net of accumulated depreciation | 139,664 | 877,704 | 1,017,368 | ||||||||||
Accounts Receivable | $ | - | $ | 50,985 | $ | 50,985 | |||||||
Nine Months Period Ended September 30, 2013 | |||||||||||||
Retail | Wholesale | Total | |||||||||||
Sales | $ | 190,030 | $ | 560,576 | $ | 750,606 | |||||||
Less excise taxes | 3,990 | 11,681 | 15,671 | ||||||||||
Net revenue | 186,040 | 548,895 | 734,935 | ||||||||||
Cost of goods sold | 74,034 | 216,728 | 290,762 | ||||||||||
Gross profit | $ | 112,006 | $ | 332,167 | $ | 444,173 | |||||||
Organization_and_Basis_of_Pres1
Organization and Basis of Presentation (Details Narrative) (USD $) | 1 Months Ended | ||
Jun. 30, 2013 | Oct. 11, 2011 | Oct. 11, 2011 | |
Convertible Common Stock [Member] | Convertible Preferred Stock [Member] | ||
Voting Stock was exchanged for Common Stock | 8,000,000 | ' | ' |
Non Voting Stock was exchanged for Preferred Stock | 250,000 | ' | ' |
Number of Authorised Shares Increased To | ' | $100,000 | $100,000 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Summary Of Significant Accounting Policies Details Narrative | ' | ' | ' | ' | ' |
Purchased kegs | $134,000 | ' | $134,000 | ' | $134,000 |
Refundable keg deposits | 58,000 | ' | 58,000 | ' | 52,000 |
Revenue recognized | 306,000 | 266,000 | 815,000 | 715,000 | ' |
Excise Tax | 5,538 | 5,813 | 15,030 | 15,671 | ' |
Aproximate accumulated deficit | $2,005,000 | ' | $2,005,000 | ' | $875,000 |
Inventories_Details
Inventories (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Inventories Details | ' | ' |
Raw materials | $14,490 | $7,040 |
Work in progress | 25,990 | 22,400 |
Finished goods | 11,949 | 1,248 |
Total | $52,429 | $30,688 |
Other_Assets_Details
Other Assets (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Other Assets Details | ' | ' |
Rent deposit | $12,817 | $12,817 |
Equipment deposit | ' | 119,346 |
Total | $12,817 | $132,163 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Property And Equipment Details | ' | ' |
Machinery and equipment | $978,749 | $444,752 |
Kegs | 134,345 | 134,345 |
Trucks | 21,401 | 21,401 |
Office equipment and furniture | 60,381 | 17,071 |
Leasehold improvements | 130,040 | 62,707 |
Property and Equipment, Gross | 1,324,916 | 680,276 |
Less accumulated depreciation | -307,548 | -259,440 |
Property and Equipment, Net | $1,017,368 | $420,836 |
Property_and_Equipment_Details1
Property and Equipment (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Property And Equipment Details Narrative | ' | ' | ' | ' | ' |
Fixed Assets Aquired | $169,000 | ' | $169,000 | ' | $160,000 |
Accumulated Depreciation | 90,000 | ' | 90,000 | ' | 67,000 |
Depreciation Expense | $46,000 | $26,000 | $113,000 | $77,000 | ' |
Accrued_Expenses_and_Other_Cur2
Accrued Expenses and Other Current Liabilities (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Accrued Expenses And Other Current Liabilities Details | ' | ' |
Accrued officer compensation | $565,000 | $460,000 |
Refundable deposits on kegs | 57,994 | 52,689 |
Accrued payroll and payroll taxes | 3,872 | 22,791 |
Due to Related Party | 150,000 | ' |
Other accrued liabilities | 7,596 | 7,649 |
Accrued Expenses and Other Current Liabilities, net | $784,462 | $543,129 |
Notes_Payable_and_Capital_Leas2
Notes Payable and Capital Leases (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | |
Notes Payable And Capital Leases Details | ' | ' |
Notes Payable | ' | $1,459 |
Capital leases | 18,521 | 27,665 |
Notes Payable And Capital Leases Gross | 18,521 | 29,124 |
Less Current portion | 12,753 | -24,182 |
Notes Payable and Capital Leases, Net | 5,768 | -4,942 |
Monthly payment for leases | 1,600 | ' |
Capitalized amount of the equipment | 139,000 | 139,000 |
Capitalized amount of the truck | 21,000 | 21,000 |
Capitalized amount of the office equipment | 9,000 | 0 |
Capitalized amount of the accumulated depreciation | $90,000 | $67,000 |
Notes_Payable_and_Capital_Leas3
Notes Payable and Capital Leases (Details 2) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Minimum lease payments due | ' | ' |
Remaining in 2014 | $5,808 | ' |
2015 | 8,283 | ' |
2016 | 3,300 | ' |
2017 | 1,925 | ' |
Less amount representing interest | -795 | ' |
Capital Leases, Future Minimum Payments Due | 18,521 | ' |
Less Current portion | 12,753 | -24,182 |
Long term portion | $5,768 | ($4,942) |
Common_Stock_Details_Narrative
Common Stock (Details Narrative) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 3 Months Ended | |
Sep. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | Mar. 31, 2014 | |
Private Placement [Member] | |||||
Stock Issued for Services | ' | 25,000 | 1,200,000 | ' | ' |
Estimated fair market value of shares issued for services | $2 | $0.50 | $0.50 | $2 | ' |
Total value of shares issued for services which is fully amortized to stock based compensation as of September 30, 2014 | $600,000 | $12,500 | $12,500 | $600,000 | ' |
Shares issued for sale | 570,000 | ' | ' | 570,000 | 200,000 |
Price per share of shares issued for sale | $0.50 | ' | ' | $0.50 | ' |
Number of shares sold | 516,866 | ' | ' | 516,866 | ' |
Amount raised for shares sold | 258,000 | ' | ' | 258,000 | ' |
Aggregate value of shares to be issued | ' | ' | ' | ' | 750,000 |
Proceeds from issue of shares | ' | ' | ' | 113,500 | 100,000 |
Placement agent commission fee | ' | ' | ' | ' | 13,200 |
Shares issed to third party service provider | 75,000 | ' | ' | ' | ' |
Estimated fair value of 25,000 of the shares, per share price | $1.27 | ' | ' | ' | ' |
Estimated fair value of 50,000 of the shares, per share price | $2 | ' | ' | ' | ' |
Total value of common stock to third party service | 113,500 | ' | ' | ' | ' |
Approximate amount amortized to share based compensation expense | 14,000 | ' | ' | ' | ' |
Approximate amount recorded under prepaid expense | $100,000 | ' | ' | $100,000 | ' |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Earnings Per Share Details | ' | ' | ' | ' |
Net loss attributable to common stockholders | ($247,272) | ($23,309) | ($1,129,316) | ($124,108) |
Basic weighted average outstanding shares of common stock | 12,591,253 | 8,139,891 | 12,152,194 | 8,047,143 |
Dilutive effect of common stock equivalents | ' | ' | ' | ' |
Dilutive weighted average common stock equivalents | 12,591,253 | 8,139,891 | 12,152,194 | 8,047,143 |
Net loss per share of common stock Basic and Diluted | ($0.02) | $0 | ($0.09) | ($0.02) |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Sep. 30, 2014 |
Purchase commitments [Abstract] | ' |
Remaining 2014 | $157,000 |
2015 | 177,000 |
2016 | 226,000 |
2017 | 220,000 |
2018 | 271,000 |
Total | $1,051,000 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details 2) (USD $) | Sep. 30, 2014 |
Commitments And Contingencies Details | ' |
Remaining 2014 | $15,000 |
2015 | 59,000 |
Total | $74,000 |
Commitments_and_Contingencies_3
Commitments and Contingencies (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Commitments And Contingencies Details | ' | ' | ' | ' | ' |
Monthly base rent | ' | ' | $4,709 | ' | ' |
Rent Expense | 19,000 | 7,000 | 43,000 | 27,000 | ' |
Monthly keg rental fees for 36 months | 5,500 | 5,500 | 17,000 | 18,000 | ' |
Prepaid expenses | 99,875 | ' | 99,875 | ' | 94,250 |
Consulting agreement and services agreement fees | $13,625 | $0 | $707,875 | $0 | ' |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Sales | $306,110 | $266,340 | $814,504 | $750,606 |
Less excise taxes | 5,538 | 5,813 | 15,030 | 15,671 |
Net revenue | 300,572 | 260,527 | 799,474 | 734,935 |
Cost of goods sold | 131,334 | 81,546 | 368,448 | 290,762 |
Gross profit | 169,238 | 178,981 | 431,026 | 444,173 |
Accounts receivable | 1,017,368 | ' | 1,017,368 | ' |
Property and equipment, net of accumulated depreciation | 50,985 | ' | 50,985 | ' |
Retail Sale [Member] | ' | ' | ' | ' |
Sales | 82,455 | 109,485 | 231,055 | 190,030 |
Less excise taxes | 1,492 | 2,343 | 4,265 | 3,990 |
Net revenue | 80,963 | 107,142 | 226,790 | 186,040 |
Cost of goods sold | 35,376 | 39,077 | 104,681 | 74,034 |
Gross profit | 45,587 | 68,065 | 122,109 | 112,006 |
Accounts receivable | 139,664 | ' | 139,664 | ' |
Property and equipment, net of accumulated depreciation | ' | ' | ' | ' |
WholeSale [Member] | ' | ' | ' | ' |
Sales | 223,655 | 156,855 | 583,449 | 560,576 |
Less excise taxes | 4,046 | 3,470 | 10,765 | 11,681 |
Net revenue | 219,609 | 153,385 | 572,684 | 548,895 |
Cost of goods sold | 95,958 | 42,469 | 263,767 | 216,728 |
Gross profit | 123,651 | 110,916 | 308,917 | 332,167 |
Accounts receivable | 877,704 | ' | 877,704 | ' |
Property and equipment, net of accumulated depreciation | $50,985 | ' | $50,985 | ' |
INCOME_TAX_Details_Narrative
INCOME TAX (Details Narrative) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Income Tax Details Narrative | ' | ' |
Net Loss Before Income tax | $1,129,000 | $124,000 |