Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Apr. 10, 2015 | Jun. 30, 2014 | |
Document And Entity Information | |||
Entity Registrant Name | American Brewing Company, Inc. | ||
Entity Central Index Key | 1579823 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
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 Public Float | $0 | ||
Entity Common Stock, Shares Outstanding | 12,815,220 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2014 |
BALANCE_SHEETS
BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current Assets: | ||
Cash and cash equivalents | $98,898 | $428,574 |
Accounts receivable, net of allowance for doubtful accounts of $0 and $0, respectively | 43,779 | 30,166 |
Inventories | 80,306 | 30,688 |
Prepaid Expense | 75,989 | 94,250 |
Total current assets | 298,972 | 583,678 |
Property and equipment, net | 992,139 | 420,836 |
Other assets | 13,957 | 132,163 |
Total assets | 1,305,068 | 1,136,677 |
Current Liabilities: | ||
Accounts payable | 69,667 | 3,317 |
Current portion of notes payable and capital leases | 7,910 | 24,182 |
Accrued expenses and other current liabilities | 677,928 | 543,129 |
Total current liabilities | 755,505 | 570,628 |
Note payable and capital leases, less current portion | 5,013 | 4,942 |
Total liabilities | 760,518 | 575,570 |
Stockholders' (Deficit) Equity: | ||
Voting Common Stock, no par value; 100,000 shares authorized; 0, and 0 shares issued and outstanding, respectively; Nonvoting Common Stock, no par value; 100,000 shares authorized; 0, and 0 shares issued and outstanding, respectively; Common Stock, $0.001 par value; 50,000,000 shares authorized; 12,715,220, and 10,616,854 shares issued and outstanding, respectively | 12,716 | 10,617 |
Preferred Stock, $0.001 par value: 1,000,000 shares authorized, 250,000, and 0 shares issued and outstanding, respectively | 250 | 250 |
Additional paid-in capital | 2,656,728 | 1,425,610 |
Accumulated deficit | -2,125,144 | -875,370 |
Total stockholders' (deficit) equity | 544,550 | 561,107 |
Total liabilities and stockholders' (deficit) equity | 1,305,068 | 1,136,677 |
Voting Common Stock [Member] | ||
Stockholders' (Deficit) Equity: | ||
Voting Common Stock, no par value; 100,000 shares authorized; 0, and 0 shares issued and outstanding, respectively; Nonvoting Common Stock, no par value; 100,000 shares authorized; 0, and 0 shares issued and outstanding, respectively; Common Stock, $0.001 par value; 50,000,000 shares authorized; 12,715,220, and 10,616,854 shares issued and outstanding, respectively | ||
Nonvoting Common Stock [Member] | ||
Stockholders' (Deficit) Equity: | ||
Voting Common Stock, no par value; 100,000 shares authorized; 0, and 0 shares issued and outstanding, respectively; Nonvoting Common Stock, no par value; 100,000 shares authorized; 0, and 0 shares issued and outstanding, respectively; Common Stock, $0.001 par value; 50,000,000 shares authorized; 12,715,220, and 10,616,854 shares issued and outstanding, respectively |
BALANCE_SHEETS_Parenthetical
BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
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 | 12,715,220 | 10,616,854 |
Common Stock, shares authorised | 12,715,220 | 10,616,854 |
Voting Common Stock [Member] | ||
Common Stock, par value | $0 | $0 |
Common Stock, shares authorised | 100,000 | 100,000 |
Common Stock, shares issued | 0 | 0 |
Common Stock, shares authorised | 0 | 0 |
Nonvoting Common Stock [Member] | ||
Common Stock, par value | $0 | $0 |
Common Stock, shares authorised | 100,000 | 100,000 |
Common Stock, shares issued | 0 | 0 |
Common Stock, shares authorised | 0 | 0 |
STATEMENTS_OF_OPERATIONS
STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | ||
Revenue | $1,069,898 | $984,614 |
Less excise taxes | -26,250 | -15,671 |
Net revenue | 1,043,648 | 968,943 |
Cost of goods sold | 879,462 | 684,591 |
Gross profit | 164,186 | 284,352 |
Operating expenses: | ||
Advertising, promotional and selling | 155,982 | 174,014 |
General and administrative | 1,284,302 | 415,091 |
Total operating expenses | 1,440,284 | 589,105 |
Operating loss | -1,276,098 | -304,753 |
Other (expense) income, net: | ||
Interest | -2,507 | -28,965 |
Gain (Loss) on Sale of Equipment | 28,831 | 3,376 |
Total other income (expense), net | 26,324 | -25,589 |
Net loss | ($1,249,774) | ($330,342) |
Net loss per share | ($0.10) | ($0.04) |
Weighted-average number of shares | 12,385,640 | 8,285,000 |
STATEMENTS_OF_STOCKHOLDERS_DEF
STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY (USD $) | Nonvoting Common Stock [Member] | Voting Common Stock [Member] | Preferred Stock 100,000,000 Shares Authorized - 0.001 Par Value | Common Stock 50,000,000 Shares Authorized - 0.001 Par Value | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance Beginning at Dec. 31, 2012 | $83,625 | $416,375 | ($545,028) | ($45,028) | |||
Balance Beginning, Shares at Dec. 31, 2012 | 1,115 | 9,700 | |||||
Reorganization | -83,625 | -416,375 | 250 | 8,000 | 491,750 | ||
Reorganization, Shares | -1,115 | -9,700 | 250,000 | 8,000,000 | |||
Issuance of Common Stock and Warrants for Consulting Services | 990 | 187,510 | 188,500 | ||||
Issuance of Common Stock and Warrants for Consulting Services, Shares | 990,000 | ||||||
Conversion of Debt to Stock | 355 | 177,322 | 177,677 | ||||
Conversion of Debt to Stock, Shares | 355,354 | ||||||
Stock issued to employees and third party service providers | 42 | 20,708 | 20,750 | ||||
Stock issued to employees and third party service providers, Shares | 41,500 | ||||||
Stock Issuance Net of Commissions | 1,230 | 548,320 | 549,550 | ||||
Stock Issuance Net of Commissions, Shares | 1,230,000 | ||||||
Net Loss | -330,342 | -330,342 | |||||
Ending Balance at Dec. 31, 2013 | 250 | 10,617 | 1,425,610 | -875,370 | 561,107 | ||
Ending Balance, Shares at Dec. 31, 2013 | 250,000 | 10,616,854 | |||||
Issuance of Common Stock and Warrants for Consulting Services | 1,303 | 730,681 | 731,984 | ||||
Issuance of Common Stock and Warrants for Consulting Services, Shares | 1,302,500 | ||||||
Stock Issuance Net of Commissions | 717 | 344,516 | 345,233 | ||||
Stock Issuance Net of Commissions, Shares | 716,866 | ||||||
Stock Issued to Board of Directors | 75 | 149,925 | 150,000 | ||||
Stock Issued to Board of Directors, Shares | 75,000 | ||||||
Stock Issued to Employees | 4 | 1,996 | 2,000 | ||||
Stock Issued to Employees, Shares | 4,000 | ||||||
Contributed Capital by Officer | 4,000 | 4,000 | |||||
Net Loss | -1,249,774 | -1,249,774 | |||||
Ending Balance at Dec. 31, 2014 | $250 | $12,716 | $2,656,728 | ($2,125,144) | $544,550 | ||
Ending Balance, Shares at Dec. 31, 2014 | 250,000 | 12,715,220 |
CONDENSED_STATEMENTS_OF_CASH_F
CONDENSED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | ||
Net loss | ($1,249,774) | ($330,342) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 169,402 | 103,206 |
Stock Issued to Board of Directors and Employees | 152,000 | 20,750 |
Amortization of prepaid stock based compensation | 750,245 | 94,250 |
(Gain) loss on the disposition of property and equipment | -28,831 | -3,351 |
Changes in operating assets and liabilities: | ||
Accounts receivable | -13,613 | 39,035 |
Inventories | -49,618 | -22,624 |
Other assets | -122,483 | |
Accounts payable | 66,350 | -16,040 |
Accrued expenses | 134,799 | 105,858 |
Net cash (used in) operating activities | -69,040 | -131,741 |
Cash flows from investing activities: | ||
Purchases of property and equipment | -651,819 | -23,544 |
Proceeds from sale of property and equipment | 67,326 | 5,280 |
Net cash (used in) investing activities | -584,493 | -18,264 |
Cash flows from financing activities: | ||
Contributed Capital by Shareholder | 4,000 | |
Issuance of stock for cash, net of commissions paid | 345,233 | 549,550 |
Proceeds received from notes payable and related party notes | 85,700 | |
Repayment of notes payable and capital lease payments | -25,376 | -103,982 |
Net cash provided by financing activities | 323,857 | 531,268 |
Change in cash and cash equivalents | -329,676 | 381,263 |
Cash and cash equivalents at beginning of period | 428,574 | 47,311 |
Cash and cash equivalents at end of period | 98,898 | 428,574 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 2,525 | 28,964 |
Noncash transactions: | ||
Issuance of Common Stock for Prepaid Consulting Services | 731,984 | 188,500 |
Transfer of deposit on equipment to property and equipment for equipment placed in service | 118,206 | |
Capitalization of property and equipment from notes payable and capital leases | 9,175 | 28,195 |
Conversion of Notes Payable to Common Stock | 158,925 | |
Accrued Interest Converted to Common Stock | $18,752 |
Organization_and_Basis_of_Pres
Organization and Basis of Presentation | 12 Months Ended |
Dec. 31, 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 | 12 Months Ended | |||
Dec. 31, 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, inventory valuation, provision for excess or expired inventory, depreciation of property and equipment, realizability of long lived assets, refundable keg deposits, fair market value of equity instruments issued for goods or services and valuation for deferred tax assets. The current economic environment has increased the degree and uncertainty inherent in these estimates and assumptions. | ||||
Cash and Cash Equivalents | ||||
Cash and cash equivalents at December 31, 2014 and 2013, included cash on-hand. Cash equivalents are considered all accounts with a maturity date within 90 days. | ||||
Accounts Receivable and Allowance for Doubtful Accounts | ||||
The Company's accounts receivable primarily consist of trade receivables. The Company records an allowance for doubtful accounts that is based on historical trends, customer knowledge, any known disputes, and the aging of the accounts receivable balances combined with management's estimate of future potential recoverability. Receivables are written off against the allowance after all attempts to collect a receivable have failed. The Company believes its allowance for doubtful accounts as of December 31, 2014 and 2013 are adequate, but actual write-offs could exceed the recorded allowance. During the years ended December 31, 2014 and 2013, there were no accounts written-off. | ||||
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. 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 December 31, 2014 there were four customers that represented 94% of Accounts Receivable. As of December 31, 2013 there were two customers that represented 70% of Accounts Receivable. For the year ended December 31, 2014 and 2013 three customers represented approximately 49% and 55% of revenue, respectively. For the years ended December 31, 2014 and 2013, two suppliers of grain and bottling services represented approximately 75% and 98% of the cost of goods sold, respectively. | ||||
Financial Instruments and Fair Value of Financial Instruments | ||||
The Company applies the provisions of accounting guidance, FASB Topic ASC 825, Financial Instruments, that requires all entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value, and defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of December 31, 2014 and 2013, the fair value of cash, accounts payable, accrued expenses, notes payable, and capital leases obligations approximated carrying value due to the short maturity of the instruments, quoted market prices or interest rates which fluctuate with market rates. | ||||
The Company defines fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). | ||||
• | Level 1 — Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. | |||
• | Level 2 — Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability. | |||
• | Level 3 — Level 3 inputs are unobservable inputs for the asset or liability in which there is little, if any, market activity for the asset or liability at the measurement date. | |||
The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. The Company had no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. | ||||
Accounting for Derivatives Liabilities | ||||
The Company evaluates stock options, stock warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic 815-40, Derivative Instruments and Hedging: Contracts in Entity's Own Equity. The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative instrument and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or other expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815-40 are reclassified to a liability account at the fair value of the instrument on the reclassification date. The Company determined that none of the company's financial instruments meet the criteria for derivative accounting as of December 31, 2014 and 2013. | ||||
Share-Based Compensation | ||||
The Company accounts for share-based compensation under the fair value recognition provisions of ASC Topic 718, Stock Compensation. | ||||
The company granted 4,000 and 28,500 shares of common stock as a bonus to various employees on December 31, 2014 and 2013, respectively. The Company estimated the fair market value to be $0.50 per share (based on the estimated fair market value of the Company's stock on the date of grant) and as a result, recorded stock based compensation in the amount of $2,000 and $14,250 under general and administrative expenses in the accompanying Statement of Operations as of December 31, 2014 and 2013, respectably. | ||||
Equity Instruments Issued to Non-Employees for Acquiring Goods or Services | ||||
Issuances of the Company's common stock or warrants for acquiring goods or services are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The measurement date for the fair value of the equity instruments issued to consultants or vendors is determined at the earlier of (i) the date at which a commitment for performance to earn the equity instruments is reached (a "performance commitment" which would include a penalty considered to be of a magnitude that is a sufficiently large disincentive for nonperformance) or (ii) the date at which performance is complete. However, situations may arise in which counter performance may be required over a period of time but the equity award granted to the party performing the service is fully vested and non-forfeitable on the date of the agreement. As a result, in this situation in which vesting periods do not exist as the instruments fully vested on the date of agreement, the Company determines such date to be the measurement date and will record the estimated fair market value of the instruments granted as a prepaid expense and amortize such amount to general and administrative expense in the accompanying statement of operations over the contract period. When it is appropriate for the Company to recognize the cost of a transaction during financial reporting periods prior to the measurement date, for purposes of recognition of costs during those periods, the equity instrument is measured at the then-current fair values at each of those interim financial reporting dates. | ||||
Inventories and Provision for Excess or Expired Inventory | ||||
Inventories consist of raw materials, work in process, and finished goods. Raw materials, which principally consist of hops, other brewing materials and packaging, are stated at the lower of cost (first-in, first-out basis) or market value. The cost elements of work in process and finished goods inventory consist of raw materials and direct labor. | ||||
The provisions for excess or expired inventory are based on management's estimates of forecasted usage of inventories on hand and under contract. A significant change in the timing or level of demand for certain products as compared to forecasted amounts may result in recording additional provisions for excess or expired inventory in the future. Provisions for excess inventory are included in cost of goods sold and have historically been immaterial but adequate to provide for losses on its raw materials. | ||||
The computation of the excess hops inventory requires management to make certain assumptions regarding future sales growth, product mix, new products, cancellation costs, and supply, among others. The Company manages inventory levels and potential purchase commitments in an effort to maximize utilization of hops on hand and hops under commitment. The Company's accounting policy for hops inventory and potential purchase commitments is to recognize a loss by establishing a reserve to the extent inventory levels and commitments exceed management's expected future usage. To date, the amount has been immaterial. | ||||
The Company used the 'just in time' method to process orders. As a result, the Company had minimal inventory on hand and did not recognize any provision for excess or expired inventory. | ||||
Property and Equipment | ||||
Property and equipment are stated at cost. Expenditures for repairs and maintenance are expensed as incurred. Major renewals and betterments that extend the life of the property are capitalized. Depreciation is computed using the straight-line method based upon the estimated useful lives of the underlying assets as follows: | ||||
Kegs | 5 years | |||
Machinery and equipment | 7 years | |||
Office equipment and furniture, and vehicles | 5 years | |||
Leasehold improvements | Lesser of the remaining term of the lease or estimated useful life of the asset | |||
Long-lived Assets | ||||
The Company's long-lived assets consisted of property and equipment and are reviewed for impairment in accordance with the guidance of the FASB Topic ASC 360, Property, Plant, and Equipment, and FASB ASC Topic 205, Presentation of Financial Statements. The Company tests for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management's estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Through December 31, 2014, the Company had not experienced impairment losses on its long-lived assets as management determined that there were no indicators that a carrying amount of the asset may not be recoverable. However, there can be no assurances that demand for the Company's products or services will continue, which could result in an impairment of long-lived assets in the future. | ||||
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 $130,000 and $134,000 as of December 31, 2014 and 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 $51,000 and $53,000 as of December 31, 2014 and 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. | ||||
Due to Related Parties | ||||
The Company received advances or had expenditures made on the Company's behalf from shareholders for operating expenses and property and equipment purchases. The amounts received or expenditures do not bear interest or have a maturity date. During the fiscal year ending December 31, 2014 fees paid on behalf of the Company totaling $4,000 were recorded under additional paid in capital in the accompanying Balance Sheet with a balance due of nil. During the fiscal year ending December 31, 2013, the Company did not receive any advances nor have any expenditures made on the Company's behalf. | ||||
Noncash Equity Transactions | ||||
Shares of equity instruments issued for noncash consideration are recorded at the estimated fair market value of the consideration received based on the estimated market value of services to be rendered, or at the estimated value of the goods received. | ||||
During the period ended December 31, 2013, the Company issued fully vested 990,000 post reorganization shares of common stock and fully vested warrants to purchase 1,000,000 post reorganization shares of common stock to a consultant for services to be performed. The Company estimated the fair market value of the common shares and warrants to be $188,500, which the Company originally recorded under prepaid expenses in the accompanying balance sheet. The Company has amortized the prepaid expense to general and administrative expense in the accompanying statement of operations beginning October 1, 2013. For the year ended December 31, 2014 and 2013 the company amortized to expense $94,250 and $94,250, respectively. At December 31, 2014 and 2013, the unamortized balance was $0 and $94,250, respectively, and is recorded under prepaid expense in the accompanying balance sheet. | ||||
During the period ended December 31, 2014, the Company issued 1,302,500 fully vested post reorganization shares of common stock to third party consultants for services to be performed. The Company estimated the fair market value of the common shares to be $726,800 (based on the stock price on the date of grant), which the Company has recorded under prepaid expenses in the accompanying balance sheet at December 31, 2014. The Company is amortizing the prepaid expense to general and administrative expense in the accompanying statement of operations over the service period from January 1, 2014 to September 30, 2015. For the year ended December 31, 2014 the company amortized as expense general and administrative expense $654,699 in the accompanying statement of operations. At December 31, 2014, the unamortized balance was $75,989 (including $3,888 related to consultants), and is recorded under prepaid expense in the accompanying balance sheet. | ||||
During the period ended December 31, 2014, the company issued 75,000 shares of common stock to a Board Member for services rendered. The Company estimated the fair market value to be $150,000 (based on the stock price on the date of grant) which was recognized as expense under general and administrative expense in the accompanying statement of operations as of December 31, 2014. | ||||
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 $1,070,000 and $985,000 for years ended December 31, 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 $15,000 and $16,000 for the years ended December 31, 2014 and 2013, respectively. | ||||
Shipping and Handling Costs | ||||
Shipping and handling costs for all wholesale sales transactions are billed to the customer and are included in cost of goods sold for all periods presented. | ||||
Cost of Goods Sold | ||||
Cost of goods sold mainly consisted of raw material costs, packaging costs, direct labor and certain overhead allocated costs. Costs are recognized when the related revenue is recorded. | ||||
Advertising, Promotions and Sales | ||||
Advertising, promotional and selling expenses consisted of sales salaries, tap handles, media advertising costs, sales and marketing expenses, and promotional activity expenses and are recognized when incurred in the accompanying statement of operations. Advertising, promotional and sales expenses were $155,982 and $174,014 for the years ending December 31, 2014 and 2013, respectively. | ||||
General and Administrative Expenses | ||||
General and administrative expenses consisted of professional service fees, rent and utility expenses, meals, travel and entertainment expenses, and other general and administrative overhead costs. Expenses are recognized when incurred. | ||||
Customer Programs and Incentives | ||||
Customer programs and incentives, which include customer promotional discount programs and customer incentives, are a common practice in the alcohol beverage industry. The Company incurs customer program costs to promote sales of products and to maintain competitive pricing. Amounts paid in connection with customer programs and incentives are recorded as reductions to net revenue or as advertising, promotional and selling expenses in accordance with ASC Topic 605-50, Revenue Recognition—Customer Payments and Incentives, based on the nature of the expenditure. | ||||
The Company did not incur any significant customer programs and incentive costs for the years ended December 31, 2014 and 2013. | ||||
Income Taxes | ||||
The Company had elected to be taxed under the provisions of subchapter S of the Internal Revenue Code for federal and state purposes. Under these provisions, the Company did not pay US corporate income taxes on its taxable income. However, the Company was subject to various state and franchise taxes. In addition, the stockholders are liable for individual federal and state income taxes on the Company's taxable income. | ||||
The Company's S-Corporation election terminated in June 2013 in connection with the expectation of the initial public offering of the Company's common stock and the issuance of preferred stock which automatically terminated the Company's subchapter S status. From the Company's inception in 2010, it was not subject to federal and state income taxes since it was operating under an S-Corporation election. As of June 1, 2013, the Company became subject to corporate federal and state income taxes. The financial statements presented herein, are presented as the Company being subject to S-corporation taxes for the periods being presented. See Note L for unaudited pro-forma effect on historical financial information to show the impact if the Company had been subject to C-corporation taxes for the periods being presented. | ||||
Effective June 1, 2013, under the asset and liability method prescribed under ASC 740, Income Taxes, the Company uses the liability method of accounting for income taxes. The liability method measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts on the financial statements. The resulting deferred tax assets or liabilities have been adjusted to reflect changes in tax laws as they occur. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized. | ||||
The Company expects to recognize the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority would sustain the position in an examination. For tax positions meeting a "more-likely-than-not" threshold, the amount to be recognized in the financial statements will be the benefit expected to be realized upon settlement with the tax authority. For tax positions not meeting the threshold, no financial statement benefit is recognized. As of December 31, 2014, the Company had no uncertain tax positions. The Company recognizes interest and penalties, if any, related to uncertain tax positions as general and administrative expenses. The Company currently has no federal tax examinations nor has it had any federal income tax penalties since its inception. | ||||
For federal tax purposes, the Company's 2011 through 2014 tax years remain open for examination by the tax authorities under the normal three-year statute of limitations. | ||||
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 years ended December 31, 2014 and 2013 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 $2,125,000 and $875,000 December 31, 2014 and 2013, respectively, had a net loss of approximately, $1,250,000 and $330,000 years ended December 31, 2014 and 2013, respectively, and negative working capital of approximately $457,000 at December 31, 2014. These matters, among others, raise substantial doubt about our ability to continue as a going concern. | ||||
While the Company is attempting to increase sales 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 or private offering. 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. | ||||
Reclassification | ||||
For the year ending December 31, 2013 the Company reclassified $200,295 from advertising, promotional and selling and $133,989 from general and administrative to cost of goods sold for consistency with the current year financial statement presentation. | ||||
Recent Accounting Pronouncements | ||||
In August 2014, the FASB issued Accounting Standards Update ("ASU") No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which provides guidance regarding management's responsibility to assess whether substantial doubt exists regarding the ability to continue as a going concern and to provide related footnote disclosures. In connection with preparing financial statements for each annual and interim reporting period, management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). This ASU is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company does not expect that the adoption of this ASU to have a material effect on the Company's financial position, operations, or cash flows. | ||||
In May 2014, the FASB issued ASU 2014-09, which will update Codification topic: Revenue from Contracts with Customers. The principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which entity expects to be entitled in exchange for those goods or services. The guidance in ASU 2014-09 is effective for public entities for annual reporting periods beginning after Dec. 15, 2016, including interim periods therein. Management is currently evaluating the impact ASU 2014-09 will have on our financial position, results of operations and cash flows. |
Inventories
Inventories | 12 Months Ended | ||||||||
Dec. 31, 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. 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, direct labor and direct overhead. Inventories are stated at the lower of cost, determined on the first-in, first-out basis, or market. Inventories are generally classified as current assets. | |||||||||
Inventories consisted of the following as of: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Raw materials | $ | 13,011 | $ | 7,040 | |||||
Work in progress | 53,145 | 22,400 | |||||||
Finished goods | 14,150 | 1,248 | |||||||
$ | 80,306 | $ | 30,688 |
Other_Assets
Other Assets | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||
Other Assets | NOTE D – Other Assets | ||||||||
Other assets consisted of the following as of: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Rent deposit | $ | 12,817 | $ | 12,817 | |||||
Equipment deposit | 1,140 | 119,346 | |||||||
$ | 13,957 | $ | 132,163 | ||||||
The Company transferred approximately $118,000 out of Equipment Deposit to property and equipment for assets received and placed into service during the year ended December 31, 2014. |
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Property and Equipment | NOTE E – Property and Equipment | ||||||||
Property and equipment consisted of the following as of: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Machinery and equipment | $ | 1,006,455 | $ | 444,752 | |||||
Kegs | 130,445 | 134,345 | |||||||
Trucks | 21,401 | 21,401 | |||||||
Office equipment and furniture | 65,418 | 17,071 | |||||||
Leasehold improvements | 130,040 | 62,707 | |||||||
1,353,759 | 680,276 | ||||||||
Less accumulated depreciation | (361,620 | ) | (259,440 | ) | |||||
$ | 992,139 | $ | 420,836 | ||||||
Property and equipment at December 31, 2014 and 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 $96,000 and $67,000 respectively | |||||||||
Depreciation and amortization expense was approximately $169,000 and $103,000 for the years ended December 31, 2014 and 2013, respectively.c |
Accrued_Expenses_and_Other_Cur
Accrued Expenses and Other Current Liabilities | 12 Months Ended | ||||||||
Dec. 31, 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: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Accrued officer compensation | $ | 600,000 | $ | 460,000 | |||||
Refundable deposits on kegs | 50,834 | 52,689 | |||||||
Accrued payroll and payroll taxes | 14,958 | 22,791 | |||||||
Other accrued liabilities | 12,136 | 7,649 | |||||||
$ | 677,928 | $ | 543,129 |
Notes_Payable_and_Capital_Leas
Notes Payable and Capital Lease | 12 Months Ended | ||||||||
Dec. 31, 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: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Notes payable | $ | - | $ | 1,459 | |||||
Capital leases | 12,923 | 27,665 | |||||||
12,923 | 29,124 | ||||||||
Less current portion | (7,910 | ) | (24,182 | ) | |||||
$ | 5,013 | $ | (4,924 | ) | |||||
Notes Payable | |||||||||
On or about April 30, 2012, the Company issued an unsecured $15,000 note payable to a third party. The note bears interest at 10% annually, monthly principal and interest payments of $750, and matures two years from the date of issuance. Principal payments of approximately $1,500 and $8,400 were made in fiscal years 2014 and in fiscal year 2013, respectively. At December 31, 2014 and 2013, the outstanding balance was $0 and $1,459, respectively. | |||||||||
During September 30, 2013, the Company borrowed $30,000 from NUWA Group, LLC. The note bears interest at 0%, matures December 15, 2013 and has a default rate of 5%. The $30,000 note was paid in full on December 17, 2013. | |||||||||
Interest expense for these notes payable was approximately $20 and $1,300 for the years ended December 31, 2014 and 2013, respectively. | |||||||||
Notes Payable to Shareholders | |||||||||
During 2011, the Company borrowed $50,490 from a shareholder, which the Company and shareholder formalized into a note payable on or about February 1, 2012. The note requires no principal payments until due. The note bears interest at 10% annually and matures two years from the date of issuance. No principal payments had been made. | |||||||||
On or about October 1, 2012, the Company issued an unsecured $14,280 note payable to a shareholder. The note requires no principal payments until due. The note bears interest at 10% annually and matures two years from the date of issuance. No principal payments had been made. | |||||||||
On or about November 26, 2012, the Company issued an unsecured $10,260 note payable to a shareholder. The note bears interest at 10% annually and matures two years from the date of issuance with no monthly principal payments required. No principal payments had been made. | |||||||||
During the year ended December 31, 2013, the Company issued a series of unsecured notes payable to shareholders for amounts between $3,800 and $28,195, for a total of approximately $84,000, of which approximately $28,000 was used to finance the purchase of property and equipment. The notes required no principal payments until due, were to mature on various dates between December 31, 2013 and December 30, 2015. The notes were to bear interest at 10% annually. No principal payments had been made. | |||||||||
On December 31, 2013 all Notes Payable to shareholders and accrued interest were converted into 355,354 share of common stock. The total principle of the debt totaled $158,925 and accrued interest totaled $18,752. The combined balance of $177,677 was converted into 355,354 shares of common stock with an estimated fair market value of $0.50 per share. | |||||||||
Interest expense was approximately $0 and $13,000 for the years ended December 31, 2014 and 2013 respectively. | |||||||||
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 December 31, 2014, total remaining payments under this lease is approximately $5,000. The Company accounts for this arrangement as a capital lease. | |||||||||
On or about April 4, 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 $8,000 on December 31, 2014 | |||||||||
As of December 31, 2014, the capitalized amount of the equipment, truck, office equipment and accumulated depreciation was approximately $139,000, $21,000, $9,000 and $96,000, 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: | |||||||||
2015 | $ | 8,283 | |||||||
2016 | 3,300 | ||||||||
2017 | 1,925 | ||||||||
Less amount representing interest | (585 | ) | |||||||
12,923 | |||||||||
Current Portion | (7,910 | ) | |||||||
Long-term Portion | $ | 5,013 | |||||||
Equity
Equity | 12 Months Ended | |||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||
Notes to Financial Statements | ||||||||||||||||||
Equity | NOTE H – Equity | |||||||||||||||||
Voting Common Stock | ||||||||||||||||||
Prior to the reorganization in June 2013, the Company had authorized 100,000 shares of voting common stock authorized and had 1,115 shares outstanding | ||||||||||||||||||
Nonvoting Common Stock | ||||||||||||||||||
Prior to the reorganization in June 2013, the Company had authorized 100,000 share of nonvoting common stock and had 9,700 shares outstanding. | ||||||||||||||||||
Common and Preferred Stock | ||||||||||||||||||
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 was exchanged for an aggregate of 8,000,000 shares of Common Stock and 250,000 shares of Preferred Stock. | ||||||||||||||||||
During December 31, 2013 the Company sold 1,230,000 shares of common stock pursuant to a private placement memorandum to various investors at $0.50 per share resulting in net proceeds of $549,550 (net of commissions paid of $65,450) in cash received during the fiscal year ended December 31, 2013. | ||||||||||||||||||
The company converted $177,677 shareholder debt and accumulated interest into 355,354 Common Shares on December 31, 2013 with an estimated fair market value of $0.50 per share (based on the share price on the date of grant). | ||||||||||||||||||
During the period ended December 31, 2013, the Company issued 990,000 post reorganization shares of common stock and warrants to purchase 1,000,000 post reorganization shares of common stock to a consultant for services to be performed. The Company estimated the fair market value of the common shares and warrants to be $188,500. (See Note J) | ||||||||||||||||||
During the year ended December 31, 21013, the company issued 28,500 shares of common stock as a bonus to various employees on December 31, 2013. The Company estimated the fair market value to be $0.50 per share (based on the share price on the date of grant) and as a result, recorded Stock Based Compensation in the amount of $14,250 under general and administrative expenses in the accompanying Statement of Operations as of December 31, 2013. | ||||||||||||||||||
During the period ended December 31, 2013, the Company issued 13,000 shares of common stock to third party service providers for services rendered. The Company estimated the fair market value to be $0.50 per share (based on the share price on the date of grant) and as a result, recorded expenses of $6,500 under general and administrative expenses in the accompanying statement of operations as of December 31, 2013. | ||||||||||||||||||
During the period ended December 31, 2014, the Company issued 1,302,500 post reorganization shares of common stock to third party consultants for services to be performed. The Company estimated the fair market value of the common shares to be $726,800 (based on the share price on the date of grant). | ||||||||||||||||||
During the year ended December 31, 2014, the Company issued 75,000 shares to a member of the Board of Directors. The Company estimated the fair market value to be $150,000 (based on the share price on the date of grant) and recorded the amount to stock based compensation under general and administrative expense in the accompanying statement of operations for the year ended December 31, 2014 | ||||||||||||||||||
During the year ended December 31, 2014, the Company sold 716,866 shares of common stock to various investors at $0.50 per share resulting in net proceeds of $345,233 (net of commissions paid of $13,200) in cash received. | ||||||||||||||||||
During the period ended December 31, 2014, the company issued 4,000 shares of common stock to employees for services rendered. The Company estimated the fair market value to be $2,000 (based on the stock price on the date of grant) and recorded the amount to compensation under general and administrative expense in the accompanying statement of operations as of December 31, 2014. | ||||||||||||||||||
Furthermore, the Company's articles of incorporation were amended. Pursuant to the amended articles of incorporation, the Company is authorized to issue 50,000,000 shares of common stock, each having a par value of $0.001, with each share of common stock entitled to one vote for all matters on which a shareholder vote is required or requested. The Corporation is also authorized to issue 1,000,000 Series A Preferred Shares, each having a par value of $0.001. The Series A Preferred Shares may carry voting rights, distribution rights, dividend rights, redemption rights, liquidation preferences and conversions as designated by the Board of Directors. As of December 31, 2014, the designation of Series A Preferred Shares as follows: | ||||||||||||||||||
Rank – Except for voting rights specifically granted to the Series A Preferred Shares shall rank (i) prior to any class or series of capital stock the Company herein after created not specifically ranking by its terms senior to or on parity with any Series A Preferred Stock or whatever subdivision; and (ii) parity with any class or series of capital stock of the Company hereafter created specifically ranking by its terms on parity of Series A Preferred Stock in each case as to distributions of assets upon liquidation, dissolution or winding up of the Company, whether voluntary or involuntary. | ||||||||||||||||||
Dividends – The Series A Preferred Stock is eligible for dividends at the discretion of the Board of Directors. | ||||||||||||||||||
Liquidation Preference – Liquidation preference with respect to each share of Series A Preferred Stock means an amount equal to the Stated Value thereof. | ||||||||||||||||||
Conversion and Redemption – The Series A Preferred Shares have no conversion or redemption rights. | ||||||||||||||||||
Voting – Each share of Series A Preferred Stock shall have 500 votes for any election or other vote placed before the shareholders of the corporation. | ||||||||||||||||||
Warrants | ||||||||||||||||||
On September 17, 2013 the Company granted fully vested warrants to purchase 1,000,000 shares of common stock to NUWA Group, LLC with an exercise price of $1.00 of which none have been exercised as of December 31, 2014. The warrants vest immediately and the Company estimated the fair market value of these warrants at $40,000 (based on the Black-Scholes option pricing model) and has fully amortized as of December 31, 2014. | ||||||||||||||||||
On October 26, 2014 the Company granted warrants to purchase 25,000 shares of common stock to Mark Savage and Dave Weiner with an exercise price of $0.50 of which none have been exercised as of December 31, 2014. The warrants vest immediately and the Company estimated the fair market value of these warrants at $5,184 and has recorded a prepaid expense asset in the accompanying balance sheets for the period ended December 31, 2014 and is amortizing the amounts to expenses over the current period. As of December 31, 2014, the Company has amortized approximately $1,000 to general and administrative expenses in the accompanying statement of operations for the period ended December 31, 2014. | ||||||||||||||||||
The following assumptions were used to derive the value of the each of the warrants granted based on the Black-Scholes pricing model: | ||||||||||||||||||
NUWA | Savage & Weiner | |||||||||||||||||
Grant date | 9/17/13 | 10/26/14 | ||||||||||||||||
Stock price | $ | 0.15 | $ | 0.5 | ||||||||||||||
Risk-free interest rate | 0.4 | % | 0.11 | % | ||||||||||||||
Expected dividend yield | 0 | % | 0 | % | ||||||||||||||
Expected term (in years) | 3 | 1.5 | ||||||||||||||||
Expected volatility | 100 | % | 161 | % | ||||||||||||||
Estimated forfeiture rate | 0 | % | 0 | % | ||||||||||||||
Expected volatility is based on the Company's expected historical volatility and analysis of comparable companies in the industry in which the company operates. The risk free rate of interest represents the implied yield from the U.S. Treasury zero coupon yield of the contractual term of the warrants. Expected dividend is 0% because the Company has not and does not expect to pay dividends in the future. Forfeiture rate is 0% because the Company does not expect these warrants to be forfeited in the future. | ||||||||||||||||||
The following tables summarize information about warrants outstanding as of December 31, 2014: | ||||||||||||||||||
Exercise | Warrants | Weighted | Date of | Intrinsic Value | ||||||||||||||
Price | Outstanding | Average | Expiration | |||||||||||||||
Life of | ||||||||||||||||||
Outstanding | ||||||||||||||||||
Warrants in | ||||||||||||||||||
Months | ||||||||||||||||||
NUWA Warrants | $ | 1 | 1,000,000 | 22 | 9/17/16 | $ | ||||||||||||
Savage and Weiner Warrants | 0.5 | 25,000 | 59 | 10/26/19 | $ | |||||||||||||
$ | 0.99 | 1,025,000 | 23 | |||||||||||||||
The intrinsic value of the warrants was $0 and $0 at December 31, 2014 and 2013, respectively. The following tables summarize the changes warrants issued and outstanding for the year ended December 31, 2014 and 2013 Fiscal Period: | ||||||||||||||||||
2014 | 2013 | |||||||||||||||||
Beginning balance | 1,000,000 | - | ||||||||||||||||
Warrants issued | 25,000 | 1,000,000 | ||||||||||||||||
Warrants exercised | - | - | ||||||||||||||||
Ending balance, December 31 | 1,025,000 | 1,000,000 | ||||||||||||||||
Remaining unamortized warrant value to be expensed in future periods is approximately $4,000 |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | ||||||||
Dec. 31, 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 years ended December 31, 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 Years | |||||||||
Ended December 31, | |||||||||
2014 | 2013 | ||||||||
Net loss attributable to common stockholders | $ | (1,249,774 | ) | $ | (330,342 | ) | |||
Basic weighted average outstanding shares of common stock | 12,385,640 | 8,285,000 | |||||||
Dilutive effect of common stock equivalents | - | - | |||||||
Dilutive weighted average common stock equivalents | 12,385,640 | 8,285,000 | |||||||
Net loss per share of voting and nonvoting | |||||||||
common stock Basic and Diluted | (0.10 | ) | $ | (04 | ) |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Commitments and Contingencies | NOTE J – Commitments and Contingencies | ||||
Legal | |||||
The Company is not involved in any legal matters arising in the normal course of business. While incapable of estimation, in the opinion of the management, the individual regulatory and legal matters in which it might involve in the future are not expected to have a material adverse effect on the Company's financial position, results of operations, or cash flows. | |||||
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 December 31, 2014, hops purchase commitments outstanding was approximately $926,000. As of December 31, 2014, projected cash outflows under hops purchase commitments for each of the remaining years under the contracts are as follows: | |||||
Remaining 2014 | $ | 32,000 | |||
2015 | 177,000 | ||||
2016 | 226,000 | ||||
2017 | 220,000 | ||||
2018 | 271,000 | ||||
Total | $ | 926,000 | |||
These commitments are not accrued in the balance of the Company at December 31, 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. | |||||
Operating 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 December 31, 2014, the minimum monthly lease payment was $4,753. Rent expense was approximately $48,000 and $43,000 for the fiscal year ended December 31, 2014 and 2013 respectively. On or about December 24, 2014 the company amended this lease to add an additional 2,016 square feet of warehouse space. Beginning January 2015 the minimum lease payment is $5,424. | |||||
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. This lease is on a month-to-month basis as of December 31, 2014. | |||||
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. This lease is on a month-to-month basis as of December 31, 2014. | |||||
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. This lease is on a in the initial rental period as of December 31, 2014. | |||||
Aggregate minimum annual rental payments for all operating lease agreements as of December 31, 2014, are as follows: | |||||
2015 | 65,000 | ||||
$ | 65,000 | ||||
Keg lease expense was approximately $22,000 and $24,000 for fiscal years ended December 31, 2014 and 2013 respectively. | |||||
Consulting Agreement | |||||
During the year ended December 31, 2013, the Company entered into a consulting and professional services agreement with a third party. The following represents a summary of the agreement which does not include all aspects that a specific reader of these statements may require, as a result, the Company advises any investor or debt holder to inquire management for an opportunity to read the agreement in full. The agreement required the Company to issue to the third party 9.99% of the outstanding shares of common stock, aggregating to 990,000 fully vested non-forfeitable shares of common stock, and warrants equal to 10% of the outstanding shares of common stock, aggregating to 1,000,000 shares of common stock at an exercise price of $1.00 per share for services to be performed. | |||||
The Company estimated the fair market value of the common stock to be $0.15 per share for a total value of $148,500. | |||||
The Company estimated the fair market value of the warrants granted to be $40,000. The Company estimated the fair market value of the warrants using the Black-Scholes option pricing model, since the warrants were fixed in number of shares to be purchased and exercise price. | |||||
As a result, the Company originally recorded the estimated fair market value of the common stock issued of $148,500 and the estimated fair market value of the warrants granted of $40,000, for a total combined value of $188,500 as a prepaid expense in the accompanying balance sheet. | |||||
The Company was amortizing the prepaid expense to general and administrative expense in the accompanying statements of operations over an estimated service period of six months, with service beginning on October 15, 2013. As of December 31, 2014 and 2013, the Company has amortized $94,250 and $94,250 to general and administrative expense, respectively and had an unamortized balance of $0 and $94,250 recorded under prepaid expenses in the accompanying balance sheet at December 31, 2014 and 2013, respectively. | |||||
As of March 31, 2014, all services were deemed to have been performed pursuant to the agreement with no additional amount due or shares of common stock to be issued. The Company paid $13,200 and $64,450 in fees pursuant to this agreement during December 31, 2014 and 2013, respectively. | |||||
During the years ended December 31, 2014 and 2013, NUWA paid approximately $30,000 and $56,000, respectively, of expense related to the initial public offering on the Company's behalf. The payments were considered contributed capital and expense of the stock issuance. As a result, the net effect on additional paid in capital is nil. | |||||
During the fiscal year ended December 31, 2014, the Company entered into various consulting agreements for services to be provided over terms from from three to twelve months for a total of 1,302,500 shares of fully vested and non-forfeitable common stock. The Company valued these shares at $726,800 (based on the estimated fair market value of the Company's stock on the date of grant) and recorded a prepaid expense on the accompanying balance sheet for the period ended December 31, 2014 then amortized $654,700 of the total $726,800 expense to general and administrative expense over the term of the agreement in the accompanying statements of operations for the period ended December 31, 2014 with the remaining balance of $72,100 as a prepaid expense asset on the accompanying balance sheet for the period ended December 31, 2014. | |||||
On October 26, 2014, the Company entered into a consulting agreement in exchange for 25,000 warrants to purchase 25,000 shares of common stock. The Company valued the warrant at $0.06 per share (based on the Black-Scholes option pricing model on the date of grant) and recorded a prepaid expense on the accompanying balance sheet for the period ended December 31, 2014 then amortized $1,295 of the total $5,184 expense to general and administrative expense over the term of the agreement in the accompanying statements of operations for the period ended December 31, 2014 with the remaining balance of $3,889 as a prepaid expense asset on the accompanying balance sheet for the period ended December 31, 2014. |
Segment_Information
Segment Information | 12 Months Ended | ||||||||||||
Dec. 31, 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: | |||||||||||||
31-Dec-14 | |||||||||||||
Retail | Wholesale | Total | |||||||||||
Sales | $ | 300,439 | $ | 769,459 | $ | 1,069,898 | |||||||
Less excise taxes | 7,350 | 18,900 | 26,250 | ||||||||||
Net revenue | 293,089 | 750,559 | 1,043,648 | ||||||||||
Cost of goods sold | 246,249 | 633,213 | 879,462 | ||||||||||
Gross profit | $ | 46,840 | $ | 117,346 | $ | 164,186 | |||||||
Accounts receivable | $ | - | $ | 43,779 | $ | 43,779 | |||||||
Depreciation Expense | 7,138 | 162,264 | 169,402 | ||||||||||
Property and equipment, | |||||||||||||
net of accumulated depreciation | $ | 49,316 | $ | 942,823 | $ | 992,139 | |||||||
31-Dec-13 | |||||||||||||
Retail | Wholesale | Total | |||||||||||
Sales | $ | 274,676 | $ | 709,938 | $ | 984,614 | |||||||
Less excise taxes | 4,372 | 11.299 | 15,671 | ||||||||||
Net revenue | 270,304 | 698,639 | 968,943 | ||||||||||
Cost of goods sold | 191,685 | 492,906 | 684,591 | ||||||||||
Gross profit | $ | 78,619 | $ | 205,733 | $ | 284,352 | |||||||
Accounts receivable | $ | - | $ | 30,166 | $ | 30,166 | |||||||
Depreciation Expense | 3,414 | 99,792 | 103,206 | ||||||||||
Property and equipment, | |||||||||||||
net of accumulated depreciation | $ | 46,292 | $ | 374,544 | $ | 420,836 | |||||||
Income_Tax_For_Year_Ended_Dece
Income Tax For Year Ended December 31, 2014 | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Income Tax For Year Ended December 31, 2014 | NOTE L – INCOME TAX FOR YEAR ENDED DECMEBER 31, 2014 | ||||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax liabilities and assets as of December 31, 2014 are as follows: | |||||||||
Net operating loss carry forward | $ | 377,000 | |||||||
Accrued expenses – temporary differences | 47,000 | ||||||||
Total deferred tax asset | 424,000 | ||||||||
Valuation allowance | (424,000 | ) | |||||||
Net deferred asset | $ | - | |||||||
The Company's net loss before income taxes was $1,265,000 for the fiscal year ended December 31, 2014. The income tax provision for the period ended December 31, 2013 consists of the following: | |||||||||
Current tax expense | $ | 345,000 | |||||||
Change in deferred tax asset | (345,000 | ) | |||||||
Total Income tax | $ | - | |||||||
The reconciliation of the results of applying the Company's effective statutory federal income tax rate of 34% for the year ended December 31, 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 | - | ||||||||
Change in deferred tax asset | -34% | ||||||||
Total income tax | - | ||||||||
Pro-forma Income Tax for the year ended December 31, 2013 (unaudited) | |||||||||
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, herein, have been presented as subchapter S-Corporation for these periods presented. The Company's net loss before income taxes totaled approximately $331,000 for the years ended December 31, 2013. Below is presented to show the pro-forma tax effect on the company and the historical financial information presented herein. The pro-forma information is not indicative of what is to be expected on future operations of the Company on a pro-forma basis. | |||||||||
The Company's unaudited pro-forma deferred tax assets and liabilities would consist of the following: | |||||||||
December 31, | |||||||||
2013 | |||||||||
Current Assets and Liabilities: | |||||||||
Accrued Expenses | $ | 156,000 | |||||||
Net operating loss | 298,000 | ||||||||
Total | 454,000 | ||||||||
Valuation Allowance | (454,000 | ) | |||||||
Unaudited Pro-Forma Total Deferred Tax Asset, Net | - | ||||||||
Variance | - | ||||||||
As reported | $ | - | |||||||
The unaudited pro-forma provisions for income taxes for the years ending December 31 consist of the following: | |||||||||
December 31, | |||||||||
2013 | |||||||||
Deferred tax (benefit) expense | $ | - | |||||||
Current provision | - | ||||||||
Unaudited Pro-Forma Total Provision for Income Taxes | |||||||||
Variance | - | ||||||||
As reported | $ | - | |||||||
The items accounting for the difference between unaudited pro-forma income taxes computed at the federal statutory rate and the unaudited pro-forma provision for income taxes are as follows: | |||||||||
2013 | |||||||||
Impact on | |||||||||
Amount | Rate | ||||||||
Income tax (benefit) expense | $ | (116,000 | ) | 35.00% | |||||
State tax, net of Federal effect | - | - | |||||||
Permanent differences | - | - | |||||||
Valuation allowance | 116,000 | 35.00% | |||||||
Total Pro-Forma Provision | $ | - | -% | ||||||
Income Tax Provision | |||||||||
As noted above, the Company converted from a Subchapter S corporation for tax purposes to a C corporation for tax purposes as of June 30, 213. For the six months period ended June 30, 2013 the taxable loss of the Company was allocated to the shareholders of the Company at such time. Therefore, no provision or liability has been included in the financial statements for this relevant period when the Company was in existence as a Subchapter S corporation. At that date, the Company would have has a deferred tax asset in the amount of approximately $375,000 had they been taxed as a C Corporation with a valuation of 100% being allocated to such deferred tax asset. Tax information below is based on the Corporation tax status as a C Corporation from July 1, 2013 to the year ended December 31, 2013. | |||||||||
Income tax provision for the period ended December 31, 2013 consists of the following: | |||||||||
Current tax expense | $ | 116,000 | |||||||
Effect of change in tax status | (37,000 | ) | |||||||
Change in deferred tax asset | (79,000 | ) | |||||||
Total Income tax | $ | - | |||||||
The reconciliation of the results of applying the Company's effective statutory federal income tax rate of 34% for the year ended December 31, 2013 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 | - | ||||||||
The Components of deferred tax assets as of December 31, 2013 is as follows: | |||||||||
Net operating loss carry forward | $ | 56,000 | |||||||
Accrued expenses – temporary differences | 23,000 | ||||||||
Total deferred tax asset | 79,000 | ||||||||
Valuation allowance | (79,000 | ) | |||||||
Net deferred asset | $ | - | |||||||
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE M – Subsequent Events |
The Company evaluated subsequent events occurring up to the date of issuance of the financial statements. | |
On or about January 16, 2015 the company entered into a loan payable with a principle amount of $124,322 with monthly payments of $7,539 of which $2,590 is for principle and $628 for interest over a four year term. The Company intends to use these funds for purchasing equipment, installation and marketing. | |
In conjunction with the assets purchase on April 1 on or about March 26, 2015 the Company entered into three promissory notes for $50,000 each with repayment terms of 60 days with no monthly payments required. The notes carry an interest rate of 8% per annum, a 1.5% of principle loan fee and additional consideration of restricted common stock totaling 230,000 shares. | |
On April 1, 2015 the Company, entered into an Asset Purchase Agreement whereby the Company acquired substantially all of the operating assets of B&R Liquid Adventure, LLC a California Limited Liability Company ("B&R"), a company engaged in the manufacture of Bucha Live Kombucha, a gluten free, organic certified, sparkling kombucha tea. On April 1, 2015, the parties executed all documents related to the Acquisition. | |
Upon the closing of the Acquisition, the Company received substantially all of the operating assets of B&R, consisting of inventory, fixed assets and intellectual property valued at $275,000 in exchange for 1,479,290 shares of common stock valued at $500,000, a cash payment of $260,000, and a secured promissory note in an amount of $140,000. See Form 8-k filed with the SEC on April 2, 2015 for more detailed information. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||
Dec. 31, 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, inventory valuation, provision for excess or expired inventory, depreciation of property and equipment, realizability of long lived assets, refundable keg deposits, fair market value of equity instruments issued for goods or services and valuation for deferred tax assets. The current economic environment has increased the degree and uncertainty inherent in these estimates and assumptions. | ||||
Cash and Cash Equivalent | Cash and Cash Equivalents | |||
Cash and cash equivalents at December 31, 2014 and 2013, included cash on-hand. Cash equivalents are considered all accounts with a maturity date within 90 days. | ||||
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts | |||
The Company's accounts receivable primarily consist of trade receivables. The Company records an allowance for doubtful accounts that is based on historical trends, customer knowledge, any known disputes, and the aging of the accounts receivable balances combined with management's estimate of future potential recoverability. Receivables are written off against the allowance after all attempts to collect a receivable have failed. The Company believes its allowance for doubtful accounts as of December 31, 2014 and 2013 are adequate, but actual write-offs could exceed the recorded allowance. During the years ended December 31, 2014 and 2013, there were no accounts written-off. | ||||
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. 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 December 31, 2014 there were four customers that represented 94% of Accounts Receivable. As of December 31, 2013 there were two customers that represented 70% of Accounts Receivable. For the year ended December 31, 2014 and 2013 three customers represented approximately 49% and 55% of revenue, respectively. For the years ended December 31, 2014 and 2013, two suppliers of grain and bottling services represented approximately 75% and 98% of the cost of goods sold, respectively. | ||||
Financial Instruments and Fair Value of Financial Instruments | Financial Instruments and Fair Value of Financial Instruments | |||
The Company applies the provisions of accounting guidance, FASB Topic ASC 825, Financial Instruments, that requires all entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value, and defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of December 31, 2014 and 2013, the fair value of cash, accounts payable, accrued expenses, notes payable, and capital leases obligations approximated carrying value due to the short maturity of the instruments, quoted market prices or interest rates which fluctuate with market rates. | ||||
The Company defines fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). | ||||
• | Level 1 — Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. | |||
• | Level 2 — Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability. | |||
• | Level 3 — Level 3 inputs are unobservable inputs for the asset or liability in which there is little, if any, market activity for the asset or liability at the measurement date. | |||
The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. The Company had no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. | ||||
Accounting for Derivatives Liabilities | Accounting for Derivatives Liabilities | |||
The Company evaluates stock options, stock warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic 815-40, Derivative Instruments and Hedging: Contracts in Entity's Own Equity. The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative instrument and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or other expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815-40 are reclassified to a liability account at the fair value of the instrument on the reclassification date. The Company determined that none of the company's financial instruments meet the criteria for derivative accounting as of December 31, 2014 and 2013. | ||||
Share-Based Compensation | Share-Based Compensation | |||
The Company accounts for share-based compensation under the fair value recognition provisions of ASC Topic 718, Stock Compensation. | ||||
The company granted 4,000 and 28,500 shares of common stock as a bonus to various employees on December 31, 2014 and 2013, respectively. The Company estimated the fair market value to be $0.50 per share (based on the estimated fair market value of the Company's stock on the date of grant) and as a result, recorded stock based compensation in the amount of $2,000 and $14,250 under general and administrative expenses in the accompanying Statement of Operations as of December 31, 2014 and 2013, respectably. | ||||
Equity Instruments Issued to Non-Employees for Acquiring Goods or Services | Equity Instruments Issued to Non-Employees for Acquiring Goods or Services | |||
Issuances of the Company's common stock or warrants for acquiring goods or services are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The measurement date for the fair value of the equity instruments issued to consultants or vendors is determined at the earlier of (i) the date at which a commitment for performance to earn the equity instruments is reached (a "performance commitment" which would include a penalty considered to be of a magnitude that is a sufficiently large disincentive for nonperformance) or (ii) the date at which performance is complete. However, situations may arise in which counter performance may be required over a period of time but the equity award granted to the party performing the service is fully vested and non-forfeitable on the date of the agreement. As a result, in this situation in which vesting periods do not exist as the instruments fully vested on the date of agreement, the Company determines such date to be the measurement date and will record the estimated fair market value of the instruments granted as a prepaid expense and amortize such amount to general and administrative expense in the accompanying statement of operations over the contract period. When it is appropriate for the Company to recognize the cost of a transaction during financial reporting periods prior to the measurement date, for purposes of recognition of costs during those periods, the equity instrument is measured at the then-current fair values at each of those interim financial reporting dates. | ||||
Inventories and Provision for Excess or Expired Inventory | Inventories and Provision for Excess or Expired Inventory | |||
Inventories consist of raw materials, work in process, and finished goods. Raw materials, which principally consist of hops, other brewing materials and packaging, are stated at the lower of cost (first-in, first-out basis) or market value. The cost elements of work in process and finished goods inventory consist of raw materials and direct labor. | ||||
The provisions for excess or expired inventory are based on management's estimates of forecasted usage of inventories on hand and under contract. A significant change in the timing or level of demand for certain products as compared to forecasted amounts may result in recording additional provisions for excess or expired inventory in the future. Provisions for excess inventory are included in cost of goods sold and have historically been immaterial but adequate to provide for losses on its raw materials. | ||||
The computation of the excess hops inventory requires management to make certain assumptions regarding future sales growth, product mix, new products, cancellation costs, and supply, among others. The Company manages inventory levels and potential purchase commitments in an effort to maximize utilization of hops on hand and hops under commitment. The Company's accounting policy for hops inventory and potential purchase commitments is to recognize a loss by establishing a reserve to the extent inventory levels and commitments exceed management's expected future usage. To date, the amount has been immaterial. | ||||
The Company used the 'just in time' method to process orders. As a result, the Company had minimal inventory on hand and did not recognize any provision for excess or expired inventory. | ||||
Property and Equipment | Property and Equipment | |||
Property and equipment are stated at cost. Expenditures for repairs and maintenance are expensed as incurred. Major renewals and betterments that extend the life of the property are capitalized. Depreciation is computed using the straight-line method based upon the estimated useful lives of the underlying assets as follows: | ||||
Kegs | 5 years | |||
Machinery and equipment | 7 years | |||
Office equipment and furniture, and vehicles | 5 years | |||
Leasehold improvements | Lesser of the remaining term of the lease or estimated useful life of the asset | |||
Long-lived Assets | Long-lived Assets | |||
The Company's long-lived assets consisted of property and equipment and are reviewed for impairment in accordance with the guidance of the FASB Topic ASC 360, Property, Plant, and Equipment, and FASB ASC Topic 205, Presentation of Financial Statements. The Company tests for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management's estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Through December 31, 2014, the Company had not experienced impairment losses on its long-lived assets as management determined that there were no indicators that a carrying amount of the asset may not be recoverable. However, there can be no assurances that demand for the Company's products or services will continue, which could result in an impairment of long-lived assets in the future. | ||||
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 $130,000 and $134,000 as of December 31, 2014 and 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 $51,000 and $53,000 as of December 31, 2014 and 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. | ||||
Due to Related Parties | Due to Related Parties | |||
The Company received advances or had expenditures made on the Company's behalf from shareholders for operating expenses and property and equipment purchases. The amounts received or expenditures do not bear interest or have a maturity date. During the fiscal year ending December 31, 2014 fees paid on behalf of the Company totaling $4,000 were recorded under additional paid in capital in the accompanying Balance Sheet with a balance due of nil. During the fiscal year ending December 31, 2013, the Company did not receive any advances nor have any expenditures made on the Company's behalf. | ||||
Noncash Equity Transactions | Noncash Equity Transactions | |||
Shares of equity instruments issued for noncash consideration are recorded at the estimated fair market value of the consideration received based on the estimated market value of services to be rendered, or at the estimated value of the goods received. | ||||
During the period ended December 31, 2013, the Company issued fully vested 990,000 post reorganization shares of common stock and fully vested warrants to purchase 1,000,000 post reorganization shares of common stock to a consultant for services to be performed. The Company estimated the fair market value of the common shares and warrants to be $188,500, which the Company originally recorded under prepaid expenses in the accompanying balance sheet. The Company has amortized the prepaid expense to general and administrative expense in the accompanying statement of operations beginning October 1, 2013. For the year ended December 31, 2014 and 2013 the company amortized to expense $94,250 and $94,250, respectively. At December 31, 2014 and 2013, the unamortized balance was $0 and $94,250, respectively, and is recorded under prepaid expense in the accompanying balance sheet. | ||||
During the period ended December 31, 2014, the Company issued 1,302,500 fully vested post reorganization shares of common stock to third party consultants for services to be performed. The Company estimated the fair market value of the common shares to be $726,800 (based on the stock price on the date of grant), which the Company has recorded under prepaid expenses in the accompanying balance sheet at December 31, 2014. The Company is amortizing the prepaid expense to general and administrative expense in the accompanying statement of operations over the service period from January 1, 2014 to September 30, 2015. For the year ended December 31, 2014 the company amortized as expense general and administrative expense $654,699 in the accompanying statement of operations. At December 31, 2014, the unamortized balance was $75,989 (including $3,888 related to consultants), and is recorded under prepaid expense in the accompanying balance sheet. | ||||
During the period ended December 31, 2014, the company issued 75,000 shares of common stock to a Board Member for services rendered. The Company estimated the fair market value to be $150,000 (based on the stock price on the date of grant) which was recognized as expense under general and administrative expense in the accompanying statement of operations as of December 31, 2014. | ||||
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 $1,070,000 and $985,000 for years ended December 31, 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 $15,000 and $16,000 for the years ended December 31, 2014 and 2013, respectively. | ||||
Shipping and Handling Costs | Shipping and Handling Costs | |||
Shipping and handling costs for all wholesale sales transactions are billed to the customer and are included in cost of goods sold for all periods presented. | ||||
Cost of Goods Sold | Cost of Goods Sold | |||
Cost of goods sold mainly consisted of raw material costs, packaging costs, direct labor and certain overhead allocated costs. Costs are recognized when the related revenue is recorded. | ||||
Advertising, Promotions and Sales | Advertising, Promotions and Sales | |||
Advertising, promotional and selling expenses consisted of sales salaries, tap handles, media advertising costs, sales and marketing expenses, and promotional activity expenses and are recognized when incurred in the accompanying statement of operations. Advertising, promotional and sales expenses were $155,982 and $174,014 for the years ending December 31, 2014 and 2013, respectively. | ||||
General and Administrative Expenses | General and Administrative Expenses | |||
General and administrative expenses consisted of professional service fees, rent and utility expenses, meals, travel and entertainment expenses, and other general and administrative overhead costs. Expenses are recognized when incurred. | ||||
Customer Programs and Incentives | Customer Programs and Incentives | |||
Customer programs and incentives, which include customer promotional discount programs and customer incentives, are a common practice in the alcohol beverage industry. The Company incurs customer program costs to promote sales of products and to maintain competitive pricing. Amounts paid in connection with customer programs and incentives are recorded as reductions to net revenue or as advertising, promotional and selling expenses in accordance with ASC Topic 605-50, Revenue Recognition—Customer Payments and Incentives, based on the nature of the expenditure. | ||||
The Company did not incur any significant customer programs and incentive costs for the years ended December 31, 2014 and 2013. | ||||
Income Taxes | Income Taxes | |||
The Company had elected to be taxed under the provisions of subchapter S of the Internal Revenue Code for federal and state purposes. Under these provisions, the Company did not pay US corporate income taxes on its taxable income. However, the Company was subject to various state and franchise taxes. In addition, the stockholders are liable for individual federal and state income taxes on the Company's taxable income. | ||||
The Company's S-Corporation election terminated in June 2013 in connection with the expectation of the initial public offering of the Company's common stock and the issuance of preferred stock which automatically terminated the Company's subchapter S status. From the Company's inception in 2010, it was not subject to federal and state income taxes since it was operating under an S-Corporation election. As of June 1, 2013, the Company became subject to corporate federal and state income taxes. The financial statements presented herein, are presented as the Company being subject to S-corporation taxes for the periods being presented. See Note L for unaudited pro-forma effect on historical financial information to show the impact if the Company had been subject to C-corporation taxes for the periods being presented. | ||||
Effective June 1, 2013, under the asset and liability method prescribed under ASC 740, Income Taxes, the Company uses the liability method of accounting for income taxes. The liability method measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts on the financial statements. The resulting deferred tax assets or liabilities have been adjusted to reflect changes in tax laws as they occur. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized. | ||||
The Company expects to recognize the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority would sustain the position in an examination. For tax positions meeting a "more-likely-than-not" threshold, the amount to be recognized in the financial statements will be the benefit expected to be realized upon settlement with the tax authority. For tax positions not meeting the threshold, no financial statement benefit is recognized. As of December 31, 2014, the Company had no uncertain tax positions. The Company recognizes interest and penalties, if any, related to uncertain tax positions as general and administrative expenses. The Company currently has no federal tax examinations nor has it had any federal income tax penalties since its inception. | ||||
For federal tax purposes, the Company's 2011 through 2014 tax years remain open for examination by the tax authorities under the normal three-year statute of limitations. | ||||
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 years ended December 31, 2014 and 2013 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 $2,125,000 and $875,000 December 31, 2014 and 2013, respectively, had a net loss of approximately, $1,250,000 and $330,000 years ended December 31, 2014 and 2013, respectively, and negative working capital of approximately $457,000 at December 31, 2014. These matters, among others, raise substantial doubt about our ability to continue as a going concern. | ||||
While the Company is attempting to increase sales 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 or private offering. 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. | ||||
Reclassification | Reclassification | |||
For the year ending December 31, 2013 the Company reclassified $200,295 from advertising, promotional and selling and $133,989 from general and administrative to cost of goods sold for consistency with the current year financial statement presentation. | ||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | |||
In August 2014, the FASB issued Accounting Standards Update ("ASU") No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which provides guidance regarding management's responsibility to assess whether substantial doubt exists regarding the ability to continue as a going concern and to provide related footnote disclosures. In connection with preparing financial statements for each annual and interim reporting period, management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). This ASU is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company does not expect that the adoption of this ASU to have a material effect on the Company's financial position, operations, or cash flows. | ||||
In May 2014, the FASB issued ASU 2014-09, which will update Codification topic: Revenue from Contracts with Customers. The principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which entity expects to be entitled in exchange for those goods or services. The guidance in ASU 2014-09 is effective for public entities for annual reporting periods beginning after Dec. 15, 2016, including interim periods therein. Management is currently evaluating the impact ASU 2014-09 will have on our financial position, results of operations and cash flows. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Summary Of Significant Accounting Policies Tables | ||||
Schedule of Useful live of Property and Equipment | Kegs | 5 years | ||
Machinery and equipment | 7 years | |||
Office equipment and furniture, and vehicles | 5 years | |||
Leasehold improvements | Lesser of the remaining term of the lease or estimated useful life of the asset |
Inventories_Tables
Inventories (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Inventories | December 31, | ||||||||
2014 | 2013 | ||||||||
Raw materials | $ | 13,011 | $ | 7,040 | |||||
Work in progress | 53,145 | 22,400 | |||||||
Finished goods | 14,150 | 1,248 | |||||||
$ | 80,306 | $ | 30,688 | ||||||
Other_Assets_Tables
Other Assets (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||
Other Assets | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Rent deposit | $ | 12,817 | $ | 12,817 | |||||
Equipment deposit | 1,140 | 119,346 | |||||||
$ | 13,957 | $ | 132,163 | ||||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Property and Equipment | December 31, | ||||||||
2014 | 2013 | ||||||||
Machinery and equipment | $ | 1,006,455 | $ | 444,752 | |||||
Kegs | 130,445 | 134,345 | |||||||
Trucks | 21,401 | 21,401 | |||||||
Office equipment and furniture | 65,418 | 17,071 | |||||||
Leasehold improvements | 130,040 | 62,707 | |||||||
1,353,759 | 680,276 | ||||||||
Less accumulated depreciation | (361,620 | ) | (259,440 | ) | |||||
$ | 992,139 | $ | 420,836 |
Accrued_Expenses_and_Other_Cur1
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Payables and Accruals [Abstract] | |||||||||
Accrued Expenses and Other Current Liabilities | December 31, | ||||||||
2014 | 2013 | ||||||||
Accrued officer compensation | $ | 600,000 | $ | 460,000 | |||||
Refundable deposits on kegs | 50,834 | 52,689 | |||||||
Accrued payroll and payroll taxes | 14,958 | 22,791 | |||||||
Other accrued liabilities | 12,136 | 7,649 | |||||||
$ | 677,928 | $ | 543,129 |
Notes_Payable_and_Capital_Leas1
Notes Payable and Capital Lease (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes to Financial Statements | |||||||||
Notes Payable and Capital Leases | December 31, | ||||||||
2014 | 2013 | ||||||||
Notes payable | $ | - | $ | 1,459 | |||||
Capital leases | 12,923 | 27,665 | |||||||
12,923 | 29,124 | ||||||||
Less current portion | (7,910 | ) | (24,182 | ) | |||||
$ | 5,013 | $ | (4,924 | ) | |||||
Minimum lease payment | 2015 | $ | 8,283 | ||||||
2016 | 3,300 | ||||||||
2017 | 1,925 | ||||||||
Less amount representing interest | (585 | ) | |||||||
12,923 | |||||||||
Current Portion | (7,910 | ) | |||||||
Long-term Portion | $ | 5,013 |
Equity_Tables
Equity (Tables) | 12 Months Ended | |||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||
Equity Tables | ||||||||||||||||||
Schedule of warrants granted based on the Black-Scholes pricing model | NUWA | Savage & Weiner | ||||||||||||||||
Grant date | 9/17/13 | 10/26/14 | ||||||||||||||||
Stock price | $ | 0.15 | $ | 0.5 | ||||||||||||||
Risk-free interest rate | 0.4 | % | 0.11 | % | ||||||||||||||
Expected dividend yield | 0 | % | 0 | % | ||||||||||||||
Expected term (in years) | 3 | 1.5 | ||||||||||||||||
Expected volatility | 100 | % | 161 | % | ||||||||||||||
Estimated forfeiture rate | 0 | % | 0 | % | ||||||||||||||
Schedule of Warrants Outstanding | Exercise | Warrants | Weighted | Date of | Intrinsic Value | |||||||||||||
Price | Outstanding | Average | Expiration | |||||||||||||||
Life of | ||||||||||||||||||
Outstanding | ||||||||||||||||||
Warrants in | ||||||||||||||||||
Months | ||||||||||||||||||
NUWA Warrants | $ | 1 | 1,000,000 | 22 | 9/17/16 | $ | ||||||||||||
Savage and Weiner Warrants | 0.5 | 25,000 | 59 | 10/26/19 | $ | |||||||||||||
$ | 0.99 | 1,025,000 | 23 | |||||||||||||||
2014 | 2013 | |||||||||||||||||
Beginning balance | 1,000,000 | - | ||||||||||||||||
Warrants issued | 25,000 | 1,000,000 | ||||||||||||||||
Warrants exercised | - | - | ||||||||||||||||
Ending balance, December 31 | 1,025,000 | 1,000,000 |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Basic and Diluted net income per share | For the Years | ||||||||
Ended December 31, | |||||||||
2014 | 2013 | ||||||||
Net loss attributable to common stockholders | $ | (1,249,774 | ) | $ | (330,342 | ) | |||
Basic weighted average outstanding shares of common stock | 12,385,640 | 8,285,000 | |||||||
Dilutive effect of common stock equivalents | - | - | |||||||
Dilutive weighted average common stock equivalents | 12,385,640 | 8,285,000 | |||||||
Net loss per share of voting and nonvoting | |||||||||
common stock Basic and Diluted | (0.10 | ) | $ | (04 | ) | ||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Purchase Commitments for each year | Remaining 2014 | $ | 32,000 | ||
2015 | 177,000 | ||||
2016 | 226,000 | ||||
2017 | 220,000 | ||||
2018 | 271,000 | ||||
Total | $ | 926,000 | |||
Minimum Annual Rental Payment | 2015 | 65,000 | |||
$ | 65,000 | ||||
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Segment Reporting [Abstract] | |||||||||||||
Operating Segment | 31-Dec-14 | ||||||||||||
Retail | Wholesale | Total | |||||||||||
Sales | $ | 300,439 | $ | 769,459 | $ | 1,069,898 | |||||||
Less excise taxes | 7,350 | 18,900 | 26,250 | ||||||||||
Net revenue | 293,089 | 750,559 | 1,043,648 | ||||||||||
Cost of goods sold | 246,249 | 633,213 | 879,462 | ||||||||||
Gross profit | $ | 46,840 | $ | 117,346 | $ | 164,186 | |||||||
Accounts receivable | $ | - | $ | 43,779 | $ | 43,779 | |||||||
Depreciation Expense | 7,138 | 162,264 | 169,402 | ||||||||||
Property and equipment, | |||||||||||||
net of accumulated depreciation | $ | 49,316 | $ | 942,823 | $ | 992,139 | |||||||
31-Dec-13 | |||||||||||||
Retail | Wholesale | Total | |||||||||||
Sales | $ | 274,676 | $ | 709,938 | $ | 984,614 | |||||||
Less excise taxes | 4,372 | 11.299 | 15,671 | ||||||||||
Net revenue | 270,304 | 698,639 | 968,943 | ||||||||||
Cost of goods sold | 191,685 | 492,906 | 684,591 | ||||||||||
Gross profit | $ | 78,619 | $ | 205,733 | $ | 284,352 | |||||||
Accounts receivable | $ | - | $ | 30,166 | $ | 30,166 | |||||||
Depreciation Expense | 3,414 | 99,792 | 103,206 | ||||||||||
Property and equipment, | |||||||||||||
net of accumulated depreciation | $ | 46,292 | $ | 374,544 | $ | 420,836 |
INCOME_TAX_FOR_YEAR_ENDED_DECM
INCOME TAX FOR YEAR ENDED DECMEBER 31, 2014 (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax For Year Ended Decmeber 31 2014 Tables | |||||||||
Schedule of Deferred tax Assets and Liabilities | Net operating loss carry forward | $ | 377,000 | ||||||
Accrued expenses – temporary differences | 47,000 | ||||||||
Total deferred tax asset | 424,000 | ||||||||
Valuation allowance | (424,000 | ) | |||||||
Net deferred asset | $ | - | |||||||
Net operating loss carry forward | $ | 56,000 | |||||||
Accrued expenses – temporary differences | 23,000 | ||||||||
Total deferred tax asset | 79,000 | ||||||||
Valuation allowance | (79,000 | ) | |||||||
Net deferred asset | $ | - | |||||||
Schedule of income tax provision | Current tax expense | $ | 345,000 | ||||||
Change in deferred tax asset | (345,000 | ) | |||||||
Total Income tax | $ | - | |||||||
Current tax expense | $ | 116,000 | |||||||
Effect of change in tax status | (37,000 | ) | |||||||
Change in deferred tax asset | (79,000 | ) | |||||||
Total Income tax | $ | - | |||||||
December 31, | |||||||||
2013 | |||||||||
Deferred tax (benefit) expense | $ | - | |||||||
Current provision | - | ||||||||
Unaudited Pro-Forma Total Provision for Income Taxes | |||||||||
Variance | - | ||||||||
As reported | $ | - | |||||||
Schedule of Effective Income Tax Rate Reconciliation | Federal income taxes | 34 | % | ||||||
State income tax | - | ||||||||
Change in deferred tax asset | (34 | )% | |||||||
Total income tax | - | ||||||||
Federal income taxes | 34 | % | |||||||
State income tax | - | ||||||||
Effect of change in income tax status | ( 8 | %) | |||||||
Change in deferred tax asset | ( 26 | %) | |||||||
Total income tax | - | ||||||||
2013 | |||||||||
Impact on | |||||||||
Amount | Rate | ||||||||
Income tax (benefit) expense | $ | (116,000 | ) | 35 | % | ||||
State tax, net of Federal effect | - | - | |||||||
Permanent differences | - | - | |||||||
Valuation allowance | 116,000 | 35 | % | ||||||
Total Pro-Forma Provision | $ | - | - | % | |||||
Schedule of Company's unaudited pro-forma deferred tax assets and liabilities | December 31, | ||||||||
2013 | |||||||||
Current Assets and Liabilities: | |||||||||
Accrued Expenses | $ | 156,000 | |||||||
Net operating loss | 298,000 | ||||||||
Total | 454,000 | ||||||||
Valuation Allowance | (454,000 | ) | |||||||
Unaudited Pro-Forma Total Deferred Tax Asset, Net | - | ||||||||
Variance | - | ||||||||
As reported | $ | - |
Organization_and_Basis_of_Pres1
Organization and Basis of Presentation (Details Narrative) | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | Oct. 11, 2011 |
Common Stock outstanding was exchanged | 12,715,220 | 10,616,854 | ||
Number of Authorised Shares Increased To | 50,000,000 | 50,000,000 | ||
Voting Common Stock [Member] | ||||
Common Stock outstanding was exchanged | 0 | 0 | 8,000,000 | |
Number of Authorised Shares Increased To | 100,000 | 100,000 | 100,000 | |
Nonvoting Common Stock [Member] | ||||
Common Stock outstanding was exchanged | 0 | 0 | 250,000 | |
Number of Authorised Shares Increased To | 100,000 | 100,000 | 100,000 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Bonus to Employees, shares Issued | 12,715,220 | 10,616,854 |
Purchased kegs | $130,000 | $134,000 |
Refundable keg deposits | 51,000 | 53,000 |
Revenue recognized | 1,070,000 | 985,000 |
Excise Tax | 26,250 | 15,671 |
Advertising, promotional and sales expenses | 155,982 | 174,014 |
Potential dilutive securities consists of warrants | 1,025,000 | 1,000,000 |
Accumulated deficit | 2,125,144 | 875,370 |
Net Loss | 1,249,774 | 330,342 |
Working Capital Defict | 457,000 | |
General and administrative | 1,284,302 | 415,091 |
Reclassification [Member] | ||
Advertising, promotional and sales expenses | 200,295 | |
General and administrative | 133,989 | |
Employee [Member] | ||
Bonus to Employees, shares Issued | 4,000 | 28,500 |
Fair Market Value per Shares | $0.50 | $0.50 |
Recorded stock based compensation | $2,000 | $14,250 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Kegs [Member] | |
Useful Life of Assets | 5 years |
Machinery and Equipment [Member] | |
Useful Life of Assets | 7 years |
Office equipment and furniture, and vehicles [Member] | |
Useful Life of Assets | 5 years |
Inventories_Details
Inventories (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Inventories Details | ||
Raw materials | $13,011 | $7,040 |
Work in progress | 53,145 | 22,400 |
Finished goods | 14,150 | 1,248 |
Total | $80,306 | $30,688 |
Other_Assets_Details
Other Assets (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Other Assets Details | ||
Rent deposit | $12,817 | $12,817 |
Equipment deposit | 1,140 | 119,346 |
Total | $13,957 | $132,163 |
Other_Assets_Details_Narrative
Other Assets (Details Narrative) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Other Assets Details Narrative | |
Deposit Transferred from Equipment to property and equipment for assets received and placed into service | $118,000 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Property and Equipment, Gross | $1,353,759 | $680,276 |
Less accumulated depreciation | -361,620 | -259,440 |
Property and Equipment, Net | 992,139 | 420,836 |
Machinery and Equipment [Member] | ||
Property and Equipment, Gross | 1,006,455 | 444,752 |
Kegs [Member] | ||
Property and Equipment, Gross | 130,445 | 134,345 |
Trucks [Member] | ||
Property and Equipment, Gross | 21,401 | 21,401 |
Office equipment and furniture [Member] | ||
Property and Equipment, Gross | 65,418 | 17,071 |
Leasehold Improvements [Member] | ||
Property and Equipment, Gross | $130,040 | $62,707 |
Property_and_Equipment_Details1
Property and Equipment (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Property And Equipment Details Narrative | ||
Fixed Assets Aquired | $169,000 | $160,000 |
Accumulated Depreciation | 96,000 | 67,000 |
Depreciation Expense | $169,000 | $103,000 |
Accrued_Expenses_and_Other_Cur2
Accrued Expenses and Other Current Liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Accrued Expenses And Other Current Liabilities Details | ||
Accrued officer compensation | $600,000 | $460,000 |
Refundable deposits on kegs | 50,834 | 52,689 |
Accrued payroll and payroll taxes | 14,958 | 22,791 |
Other accrued liabilities | 12,136 | 7,649 |
Accrued Expenses and Other Current Liabilities, net | $677,928 | $543,129 |
Notes_Payable_and_Capital_Leas2
Notes Payable and Capital Leases (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Notes Payable And Capital Leases Details | ||
Notes Payable | $1,459 | |
Capital leases | 12,923 | 27,665 |
Notes Payable And Capital Leases Gross | 12,923 | 29,124 |
Less Current portion | -7,910 | -24,182 |
Notes Payable and Capital Leases, Net | $5,013 | $4,942 |
Notes_Payable_and_Capital_Leas3
Notes Payable and Capital Leases (Details Narrative) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Apr. 30, 2012 | Sep. 30, 2013 | Nov. 26, 2012 | Oct. 01, 2012 | Dec. 31, 2011 | |
Interest Expense | ($2,507) | ($28,965) | |||||
Common Stock Issued against Debt | 12,715,220 | 10,616,854 | |||||
Third Party Unsecured Note [Member] | |||||||
Unsecured Notes Payable | 15,000 | ||||||
Interest Rate | 10.00% | ||||||
Monthly Installment, principal amount | 750 | ||||||
Monthly Installment, interest amount | 750 | ||||||
Period of Loan | 2 years | ||||||
Principal payment made | 1,500 | 8,400 | |||||
NUWA Group, LLC. [Member] | |||||||
Unsecured Notes Payable | 30,000 | ||||||
Interest Rate | 5.00% | ||||||
Principal payment made | 30,000 | ||||||
Interest Expense | 20 | 1,300 | |||||
Shareholder [Member] | |||||||
Unsecured Notes Payable | 84,000 | 10,260 | 14,280 | 50,490 | |||
Interest Rate | 10.00% | 10.00% | 10.00% | 10.00% | |||
Period of Loan | 2 years | 2 years | 2 years | ||||
Principal payment made | 158,925 | ||||||
Interest Expense | 0 | 13,000 | |||||
Property and Equipment purchased | 28,000 | ||||||
Interest Expense, Debt | 18,752 | ||||||
Principal and Interest Debt Total | 177,677 | ||||||
Common Stock Issued against Debt | 355,354 | ||||||
Common stock fair value | $0.50 | ||||||
Shareholder [Member] | Minimum [Member] | |||||||
Unsecured Notes Payable | 3,800 | ||||||
Shareholder [Member] | Maximum [Member] | |||||||
Unsecured Notes Payable | 28,195 | ||||||
Capital Lease Obligations [Member] | Equipment [Member] | |||||||
Capitalized Amount of Property | 139,000 | 139,000 | |||||
Capital Lease Obligations [Member] | Trucks [Member] | |||||||
Capitalized Amount of Property | 21,000 | 21,000 | |||||
Capital Lease Obligations [Member] | Office equipment and furniture, and vehicles [Member] | |||||||
Capitalized Amount of Property | 9,000 | ||||||
Capital Lease Obligations [Member] | Accumulated Depreciation [Member] | |||||||
Capitalized Amount of Property | $96,000 | $67,000 |
Notes_Payable_and_Capital_Leas4
Notes Payable and Capital Leases (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Minimum lease payments due | ||
2015 | $8,283 | |
2016 | 3,300 | |
2017 | 1,925 | |
Less amount representing interest | -585 | |
Capital Leases, Future Minimum Payments Due | 12,923 | 29,124 |
Less Current portion | -7,910 | -24,182 |
Long term portion | $5,013 | $4,942 |
Equity_Details
Equity (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
NUWA [Member] | |
Grant date | 17-Sep-13 |
Stock price | $0.15 |
Risk-free interest rate | 0.40% |
Expected dividend yield | 0.00% |
Expected term (in years) | 3 years |
Expected volatility | 100.00% |
Estimated forfeiture rate | 0 |
Savage & Weiner [Member] | |
Grant date | 26-Oct-14 |
Stock price | $0.50 |
Risk-free interest rate | 0.11% |
Expected dividend yield | 0.00% |
Expected term (in years) | 1 year 6 months |
Expected volatility | 161.00% |
Estimated forfeiture rate | 0 |
Equity_Details_2
Equity (Details 2) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Exercise Price | $0.99 | ||
Warrants Outstanding | 1,025,000 | 1,000,000 | |
Weighted Average Life of Outstanding Warrants in Months | 23 months | ||
NUWA [Member] | |||
Exercise Price | $1 | ||
Warrants Outstanding | 1,000,000 | ||
Weighted Average Life of Outstanding Warrants in Months | 22 months | ||
Savage & Weiner [Member] | |||
Exercise Price | $0.50 | ||
Warrants Outstanding | 25,000 | ||
Weighted Average Life of Outstanding Warrants in Months | 59 months |
Equity_Details_3
Equity (Details 3) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Equity Details 3 | ||
Beginning balance | 1,000,000 | |
Warrants issued | 25,000 | 1,000,000 |
Warrants exercised | ||
Ending balance, December 31 | 1,025,000 | 1,000,000 |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Earnings Per Share Details | ||
Net loss attributable to common stockholders | ($1,249,774) | ($330,342) |
Basic weighted average outstanding shares of common stock | 12,385,640 | 8,285,000 |
Dilutive effect of common stock equivalents | ||
Dilutive weighted average common stock equivalents | 12,385,640 | 8,285,000 |
Net loss per share of common stock Basic and Diluted | ($0.10) | ($0.04) |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Dec. 31, 2014 |
Purchase commitments [Abstract] | |
Remaining 2014 | $23,000 |
2015 | 177,000 |
2016 | 230,000 |
2017 | 229,000 |
2018 | 271,000 |
Total | $930,000 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details 2) (USD $) | Dec. 31, 2014 |
Commitments And Contingencies Details | |
2015 | $65,000 |
Total | $65,000 |
Commitments_and_Contingencies_3
Commitments and Contingencies (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Commitments And Contingencies Details | ||
Monthly base rent | $4,709 | |
Rent Expense | 48,000 | 43,000 |
Monthly keg rental fees for 36 months | 18,432 | 17,136 |
Prepaid expenses | 72,100 | |
Consulting agreement and services agreement fees | $726,800 |
Segment_Information_Details
Segment Information (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Sales | $1,069,898 | $984,614 |
Less excise taxes | 26,250 | 15,671 |
Net revenue | 1,043,648 | 968,943 |
Cost of goods sold | 879,462 | 684,591 |
Gross profit | 164,186 | 284,352 |
Accounts receivable | 43,779 | 30,166 |
Depreciation Expense | 169,402 | 103,206 |
Property and equipment, net of accumulated depreciation | 992,139 | 420,836 |
Retail Sale [Member] | ||
Sales | 300,439 | 274,676 |
Less excise taxes | 7,350 | 4,372 |
Net revenue | 293,089 | 270,304 |
Cost of goods sold | 246,249 | 191,685 |
Gross profit | 46,840 | 78,619 |
Accounts receivable | ||
Depreciation Expense | 7,138 | 3,414 |
Property and equipment, net of accumulated depreciation | 49,316 | 46,292 |
WholeSale [Member] | ||
Sales | 769,459 | 709,938 |
Less excise taxes | 18,900 | 11,299 |
Net revenue | 750,559 | 698,639 |
Cost of goods sold | 633,213 | 492,906 |
Gross profit | 117,346 | 205,733 |
Accounts receivable | 43,779 | 30,166 |
Depreciation Expense | 162,264 | 99,792 |
Property and equipment, net of accumulated depreciation | $942,823 | $374,544 |
Income_Tax_For_the_Period_Ende
Income Tax For the Period Ended December 31, 2014 (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Income Tax For Period Ended December 31 2014 Details | ||
Net operating loss carry forward | $377,000 | $56,000 |
Accrued expenses - temporary differences | 47,000 | 23,000 |
Total deferred tax asset | 424,000 | 79,000 |
Valuation allowance | -424,000 | -79,000 |
Net deferred asset |
Income_Tax_For_the_Period_Ende1
Income Tax For the Period Ended December 31, 2014 (Details 2) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax For Period Ended December 31 2014 Details 2 | ||
Current tax expense | $345,000 | $116,000 |
Effect of change in tax status | -37,000 | |
Change in deferred tax asset | -345,000 | -79,000 |
Total Income tax |
Income_Tax_For_the_Period_Ende2
Income Tax For the Period Ended December 31, 2014 (Details 3) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax For Period Ended December 31 2014 Details 3 | ||
Federal income taxes | 0.34% | 34.00% |
State income tax | ||
Effect of change in income tax status | -8.00% | |
Change in deferred tax asset | -34.00% | -26.00% |
Total income tax |
Income_Tax_For_the_Period_Ende3
Income Tax For the Period Ended December 31, 2014 (Details Narrative) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Income Tax For Period Ended December 31 2014 Details Narrative | |
Net Loss Before Income Tax | $1,265,000 |
Subsequent_Events_Details_Narr
Subsequent Events (Details Narrative) (USD $) | 0 Months Ended | ||||
Jan. 16, 2015 | Mar. 26, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Apr. 01, 2015 | |
Promissory Notes Value | $1,459 | ||||
Common Stock, shares issued | 12,715,220 | 10,616,854 | |||
Shares Issued Value in exchange of Businness Acquired | 12,716 | 10,617 | |||
B&R Liquid Adventure, LLC [Member] | |||||
Promissory Notes Value | 140,000 | ||||
Inventory, Fixed Assets and Intellectual Property Acquired | 275,000 | ||||
Common Stock, shares issued | 1,479,290 | ||||
Shares Issued Value in exchange of Businness Acquired | 50,000 | ||||
Cash Payment made for Business Acquisation | 260,000 | ||||
Subsequent Event [Member] | |||||
Loan Payable at Principal Amouunt | 124,322 | ||||
Monthly Installment | 7,539 | ||||
Monthly Installment, principal amount | 2,590 | ||||
Monthly Installment, interest amount | 628 | ||||
Period of Loan | 4 years | ||||
Subsequent Event [Member] | Promissory Notes [Member] | |||||
Period of Loan | 60 days | ||||
Promissory Notes Value | $50,000 | ||||
Interest Rate | 0.08 | ||||
Principle loan fee | 0.015 | ||||
Restricted common stock | 230,000 |