Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 19, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | American Brewing Company, Inc. | |
Entity Central Index Key | 1,579,823 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Amendment Flag | true | |
Amendment Description | The Company is filing this Amendment No. 2 on Form 10-Q/A to amend our Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, originally filed with the Securities and Exchange Commission on August 19, 2015 (the "Original Filing"), to restate our unaudited consolidated financial statements and related footnote disclosures as of June 30, 2015 and for the three and six month periods ended June 30, 2015. | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 12,280,454 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,015 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
CURRENT ASSETS: | |||
Property and equipment, net of accumulated depreciation of 479,164 and $36,541, respectively | $ 991,798 | ||
Common Class NP A [Member] | |||
STOCKHOLDERS' EQUITY: | |||
Common stock, no par value, 40,000,000 shares authorized;1,366,042 shares issued and outstanding | $ (35,000) | ||
Series A Preferred Stock [Member] | |||
STOCKHOLDERS' EQUITY: | |||
Series A preferred stock, $0.001 par value: 250,000 shares authorized, 250,000 shares issued and outstanding | 250 | ||
Series B Preferred Stock [Member] | |||
STOCKHOLDERS' EQUITY: | |||
Series B Preferred stock, $0.001 par value: 300,000 shares authorized, 254,807 shares issued and outstanding | 255 | ||
Series A Preferred NP Stock [Member] | |||
STOCKHOLDERS' EQUITY: | |||
Series A Preferred stock, no par value: 8,000,000 shares authorized, 6,205,558 shares issued and outstanding | 4,327,628 | ||
Restated Successor [Member] | |||
CURRENT ASSETS: | |||
Cash | 66,453 | ||
Accounts receivable, net of allowance for doubtful accounts of | 330,151 | ||
Inventories | 443,592 | ||
Prepaid expenses and other current assets | 45,140 | ||
Total current assets | 885,336 | ||
Property and equipment, net of accumulated depreciation of 479,164 and $36,541, respectively | 991,798 | ||
Goodwill | 717,914 | ||
Other assets | 22,204 | ||
Total assets | 2,617,252 | ||
CURRENT LIABILITIES: | |||
Accounts payable | 372,369 | ||
Current portion of notes payable and capital leases, net of unamortized discounts | $ 146,157 | ||
Convertible notes payable to related parties | |||
Factoring payable | $ 115,420 | ||
Accrued expenses and other current liabilities | $ 209,801 | ||
Reserve for legal settlement | |||
Total current liabilities | $ 843,747 | ||
Note payable and capital leases, less current portion, net of unamortized discounts | 315,343 | ||
Related party debt, less current portion, net of unamortized discounts | 19,395 | ||
Total liabilities | $ 1,178,485 | ||
COMMITMENTS AND CONTINGENCIES | |||
STOCKHOLDERS' EQUITY: | |||
Common Stock, $0.001 par value; 50,000,000 shares authorized; 13,045,220, and 12,715,220 shares issued and outstanding, respectively | $ 15,404 | ||
Common stock, no par value, 40,000,000 shares authorized;1,366,042 shares issued and outstanding | |||
Series A preferred stock, $0.001 par value: 250,000 shares authorized, 250,000 shares issued and outstanding | $ 250 | ||
Series B Preferred stock, $0.001 par value: 300,000 shares authorized, 254,807 shares issued and outstanding | $ 255 | ||
Series A Preferred stock, no par value: 8,000,000 shares authorized, 6,205,558 shares issued and outstanding | |||
Additional paid-in capital | $ 3,798,081 | ||
Accumulated deficit | (2,375,223) | ||
Total stockholders' (deficit) equity | 1,438,767 | ||
Total liabilities and stockholders' (deficit) equity | $ 2,617,252 | ||
Predecessor [Member] | |||
CURRENT ASSETS: | |||
Cash | $ 125,312 | 125,312 | |
Accounts receivable, net of allowance for doubtful accounts of | 254,705 | ||
Inventories | 286,070 | 286,070 | |
Prepaid expenses and other current assets | 13,865 | ||
Total current assets | 679,952 | ||
Property and equipment, net of accumulated depreciation of 479,164 and $36,541, respectively | $ 65,453 | $ 65,453 | |
Goodwill | |||
Other assets | |||
Total assets | $ 745,405 | ||
CURRENT LIABILITIES: | |||
Accounts payable | 616,719 | ||
Current portion of notes payable and capital leases, net of unamortized discounts | 3,689 | ||
Convertible notes payable to related parties | $ 120,000 | ||
Factoring payable | |||
Accrued expenses and other current liabilities | $ 106,899 | ||
Reserve for legal settlement | 342,924 | ||
Total current liabilities | $ 1,190,231 | ||
Note payable and capital leases, less current portion, net of unamortized discounts | |||
Related party debt, less current portion, net of unamortized discounts | |||
Total liabilities | $ 1,190,231 | ||
COMMITMENTS AND CONTINGENCIES | |||
STOCKHOLDERS' EQUITY: | |||
Common Stock, $0.001 par value; 50,000,000 shares authorized; 13,045,220, and 12,715,220 shares issued and outstanding, respectively | |||
Common stock, no par value, 40,000,000 shares authorized;1,366,042 shares issued and outstanding | $ (35,000) | ||
Series A preferred stock, $0.001 par value: 250,000 shares authorized, 250,000 shares issued and outstanding | |||
Series B Preferred stock, $0.001 par value: 300,000 shares authorized, 254,807 shares issued and outstanding | |||
Series A Preferred stock, no par value: 8,000,000 shares authorized, 6,205,558 shares issued and outstanding | $ 4,327,628 | ||
Additional paid-in capital | 126,328 | ||
Accumulated deficit | (4,863,782) | ||
Total stockholders' (deficit) equity | (444,826) | ||
Total liabilities and stockholders' (deficit) equity | $ 745,405 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Common Class A [Member] | |||
Common Stock, par value | $ 0 | ||
Common Stock, shares authorized | 40,000,000 | ||
Common Stock, shares issued | 0 | ||
Common Stock, shares outstanding | 0 | ||
Common Class NP A [Member] | |||
Common Stock, par value | $ 0 | ||
Common Stock, shares authorized | 40,000,000 | ||
Common Stock, shares issued | 1,366,042 | ||
Common Stock, shares outstanding | 1,366,042 | ||
Series A Preferred Stock [Member] | |||
Series A Preferred Stock, par value | $ 0.001 | ||
Series A Preferred Stock, shares authorized | 250,000 | ||
Series A Preferred Stock, shares issued | 250,000 | ||
Series A Preferred Stock, shares outstanding | 250,000 | ||
Series B Preferred Stock [Member] | |||
Series A Preferred Stock, par value | $ 0.001 | ||
Series A Preferred Stock, shares authorized | 300,000 | ||
Restated Successor [Member] | |||
Common Stock, par value | $ 0.001 | ||
Common Stock, shares authorized | 50,000,000 | ||
Common Stock, shares issued | 15,403,925 | ||
Common Stock, shares outstanding | 15,403,925 | ||
Common Stock No Par value, par value | $ 0 | ||
Common Stock No Par value, shares authorized | 40,000,000 | ||
Common Stock No Par value, shares issued | 0 | ||
Common Stock No Par value, shares outstanding | 0 | ||
Series A Preferred Stock, par value | $ 0.001 | ||
Series A Preferred Stock, shares authorized | 250,000 | ||
Series A Preferred Stock, shares issued | 250,000 | ||
Series A Preferred Stock, shares outstanding | 250,000 | ||
Series B Preferred Stock, par value | $ 0.001 | ||
Series B Preferred Stock, shares authorized | 300,000 | ||
Series B Preferred Stock, shares issued | 254,807 | ||
Series B Preferred Stock, shares outstanding | 254,807 | ||
Series A No Par value Preferred Stock, par value | $ 0 | ||
Series A No Par value Preferred Stock, shares authorized | 8,000,000 | ||
Series A No Par value Preferred Stock, shares issued | 0 | ||
Series A No Par value Preferred Stock, shares outstanding | 0 | ||
Predecessor [Member] | |||
Common Stock, par value | $ 0.001 | ||
Common Stock, shares authorized | 50,000,000 | ||
Common Stock, shares issued | 0 | ||
Common Stock, shares outstanding | 0 | ||
Common Stock No Par value, par value | $ 0 | ||
Common Stock No Par value, shares authorized | 40,000,000 | ||
Common Stock No Par value, shares issued | 1,366,042 | ||
Common Stock No Par value, shares outstanding | 1,366,042 | ||
Series A Preferred Stock, par value | $ 0.001 | ||
Series A Preferred Stock, shares authorized | 250,000 | ||
Series A Preferred Stock, shares issued | 0 | ||
Series A Preferred Stock, shares outstanding | 0 | ||
Series B Preferred Stock, par value | $ 0.001 | ||
Series B Preferred Stock, shares authorized | 300,000 | ||
Series B Preferred Stock, shares issued | 0 | ||
Series B Preferred Stock, shares outstanding | 0 | ||
Series A No Par value Preferred Stock, par value | $ 0 | ||
Series A No Par value Preferred Stock, shares authorized | 8,000,000 | ||
Series A No Par value Preferred Stock, shares issued | 6,205,558 | ||
Series A No Par value Preferred Stock, shares outstanding | 6,205,558 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Jun. 30, 2014 | |
REVENUES | $ 944,916 | |||
Net revenue | 940,007 | |||
Cost of goods sold | 613,379 | |||
GROSS PROFIT | 326,628 | |||
Restated Successor [Member] | ||||
REVENUES | 944,916 | |||
Less: Excise taxes | (4,909) | |||
Net revenue | 940,007 | |||
Cost of goods sold | 697,284 | |||
GROSS PROFIT | 242,723 | |||
OPERATING EXPENSES: | ||||
Advertising, promotion and selling | 88,281 | |||
General and administrative | 547,933 | |||
Gain on forgiveness of accrued payroll | (500,000) | |||
Legal and professional | 107,974 | |||
Total operating expenses | 244,188 | |||
LOSS FROM OPERATIONS | (1,465) | |||
OTHER INCOME (EXPENSE): | ||||
Interest expense | $ (73,193) | |||
Interest income | ||||
Total other income (expense) | $ (73,193) | |||
NET INCOME (LOSS) | $ (74,658) | |||
Weighted Average Number of Common Shares Outstanding - Basic | 14,763,091 | |||
Weighted Average Number of Common Shares Outstanding - Diluted | 14,763,091 | |||
NET INCOME (LOSS) PER SHARE - BASIC | $ (0.01) | |||
NET INCOME (LOSS) PER SHARE - DILUTED | $ (0.01) | |||
Predecessor [Member] | ||||
REVENUES | $ 576,863 | $ 808,726 | $ 1,347,493 | |
Less: Excise taxes | ||||
Net revenue | $ 576,863 | $ 808,726 | 1,347,493 | |
Cost of goods sold | 413,582 | 495,858 | 895,287 | |
GROSS PROFIT | 163,281 | 312,868 | 452,206 | |
OPERATING EXPENSES: | ||||
Advertising, promotion and selling | 51,516 | 145,909 | 275,274 | |
General and administrative | $ 134,124 | $ 151,490 | $ 303,047 | |
Gain on forgiveness of accrued payroll | ||||
Legal and professional | $ 47,369 | $ 141,333 | $ 432,870 | |
Total operating expenses | 233,009 | 438,732 | 1,011,191 | |
LOSS FROM OPERATIONS | (69,728) | (125,864) | (558,985) | |
OTHER INCOME (EXPENSE): | ||||
Interest expense | $ (2,294) | (433) | (884) | |
Interest income | 29 | 88 | ||
Total other income (expense) | $ (2,294) | (404) | (796) | |
NET INCOME (LOSS) | $ (72,022) | $ (126,268) | $ (559,781) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | |
Restated Successor [Member] | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | $ (74,658) | ||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||
Depreciation and amortization | 60,631 | ||
Amortization of debt discount | 47,699 | ||
Gain on forgiveness of accrued payroll | (500,000) | ||
Common stock issued for services | 298,080 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | (280,118) | ||
Inventories | (140,359) | ||
Prepaid expenses and other current assets | 41,595 | ||
Accounts payable | 212,921 | ||
Accrued expenses and other current liabilities | $ 29,369 | ||
Reserve for legal settlement | |||
Net cash (used in) provided by operating activities | $ (304,840) | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of property and equipment | (15,320) | ||
Repayment of note issued for acqusition of assets of B&R Liquid Adventure | (140,000) | ||
Acqusition of assets of B&R Liquid Adventure | (260,000) | ||
Net cash used in investment activities | (415,320) | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from notes payable | 288,320 | ||
Net factoring advances | 115,420 | ||
Issuance of stock for cash | 61,200 | ||
Issuance of Series B Preferred stock for cash | $ 25,000 | ||
Payments on convertible notes payable to related parties | |||
Repayment of notes payable and capital lease obligations | $ (110,712) | ||
Net cash provided by (used in) financing activities | 328,478 | ||
NET CHANGE IN CASH | (391,682) | ||
CASH AT BEGINNING OF PERIOD | 458,135 | ||
CASH AT END OF PERIOD | $ 66,453 | $ 458,135 | |
SUPPLEMENTAL INFORMATION: | |||
Cash paid during the period for: Interest | |||
Cash paid during the period for: Income taxes | |||
NONCASH INVESTING AND FINANCING ACTIVITIES: | |||
Debt issued for acquisition of B&R Liquid Adventure | $ 140,000 | ||
Common stock issued for acquisition of B&R Liquid Adventure | $ 500,000 | ||
Preferred stock issued for settlement of accounts payable | |||
Predecessor [Member] | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | (72,022) | $ (559,781) | |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||
Depreciation and amortization | $ 5,100 | $ 9,963 | |
Amortization of debt discount | |||
Gain on forgiveness of accrued payroll | |||
Common stock issued for services | |||
Changes in operating assets and liabilities: | |||
Accounts receivable | $ (23,277) | $ (32,313) | |
Inventories | 105,419 | (221,970) | |
Prepaid expenses and other current assets | 5,695 | (1,798) | |
Accounts payable | (5,158) | 363,006 | |
Accrued expenses and other current liabilities | 3,473 | 32,745 | |
Reserve for legal settlement | 5,100 | 185,845 | |
Net cash (used in) provided by operating activities | 24,330 | (224,303) | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of property and equipment | $ (11,688) | $ (4,929) | |
Repayment of note issued for acqusition of assets of B&R Liquid Adventure | |||
Acqusition of assets of B&R Liquid Adventure | |||
Net cash used in investment activities | $ (11,688) | $ (4,929) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from notes payable | |||
Net factoring advances | |||
Issuance of stock for cash | |||
Issuance of Series B Preferred stock for cash | |||
Payments on convertible notes payable to related parties | $ (69,000) | ||
Repayment of notes payable and capital lease obligations | (1,874) | $ (3,748) | |
Net cash provided by (used in) financing activities | (70,874) | (3,748) | |
NET CHANGE IN CASH | (58,232) | (232,980) | |
CASH AT BEGINNING OF PERIOD | $ 67,080 | 125,312 | 286,258 |
CASH AT END OF PERIOD | 67,080 | $ 53,278 | |
SUPPLEMENTAL INFORMATION: | |||
Cash paid during the period for: Interest | $ 1,861 | ||
Cash paid during the period for: Income taxes | |||
NONCASH INVESTING AND FINANCING ACTIVITIES: | |||
Debt issued for acquisition of B&R Liquid Adventure | |||
Common stock issued for acquisition of B&R Liquid Adventure | |||
Preferred stock issued for settlement of accounts payable | $ 16,532 |
NOTE 1 - NATURE OF OPERATIONS,
NOTE 1 - NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES American Brewing Company, Inc. (the "Company") was formed under the laws of the State of Washington on April 26, 2010. The Company is a micro-brewing company based out of Edmonds, Washington. The Company also manufactures and sells búcha Live Kombucha, a gluten free, organic certified, sparkling kombucha tea. The Company acquired the búcha Live Kombucha brand and the assets related to the production and sale of it pursuant to an Asset Purchase Agreement dated April 1, 2015 (see Note 3). The búcha Live Kombucha brand is distributed in major health and grocery chains throughout North America. Basis of Presentation The accompanying unaudited interim consolidated financial statements as of June 30, 2015 of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") 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 10-K filed with the SEC on April 15, 2015. 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 2014 as reported in the Form 10-K have been omitted. The ve been presented on a comparative basis. For periods after the acquisition of the (see Note 3), the Company is referred to as the Successor and its results of operations combines the brewery operations and the kombuch tea operations. For periods prior to the acquisition of the the Company is referred to as the Predecessor and its results of operations includes only the . A black line separates the Predecessor and Successor financial statements to highlight the lack of comparability between these two periods. Concentrations Receivables arising from sales of the Company's products are not collateralized. As of June 30, 2015, four customers represented approximately 80.2% (36.2%, 18.3%, 14.1% and 11.6%) of accounts receivable and as of December 31, 2014, four customers represented approximately 75.1% (25.4%, 24.1%, 13.5% and 12.1%) of accounts receivable. For the three months ended June 30, 2015 (Successor), three customers represented approximately 59.5% (24.4%, 22.4% and 12.7%) of revenue. For the three months ended March 31, 2015 (Predecessor), three customers represented approximately 85.6% (30.2%, 29.4% and 26.0%) of revenue. For the six months ended June 30, 2014 (Predecessor), four customers represented approximately 87.0% (30.3%, 22.7%, 17.5% and 16.5%) of revenue. For the three months ended June 30, 2014 (Predecessor), four customers represented approximately 85.8% (34.6%, 18.8%, 16.5% and 15.9%) of revenue. Accounts Receivable Factoring Arrangement with Recourse On April 2, 2015, the Company entered into a factoring agreement to sell, with recourse, certain receivables to an unrelated third-party financial institution. Under the terms of the factoring agreement, the Company receives an advance of 80% of qualified receivables and maximum amount of outstanding advances at any one time will not exceed $500,000. During the three months ended June 30, 2015, the Company received net advances from the factoring of accounts receivable of $115,420 and recognized a loss on factoring of $5,647. The Company pays factoring fees associated with the sale of receivables at the rate of 0.67% of the gross face value of the receivable for every ten-day period or fraction thereof from the date of the advance until the receivable is paid in full. The outstanding factoring payable as of June 30, 2015 was $115,420. Goodwill Goodwill represents the excess of the purchase price of acquired businesses over the estimated fair value of the identifiable net assets acquired. Goodwill is not amortized but is tested for impairment at least annually at the reporting unit level or more frequently if events or changes in circumstances indicate that the asset might be impaired. The goodwill impairment test is applied by performing a qualitative assessment before calculating the fair value of the reporting unit. If, on the basis of qualitative factors, it is considered not more likely than not that the fair value of the reporting unit is less than the carrying amount, further testing of goodwill for impairment would not be required. Otherwise, goodwill impairment is tested using a two-step approach. The first step involves comparing the fair value of a company's reporting units to their carrying amount. If the fair value of the reporting unit is determined to be greater than its carrying amount, there is no impairment. If the reporting unit's carrying amount is determined to be greater than the fair value, the second step must be completed to measure the amount of impairment, if any. The second step involves calculating the implied fair value of goodwill by deducting the fair value of all tangible and intangible assets, excluding goodwill, of the reporting unit from the fair value of the reporting unit as determined in step one. The implied fair value of the goodwill in this step is compared to the carrying value of goodwill. If the implied fair value of the goodwill is less than the carrying value of the goodwill, an impairment loss equivalent to the difference is recorded. There was no impairment of goodwill recognized during 2015. |
NOTE 3 - GOING CONCERN AND MANA
NOTE 3 - GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS | NOTE 2 GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS The accompanying unaudited interim consolidated 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. Since inception, the Company has financed its operations primarily through equity and debt financings. As of June 30, 2015, the Company had an accumulated deficit of $2,281,348 and used cash in operating activities of $189,420. These matters, among others, raise substantial doubt about the Company's ability to continue as a going concern. The Company recognizes it will need to raise additional capital in order to fund operations and execute its business plan. There is no assurance that additional financing will be available when needed or that management will be able to obtain financing on terms acceptable to the Company and whether the Company will become profitable and generate positive operating cash flow. 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. If the Company is unable to raise sufficient additional funds on favorable terms, it will have to develop and implement a plan to raise capital through the issuance of debt or equity on less favorable terms until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful. If the Company is unable to obtain financing on a timely basis, the Company could be forced scale back its business and/or pursue other strategic avenues to develop its business. These unaudited interim consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. |
NOTE 4 - ACQUISITION OF ASSETS
NOTE 4 - ACQUISITION OF ASSETS OF B&R LIQUID ADVENTURE, LLC | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
ACQUISITION OF ASSETS OF B&R LIQUID ADVENTURE, LLC | NOTE 3 ACQUISITION OF ASSETS OF B&R LIQUID ADVENTURE, LLC On April 1, 2015, the Company entered into an Asset Purchase Agreement whereby it acquired substantially all of the operating assets of B&R Liquid Adventure, LLC, a California Limited Liability Company ("B&R") (the "Acquisition"). B&R is engaged in the manufacture of búcha 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. Kombucha, a fermented, probiotic tea beverage, offers a myriad of health benefits. Sales of kombucha have been steadily growing as it projects to reach $500 million for 2015 according to WholeFoods Magazine. With the acquisition of the búcha Live Kombucha brand, which features eight flavors, the Company plans to leverage its beer-making expertise to expand distribution in major health and grocery chains throughout North America. The Company believes its búcha Live Kombucha brand differentiates itself from other kombucha producers through its proprietary extraction process which reduces the sour taste and may appeal to a larger audience. Pursuant to the Acquisition, the purchase price of the operating assets of B&R was a cash payment of $260,000, a secured promissory note in an amount of $140,000 and the issuance 1,479,290 shares of common stock valued at $500,000. In addition, the Company assumed $121,416 of scheduled liabilities. The Asset Purchase Agreement provided that the shares were issued with "Price Protection" for a period of 18 months, meaning that on the date that is 18 months from the date of the Acquisition, if the market value of the common stock issued pursuant to the Acquisition is less than $500,000, the Company shall issue additional shares so the aggregate amount of shares held by B&R is equal to a market value of $500,000 based on the average closing bid price of the common stock for the five days prior thereto. The Company determined the fair value of the 1,479,290 shares issued as of June 30, 2015 to be higher than $500,000, and thus no additional shares were due as of June 30, 2015. The Company accounted for its acquisition of the operating assets of B&R using the acquisition method of accounting. B&R's inventory, fixed assets and identifiable intangible assets acquired and liabilities assumed were recorded based upon their estimated fair values as of the closing date of the Acquisition. The excess of purchase price over the value of the net assets acquired was recorded as goodwill. The Company's purchase price allocation is preliminary. The fair values of acquired assets and liabilities may be further adjusted as additional information becomes available during the measurement period. Additional information that may become available subsequently and may result in changes in the values allocated to various assets and liabilities includes, but is not limited to any changes in the values allocated to tangible and identified intangible assets acquired and liabilities assumed during the measurement period and may result in material adjustments to goodwill. The following table summarizes the preliminary acquisition accounting and the tangible and intangible assets acquired as of the date of acquisition: Total Purchase Consideration Cash $ 260,000 Notes payable 140,000 Common stock issued 500,000 $ 900,000 The following table summarizes the estimated fair values of the assets acquired: Net assets acquired: Inventory $ 249,902 Property and equipment, net 53,600 Intangible assets acquired - Assumption of scheduled liabilities (121,416 ) 182,086 Goodwill 717,914 $ 900,000 Goodwill is the excess of the purchase price over the preliminary fair value of the underlying net tangible and identifiable intangible assets. In accordance with applicable accounting standards, goodwill is not amortized but instead is tested for impairment at least annually or more frequently if certain indicators are present. |
NOTE 5 - INVENTORIES
NOTE 5 - INVENTORIES | 6 Months Ended |
Jun. 30, 2015 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 4 INVENTORIES Inventories consist of hops, sugar, brewing materials, tea ingredients, bulk packaging and finished goods. The cost elements of work in process and finished goods inventory consist of raw materials and direct labor. 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 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. Inventories are stated at the lower of cost, determined on the first-in, first-out basis, or market. Inventories consisted of the following as of: June 30, 2015 December 31, 2014 Successor Predecessor Raw materials $ 58,585 $ 83,892 Work-in-process 25,168 - Finished goods 408,443 202,178 $ 492,196 $ 286,070 |
NOTE 6 - PROPERTY AND EQUIPMENT
NOTE 6 - PROPERTY AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
NOTE 5 - PROPERTY AND EQUIPMENT | NOTE 5 PROPERTY AND EQUIPMENT Property and equipment consisted of the following as of: June 30, 2015 December 31, 2014 Successor Predecessor Property and equipment $ 1,470,962 $ 101,994 Less: accumulated depreciation (479,164 ) (36,541 ) $ 991,798 $ 65,453 Depreciation expense, computed on the basis of three to five year useful lives for all property and equipment, was $60,631, $5,100 and $9,963 for the three months ended June 30, 2015 (Successor), the three months ended March 31, 2015 (Predecessor), and the six months ended June 30, 2014 (Predecessor), respectively. |
NOTE 7 - NOTES PAYABLE AND CAPI
NOTE 7 - NOTES PAYABLE AND CAPITAL LEASES | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
NOTES PAYABLE AND CAPITAL LEASES | NOTE 6 NOTES PAYABLE AND CAPITAL LEASES Notes payable and capital leases consisted of the following as of: June 30, 2015 December 31, 2014 Successor Predecessor Notes payable, net of unamortized discounts of $135,312 $ 454,992 $ - Capital lease obligations 6,508 3,689 461,500 3,689 Less: current portion (146,157 ) (3,689 ) Long-term portion, net of unamortized discounts of $135,312 $ 315,343 $ - Notes Payable In January 2015, the Company entered into an Equipment Financing Agreement with Pinnacle Capital Partners for $124,322. The note requires 48 monthly payments of $3,218 each of which include $628 in interest. The note cannot be prepaid. As of June 30, 2015, the remaining balance of this note is $108,154. The note is secured by the underlying assets. In March 2015, the Company entered into two 60-day promissory notes for cash proceeds of $50,000 each. Each note has a 1.5% loan fee and bears an interest rate of 8% per annum. The loan fees resulted in aggregate discounts to the notes of $2,250. The notes also included an equity payment totaling 230,000 shares of common stock that were issued with the debt. The Company has allocated the loan proceeds among the debt and the stock based upon relative fair value. The relative fair value of the stock was determined to be $9,020 and it was recorded as a debt discount. The two notes were fully paid off during the three months ended June 30, 2015. In March 2015, the Company borrowed $200,000 used for the Acquisition (see Note 3). The note bears interest at 10% per annum and is due and payable beginning June 30, 2015 maturing on March 31, 2020. Payments of interest are required quarterly. Should the Company be successful in raising $2,000,000 or more in funding the entire balance of the note will be due immediately. The note was issued in conjunction with an equity payment totaling 176,734 shares of Series B preferred stock that was issued with the debt. The Company has allocated the loan proceeds among the debt and the stock based upon relative fair value. The relative fair value of the stock was determined to be $142,434 and was recorded as a debt discount. As of June 30, 2015, no payment has been made on this note and the remaining balance of this note is $64,688, net of the unamortized discount. The discount will be amortized over the life of the loans to interest expense and $7,122 was amortized during the three months ended June 30, 2015. On April 1, 2015, a promissory note in an amount of $140,000 was issued pursuant to the Acquisition (see Note 3). The note bears interest at 10% per annum and it due on June 30, 2015. The note was fully paid off, and the balance as of June 30, 2015 is zero. In April 2015, the Company borrowed $50,000 under a 90-day promissory note. The note bears interest at 3% per month and is due on July 21, 2015. As of June 30, 2015, the remaining balance of this note is $50,000. In June 2015, the Company entered into an Equipment Financing Agreement with Pinnacle Capital Partners for $125,000. The note requires 48 monthly payments of $3,236 each of which include $632 in interest. The note cannot be prepaid. As of June 30, 2015, the remaining balance of this note is $121,764. The note is secured by the underlying assets. In June 2015, the Company entered into an Equipment Financing Agreement with Pinnacle Capital Partners for $113,320. The note requires 48 monthly payments of $2,934 each of which include $573 in interest. The note cannot be prepaid. As of June 30, 2015, the remaining balance of this note is $110,386. The note is secured by the underlying assets. Capital Leases The Company has entered into various capital lease agreements to obtain property and equipment for operations. These agreements range from two to three years with interest rates ranging from 5% to 6%. These leases are secured by the underlying leased property and equipment. |
NOTE 8 - RELATED PARTY DEBT
NOTE 8 - RELATED PARTY DEBT | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
NOTE 7 - RELATED PARTY DEBT | NOTE 7 RELATED PARTY DEBT Related Party debt consisted of the following as of: June 30, 2015 December 31, 2014 Successor Predecessor Convertible Notes payable to related parties $ - $ 120,000 Related party debt, net of unamortized discounts of $40,605 19,395 - 19,395 120,000 Less: current portion - (120,000 ) $ 19,395 $ - In March 2015, the Company entered into a 60 day-promissory note for cash proceeds of $50,000 with a member of management. The note has a 1.5% loan fee and bears an interest rate of 8% per annum. The loan fee resulted in a discount to the note of $750. The note also included an equity payment of 200,000 shares of common stock that were issued with the debt. The Company has allocated the loan proceed among the debt and the stock based upon relative fair value. The relative fair value of the stock was determined to be $29,420 and it was recorded as a debt discount. The note was fully paid off during the three months ended June 30, 2015. In March 2015, the Company borrowed $60,000 from a member of management used for the Acquisition (see Note 3). The note bears interest at 10% per annum and is due and payable beginning June 30, 2015 maturing on March 31, 2020. Payments of interest are required quarterly. Should the Company be successful in raising $2,000,000 or more in funding the entire balance of the note will be due immediately. The note was issued in conjunction with an equity payment totaling 53,073 shares of Series B preferred stock that was issued with the debt. The Company has allocated the loan proceeds among the debt and the stock based upon relative fair value. The relative fair value of the stock was determined to be $42,742 and was recorded as a debt discount. As of June 30, 2015, no payment has been made on this note and the remaining balance of this note is $19,395, net of the unamortized discount. The discount will be amortized over the life of the loans to interest expense and $2,137 was amortized during the three months ended June 30, 2015. Accrued Officer Compensation and Gain on Forgiveness of Accrued Payroll In April 2015, the Company and two officers agreed to forgive $500,000 of the $600,000 in accrued officer compensation. This resulted in the Company recognizing a gain of $500,000 on forgiveness of accrued payroll during the three months ended June 30, 2015. No payments have been made on the remaining balance of $100,000, which is recorded as an accrued liability on the accompanying unaudited interim consolidated balance sheet as of June 30, 2015. |
NOTE 9 - COMMITMENTS AND CONTIN
NOTE 9 - COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 8 COMMITMENTS AND CONTINGENCIES Hops Purchase Commitments The Company entered into contracts for the supply of a portion of its hops requirements. These purchase contracts extend through crop year 2021 and specify both the quantities and prices to which the Company is committed. As of June 30, 2015, hops purchase commitments outstanding was approximately $890,500. As of June 30, 2015, projected cash outflows under hops purchase commitments for each of the remaining years under the contracts are as follows: Remaining 2015 $ 51,900 2016 232,650 2017 231,950 2018 273,200 2019 38,200 2020 31,650 2021 30,950 $ 890,500 These commitments are not accrued in the accompanying unaudited interim consolidated balance sheet as of June 30, 2015. 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 In December 2013, the Company entered into a 25-month facilities lease with a third party for its brewery operations. 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 include common area maintenance charges, taxes, and other charges. In December 2014, the Company amended this lease to add an additional 2,016 square feet of warehouse space. As of June 30, 2015, the minimum monthly lease payment was $5,510. Effective April 1, 2015, the Company assumed a facilities lease with a third party for the manufacture of its búcha Live Kombucha tea. This lease was executed in August 31, 2013 with a lease term of 31 months, expiring February 29, 2016. The monthly base rent is $2,673 for first 12 months, $2,748 for next 12 months, and $2,836 for the balance of the term. Monthly rent payments also include common area maintenance charges, taxes, and other charges. Future minimum lease payments under operating leases are approximately as follows: Remaining 2015 $ 50,076 2016 5,672 $ 55,748 Rent expense for both facilities was approximately $24,500 for the three months ended June 30, 2015. Consulting Agreement During the year ended December 31, 2014, the Company issued 1,302,500 shares of common stock under various consulting agreements for services to be provided over terms from three to twelve months. The Company estimated the fair market value to be $0.56 per share at the time of issuance and recorded $726,800 as a prepaid expense to be amortized to general and administrative expense over the term of the agreements. A total of $57,138 was amortized during the six months ended June 30, 2015 with the remaining balance of $14,962 as a prepaid expense on the accompanying unaudited interim consolidated balance sheet as of June 30, 2015. 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 to be amortized to general and administrative expense over the term of the agreement. A total of $2,594 was amortized during the three months ended June 30, 2015, with the remaining balance of $1,295 as a prepaid expense asset on the accompanying unaudited interim consolidated balance sheet as of June 30, 2015. Legal In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. There are no such matters that are deemed material to the consolidated unaudited interim consolidated financial statements as of June 30, 2015. |
NOTE 10 - STOCKHOLDERS' EQUITY
NOTE 10 - STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 9 STOCKHOLDERS' EQUITY Preferred Stock The Company is authorized to issue 1,000,000 shares of preferred stock, each having a par value of $0.001, with voting, distribution, dividend and redemption rights, and liquidation preferences and conversions as designated by the board of directors. The board of directors has designated 250,000 shares as Series A Preferred stock, par value $.001 per share ("Series A Preferred"). Each share of Series A Preferred shall have 500 votes for any election or other vote placed before the shareholders of the Company. During the six months ended June 30, 2015, no new shares were issued and as of June 30, 2015, 250,000 shares of Series A Preferred are issued and outstanding. The board of directors has designated 300,000 shares as Series B Preferred stock, par value $.001 per shares ("Series B Preferred"). The Series B Preferred is non-voting, not eligible for dividends and ranks equal to common stock and below Series A preferred stock. Each share of Series B Preferred has a conversion rate into eight shares of common stock. During the six months ended June 30, 2015, the Company issued 229,807 shares of Series B Preferred in conjunction with two promissory notes (see Notes 6 and 7). In June 2015, the Company sold 25,000 shares of Series B Preferred for $25,000 cash. As of June 30, 2015, 254,807 shares of Series B Preferred are issued and outstanding. Common Stock The Company is authorized to issue 50,000,000 shares of common stock, $0.001 par value. New issuances of common stock during the three months ended June 30, 2015 were as follows: · 1,479,290 shares of common stock were issued pursuant to the Acquisition (see Note 3). The Company estimated the fair market value to be $0.338 per share at the time of issuance. These shares were issued with "Price Protection" for a period of 18 months. If the market value of the common stock issued pursuant to the Acquisition is less than $500,000, the Company shall issue additional shares so the aggregate amount of shares issued in the Acquisition is equal to a market value of $500,000 based on the average closing bid price of the common stock for the five days prior thereto. · 204,000 shares of common stock were sold to three investors for cash proceeds of $61,200, or $.30 per share, under a private placement offering (the "Offering"). The Offering provided for the issuance warrants to purchase 50% of the number of shares subscribed for, at a price of $.50 per share, expiring one year from the investment. A total of 102,000 warrants were issued and expire between April 13 and June 10, 2016 (see Note 9). · 52,000 shares of common stock were issued to employees for services rendered. The Company estimated the fair market value to be $0.44 per share at the time of issuance and recorded an expense of $22,880 during the three months ended June 30, 2015. · 85,714 shares of common stock were issued to employee pursuant to an employment contract whereby the employee would be granted shares of common stock valued at $30,000. The Company estimated the fair market value to be $0.35 per share at the time of issuance and recorded a corresponding expense during the three months ended June 30, 2015. · 32,701 shares of common stock were issued to employee pursuant to an employment contract whereby the employee would be granted shares of common stock equal to $6,500 at the end of each quarter effective with the three months ending March 31, 2015. The Company estimated the fair market value to be $0.35 per share as of March 31, 2015 and $0.46 per share as of June 30, 2015. Accordingly, the employee received 18,571 and 14,130 shares of common stock, respectively, and the Company recorded an expense of $13,000 during the three months ended June 30, 2015. · 5,000 shares of common stock were issued to Stonefield Fund for services rendered. The Company estimated the fair market value to be $0.44 per share at the time of issuance and recorded an expense of $2,200 during the three months ended June 30, 2015. · 500,000 shares of common stock were issued to LP Funding, LLC for services rendered. The Company estimated the fair market value to be $0.46 per share at the time of issuance and recorded an expense of $230,000 during the three months ended June 30, 2015. As of June 30, 2015,15,403,925 shares of common stock are issued and outstanding. |
NOTE 11 - COMMON STOCK WARRANTS
NOTE 11 - COMMON STOCK WARRANTS | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
COMMON STOCK WARRANTS | NOTE 10 COMMON STOCK WARRANTS As of March 31, 2015, the Company has warrants to purchase 1,025,000 shares of common stock outstanding, with exercise prices between $0.50 and $1.00 and expiration dates between September 2016 and October 2019. During the period ended June 30, 2015, the Company issued a total of 102,000 warrants under the Offering (see Note 8). A summary of common stock warrants activity for the three months ended June 30, 2015 is as follows: Weighted Average Number Exercise Price Warrants outstanding March 31, 2015 1,025,000 $ 0.99 Granted 102,000 $ 0.50 Exercised - $ - Forfeited - $ - Warrants outstanding June 30, 2015 1,127,000 $ 0.94 Warrants exercisable as of June 30, 2015 1,127,000 $ 0.94 |
NOTE 12 - SEGMENT INFORMATION
NOTE 12 - SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | NOTE G Segment Information The Company's operations are classified into the sale of alcohol to retail customers through the Company's tasting room, and wholesale sales to distributors. Our retail division is located in the greater Seattle, Washington area and serves walk-in customers seven days a week. Our wholesale division sells to distributors primarily in the greater Seattle, Washington area. Although both segments are involved in the sale and distribution of alcohol, they serve different customers and are managed separately, requiring specialized expertise. We determined our operating segments in accordance with FASB ASC Topic 280, Segment Reporting Results of the operating segments are as follows: Three Months Ended March 31, 2015 Retail Wholesale Total Sales $ 82,225 $ 166,083 $ 248,308 Less excise taxes 1,620 3,289 4,909 Net revenue 80,605 162,794 243,399 Cost of goods sold 75,506 153,300 228,806 Gross profit $ 5,099 $ 9,494 $ 14,593 As of March 31, 2015 Accounts receivable $ - $ 50,032 $ 50,032 Property and equipment, net of accumulated depreciation $ 46,575 $ 936,934 $ 983,509 Three Months Ended March 31, 2014 Retail Wholesale Total Sales $ 69,834 $ 171,169 $ 241,003 Less excise taxes 1,343 3,293 4,636 Net revenue 68,491 167,876 236,367 Cost of goods sold 53,610 131,252 184,862 Gross profit $ 14,881 $ 36,624 $ 51,505 |
NOTE 3 - ACQUISITION OF ASSETS
NOTE 3 - ACQUISITION OF ASSETS OF B&R LIQUID ADVENTURE, LLC (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
Summary of the acquisition, tangible and intangible assets acquired at date of acquisition | Total Purchase Consideration Cash $ 260,000 Notes payable 140,000 Common stock issued 500,000 $ 900,000 |
Summary of the estimated fair value of assets acquired | Net assets acquired: Inventory $ 249,902 Property and equipment, net 53,600 Intangible assets acquired - Assumption of scheduled liabilities (121,416 ) 182,086 Goodwill 717,914 $ 900,000 |
NOTE 5 - INVENTORIES (Tables)
NOTE 5 - INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | June 30, 2015 December 31, 2014 Successor Predecessor Raw materials $ 58,585 $ 83,892 Work-in-process 25,168 - Finished goods 408,443 202,178 $ 492,196 $ 286,070 |
NOTE 6 - PROPERTY AND EQUIPME19
NOTE 6 - PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | June 30, 2015 December 31, 2014 Successor Predecessor Notes payable, net of unamortized discounts of $135,312 $ 454,992 $ - Capital lease obligations 6,508 3,689 461,500 3,689 Less: current portion (146,157 ) (3,689 ) Long-term portion, net of unamortized discounts of $135,312 $ 315,343 $ - |
NOTE 7 - Notes Payable and Ca20
NOTE 7 - Notes Payable and Capital Leases (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Notes Payable and Capital Leases | March 31, 2015 December 31, 2014 Notes payable, net of unamortized discounts of $152,954 and $0, respectively $ 261,251 $ - Related party debt, net of unamortized discounts of $72,912 and $0, respectively 37,838 - Capital leases 7,253 12,923 306,342 12,923 Less current portion, net of unamortized discounts of $40,690 and $0, respectively (145,646 ) (7,910 ) Long-term portion, net of unamortized discounts of $185,176 and $0, respectively $ 160,696 $ 5,013 |
NOTE 8 - RELATED PARTY DEBT (Ta
NOTE 8 - RELATED PARTY DEBT (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party debt | June 30, 2015 December 31, 2014 Successor Predecessor Convertible Notes payable to related parties $ - $ 120,000 Related party debt, net of unamortized discounts of $40,605 19,395 - 19,395 120,000 Less: current portion - (120,000 ) $ 19,395 $ - |
NOTE 9 - COMMITMENTS AND CONT22
NOTE 9 - COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase Commitments for each year | Remaining 2015 $ 51,900 2016 232,650 2017 231,950 2018 273,200 2019 38,200 2020 31,650 2021 30,950 $ 890,500 |
Minimum Annual Rental Payment | Remaining 2015 $ 50,076 2016 5,672 $ 55,748 |
Disclosure - NOTE 12 - SEGMENT
Disclosure - NOTE 12 - SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Operating Segment | Three months ended June 30, 2015 (Successor) Brewery Retail Brewery Wholesale búcha tea Wholesale Total Sales $ 86,253 $ 166,678 $ 691,985 $ 944,916 Less excise taxes 1,674 3,235 - 4,909 Net revenue 84,579 163,443 691,985 940,007 Cost of goods sold 66,713 128,918 417,748 613,379 Gross profit $ 17,866 $ 34,525 $ 274,237 $ 326,628 Three months ended June 30, 2015 (Successor) Brewery Retail Brewery Wholesale búcha tea Wholesale Total Accounts receivable $ - $ 31,818 $ 298,333 $ 330,151 Property and equipment, net $ 46,575 $ 880,287 $ 64,936 $ 991,798 |
Operating Segment bucha Live Kombucha brand | Three months ended March 31, 2015 Six months ended June 30, 2014 Three months ended June 30, 2014 Predecessor Predecessor Predecessor Sales $ 638,525 $ 1,526,453 $ 843,320 Less excise taxes - - - Net revenue 638,525 1,526,453 843,320 Cost of goods sold 413,582 895,287 495,858 Gross profit $ 224,943 $ 631,166 $ 347,462 |
NOTE 11 - COMMON STOCK WARRAN24
NOTE 11 - COMMON STOCK WARRANTS (Tables) | 3 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
A summary of common stock warrants activity | Weighted Average Number Exercise Price Warrants outstanding March 31, 2015 1,025,000 $ 0.99 Granted 102,000 $ 0.50 Exercised - $ - Forfeited - $ - Warrants outstanding June 30, 2015 1,127,000 $ 0.94 Warrants exercisable as of June 30, 2015 1,127,000 $ 0.94 |
NOTE 4 - ACQUISITION OF ASSET25
NOTE 4 - ACQUISITION OF ASSETS OF B&R LIQUID ADVENTURE, LLC (Details) | 6 Months Ended |
Jun. 30, 2015USD ($) | |
Total Purchase Consideration | |
Cash | $ 260,000 |
Notes payable | 140,000 |
Common stock issued | 500,000 |
Total Purchase Consideration | $ 900,000 |
NOTE 5 - INVENTORIES (Details)
NOTE 5 - INVENTORIES (Details) - USD ($) | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Restated Successor [Member] | |||
Raw materials | $ 58,585 | ||
Work in progress | 25,168 | ||
Finished goods | 408,443 | ||
Total | $ 443,592 | ||
Predecessor [Member] | |||
Raw materials | $ 83,892 | ||
Work in progress | |||
Finished goods | $ 202,178 | ||
Total | $ 286,070 | $ 286,070 |
NOTE 5 - PROPERTY AND EQUIPMENT
NOTE 5 - PROPERTY AND EQUIPMENT - Property and equipment (Details) - USD ($) | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Value after accumulated depreciation | $ 991,798 | ||
Restated Successor [Member] | |||
Property and equipment | 1,470,962 | ||
Less: accumulated depreciation | (479,164) | ||
Value after accumulated depreciation | $ 991,798 | ||
Predecessor [Member] | |||
Property and equipment | $ 101,994 | ||
Less: accumulated depreciation | (36,541) | ||
Value after accumulated depreciation | $ 65,453 | $ 65,453 |
NOTE 6 - NOTES PAYABLE AND CAPI
NOTE 6 - NOTES PAYABLE AND CAPITAL LEASES (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Note 6 - Notes Payable And Capital Leases Details | ||
Notes payable, net of unamortized discounts of $152,954 and $0, respectively | $ 261,251 | |
Related party debt, net of unamortized discounts of $72,912 and $0, respectively | 37,838 | |
Capital leases | 7,253 | $ 12,923 |
Subtotal | 306,342 | 12,923 |
Less current portion, net of unamortized discounts of $40,690 and $0, respectively | (145,646) | (7,910) |
Long-term portion, net of unamortized discounts of $185,176 and $0, respectively | $ 160,696 | $ 5,013 |
NOTE 6 - Notes Payable and Ca29
NOTE 6 - Notes Payable and Capital Leases (Details 2) | 6 Months Ended |
Jun. 30, 2015USD ($)shares | |
Note 6 - Notes Payable And Capital Leases Details 2 | |
Entered into Equipment Financing Agreement | $ 124,322 |
Number of monthly payments | 48 |
Amount of payments | $ 3,218 |
Interest included with payments | 628 |
Remaining balance of agreement | 112,705 |
Amount received for (3) 60 day Pomissory notes | $ 150,000 |
Loan fee for each note | 150.00% |
Interest rate for (3) 60 day Pomissory notes | 80.00% |
Number of shares issued for debt discount | shares | 230,000 |
The relative fair value of the stock | $ 38,440 |
Aggregate discounts to the (3) 60 day Pomissory notes | 2,250 |
Outstanding amount due on the (3) 60 day Pomissory notes | 111,560 |
Amount received for (2) Pomissory notes | $ 260,000 |
Interest rate for (2) Promissory notes | 10.00% |
Maturity of notes | Mar. 31, 2020 |
Number of shares of Series B preferred stock issued with the debt | shares | 229,807 |
The relative fair value of the shares of Series B preferred stock | $ 185,176 |
Outstanding amount due for the (2) Pomissory notes | 74,824 |
Aggregate discounts to the Series B preferred stock | $ 185,176 |
NOTE 7 - RELATED PARTY DEBT - R
NOTE 7 - RELATED PARTY DEBT - Related Party debt (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Restated Successor [Member] | ||
Convertible Notes payable to related parties | ||
Related party debt, net of unamortized discounts of $40,605 | $ 19,395 | |
Less: current portion | ||
total convertible notes payable to related parties | $ 19,395 | |
Predecessor [Member] | ||
Convertible Notes payable to related parties | $ 120,000 | |
Related party debt, net of unamortized discounts of $40,605 | ||
Less: current portion | $ (120,000) | |
total convertible notes payable to related parties |
Disclosure - NOTE 8 - COMMITMEN
Disclosure - NOTE 8 - COMMITMENTS AND CONTINGENCIES (Details) | Jun. 30, 2015USD ($) |
Purchase commitments [Abstract] | |
Remaining 2,015 | $ 51,900 |
2,016 | 232,650 |
2,017 | 231,950 |
2,018 | 273,200 |
2,019 | 38,200 |
2,020 | 31,650 |
2,021 | 30,950 |
Total | $ 890,500 |
B Going Concern (Details Narrat
B Going Concern (Details Narrative) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Approximate accumulated deficit | $ 2,300,000 | $ 2,125,000 |
Disclosure - NOTE 9 - STOCKHOLD
Disclosure - NOTE 9 - STOCKHOLDERS' EQUITY (Details Narrative) | 6 Months Ended |
Jun. 30, 2015$ / sharesshares | |
Preferred stock terms of conversion | Preferred Stock The Company is authorized to issue 1,000,000 shares of preferred stock, each having a par value of $0.001, with voting, distribution, dividend and redemption rights, and liquidation preferences and conversions as designated by the board of directors. The board of directors has designated 250,000 shares as Series A Preferred stock, par value $.001 per share ("Series A Preferred"). Each share of Series A Preferred shall have 500 votes for any election or other vote placed before the shareholders of the Company. During the six months ended June 30, 2015, no new shares were issued and as of June 30, 2015, 250,000 shares of Series A Preferred are issued and outstanding. The board of directors has designated 300,000 shares as Series B Preferred stock, par value $.001 per shares ("Series B Preferred"). The Series B Preferred is non-voting, not eligible for dividends and ranks equal to common stock and below Series A preferred stock. Each share of Series B Preferred has a conversion rate into eight shares of common stock. During the six months ended June 30, 2015, the Company issued 229,807 shares of Series B Preferred in conjunction with two promissory notes (see Notes 6 and 7). In June 2015, the Company sold 25,000 shares of Series B Preferred for $25,000 cash. As of June 30, 2015, 254,807 shares of Series B Preferred are issued and outstanding. |
Common stock issuance and terms of conversion | Common Stock The Company is authorized to issue 50,000,000 shares of common stock, $0.001 par value. New issuances of common stock during the three months ended June 30, 2015 were as follows: · 1,479,290 shares of common stock were issued pursuant to the Acquisition (see Note 3). The Company estimated the fair market value to be $0.338 per share at the time of issuance. These shares were issued with "Price Protection" for a period of 18 months. If the market value of the common stock issued pursuant to the Acquisition is less than $500,000, the Company shall issue additional shares so the aggregate amount of shares issued in the Acquisition is equal to a market value of $500,000 based on the average closing bid price of the common stock for the five days prior thereto. · 204,000 shares of common stock were sold to three investors for cash proceeds of $61,200, or $.30 per share, under a private placement offering (the "Offering"). The Offering provided for the issuance warrants to purchase 50% of the number of shares subscribed for, at a price of $.50 per share, expiring one year from the investment. A total of 102,000 warrants were issued and expire between April 13 and June 10, 2016 (see Note 9). · 52,000 shares of common stock were issued to employees for services rendered. The Company estimated the fair market value to be $0.44 per share at the time of issuance and recorded an expense of $22,880 during the three months ended June 30, 2015. · 85,714 shares of common stock were issued to employee pursuant to an employment contract whereby the employee would be granted shares of common stock valued at $30,000. The Company estimated the fair market value to be $0.35 per share at the time of issuance and recorded a corresponding expense during the three months ended June 30, 2015. · 32,701 shares of common stock were issued to employee pursuant to an employment contract whereby the employee would be granted shares of common stock equal to $6,500 at the end of each quarter effective with the three months ending March 31, 2015. The Company estimated the fair market value to be $0.35 per share as of March 31, 2015 and $0.46 per share as of June 30, 2015. Accordingly, the employee received 18,571 and 14,130 shares of common stock, respectively, and the Company recorded an expense of $13,000 during the three months ended June 30, 2015. · 5,000 shares of common stock were issued to Stonefield Fund for services rendered. The Company estimated the fair market value to be $0.44 per share at the time of issuance and recorded an expense of $2,200 during the three months ended June 30, 2015. · 500,000 shares of common stock were issued to LP Funding, LLC for services rendered. The Company estimated the fair market value to be $0.46 per share at the time of issuance and recorded an expense of $230,000 during the three months ended June 30, 2015. As of June 30, 2015,15,403,925 shares of common stock are issued and outstanding. |
Number of common shares authorized to issue | 50,000,000 |
Series A Preferred Stock [Member] | |
Preferred Shares authorized to be Issued | 250,000 |
Par Value | $ / shares | $ 0.001 |
Series B Preferred Stock [Member] | |
Preferred Shares authorized to be Issued | 300,000 |
Par Value | $ / shares | $ 0.001 |
NOTE 3 - ACQUISITION OF ASSET34
NOTE 3 - ACQUISITION OF ASSETS OF B&R LIQUID ADVENTURE, LLC (Details Narrative) | 6 Months Ended |
Jun. 30, 2015USD ($)shares | |
Business Combinations [Abstract] | |
Cash payment required for purchase of B&R | $ 260,000 |
Secured promissory note required | $ 140,000 |
Number of shares required to be issued for acquisition | shares | 1,479,290 |
Value of shares issued | $ 500,000 |
Amount of of scheduled liabilities assumed for acquisition | $ 121,416 |
Price protection description | 18 |
NOTE 5 - PROPERTY AND EQUIPME35
NOTE 5 - PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | |
Restated Successor [Member] | |||
Depreciation expense | $ 60,631 | ||
Predecessor [Member] | |||
Depreciation expense | $ 5,100 | $ 9,963 |
NOTE 7 - RELATED PARTY DEBT (De
NOTE 7 - RELATED PARTY DEBT (Details Narrative) | 6 Months Ended |
Jun. 30, 2015USD ($)shares | |
Related Party Transactions [Abstract] | |
Promissory Note for cash amount | $ 50,000 |
Loan fee percentage | 1.50% |
Interest rate on promissory note | 8.00% |
Discount resulting from loan fee | $ 750 |
Number os ahres included as equity payment | shares | 200,000 |
The relative fair value of the stock | $ 29,420 |
Amount borrowed for acquisition | 60,000 |
Interest rate per annum | 10 |
Amount to be raised that will mae the note due immediately | $ 2,000,000 |
Shares of Series B preferred stock equity payment issued with debt | shares | 53,073 |
The relative fair value of the Series B preferred stock issued recorded as a debt discount | shares | 42,742 |
Remaining balance of this note t be amortized to interest expense over the life of the loan | $ 19,395 |
Disclosure - NOTE 8 - COMMITM37
Disclosure - NOTE 8 - COMMITMENTS AND CONTINGENCIES (Details Narrative) | Jun. 30, 2015USD ($) |
Disclosure - Note 8 - Commitments And Contingencies Details | |
Remaining 2,015 | $ 50,076 |
2,016 | 5,672 |
Total | $ 55,748 |
Disclosure - NOTE 8 - COMMITM38
Disclosure - NOTE 8 - COMMITMENTS AND CONTINGENCIES (Details Narrative2) - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Disclosure - Note 8 - Commitments And Contingencies Details | ||
Monthly base rent | $ 4,709 | |
Rent Expense | $ 24,500 | 9,500 |
Kegs lease expense | $ 2,000 | $ 5,500 |
NOTE 3 - ACQUISITION OF ASSET39
NOTE 3 - ACQUISITION OF ASSETS OF B&R LIQUID ADVENTURE, LLC (Details Narrative2) | Jun. 30, 2015USD ($) |
Net assets acquired: | |
Inventory | $ 249,902 |
Property and equipment, net | $ 53,600 |
Intangible assets acquired | |
Assumption of scheduled liabilities | $ (121,416) |
Subtotal | 182,086 |
Goodwill | 717,914 |
Total | $ 900,000 |
NOTE 10 - COMMON STOCK WARRANTS
NOTE 10 - COMMON STOCK WARRANTS (Details Narrative) | 6 Months Ended |
Jun. 30, 2015USD ($)$ / sharesshares | |
Notes to Financial Statements | |
Number of shares outstanding that warrants the Company owns can purchase | shares | 1,025,000 |
Excercise price minimum | $ 0.50 |
Excercise price maximum | $ 1 |
Expriation date between | |
Total number of warrants issued under Offering | $ | $ 102,000 |
G Segment Information (Details)
G Segment Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | |
Sales | $ 944,916 | |||
Less excise taxes | 4,909 | |||
Net revenue | 940,007 | |||
Cost of goods sold | 613,379 | |||
Gross profit | 326,628 | |||
Accounts receivable | 330,151 | $ 330,151 | ||
Property and equipment, net of accumulated depreciation | 991,798 | $ 991,798 | ||
Brewery Retail Sale [Member] | ||||
Sales | 86,253 | |||
Less excise taxes | 1,674 | |||
Net revenue | 84,579 | |||
Cost of goods sold | 66,713 | |||
Gross profit | $ 17,866 | |||
Accounts receivable | ||||
Property and equipment, net of accumulated depreciation | $ 46,575 | $ 46,575 | ||
Brewery WholeSale [Member] | ||||
Sales | 166,678 | |||
Less excise taxes | 3,235 | |||
Net revenue | 163,443 | |||
Cost of goods sold | 128,918 | |||
Gross profit | 34,525 | |||
Accounts receivable | 31,818 | 31,818 | ||
Property and equipment, net of accumulated depreciation | 880,287 | 880,287 | ||
Bucha tea Wholesale [Member] | ||||
Sales | $ 691,985 | |||
Less excise taxes | ||||
Net revenue | $ 691,985 | |||
Cost of goods sold | 417,748 | |||
Gross profit | 274,237 | |||
Accounts receivable | 298,333 | 298,333 | ||
Property and equipment, net of accumulated depreciation | $ 64,936 | 64,936 | ||
Predessor Bucha tea Wholesale [Member] | ||||
Sales | $ 638,525 | $ 843,320 | $ 1,526,453 | |
Less excise taxes | ||||
Net revenue | $ 638,525 | 843,320 | $ 1,526,453 | |
Cost of goods sold | 413,582 | 495,858 | 895,287 | |
Gross profit | $ 224,943 | $ 347,462 | $ 631,166 |
NOTE 10 - COMMON STOCK WARRAN42
NOTE 10 - COMMON STOCK WARRANTS - (Details) | 3 Months Ended |
Jun. 30, 2015$ / sharesshares | |
Shares | |
Warrants outstanding March 31, 2015 | shares | 1,025,000 |
Granted | shares | 102,000 |
Warrants outstanding June 30, 2015 | shares | 1,127,000 |
Warrants exercisable as of June 30, 2015 | shares | 1,127,000 |
Weighted Average Exercise Price | |
Warrants outstanding March 31, 2015 | $ .99 |
Granted | $ 0.50 |
Forfeited | |
Warrants outstanding June 30, 2015 | $ 0.94 |
Warrants exercisable as of June 30, 2015 | $ .94 |