Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 22, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | NEW AGE BEVERAGES CORPORATION | |
Entity Central Index Key | 1,579,823 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 12,280,454 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,016 |
BALANCE SHEETS (Unaudited)
BALANCE SHEETS (Unaudited) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
CURRENT ASSETS: | ||
Cash | $ 5,810 | $ 43,856 |
Accounts receivable, net of allowance for doubtful accounts of zero and zero, respectively. | 5,979,594 | 259,619 |
Inventories | 5,083,061 | 196,220 |
Prepaid expenses and other current assets | 504,667 | 26,264 |
Total current assets | 11,573,132 | 525,959 |
Property and equipment, net of accumulated depreciation of $14,074 and $10,215, respectively | 7,477,470 | 66,336 |
Customer relationships, net of accumulated amortization of $83,333 and $62,500, respectively | 7,335,529 | 187,500 |
Goodwill | 145,833 | 389,014 |
Total assets | 26,531,964 | 1,168,809 |
CURRENT LIABILITIES: | ||
Accounts payable | 6,922,217 | 460,434 |
Factoring payable | 104,651 | 110,663 |
Accrued expenses and other current liabilities | 4,500,000 | |
Total current liabilities | 11,526,868 | 571,097 |
Convertible note payable, net of unamortized discounts of $17,987and $0, respectively | 183,526 | |
Note payable, net of unamortized discounts of $113,947 and $121,069, respectively | 8,593,174 | 78,931 |
Related party debt, net of unamortized discounts of $34,194 and $36,331, respectively | 27,944 | 23,669 |
Total liabilities | 20,331,512 | 673,697 |
STOCKHOLDERS' EQUITY: | ||
Common Stock, $0.001 par value; 40,000,000 shares authorized; 15,419,401 shares issued and outstanding | 21,900 | 15,436 |
Series A preferred stock, $0.001 par value: 250,000 shares authorized, 250,000 shares issued and outstanding | 250 | 250 |
Series B Preferred stock, $0.001 par value: 300,000 shares authorized, 254,807 shares issued and outstanding | 255 | 255 |
Additional paid-in capital | 11,795,335 | 3,811,049 |
Accumulated deficit | (5,617,288) | (3,331,878) |
Total stockholders' equity | 6,200,452 | 495,112 |
Total liabilities and stockholders' equity | 26,531,964 | $ 1,168,809 |
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 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 50,000,000 | 50,000,000 |
Common Stock, shares issued | 15,435,651 | 15,435,651 |
Common Stock, shares outstanding | 15,435,651 | 15,435,651 |
Series A Preferred Stock, par value | $ 0.001 | $ 0.001 |
Series A Preferred Stock, shares authorized | 250,000 | 250,000 |
Series A Preferred Stock, shares issued | 250,000 | 250,000 |
Series A Preferred Stock, shares outstanding | 250,000 | 250,000 |
Series B Preferred Stock, par value | $ 0.001 | $ 0.001 |
Series B Preferred Stock, shares authorized | 300,000 | 300,000 |
Series B Preferred Stock, shares issued | 254,807 | 254,807 |
Series B Preferred Stock, shares outstanding | 254,807 | 254,807 |
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 | |
Series A Preferred Stock, shares issued | 254,807 | |
Series A Preferred Stock, shares outstanding | 254,807 |
STATEMENTS OF OPERATIONS (Unaud
STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2016 | |
Successor [Member] | ||||
REVENUES | $ 686,740 | $ 691,985 | $ 1,275,540 | |
Less: Cost of Good Sold | 600,648 | 450,414 | 1,100,129 | |
GROSS PROFIT | 86,092 | 241,571 | 175,411 | |
OPERATING EXPENSES: | ||||
Advertising, promotion and selling | 101,614 | 88,281 | 197,835 | |
General and administrative | 850,818 | 537,963 | 1,020,428 | |
Gain on forgiveness of accrued payroll | (500,000) | |||
Legal and professional | 1,093,755 | 107,974 | 1,175,400 | |
Total operating expenses | 2,046,187 | 234,218 | 2,393,663 | |
INCOME (LOSS) FROM OPERATIONS | (1,960,095) | 7,353 | (2,218,252) | |
OTHER INCOME (EXPENSE): | ||||
Interest expense | (36,590) | (71,308) | (66,224) | |
Other income (expense) | (934) | (934) | ||
Total other income (expense) | (37,524) | (71,308) | (67,158) | |
LOSS FROM CONTNUING OPERATIONS | (1,997,619) | (63,955) | (2,285,410) | |
INCOME FROM DISCONTINUED OPERATIONS | 83,172 | |||
NET INCOME (LOSS) | $ (1,997,619) | $ 19,217 | $ (2,285,410) | |
NET (LOSS) INCOME PER SHARE – BASIC AND DILUTED | ||||
Continuing operations | $ (0.12) | $ 0 | $ (0.14) | |
Discontinued operations | $ 0 | $ 0 | $ 0 | |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED | 16,256,403 | 14,763,091 | 15,846,027 | |
Successor 2 [Member] | ||||
REVENUES | $ 691,985 | |||
Less: Cost of Good Sold | 450,414 | |||
GROSS PROFIT | 241,571 | |||
OPERATING EXPENSES: | ||||
Advertising, promotion and selling | 88,281 | |||
General and administrative | 537,963 | |||
Gain on forgiveness of accrued payroll | (500,000) | |||
Legal and professional | 107,974 | |||
Total operating expenses | 234,218 | |||
INCOME (LOSS) FROM OPERATIONS | 7,353 | |||
OTHER INCOME (EXPENSE): | ||||
Interest expense | (71,308) | |||
Other income (expense) | ||||
Total other income (expense) | (71,308) | |||
LOSS FROM CONTNUING OPERATIONS | (63,955) | |||
INCOME FROM DISCONTINUED OPERATIONS | 83,172 | |||
NET INCOME (LOSS) | $ 19,217 | |||
NET (LOSS) INCOME PER SHARE – BASIC AND DILUTED | ||||
Continuing operations | $ 0 | |||
Discontinued operations | $ 0 | |||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED | 14,763,091 | |||
Predecessor [Member] | ||||
REVENUES | $ 576,863 | |||
Less: Cost of Good Sold | 413,582 | |||
GROSS PROFIT | 163,281 | |||
OPERATING EXPENSES: | ||||
Advertising, promotion and selling | 51,516 | |||
General and administrative | 134,124 | |||
Gain on forgiveness of accrued payroll | ||||
Legal and professional | 47,369 | |||
Total operating expenses | 233,009 | |||
INCOME (LOSS) FROM OPERATIONS | (69,728) | |||
OTHER INCOME (EXPENSE): | ||||
Interest expense | (2,294) | |||
Other income (expense) | ||||
Total other income (expense) | (2,294) | |||
LOSS FROM CONTNUING OPERATIONS | (72,022) | |||
INCOME FROM DISCONTINUED OPERATIONS | ||||
NET INCOME (LOSS) | $ (72,022) |
STATEMENTS OF CASH FLOWS (Unaud
STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2016 | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
CASH AT BEGINNING OF PERIOD | $ 43,856 | ||
CASH AT END OF PERIOD | 5,810 | ||
Successor [Member] | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | $ 19,217 | (2,285,410) | |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||
Depreciation | 49,322 | ||
Amortization of debt discounts | 20,198 | ||
Gain on forgiveness of accrued payroll | 500,000 | ||
Accrued acquisition costs | 753,857 | ||
Common stock issued for services | 956,596 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | (92,306) | ||
Inventories | (39,424) | ||
Prepaid expenses and other current assets | 14,569 | ||
Accounts payable, accrued expenses and other current liabilities | 369,564 | ||
Reserve for legal settlement | |||
Net cash (used in) provided by operating activities | (253,034) | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of property and equipment | |||
Cash paid to acquire the combined assets of Xing | (8,500,000) | ||
Repayment of note issued for acquisition of assets of B&R Liquid Adventure | |||
Acquisition of assets of B&R Liquid Adventure | |||
Net cash used in investment activities | (8,500,000) | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from notes payable | 8,500,000 | ||
Proceeds from convertible note payable | 200,000 | ||
Net factoring advances | (6,012) | ||
Exercise of stock warrants | 21,000 | ||
Issuance of common stock for cash | |||
Issuance of Series B Preferred stock for cash | |||
Repayment of notes payable to related party | |||
Repayment of notes payable and capital lease obligations | |||
Net cash provided by (used in) financing activities | 8,714,988 | ||
NET CHANGE IN CASH | (38,046) | ||
CASH AT BEGINNING OF PERIOD | 43,856 | ||
CASH AT END OF PERIOD | $ 5,810 | ||
Successor 2 [Member] | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | 19,217 | ||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||
Depreciation | 60,631 | ||
Amortization of debt discounts | 47,699 | ||
Gain on forgiveness of accrued payroll | 500,000 | ||
Accrued acquisition costs | |||
Common stock issued for services | 298,080 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | (280,118) | ||
Inventories | (188,963) | ||
Prepaid expenses and other current assets | 41,595 | ||
Accounts payable, accrued expenses and other current liabilities | 197,019 | ||
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) | ||
Cash paid to acquire the combined assets of Xing | |||
Repayment of note issued for acquisition of assets of B&R Liquid Adventure | (140,000) | ||
Acquisition 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 | ||
Proceeds from convertible note payable | |||
Net factoring advances | 115,420 | ||
Exercise of stock warrants | |||
Issuance of common 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 to related party | (50,750) | ||
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 | |
Predecessor [Member] | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | (72,022) | ||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||
Depreciation | 5,100 | ||
Amortization of debt discounts | |||
Gain on forgiveness of accrued payroll | |||
Accrued acquisition costs | |||
Common stock issued for services | |||
Changes in operating assets and liabilities: | |||
Accounts receivable | (23,277) | ||
Inventories | 105,419 | ||
Prepaid expenses and other current assets | 5,695 | ||
Accounts payable, accrued expenses and other current liabilities | (1,685) | ||
Reserve for legal settlement | 5,100 | ||
Net cash (used in) provided by operating activities | 24,330 | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of property and equipment | (11,688) | ||
Cash paid to acquire the combined assets of Xing | |||
Repayment of note issued for acquisition of assets of B&R Liquid Adventure | |||
Acquisition of assets of B&R Liquid Adventure | |||
Net cash used in investment activities | (11,688) | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from notes payable | |||
Proceeds from convertible note payable | |||
Net factoring advances | |||
Exercise of stock warrants | |||
Issuance of common 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 to related party | |||
Repayment of notes payable and capital lease obligations | (1,874) | ||
Net cash provided by (used in) financing activities | (70,874) | ||
NET CHANGE IN CASH | (58,232) | ||
CASH AT BEGINNING OF PERIOD | $ 67,080 | 125,312 | |
CASH AT END OF PERIOD | $ 67,080 |
NOTE 1 - NATURE OF OPERATIONS,
NOTE 1 - NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2016 | |
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 New Age Beverages Corporation (the "Company") was formed under the laws of the State of Washington on April 26, 2010 under the name American Brewing Company, Inc. On April 1, 2015, the Company acquired the assets of B&R Liquid Adventure, which included the brand Búcha ® Live Kombucha. On June 30, 2016, the Company acquired the combined assets of New Age Beverages, LLC, Aspen Pure, LLC, New Age Properties, LLC and Xing Beverage, LLC (see Note 3) and changed the integrated company's name to New Age Beverages Corporation. The Company manufactures, markets and sells a portfolio of Healthy Functional Beverages including XingTea ® , an all-natural, non-GMO, non-HFCS premium Ready to Drink (RTD) Tea, Aspen Pure ® , an artesian-well, naturally-high PH balanced, source water from the Colorado Rocky Mountains, XingEnergy ® , an all-natural, vitamin-enriched, non-GMO, Non-HFCS Energy Drink, and Búcha ® Live Kombucha, an organic, all natural, fermented kombucha tea. The portfolio of brands is distributed through the Company's own Direct Store Distribution (DSD) network in Colorado and surrounding states, throughout the United States both direct to major retailers and through its network of DSD partners, and in 10 countries around the world. The brands are sold in all channels of distribution including Hypermarkets, Supermarkets, Pharmacies, Convenience, Gas and other outlets. Prior to acquiring the Búcha Live Kombucha ® brand and business, the Company was a craft brewery operation. On October 1, 2015, American Brewing agreed to sell their brewery, brewery assets and its related liabilities to focus exclusively on the healthy functional beverage category and the Búcha ® brand. The assets sold consisted of accounts receivable, inventories, prepaid assets and property and equipment. The Company recognized the sale of its brewery and micro-brewing operations as a discontinued operation beginning in the third quarter of 2015 (see Note 11). That transaction ultimately concluded in May 2016. Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements as of June 30, 2016 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 7, 2016. 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 unaudited condensed consolidated financial statements which substantially duplicate the disclosure contained in the audited financial statements for fiscal 2015 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 (since April 1, 2015), our operating results are referred to as Successor. For periods prior to the acquisition of the our operating results are referred to as Predecessor. Where applicable black line separates the Successor and Predecessor financial information to highlight the lack of comparability between the periods. Our operating results for the three months ended June 30, 2015 (Successor) incorporate certain reclassifications necessary to remove our prior micro-brewing operations and brewery from our continuing operations and report them as discontinued operations. Further, our net (loss) income per share has been changed accordingly to report per-share amounts from continuing and discontinued operations. For all periods presented, we are reporting a net loss from continuing operations, and as a result our diluted (loss) earnings per share are the same as our basic (loss) income per share. Concentrations As of December 31, 2015, three customers represented approximately 92.7% (59.9%, 22.9% and 10.9%) of accounts receivable. For the three months ended June 30, 2016 (Successor), three customers represented approximately 59.5% (24.4%, 22.4% and 12.7%) of revenue. For the three months ended June 30, 2015 (Successor), three customers represented approximately 80.8% (33.1%, 30.4% and 17.3%) of revenue. For the six months ended June 30, 2016 (Successor), three customers represented approximately 18.5% (9.8%, 5.7%, and 3.0%) 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. 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 six months ended June 30, 2016 (Successor), the Company repaid net advances from the factoring of accounts receivable of $6,012. The outstanding factoring payable as of June 30, 2016 was $104,651 compared to $110,663 as of December 31, 2015. The Company pays factoring interest and 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. Factoring interest and fees for the periods presented were as follows: Three months ended June 30, 2016 Three months ended June 30, 2015 Six Months ended June 30, 2016 Three months ended June 30, 2015 Three months ended March 31, 2015 Successor Successor Successor Successor Predecessor Factoring interest and fees $ 14,825 $ 5,647 $ 28,482 $ 5,647 $ - Goodwill and Customer Relationships Goodwill represents the excess of the purchase price of acquired businesses over the estimated fair value of the identifiable net assets acquired. Goodwill and other intangibles with indefinite useful lives are not amortized but tested for impairment annually or more frequently when events or circumstances indicates that the carrying value of a reporting unit more likely than not exceeds its fair value. 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. Customer relationships are recorded at acquisition cost less accumulated amortization and impairment. Definite lived intangible assets are amortized over their estimated useful life using the straight-line method, which is determined by identifying the period over which the cash flows from the asset are expected to be generated. As of June 30, 2016 and December 31, 2015, accumulated amortization was $104,167 and $62,500, respectively. Amortization expense was $20,834 and $41,667 for the three and six months ended June 30, 2016 (Successor), respectively. There was no amortization expense for customer relationships in 2015 for the periods presented. Amortization expense is classified as cost of goods sold in the statements of operations. Long-lived Assets Our long-lived assets consisted of property and equipment and customer relationships and are reviewed for impairment in accordance with the guidance for Property, Plant, and Equipment. Cash Flows Supplemental Disclosures Six months ended June 30, 2016 Three months ended June 30, 2015 Three months ended March 31, 2015 Successor Successor Predecessor CASH PAID DURING THE PERIODS FOR: Interest $ 400,735 $ 204,080 $ 1,861 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 - Warrants issued with convertible debt $ 18,154 $ - - Common stock issued for acquisition of Xing Beverage, LLC $ 6,995,000 $ - - Promissory note issued for acquisition of Xing Beverage, LLC $ 4,500,000 $ - - |
NOTE 2 - GOING CONCERN AND MANA
NOTE 2 - GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS | 6 Months Ended |
Jun. 30, 2016 | |
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 condensed 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, 2016, the Company had an accumulated deficit of $5,617,288 and for the six months then ended incurred operating losses of $2,285,410 and used cash in operating activities of $253,034. Overview New Age Beverages Corporation, formerly American Brewing Company, Inc., (the " Company ® Live Kombucha, a certified organic, all natural, probiotic, fermented kombucha tea. We acquired the Búcha ® Live Kombucha brand and the assets related to its production and sale on April, 1 2015. The Búcha ® Live Kombucha brand is distributed nationally in major grocery and natural food retailers throughout North America. On October 1, 2015, we sold the assets and various liabilities related to our brewery and craft brewing operations. The assets sold consisted of accounts receivable, inventories, prepaid assets and property and equipment. The liabilities consisted of brewing-related contracts we held, liabilities related to inventory as well as lease obligations. We recognized the sale of the brewery and craft brewing operations as a discontinued operation in the year ended December 31, 2015, in accordance with accounting guidelines. Since October 1, 2015, we have been focusing on integrating the Búcha® Live Kombucha business, strengthening the businesses foundation and processes, improving efficiency, reducing costs, and positioning the Company as a standalone healthy functional beverage company. Our Búcha ® Live Kombucha is a certified organic, all natural, probiotic, fermented kombucha tea. Our kombucha tea is brewed at our co-packaging facility located in Montebello, California. On June 30, 2016, we acquired the combined assets of New Age Beverage, LLC, New Age Properties, LLC, Aspen Pure, LLC, and Xing Beverage, LLC (collectively, Xing). Xing is engaged in the manufacturing and sale of various teas, waters, and other healthy functional beverages. This acquisition will help us expand our capabilities and product offerings, and has significantly increased our assets as well as our liabilities. We acquired Xing's assets 4,353,915 shares of common stock. The common stock issued was valued at $1.61 per share. To consummate this acquisition, we borrowed $8,500,000 from a bank. The operating results of Xing will be consolidated with those of the Company beginning July 1, 2016. Xing is Our fiscal year end is December 31st. Successor and Predecessor Financial Presentation Throughout the financial statements and in this MD&A, we refer to Successor and Predecessor. For periods after the acquisition of the Búcha ® Live Kombucha brand (since April 1, 2015), our operating results and cash flows are referred to as Successor. For periods prior to the acquisition of the búcha® Live Kombucha brand, our operating results and cash flows are referred to as Predecessor. Where tables are presented in this MD&A, a black line separates the Successor and Predecessor financial information to highlight the lack of comparability between the periods. Revenue Model and Distribution Methods of our Products and Services Our revenue model is based on selling and marketing consumer preferred healthy-functional beverages sold primarily at food, drug, mass, convenience and specialty health retail outlets in the United States. We develop, market and sell a current portfolio of products, continually innovate with new flavors and products, distribute those products and actively engage in customer relationship development, and market to connect with end consumers. Currently, our Búcha ® Live Kombucha consists of ten flavors including Blood Orange, Grapefruit Sage, Guava Mango, Lemongrass Ginger, Raspberry Pomegranate, Verbena Rose, Yuzu Lemon, and the newest flavors of Elderflower Green Tea, Lemon-Lime/Ginger and Tropical Honey Blossom/Ginger. We plan to continually innovate and lead the category with new consumer-preferred and trending flavor combinations. Our Búcha ® Live Kombucha is currently distributed into approximately 2,400 stores, consisting of specialty health food stores and food, drug and mass chains including Whole Foods, Kroger, Safeway, PCC, Vons and Ralph's among others. In the past three months, distribution has expanded to approximately 400 new outlets, with no losses in distribution. Búcha ® Live Kombucha products are 100% certified organic, all natural, probiotic, fermented black teas made with purified water, organic cane juice, and kombucha culture. Kombucha products contain a colony of bacteria and yeast with more than 2 billion microorganisms. The product end result is rich in probiotics, B-Vitamins and other nutritional ingredients. Health benefits are mostly anecdotal but reputed to support digestion, detoxification, and boosting of overall immunity. We believe that our Búcha ® Live Kombucha flavor combinations and proprietary production process contribute to an industry leading flavor profile that meets core kombucha-user needs, but also has broad-based mainstream consumer appeal without the typical vinegar aftertaste associated with competitive kombucha products. Results of Operations The remainder of this MD&A discusses our continuing operations of the Búcha ® Live Kombucha tea business. As discussed previously, where tables are presented, a black line separates the Successor and Predecessor financial information to highlight the lack of comparability between the periods. See further discussion under " Successor and Predecessor Financial Presentation" |
NOTE 3 ACQUISITION OF XING BEVE
NOTE 3 ACQUISITION OF XING BEVERAGE, LLC | 6 Months Ended |
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
ACQUISITION OF XING BEVERAGE, LLC | NOTE 3 ACQUISITION OF XING BEVERAGE, LLC On June 30, 2016, the Company acquired the assets of New Age Beverage, LLC, New Age Properties, LLC, Aspen Pure, LLC, and Xing Beverage, LLC (collectively, Xing). Xing is engaged in the manufacturing and sale of various teas and beverages, which will help the Company expand its capabilities and product offering. The operating results of Xing will be condensed consolidated with those of the Company beginning July 1, 2016. Total purchase consideration paid was $19,995,000, which consisted of $8,500,000 of cash, a note payable for $4,500,000 and 4,353,915 shares of common stock. The common stock issued was valued at $1.61 per share, which was the volume weighted average closing stock for the thirty days preceding the acquisition. The purchase price was allocated to the net assets acquired based on their estimated fair values as follows: Accounts receivable $ 5,627,669 Inventories 4,847,417 Prepaid expenses and other current assets 492,972 Property and equipment, net 7,418,789 Other intangible assets acquired - Assumption of accounts payable, accrued expenses and other current liabilities (5,338,362 ) 13,048,485 Goodwill 6,946,515 Total Inventory $ 19,995,000 The above allocation is preliminary and is subject to change. Because the acquisition was consummated on June 30, 2016, the Company has begun to assess the fair value of the various net assets acquired, but has not yet completed this assessment. The Company is also in the process of identifying other intangible assets, such as customer relationships and recipes that may need to be recognized apart from goodwill. Once identified, these other intangible assets, if any, will be recorded at their fair values. The Company is working to finalize the allocations as quickly as possible, and anticipates that the allocation will not be final for approximately 6 months. Any adjustments necessary may be material to the condensed consolidated balance sheet and the amount of goodwill recognized. Any resulting adjustments would have no impact to the June 30, 2016 reported operating results. 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. In connection with the acquisition, the Company incurred transactional costs totaling $1,412,111, which has been recognized as expense as of June 30, 2016 (Successor). Of these costs, $1,023,756 was included in legal and professional fee expense and $388,355 was included in general and administrative expenses. Legal and professional fee expense was due to the Company issuing a total of 167,994 shares of common stock to several consultants for transactional services provided. The shares were fair valued at $1.61 per share. Legal and professional fees also include accrued transactional costs of $753,857 as of June 30, 2016, which is to be paid in cash. The general and administrative expense of $388,355 was pursuant to an employment agreement entered into during the first quarter of 2016, whereby an officer earned 1,078,763 shares of common stock upon the consummation of the Xing acquisition. These shares were fair valued at $0.36 per share, which is the Company's traded stock price when entering into the employment agreement. The following unaudited pro forma reflects the historical operating results of the Company, including the Predecessor for the six months ended June 30, 2015, and those of Xing, as if Xing was acquired on January 1, 2015. The unaudited pro forma financial information includes an adjustment to remove $1,412,111 of one-time transactional costs that were expensed during the three months ended June 30, 2016 (Successor). These one-time costs were removed for pro forma purposes as the costs were non-recurring. No adjustments have been made for synergies that may result from the acquisition. These combined results are not necessarily indicative of the results that may have been achieved had the companies been combined as of such dates or periods, or of the Company's future operating results. Six months Ended June 30, 2016 Year Ended December 31, 2015 (unaudited) (unaudited) Revenues $ 24,038,350 $ 52,120,203 Net income (loss) from continuing operations (560,499 ) (407,156 ) Net loss from discontinued operations -- (130,619 ) Net income (loss) $ (560,499 ) $ (537,775 ) Income (loss) per share Basic Continuing operations $ (0.03 ) $ (0.03 ) Discontinued operations $ -- $ (0.01 ) Net income (loss) $ (0.03 ) $ (0.04 ) Weighted average number of common shares outstanding Dilutive 21,900,106 12,435,461 Adjustments to the fair values of the assets acquired, which are subject to change, could have a material impact on these pro forma combined results. |
NOTE 4 - INVENTORIES
NOTE 4 - INVENTORIES | 6 Months Ended |
Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 4 INVENTORIES Inventories consist of 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. Inventories are stated at the lower of cost, determined on the first-in, first-out basis, or market. When acquiring Xing, our inventory balance increased by $4,847,417. Inventories consisted of the following as of: June 30, 2016 December 31, 2015 Finished goods $ 4,517,006 $ 3,590,145 Raw materials 513,861 611,482 Work-in-process 52,194 50,798 Total Inventory $ 5,083,061 $ 4,252,425 |
NOTE 5 - PROPERTY AND EQUIPMENT
NOTE 5 - PROPERTY AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
NOTE 5 - PROPERTY AND EQUIPMENT | NOTE 5 PROPERTY AND EQUIPMENT When acquiring Xing, our property and equipment balance increased by $7,418,789. Our property and equipment consisted of the following as of: June 30, 2016 December 31, 2015 Land and building $ 6,270,000 $ - Trucks and coolers 630,000 - Other property and equipment 595,340 76,551 Less: accumulated depreciation (17,870 ) (10,215 ) $ 7,477,470 $ 66,336 Depreciation expense, computed on the basis of three to five year useful lives for all property and equipment, was $3,796, 3,239 and $5,100 for the three months ended June 30, 2016 and 2015 (Successor) and March 31, 2015 (Predecessor). For the six months ended June 30, 2016 (Successor), depreciation expense was $7,655. Depreciation expense is classified as cost of goods sold in the statements of operations. The Company is still assessing the depreciable lives of those assets acquired from Xing. However, because Xing was acquired on June 30, 2016, the operating results do not include any depreciation from Xing's acquired property and equipment. |
NOTE 6 - NOTES PAYABLE AND CONV
NOTE 6 - NOTES PAYABLE AND CONVERTIBLE NOTE PAYABLE | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
NOTES PAYABLE AND CAPITAL LEASES | NOTE 6 NOTES PAYABLE AND CONVERTIBLE NOTE PAYABLE Notes payable consisted of the following as of: June 30, 2016 December 31, 2015 Note payable due to bank $ 8,500,000 $ - Seller's note payable 4,500,000 - Note payable, net of unamortized discount of $106,825 and $121,069 93,175 78,931 Convertible promissory note, net of unamortized discounts of $16,474 183,526 - 13,276,701 78,931 Less: current portion (4,500,000 ) - Long-term portion, net of unamortized discounts $ 8,776,701 $ 78,931 In connection with the Acquisition of Xing, the Company entered into an $8.5 million note payable with a bank. The Company also issued a $4.5 million note payable to the selling shareholders of Xing. This seller's note bears interest, payable monthly, at 1% per year, beginning after December 31, 2016. The loan matures on June 30, 2017. On March 19, 2016, the Company entered into a Securities Purchase Agreement with an unaffiliated third party, whereby the Company sold a Convertible Promissory Note in an amount of $200,000. The purchaser also received a three-year Warrant to purchase 100,000 shares at an exercise price of $0.40 per share. The Convertible Promissory Note is convertible after 180 days into shares of the Company's common stock at a twenty-five percent (25%) discount to the Volume Weighted Average Price for the five (5) trading days prior to the date of conversion. The Company has allocated the loan proceeds among the debt and the warrant based upon relative fair values. The relative fair value of the warrant was determined to be $18,154 and was recorded as a debt discount. The discount will be amortized over the life of the loan to interest expense. As of June 30, 2016, no principal payments have been made on this note. |
NOTE 7 - RELATED PARTY DEBT
NOTE 7 - RELATED PARTY DEBT | 6 Months Ended |
Jun. 30, 2016 | |
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, 2016 December 31, 2015 Related party debt, net of unamortized discount of $32,056 and $36,331 $ 27,944 $ 23,669 Less: current portion - - Long-term portion, net of unamortized discount $ 27,944 $ 23,669 In March 2015, the Company borrowed $60,000 from a member of management. 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 values. The relative fair value of the stock was determined to be $42,742 and was recorded as a debt discount. The discount will be amortized over the life of the loan to interest expense. As of June 30, 2016, no principal payment has been made on this note. |
NOTE 8 - COMMITMENTS AND CONTIN
NOTE 8 - COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 8 COMMITMENTS AND CONTINGENCIES Operating Lease Commitments In April 2015, the Company assumed a facilities lease with a third party for the manufacture of its búcha® Live Kombucha tea, which expired February 29, 2016. In September 2015, the Company extended the facilities lease for 39 months effective March 1, 2016 and expiring May 31, 2019. The monthly base rent is $2,795 for first 12 months, $2,879 for next 12 months, $2,965 for next 12 months, and $3,054 for the balance of the term. Monthly rent payments also include common area maintenance charges, taxes, and other charges. Future minimum lease payments under this facilities lease are approximately as follows: 2016 $ 331,880 2017 670,569 2018 611,410 2019 597,093 2020 588,000 $ 2,798,952 Rent expense was $4,819, $8,019 and $6,435 for the three months ended June 30, 2016 and 2015 (Successor) and for the three months ended March 31, 2015 (Predecessor), respectively. Rent expense was $12,408 for the six months ended June 30, 2016 (Successor). 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 condensed consolidated unaudited interim financial statements as of June 30, 2016. |
NOTE 9 - STOCKHOLDERS' EQUITY
NOTE 9 - STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2016 | |
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 Series B Preferred Common Stock During the three months ended June 30, 2016, the Company issued 50,000 shares of fully vested common stock to a consultant as partial consideration for professional services to be rendered. The shares were fair valued at $0.41 per share, which was the traded stock price of the Company's common stock at the time of grant. The Company (Successor) recognized legal and professional fees of $20,500 related to this grant. The Company also issued 42,000 shares of common stock in connection with a warrant being exercised (see Note 10). In connection with the acquisition of Xing, the Company issued a total of 5,600,672 shares of common stock as either purchase consideration or payment of transactional services that were provided (see Note 3). |
NOTE 10 - COMMON STOCK WARRANTS
NOTE 10 - COMMON STOCK WARRANTS | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
COMMON STOCK WARRANTS | NOTE 10 COMMON STOCK WARRANTS As of June 30, 2016, the Company had warrants to purchase 1,185,000 shares of common stock outstanding, with exercise prices between $0.40 and $1.00 and expiration dates between July 2016 and October 2019. A summary of common stock warrants activity for the six months ended June 30, 2016 is as follows: Weighted Average Number Exercise Price Warrants outstanding December 31, 2015 1,127,000 $ 0.94 Granted 100,000 $ 0.40 Exercised (42,000 ) $ 0.50 Forfeited - $ - Warrants outstanding June 30, 2016 1,185,000 $ 0.91 Warrants exercisable as of June 30, 2016 1,185,000 $ 0.91 During the three months ended March 31, 2016, the Company issued a three-year warrant to purchase 100,000 shares at an exercise price of $0.40 per share in connection with a $200,000 Convertible Promissory Note (see Note 6). During the three months ended June 30, 2016, warrants totaling 42,000 shares of common stock were exercised at $0.50 per share. The Company received $21,000 when the warrant shares were exercised. |
NOTE 11 DISCONTINUED OPERATIONS
NOTE 11 DISCONTINUED OPERATIONS – BREWERY AND MICRO-BREWING OPERATIONS | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
DISCONTINUED OPERATIONS – BREWERY AND MICRO-BREWING OPERATIONS | 11 DISCONTINUED OPERATIONS BREWERY AND MICRO-BREWING OPERATIONS On October 1, 2015 (the "Closing Date"), the Company entered into an asset purchase agreement ("APA") whereby it sold its assets and various liabilities related to its brewery and micro-brewing operations to AMBREW (the "Sale".) Under the terms of the APA, the assets sold consisted of accounts receivable, inventories, prepaid assets and property and equipment. The liabilities consisted of brewing-related contracts held by the Company, liabilities related to inventory as well as lease obligations. The Company recognized the sale of its brewery and micro-brewing operations as a discontinued operation, in accordance with Accounting Standards Update (ASU) 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." The following table provides income and expense of discontinued operations for the three months ended June 30, 2015 (Successor): June 30, 2015 Successor Revenues $ 248,022 Cost of goods sold 162,965 Gross profit 85,057 Operating expenses - Income from operations 85,057 Interest expense (1,885 ) Income from discontinued operations $ 83,172 |
NOTE 12 SUBSEQUENT EVENTS
NOTE 12 SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
NOTE 12 SUBSEQUENT EVENTS | NOTE 12 SUBSEQUENT EVENTS On August 3, 2016, the Company approved and implemented the New Age Beverages Corporation 2016-2017 Long Term Incentive Plan (the "Plan") pursuant to which the maximum number of shares that can be granted is 1,600,000 shares. Grants under the Plan may include options and restricted stock, as well as many other equity-type awards. The purpose of the Plan is to attract able persons to enter the employ or to serve as directors or as consultants of the Company and its affiliates. A further purpose of the Plan is to provide such individuals with additional incentive and reward opportunities designed to enhance the profitable growth of the Company and its affiliates. The shares of our common stock to be issued in connection with the Plan will not be registered under the Securities Act. |
NOTE 1 - NATURE OF OPERATIONS18
NOTE 1 - NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Concentrations | Concentrations As of December 31, 2015, three customers represented approximately 92.7% (59.9%, 22.9% and 10.9%) of accounts receivable. For the three months ended June 30, 2016 (Successor), three customers represented approximately 59.5% (24.4%, 22.4% and 12.7%) of revenue. For the three months ended June 30, 2015 (Successor), three customers represented approximately 80.8% (33.1%, 30.4% and 17.3%) of revenue. For the six months ended June 30, 2016 (Successor), three customers represented approximately 18.5% (9.8%, 5.7%, and 3.0%) 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. |
Accounts Receivable Factoring Arrangement with Recourse | 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 six months ended June 30, 2016 (Successor), the Company repaid net advances from the factoring of accounts receivable of $6,012. The outstanding factoring payable as of June 30, 2016 was $104,651 compared to $110,663 as of December 31, 2015. The Company pays factoring interest and 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. Factoring interest and fees for the periods presented were as follows: Three months ended June 30, 2016 Three months ended June 30, 2015 Six Months ended June 30, 2016 Three months ended June 30, 2015 Three months ended March 31, 2015 Successor Successor Successor Successor Predecessor Factoring interest and fees $ 14,825 $ 5,647 $ 28,482 $ 5,647 $ - |
Goodwill | Goodwill and Customer Relationships Goodwill represents the excess of the purchase price of acquired businesses over the estimated fair value of the identifiable net assets acquired. Goodwill and other intangibles with indefinite useful lives are not amortized but tested for impairment annually or more frequently when events or circumstances indicates that the carrying value of a reporting unit more likely than not exceeds its fair value. 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. Customer relationships are recorded at acquisition cost less accumulated amortization and impairment. Definite lived intangible assets are amortized over their estimated useful life using the straight-line method, which is determined by identifying the period over which the cash flows from the asset are expected to be generated. As of June 30, 2016 and December 31, 2015, accumulated amortization was $104,167 and $62,500, respectively. Amortization expense was $20,834 and $41,667 for the three and six months ended June 30, 2016 (Successor), respectively. There was no amortization expense for customer relationships in 2015 for the periods presented. Amortization expense is classified as cost of goods sold in the statements of operations. |
Long-lived Assets | Long-lived Assets Our long-lived assets consisted of property and equipment and customer relationships and are reviewed for impairment in accordance with the guidance for Property, Plant, and Equipment. |
Cash Flows | Cash Flows Supplemental Disclosures Six months ended June 30, 2016 Three months ended June 30, 2015 Three months ended March 31, 2015 Successor Successor Predecessor CASH PAID DURING THE PERIODS FOR: Interest $ - $ - $ 1,861 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 - Warrants issued with convertible debt $ 18,154 $ - - Common stock issued for acquisition of Xing Beverage, LLC $ 6,995,000 $ - - Promissory note issued for acquisition of Xing Beverage, LLC $ 4,500,000 $ - - |
3 ACQUISITION OF XING BEVERAGE,
3 ACQUISITION OF XING BEVERAGE, LLC (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
Net assets estimated fair values establishing purchase price | Accounts receivable $ 5,627,669 Inventories 4,847,417 Prepaid expenses and other current assets 492,972 Property and equipment, net 7,418,789 Other intangible assets acquired - Assumption of accounts payable, accrued expenses and other current liabilities (5,338,362 ) 13,048,485 Goodwill 6,946,515 Total Inventory $ 19,995,000 |
Unaudited pro forma of Xing Beverage, LLC | Six months Ended June 30, 2016 Year Ended December 31, 2015 (unaudited) (unaudited) Revenues $ 24,038,350 $ 52,120,203 Net income (loss) from continuing operations (560,499 ) (407,156 ) Net loss from discontinued operations -- (130,619 ) Net income (loss) $ (560,499 ) $ (537,775 ) Income (loss) per share Basic Continuing operations $ (0.03 ) $ (0.03 ) Discontinued operations $ -- $ (0.01 ) Net income (loss) $ (0.03 ) $ (0.04 ) Weighted average number of common shares outstanding Dilutive 21,900,106 12,435,461 |
NOTE 4 - INVENTORIES (Tables)
NOTE 4 - INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | Inventories consisted of the following as of: June 30, 2016 December 31, 2015 Finished goods $ 4,517,006 $ 3,590,145 Raw materials 513,861 611,482 Work-in-process 52,194 50,798 Total Inventory $ 5,083,061 $ 4,252,425 |
NOTE 5 - PROPERTY AND EQUIPME21
NOTE 5 - PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | June 30, 2016 December 31, 2015 Land and building $ 6,270,000 $ - Trucks and coolers 630,000 - Other property and equipment 595,340 76,551 Less: accumulated depreciation (17,870 ) (10,215 ) $ 7,477,470 $ 66,336 |
NOTE 6 - NOTES PAYABLE (Tables)
NOTE 6 - NOTES PAYABLE (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Notes Payable and Capital Leases | Notes payable consisted of the following as of: June 30, 2016 December 31, 2015 Note payable due to bank $ 8,500,000 $ - Seller's note payable 4,500,000 - Note payable, net of unamortized discount of $106,825 and $121,069 93,175 78,931 Convertible promissory note, net of unamortized discounts of $16,474 183,526 - 13,276,701 78,931 Less: current portion (4,500,000 ) - Long-term portion, net of unamortized discounts $ 8,776,701 $ 78,931 |
NOTE 7 - RELATED PARTY DEBT (Ta
NOTE 7 - RELATED PARTY DEBT (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party debt | June 30, 2016 December 31, 2015 Related party debt, net of unamortized discount of $32,056 and $36,331 $ 27,944 $ 23,669 Less: current portion - - Long-term portion, net of unamortized discount $ 27,944 $ 23,669 |
NOTE 8 - COMMITMENTS AND CONT24
NOTE 8 - COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase Commitments for each year | 2016 $ 331,880 2017 670,569 2018 611,410 2019 597,093 2020 588,000 $ 2,798,952 |
NOTE 10 - COMMON STOCK WARRAN25
NOTE 10 - COMMON STOCK WARRANTS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
A summary of common stock warrants activity | Weighted Average Number Exercise Price Warrants outstanding December 31, 2015 1,127,000 $ 0.94 Granted 100,000 0.40 Exercised - - Forfeited - - Warrants outstanding June 30, 2016 1,227,000 $ 0.90 Warrants exercisable as of June 30, 2016 1,227,000 $ 0.90 |
NOTE 4 - INVENTORIES (Details)
NOTE 4 - INVENTORIES (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Note 4 - Inventories Details | ||
Finished goods | $ 52,194 | $ 50,798 |
Raw materials | 4,517,006 | 3,590,145 |
Work in progress | 513,861 | 611,482 |
Total | $ 5,083,061 | $ 196,220 |
NOTE 5 - PROPERTY AND EQUIPME27
NOTE 5 - PROPERTY AND EQUIPMENT - Property and equipment (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Abstract] | ||
Property and equipment | $ 76,551 | $ 76,551 |
Less: accumulated depreciation | (14,074) | (10,215) |
Value after accumulated depreciation | $ 7,477,470 | $ 66,336 |
NOTE 7 - RELATED PARTY DEBT - R
NOTE 7 - RELATED PARTY DEBT - Related Party debt (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Related Party Transactions [Abstract] | ||
Related party debt, net of unamortized discounts of $34,194 and 36,331 | $ 27,944 | $ 23,669 |
Less: current portion | ||
Long-term portion, net of unamortized discounts of $34,194 and 36,331 | $ 27,944 | $ 23,669 |
NOTE 2 GOING CONCERN AND MANAGE
NOTE 2 GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2016 | Dec. 31, 2015 | |
Accumulated deficit | $ (5,617,288) | $ (5,617,288) | $ (3,331,878) | ||
Working Capital | 98,811 | ||||
Successor [Member] | |||||
Net loss | $ (1,997,619) | $ 19,217 | $ (2,285,410) | ||
Predecessor [Member] | |||||
Net loss | $ (72,022) |
NOTE 4 - PROPERTY AND EQUIPMENT
NOTE 4 - PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended |
Mar. 31, 2015 | Jun. 30, 2016 | |
Successor [Member] | ||
Depreciation expense | $ 49,322 | |
Predecessor [Member] | ||
Depreciation expense | $ 5,100 |
NOTE 5 - CUSTOMER RELATIONSHIPS
NOTE 5 - CUSTOMER RELATIONSHIPS (Details Narrative) | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Segment Reporting [Abstract] | |
Amortization expense | $ 0 |
NOTE 7 - RELATED PARTY DEBT (De
NOTE 7 - RELATED PARTY DEBT (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2015 | Jun. 30, 2016 | |
Related Party Transactions [Abstract] | ||
Promissory Note for cash amount | $ 60,000 | |
Interest rate on promissory note | 10.00% | |
First payment due date | Mar. 31, 2015 | |
Loan maturity date | Mar. 31, 2020 | |
Amount to be raised that will make the entire balance of the note due immediately | $ 2,000,000 | |
Number of Series B preferred sshares equity payment issued with debt | 53,073 | |
The relative fair value of the Series B preferred stock recorded as debt discount | $ 42,742 | |
Remaining balance of this note | $ 60,000 | |
Net of the unamortized discount | $ 25,806 |
Disclosure - NOTE 8 - COMMITMEN
Disclosure - NOTE 8 - COMMITMENTS AND CONTINGENCIES (Details Narrative) | Dec. 31, 2015USD ($) |
Disclosure - Note 8 - Commitments And Contingencies Details Narrative | |
2,016 | $ 331,880 |
2,017 | 670,569 |
2,018 | 611,410 |
2,019 | 597,093 |
2,020 | 588,000 |
Total | $ 2,798,952 |
Disclosure - NOTE 8 - COMMITM34
Disclosure - NOTE 8 - COMMITMENTS AND CONTINGENCIES (Details Narrative2) - USD ($) | 3 Months Ended | 6 Months Ended |
Mar. 31, 2015 | Jun. 30, 2016 | |
Successor [Member] | ||
Rent Expense | $ 7,589 | |
Predecessor [Member] | ||
Rent Expense | $ 6,435 |
Disclosure - NOTE 9 - STOCKHOLD
Disclosure - NOTE 9 - STOCKHOLDERS' EQUITY (Details Narrative) - $ / shares | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
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 Series B Preferred | |
Preferred Shares authorized to be Issued | 250,000 | 250,000 |
Par Value | $ 0.001 | $ 0.001 |
Common stock issuance and terms of conversion | Common Stock There were no new issuances of common stock during the three months ended March 31, 2016. As of March 31, 2016, 15,435,651 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 | $ 0.001 | |
Series B Preferred Stock [Member] | ||
Preferred Shares authorized to be Issued | 300,000 | |
Par Value | $ 0.001 |
NOTE 10 - COMMON STOCK WARRAN36
NOTE 10 - COMMON STOCK WARRANTS (Details Narrative) - $ / shares | 3 Months Ended | 6 Months Ended |
Mar. 31, 2015 | Jun. 30, 2016 | |
Shares | ||
Outstanding, Beginning Balance | 0.94 | 1,127,000 |
Granted | 0.40 | 100,000 |
Exercised | .50 | (42,000) |
Outstanding, Ending Balance | .91 | 1,185,000 |
Weighted Average Exercise Price | ||
Outstanding, Ending Balance | $ .91 |