Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 10, 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 | Sep. 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 | 21,900,106 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,016 |
BALANCE SHEETS (Unaudited)
BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
CURRENT ASSETS: | ||
Cash | $ 267,784 | $ 43,856 |
Accounts receivable, net of allowance for doubtful accounts | 5,210,300 | 259,619 |
Inventories | 4,544,441 | 196,220 |
Prepaid expenses and other current assets | 488,348 | 26,264 |
Total current assets | 10,510,873 | 525,959 |
Property and equipment, net of accumulated depreciation | 7,345,982 | 66,336 |
Goodwill | 9,524,041 | 187,500 |
Customer relationships, net of accumulated amortization | 125,000 | 389,014 |
Total assets | 27,505,896 | 1,168,809 |
CURRENT LIABILITIES: | ||
Accounts payable, accrued expenses and other current liabilities | 5,713,327 | 460,434 |
Factoring payable | 0 | 110,663 |
Current portion of notes payable | 4,500,000 | 0 |
Total current liabilities | 10,213,327 | 571,097 |
Convertible note payable, net of unamortized discount | 0 | 0 |
Notes payable, net of unamortized discounts and current portion | 10,673,496 | 78,931 |
Related party debt, net of unamortized discount | 28,953 | 23,669 |
Total liabilities | 20,915,776 | 673,697 |
COMMITMENTS AND CONTINGENCIES | 0 | 0 |
STOCKHOLDERS' EQUITY: | ||
Common stock, $0.001 par value, 50,000,000 shares authorized;21,900,106 share issued and outstanding at September 30, 2016, and 15,435,461 shares issued and shares outstanding at December 31, 2015 | 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, $1.001 par value: 300,000 shares authorized, 254,807 shares issued and outstanding | 285 | 255 |
Additional paid-in capital | 12,021,177 | 3,811,049 |
Accumulated deficit | (5,453,492) | (3,331,878) |
Total stockholders' equity | 6,590,120 | 495,112 |
Total liabilities and stockholders' equity | 27,505,896 | $ 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, $1.001 par value: 300,000 shares authorized, 254,807 shares issued and outstanding | $ 285 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 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 | 21,900,106 | 15,435,461 |
Common Stock, shares outstanding | 21,900,106 | 15,435,461 |
Series A Preferred Stock [Member] | ||
Preferred Stock, par value | $ 0.001 | |
Preferred Stock, shares authorized | 250,000 | |
Preferred Stock, shares issued | 250,000 | |
Preferred Stock, shares outstanding | 250,000 | |
Series B Preferred Stock [Member] | ||
Preferred Stock, par value | $ 0.001 | |
Preferred Stock, shares authorized | 300,000 | |
Preferred Stock, shares issued | 254,807 | |
Preferred Stock, shares outstanding | 254,807 |
STATEMENTS OF OPERATIONS (Unaud
STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2015 | Sep. 30, 2016 | |
OTHER INCOME (EXPENSE): | |||||
INCOME (LOSS) FROM CONTINUING OPERATIONS | $ (396,703) | ||||
INCOME FROM DISCONTINUED OPERATIONS | 0 | ||||
NET INCOME (LOSS) | $ (396,703) | ||||
NET (LOSS) INCOME PER SHARE – BASIC AND DILUTED | |||||
Continuing operations | $ (0.02) | ||||
Net loss income per share basic diluted operation | $ (0.02) | ||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED | 21,900,106 | ||||
Successor [Member] | |||||
REVENUES | $ 13,482,012 | $ 611,014 | $ 1,302,999 | $ 14,757,552 | |
Cost of Good Sold | 10,529,464 | 458,873 | 981,336 | 11,629,593 | |
GROSS PROFIT | 2,952,548 | 152,141 | 321,663 | 3,127,959 | |
OPERATING EXPENSES: | |||||
Advertising, promotion and selling | 708,174 | 126,420 | 214,701 | 906,009 | |
General and administrative | 1,798,798 | 277,567 | 835,471 | 2,819,226 | |
Gain on forgiveness of accrued payroll | 0 | 0 | (500,000) | 0 | |
Legal and professional | 150,708 | 63,520 | 171,494 | 1,326,108 | |
Total operating expenses | 2,657,680 | 467,507 | 721,666 | 5,051,343 | |
INCOME (LOSS) FROM OPERATIONS | 294,868 | (315,366) | (400,003) | (1,923,384) | |
OTHER INCOME (EXPENSE): | |||||
Interest expense | (123,246) | (34,767) | (107,960) | (189,470) | |
Other income (expense) | (7,826) | 10,853 | 10,853 | (8,760) | |
Total other income (expense) | (131,072) | (23,914) | (97,107) | (198,230) | |
INCOME (LOSS) FROM CONTINUING OPERATIONS | 163,796 | (288,638) | (497,110) | (2,121,614) | |
INCOME FROM DISCONTINUED OPERATIONS | 0 | 50,642 | 133,814 | 0 | |
NET INCOME (LOSS) | $ 163,796 | $ (288,638) | $ (363,296) | $ (2,121,614) | |
NET (LOSS) INCOME PER SHARE – BASIC AND DILUTED | |||||
Continuing operations | $ 0.01 | $ (0.02) | $ (0.03) | $ (0.12) | |
Discontinued operations | 0 | 0 | 0.01 | 0 | |
Net loss income per share basic diluted operation | $ 0.01 | $ (0.02) | $ (0.02) | $ (0.12) | |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED | 21,900,106 | 15,403,925 | 14,318,764 | 17,878,784 | |
Predecessor [Member] | |||||
REVENUES | $ 576,863 | ||||
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 | 0 | ||||
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) | 0 | ||||
Total other income (expense) | (2,294) | ||||
INCOME (LOSS) FROM CONTINUING OPERATIONS | (72,022) | ||||
INCOME FROM DISCONTINUED OPERATIONS | 0 | ||||
NET INCOME (LOSS) | $ (72,022) |
STATEMENTS OF CASH FLOWS (Unaud
STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income (loss) | $ (396,703) | $ (537,775) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
CASH AT BEGINNING OF PERIOD | 43,856 | ||||||
CASH AT END OF PERIOD | $ 267,784 | 267,784 | 43,856 | ||||
Successor [Member] | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income (loss) | 163,796 | $ (288,638) | $ (363,296) | $ (363,296) | (2,121,614) | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization | 121,918 | 208,485 | |||||
Amortization of debt discount | 59,207 | 44,803 | |||||
Gain on forgiveness of accrued payroll | 0 | 0 | (500,000) | (500,000) | 0 | ||
Accrued acquisition costs | 0 | 753,857 | |||||
Common stock issued for services | 304,580 | 956,596 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (328,812) | 676,988 | |||||
Inventories | (52,629) | 499,196 | |||||
Prepaid expenses and other current assets | 44,675 | 30,888 | |||||
Accounts payable, accrued expenses and other current liabilities | 330,319 | (59,597) | |||||
Reserve for legal settlement | 0 | 0 | |||||
Net cash provided by (used in) operating activities | (384,038) | 989,602 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchases of property and equipment | (24,327) | (6,842) | |||||
Cash paid to acquire the combined assets of Xing Beverage, LLC | 0 | (8,500,000) | |||||
Acquisition costs paid to acquire Xing Beverage, LLC | 0 | (753,857) | |||||
Repayment of note issued for acquisition of assets of B&R Liquid Adventure | (140,000) | 0 | |||||
Acquisition of assets of B&R Liquid Adventure | (260,000) | 0 | |||||
Net cash used in investment activities | (424,327) | (9,260,699) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Borrowings on notes payable and bank indebtedness | 339,322 | 10,700,000 | |||||
Proceeds from convertible note payable | 0 | 200,000 | |||||
Net factoring advances | 170,228 | (110,663) | |||||
Exercise of stock warrants | 0 | 21,000 | |||||
Issuance of common stock for cash | 61,200 | 0 | |||||
Issuance of Series B Preferred stock for cash | 25,000 | 0 | |||||
Payments on convertible notes payable to related parties | 0 | 0 | |||||
Repayment of notes payable to related party | (50,750) | 0 | |||||
Repayment of notes payable and capital lease obligations | (136,379) | (2,315,312) | |||||
Net cash provided by (used in) financing activities | 408,621 | 8,495,025 | |||||
NET CHANGE IN CASH | (399,744) | 223,928 | |||||
CASH AT BEGINNING OF PERIOD | 458,135 | 43,856 | |||||
CASH AT END OF PERIOD | $ 267,784 | $ 58,391 | $ 458,135 | 58,391 | $ 267,784 | 43,856 | |
Predecessor [Member] | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income (loss) | (72,022) | ||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization | 5,100 | ||||||
Amortization of debt discount | 0 | ||||||
Gain on forgiveness of accrued payroll | 0 | ||||||
Accrued acquisition costs | 0 | ||||||
Common stock issued for services | 0 | ||||||
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 provided by (used in) 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 Beverage, LLC | 0 | ||||||
Acquisition costs paid to acquire Xing Beverage, LLC | 0 | ||||||
Repayment of note issued for acquisition of assets of B&R Liquid Adventure | 0 | ||||||
Acquisition of assets of B&R Liquid Adventure | 0 | ||||||
Net cash used in investment activities | (11,688) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Borrowings on notes payable and bank indebtedness | 0 | ||||||
Proceeds from convertible note payable | 0 | ||||||
Net factoring advances | 0 | ||||||
Exercise of stock warrants | 0 | ||||||
Issuance of common stock for cash | 0 | ||||||
Issuance of Series B Preferred stock for cash | 0 | ||||||
Payments on convertible notes payable to related parties | (69,000) | ||||||
Repayment of notes payable to related party | 0 | ||||||
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 | 125,312 | $ 67,080 | $ 125,312 | $ 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 | 9 Months Ended |
Sep. 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 Bucha® 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 Bucha® 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 Bucha 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 Bucha® 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 September 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 accompanying unaudited interim condensed consolidated financial statements have been presented on a comparative basis. For periods after the acquisition of the bucha® Live Kombucha brand (since April 1, 2015), our operating results are referred to as Successor. For periods prior to the acquisition of the bucha® Live Kombucha brand, our operating results are referred to as Predecessor. Where applicable, a 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 September 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. As of December 31, 2015, three customers represented approximately 92.7% (59.9%, 22.9% and 10.9%) of accounts receivable. For the nine months ended September 30, 2016 (Successor), three customers represented approximately 27.5% (14.5%, 7.5% and 5.5%) of revenue. For the six months ended September 30, 2015 (Successor), three customers represented approximately 31.3% (18.8%, 7.9% and 4.5%) 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. On July 1 st , 2016 the Company cancelled its factoring contract. As of September 30, 2016 (Successor), the Company has no factoring payable liability as compared to $110,663 as of December 31, 2015. 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 September 30, 2016 and December 31, 2015, accumulated amortization was $125,000 and $62,500, respectively. Amortization expense was $20,834 and $62,500 for the three and nine months ended September 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 of the FASB Topic ASC 360, Property, Plant, and Equipment. We test for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Through June 30, 2016, we had not experienced impairment losses on our long-lived assets as management determined that there were no indicators that a carrying amount of the asset may not be recoverable. Cash Flows Supplemental Disclosures Nine months Ended September 30, 2016 Six months ended June 30, 2015 Three months ended March 31, 2015 Successor Successor Predecessor CASH PAID DURING THE PERIODS FOR: Interest $ 462,786 $ - $ 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 to 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 $ - $ - Convertible debt and accrued interest converted into shares of Series B Preferred stock $ 225,872 $ - $ - |
NOTE 2 - GOING CONCERN AND MANA
NOTE 2 - GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS | 9 Months Ended |
Sep. 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 September 30, 2016, the Company had an accumulated deficit of $5,453,492 and for the nine months then ended incurred operating losses of $2,121,614. For the nine months ended September 30, 2016, the Company generated cash from operating activities of $989,602. |
NOTE 3 ACQUISITION OF XING BEVE
NOTE 3 ACQUISITION OF XING BEVERAGE, LLC | 9 Months Ended |
Sep. 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 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 (7,526,874 ) 10,859,973 Goodwill 9,135,027 $ 19,995,000 The above allocation is preliminary and is subject to change. The acquisition was consummated on June 30, 2016, and as such, 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 3 to 6 months. Any adjustments necessary may be material to the consolidated balance sheet and the amount of goodwill recognized. Any resulting adjustments would have no impact to the September 30, 2016 reported operating results or cash flows. 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. During the quarter ended September 30, 2016, our preliminary assessment of goodwill increased by $2,188,512 resulting from increased liabilities that were assumed in the business acquisition. In connection with the acquisition of Xing Beverage, LLC (see Note 3, Acquisition of Xing Beverage, LLC The following unaudited pro forma financial results reflects the historical operating results of the Company, including the Predecessor for the three months ended March 31, 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 $1,714,463 of one-time transactional costs that were expensed during the nine months ended September 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 necessary 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. Nine months ended September 30, 2016 Year ended December 31, 2015 (unaudited) (unaudited) Revenues $ 37,520,362 $ 52,120,203 Net loss from continuing operations $ (396,703 ) $ (407,156 ) Net income from discontinued operations -- (130,619 ) Net loss $ (396,703 ) $ (537,775 ) Income (loss) per share – Basic and diluted Continuing operations $ (0.02 ) $ (0.03 ) Discontinued operations -- (0.01 ) $ (0.02 ) $ (0.04 ) Weighted average number of common shares outstanding – Basic and 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 | 9 Months Ended |
Sep. 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 butx 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: September 30, 2016 December 31, 2015 Raw materials $ 357,179 $ 46,928 Work-in-process 25,316 5,798 Finished goods 4,161,946 143,494 $ 4,544,441 $ 196,220 |
NOTE 5 - PROPERTY AND EQUIPMENT
NOTE 5 - PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
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: September 30, 2016 December 31, 2015 Land and building $ 6,270,000 $ - Trucks and coolers 630,000 - Other property and equipment 602,182 76,551 Less: accumulated depreciation (156,200 ) (10,215 ) $ 7,345,982 $ 66,336 Depreciation expense, computed on the basis of three-to-five year useful lives for all property and equipment, and a 50-year useful life on the building, was $138,330 and $3,238 for the three months ended September 30, 2016 and 2015 (Successor). For the nine months ended September 30, 2016 (Successor), depreciation expense was $145,985. Depreciation expense was $6,477 for the six months ended September 30, 2015 (Successor) and $5,100 for the three months ended March 31, 2015 (Predecessor). Depreciation expense is classified as cost of goods sold in the statements of operations. |
NOTE 6 - NOTES PAYABLE AND CONV
NOTE 6 - NOTES PAYABLE AND CONVERTIBLE NOTE PAYABLE | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
NOTES PAYABLE AND CONVERTIBLE NOTE PAYABLE | NOTE 6 – NOTES PAYABLE AND CONVERTIBLE NOTE PAYABLE Notes payable consisted of the following as of: September 30, 2016 December 31, 2015 Note payable due bank $ 5,800,000 $ - Note payable due to bank – secured by building 4,773,200 Seller's note payable 4,500,000 - Note payable, net of unamortized discount of $99,704 and $121,069 100,296 78,931 15,173,496 78,931 Less: current portion (4,500,000 ) - Long-term portion, net of unamortized discounts $ 10,673,496 $ 78,931 In connection with the Acquisition of Xing, the Company entered into several notes payable and received proceeds of $10.7 million.. 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 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. During the three months ended September 30, 2016, the note was converted into 30,000 shares of Series B Preferred stock. |
NOTE 7 - RELATED PARTY DEBT
NOTE 7 - RELATED PARTY DEBT | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY DEBT | NOTE 7 – RELATED PARTY DEBT Related Party debt consisted of the following as of: September 30, 2016 December 31, 2015 Related party debt, net of unamortized discount of $31,047 and $36,331 $ 28,953 $ 23,669 Less: current portion - - Long-term portion, net of unamortized discount $ 28,953 $ 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 | 9 Months Ended |
Sep. 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 bucha® 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. On June 30, 2016 the Company assumed the lease commitments for the New Age Beverage, LLC (NAB) and Xing Beverage, LLC (Xing) when they acquired those companies. The Denver property, previously leased by NAB, has a base rent of $33,000 per month plus common area expenses, with escalation clauses over time. The Colorado Springs property, previously leased by Xing, has a base rent of $14,000 per month plus common area expenses, with escalation clauses over time. 2016 $ 145,500 2017 604,349 2018 611,410 2019 597,093 2020 588,000 $ 2,546,352 Rent expense was $141,000 and $25,185 for the three months ended September 30, 2016 and 2015 (Successor). Rent expense was $384,207 for the nine months ended September 30, 2016 (Successor). Rent expense was $33,204 for the six months ended September 30, 2015 (Successor) and $6,435for the three months ended March 31, 2015 (Predecessor). 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 September 30, 2016. |
NOTE 9 - STOCKHOLDERS' EQUITY
NOTE 9 - STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 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). On August 3, 2016, the Company's 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. As of September 30, 2016, there has been no grants under the Plan. |
NOTE 10 - COMMON STOCK WARRANTS
NOTE 10 - COMMON STOCK WARRANTS | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
COMMON STOCK WARRANTS | NOTE 10 – COMMON STOCK WARRANTS As of September 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 nine months ended September 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 | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
DISCONTINUED OPERATIONS – BREWERY AND MICRO-BREWING OPERATIONS | NOTE 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 and six months ended September 30, 2015 (Successor): Three Months Ended Six Months Ended September 30, 2015 September 30, 2015 Revenues $ 262,194 $ 510,216 Cost of goods sold 203,887 366,852 Gross profit 58,307 143,364 Operating expenses - - Income from operations 58,307 143,364 Interest expense (7,665 ) (9,550 ) Income from discontinued operations $ 50,642 $ 133,814 |
NOTE 1 - NATURE OF OPERATIONS17
NOTE 1 - NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements as of September 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 accompanying unaudited interim condensed consolidated financial statements have been presented on a comparative basis. For periods after the acquisition of the bucha® Live Kombucha brand (since April 1, 2015), our operating results are referred to as Successor. For periods prior to the acquisition of the bucha® Live Kombucha brand, our operating results are referred to as Predecessor. Where applicable, a 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 September 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 nine months ended September 30, 2016 (Successor), three customers represented approximately 27.5% (14.5%, 7.5% and 5.5%) of revenue. For the six months ended September 30, 2015 (Successor), three customers represented approximately 31.3% (18.8%, 7.9% and 4.5%) 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. On July 1 st |
Goodwill and Customer Relationships | 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 September 30, 2016 and December 31, 2015, accumulated amortization was $125,000 and $62,500, respectively. Amortization expense was $20,834 and $62,500 for the three and nine months ended September 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 of the FASB Topic ASC 360, Property, Plant, and Equipment. We test for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Through June 30, 2016, we had not experienced impairment losses on our long-lived assets as management determined that there were no indicators that a carrying amount of the asset may not be recoverable. |
Cash Flows | Cash Flows Supplemental Disclosures Nine months Ended September 30, 2016 Six months ended June 30, 2015 Three months ended March 31, 2015 Successor Successor Predecessor CASH PAID DURING THE PERIODS FOR: Interest $ 462,786 $ - $ 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 to 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 $ - $ - Convertible debt and accrued interest converted into shares of Series B Preferred stock $ 225,872 $ - $ - |
NOTE 1 - NATURE OF OPERATIONS18
NOTE 1 - NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | Cash Flows Supplemental Disclosures Nine months Ended September 30, 2015 Six months ended June 30, 2015 Three months ended March 31, 2015 Successor Successor Predecessor CASH PAID DURING THE PERIODS FOR: Interest $ 462,786 $ - $ 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 to 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 $ - $ - Convertible debt and accrued interest converted into shares of Series B Preferred stock $ 225,872 $ - $ - |
NOTE 3 ACQUISITION OF XING BE19
NOTE 3 ACQUISITION OF XING BEVERAGE, LLC (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Net assets estimated fair values establishing purchase price | 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 (7,526,874 ) 10,859,973 Goodwill 9,135,027 $ 19,995,000 |
Unaudited pro forma of Xing Beverage, LLC | Nine months ended September 30, 2016 Year ended December 31, 2015 (unaudited) (unaudited) Revenues $ 37,520,362 $ 52,120,203 Net loss from continuing operations $ (396,703 ) $ (407,156 Net income from discontinued operations -- (130,619 Net loss $ (396,703 ) $ (537,775 Income (loss) per share – Basic and diluted Continuing operations $ (0.02 ) $ (0.03 Discontinued operations -- (0.01 $ (0.02 ) $ (0.04 Weighted average number of common shares outstanding – Basic and Dilutive 21,900,106 12,435,461 |
NOTE 4 - INVENTORIES (Tables)
NOTE 4 - INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | Inventories consisted of the following as of: September 30, 2016 December 31, 2015 Raw materials $ 357,179 $ 46,928 Work-in-process 25,316 5,798 Finished goods 4,161,946 143,494 $ 4,544,441 $ 196,220 |
NOTE 5 - PROPERTY AND EQUIPME21
NOTE 5 - PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Our property and equipment consisted of the following as of: September 30, 2016 December 31, 2015 Land and building $ 6,270,000 $ - Trucks and coolers 630,000 - Other property and equipment 602,182 76,551 Less: accumulated depreciation (156,200 ) (10,215 ) $ 7,345,982 $ 66,336 |
NOTE 6 - NOTES PAYABLE (Tables)
NOTE 6 - NOTES PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
NOTES PAYABLE AND CONVERTIBLE NOTE PAYABLE | Notes payable consisted of the following as of: September 30, 2016 December 31, 2015 Note payable due bank $ 5,800,000 $ - Note payable due to bank – secured by building 4,773,200 Seller's note payable 4,500,000 - Note payable, net of unamortized discount of $99,704 and $121,069 100,296 78,931 15,173,496 78,931 Less: current portion (4,500,000 ) - Long-term portion, net of unamortized discounts $ 10,673,496 $ 78,931 |
NOTE 7 - RELATED PARTY DEBT (Ta
NOTE 7 - RELATED PARTY DEBT (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party debt | Related Party debt consisted of the following as of: September 30, 2016 December 31, 2015 Related party debt, net of unamortized discount of $31,047 and $36,331 $ 28,953 $ 23,669 Less: current portion - - Long-term portion, net of unamortized discount $ 28,953 $ 23,669 |
NOTE 8 - COMMITMENTS AND CONT24
NOTE 8 - COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase Commitments for each year | Future minimum lease payments under this facilities lease are approximately as follows: 2016 $ 145,500 2017 604,349 2018 611,410 2019 597,093 2020 588,000 $ 2,546,352 |
NOTE 10 - COMMON STOCK WARRAN25
NOTE 10 - COMMON STOCK WARRANTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
A summary of common stock warrants activity | A summary of common stock warrants activity for the nine months ended September 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 |
NOTE 11 DISCONTINUED OPERATIO26
NOTE 11 DISCONTINUED OPERATIONS – BREWERY AND MICRO-BREWING OPERATIONS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Income and expense of discontinued operations | The following table provides income and expense of discontinued operations for the three and six months ended September 30, 2015 (Successor): Three Months Ended Six Months Ended September 30, 2015 September 30, 2015 Revenues $ 262,194 $ 510,216 Cost of goods sold 203,887 366,852 Gross profit 58,307 143,364 Operating expenses - - Income from operations 58,307 143,364 Interest expense (7,665 ) (9,550 ) Income from discontinued operations $ 50,642 $ 133,814 |
NOTE 1 - NATURE OF OPERATIONS27
NOTE 1 - NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2016 | |
Successor [Member] | |||
CASH PAID DURING THE PERIODS FOR Interest | $ 0 | $ 462,786 | |
CASH PAID DURING THE PERIODS FOR Income taxes | 0 | 0 | |
NONCASH INVESTING AND FINANCING ACTIVITIES: | |||
Debt issued for acquisition of B&R Liquid Adventure | 140,000 | 0 | |
Common stock issued for acquisition of B&R Liquid Adventure | 500,000 | 0 | |
Warrants issued to with convertible debt | 0 | 18,154 | |
Common stock issued for acquisition of Xing Beverage, LLC | 0 | 6,995,000 | |
Promissory note issued for acquisition of Xing Beverage, LLC | 0 | 4,500,000 | |
Convertible debt and accrued interest converted into shares of Series B Preferred stock | $ 0 | $ 225,872 | |
Predecessor [Member] | |||
CASH PAID DURING THE PERIODS FOR Interest | $ 1,861 | ||
CASH PAID DURING THE PERIODS FOR Income taxes | 0 | ||
NONCASH INVESTING AND FINANCING ACTIVITIES: | |||
Debt issued for acquisition of B&R Liquid Adventure | 0 | ||
Common stock issued for acquisition of B&R Liquid Adventure | 0 | ||
Warrants issued to with convertible debt | 0 | ||
Common stock issued for acquisition of Xing Beverage, LLC | 0 | ||
Promissory note issued for acquisition of Xing Beverage, LLC | 0 | ||
Convertible debt and accrued interest converted into shares of Series B Preferred stock | $ 0 |
NOTE 1 - NATURE OF OPERATIONS28
NOTE 1 - NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Accumulated amortization | $ 125,000 | $ 125,000 | $ 62,500 |
Successor [Member] | |||
Amortization expense | $ 62,500 | $ 20,834 |
NOTE 2 GOING CONCERN AND MANAGE
NOTE 2 GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | |
Accumulated deficit | $ (5,453,492) | $ (5,453,492) | $ (3,331,878) | ||||
Net loss | (396,703) | $ (537,775) | |||||
Successor [Member] | |||||||
Net loss | $ 163,796 | $ (288,638) | $ (363,296) | $ (363,296) | (2,121,614) | ||
Cash generated from operating activities | $ (384,038) | $ 989,602 | |||||
Predecessor [Member] | |||||||
Net loss | $ (72,022) | ||||||
Cash generated from operating activities | $ 24,330 |
NOTE 3 ACQUISITION OF XING BE30
NOTE 3 ACQUISITION OF XING BEVERAGE, LLC (Details 1) | Sep. 30, 2016USD ($) |
Business Combinations [Abstract] | |
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 | (7,526,874) |
Gross estimated fair values of acquisition | 10,859,973 |
Goodwill | 9,135,027 |
Net estimated fair values of acquisition | $ 19,995,000 |
NOTE 3 ACQUISITION OF XING BE31
NOTE 3 ACQUISITION OF XING BEVERAGE, LLC (Details 2) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Business Combinations [Abstract] | ||
Revenues | $ 37,520,362 | $ 52,120,203 |
Net loss from continuing operations | (396,703) | (407,156) |
Net income from discontinued operations | 0 | (130,619) |
Net loss | $ (396,703) | $ (537,775) |
Income (loss) per share – Basic and diluted Continuing operations | $ (0.02) | $ (0.03) |
Income (loss) per share – Basic and diluted Discontinued operations | 0 | (0.01) |
Earnings Per Share, Basic and Diluted | $ (0.02) | $ (0.04) |
Weighted average number of common shares outstanding – Basic and Dilutive | 21,900,106 | 12,435,461 |
NOTE 4 - INVENTORIES (Details)
NOTE 4 - INVENTORIES (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Note 4 - Inventories Details | ||
Raw materials | $ 357,179 | $ 46,928 |
Work in progress | 25,316 | 5,798 |
Finished goods | 4,161,946 | 143,494 |
Total | $ 4,544,441 | $ 196,220 |
NOTE 5 - PROPERTY AND EQUIPME33
NOTE 5 - PROPERTY AND EQUIPMENT (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Abstract] | ||
Land and building | $ 6,270,000 | $ 0 |
Trucks and coolers | 630,000 | 0 |
Other property and equipment | 602,182 | 76,551 |
Less: accumulated depreciation | (156,200) | (10,215) |
Value after accumulated depreciation | $ 7,345,982 | $ 66,336 |
NOTE 5 - PROPERTY AND EQUIPME34
NOTE 5 - PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | |
Successor [Member] | |||||
Depreciation expense | $ 138,330 | $ 3,238 | $ 121,918 | $ 208,485 | |
Predecessor [Member] | |||||
Depreciation expense | $ 5,100 |
NOTE 6 - NOTES PAYABLE AND CO35
NOTE 6 - NOTES PAYABLE AND CONVERTIBLE NOTE PAYABLE (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Notes to Financial Statements | ||
Note payable due bank | $ 5,800,000 | $ 0 |
Note payable due to bank – secured by building | 4,773,200 | 0 |
Seller's note payable | 4,500,000 | 0 |
Note payable, net of unamortized discount of $99,704 and $121,069 | 100,296 | 78,931 |
Note payable, Gross | 15,173,496 | 78,931 |
Less: current portion | (4,500,000) | 0 |
Long-term portion, net of unamortized discounts | $ 10,673,496 | $ 78,931 |
NOTE 7 - RELATED PARTY DEBT (De
NOTE 7 - RELATED PARTY DEBT (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Related Party Transactions [Abstract] | ||
Related party debt, net of unamortized discount of $31,047 and $36,331 | $ 28,953 | $ 23,669 |
Less: current portion | 0 | 0 |
Long-term portion, net of unamortized discount | $ 28,953 | $ 23,669 |
NOTE 7 - RELATED PARTY DEBT (37
NOTE 7 - RELATED PARTY DEBT (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2015 | Sep. 30, 2016 | |
Related Party Transactions [Abstract] | ||
Promissory Note for cash amount | $ 60,000 | |
Interest rate on promissory note | 10.00% | |
First payment due date | Jun. 30, 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 | $ 0 |
NOTE 8 - COMMITMENTS AND CONT38
NOTE 8 - COMMITMENTS AND CONTINGENCIES (Details) | Dec. 31, 2015USD ($) |
Note 8 - Commitments And Contingencies Details | |
2,016 | $ 145,500 |
2,017 | 604,349 |
2,018 | 611,410 |
2,019 | 597,093 |
2,020 | 588,000 |
Total | $ 2,546,352 |
NOTE 8 - COMMITMENTS AND CONT39
NOTE 8 - COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | |
Successor [Member] | |||||
Rent Expense | $ 141,000 | $ 25,185 | $ 33,204 | $ 384,207 | |
Predecessor [Member] | |||||
Rent Expense | $ 6,435 |
NOTE 9 - STOCKHOLDERS' EQUITY (
NOTE 9 - STOCKHOLDERS' EQUITY (Details Narrative) | 9 Months Ended |
Sep. 30, 2016$ / 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 Series B Preferred |
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. |
Series A Preferred Stock [Member] | |
Preferred Stock, par value | $ / shares | $ 0.001 |
Preferred Stock, shares authorized | 250,000 |
Preferred Stock, shares issued | 250,000 |
Preferred Stock, shares outstanding | 250,000 |
Series B Preferred Stock [Member] | |
Preferred Stock, par value | $ / shares | $ 0.001 |
Preferred Stock, shares authorized | 300,000 |
Preferred Stock, shares issued | 254,807 |
Preferred Stock, shares outstanding | 254,807 |
NOTE 10 - COMMON STOCK WARRAN41
NOTE 10 - COMMON STOCK WARRANTS (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Shares | ||
Warrants Outstanding, Beginning Balance | 1,127,000 | |
Granted | 100,000 | |
Exercised | (42,000) | |
Forfeited | 0 | |
Warrants Outstanding, Ending Balance | 1,185,000 | |
Warrants exercisable, Ending Balance | 1,185,000 | 1,185,000 |
Weighted Average Exercise Price | ||
Warrants Outstanding, Beginning Balance | $ 0.94 | |
Granted | 0.4 | |
Exercised | 0.5 | |
Forfeited | 0 | |
Warrants Outstanding, Ending Balance | 0.91 | |
Warrants exercisable, Ending Balance | $ 0.91 | $ 0.91 |
NOTE 11 DISCONTINUED OPERATIO42
NOTE 11 DISCONTINUED OPERATIONS – BREWERY AND MICRO-BREWING OPERATIONS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | |
Income from operations | $ (396,703) | $ (407,156) | ||||
Income from discontinued operations | 0 | $ (130,619) | ||||
Successor [Member] | ||||||
Revenues | $ 13,482,012 | $ 611,014 | $ 1,302,999 | 14,757,552 | ||
Cost of goods sold | 10,529,464 | 458,873 | 981,336 | 11,629,593 | ||
Gross profit | 2,952,548 | 152,141 | 321,663 | 3,127,959 | ||
Operating expenses | 2,657,680 | 467,507 | 721,666 | 5,051,343 | ||
Income from operations | 163,796 | (288,638) | (497,110) | (2,121,614) | ||
Income from discontinued operations | $ 0 | 50,642 | $ 133,814 | $ 0 | ||
Discontinued Operations [Member] | Successor [Member] | ||||||
Revenues | 262,194 | $ 510,216 | ||||
Cost of goods sold | 203,887 | 366,852 | ||||
Gross profit | 58,307 | 143,364 | ||||
Operating expenses | 0 | 0 | ||||
Income from operations | 58,307 | 143,364 | ||||
Interest expense | (7,665) | (9,550) | ||||
Income from discontinued operations | $ 50,642 | $ 133,814 |