Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Mar. 15, 2014 | Jun. 30, 2013 | |
Equipment under capital lease | ' | ' | ' |
Entity Registrant Name | 'MENDOCINO BREWING CO INC | ' | ' |
Entity Central Index Key | '0000919134 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
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 Public Float | ' | ' | $711,300 |
Entity Common Stock, Shares Outstanding | ' | 12,611,133 | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Current Assets | ' | ' |
Cash | $324,800 | $198,500 |
Accounts receivable, net | 4,119,300 | 5,421,600 |
Inventories | 2,242,000 | 1,910,500 |
Prepaid expenses | 591,600 | 514,900 |
Total Current Assets | 7,277,700 | 8,045,500 |
Property and Equipment, net | 11,664,800 | 11,937,200 |
Other Assets | ' | ' |
Deposits and other assets | 324,500 | 268,800 |
Total Other Assets | 324,500 | 268,800 |
Total Assets | 19,267,000 | 20,251,500 |
Current Liabilities | ' | ' |
Secured lines of credit | 2,245,000 | 3,159,700 |
Accounts payable | 4,893,800 | 5,693,600 |
Accrued liabilities | 1,467,900 | 1,652,100 |
Current maturities of long-term debt to related party | 552,500 | ' |
Current maturities of long-term debt, others | 4,448,000 | 450,000 |
Current maturities of capital leases | 5,300 | 3,100 |
Total Current Liabilities | 13,612,500 | 10,958,500 |
Long-Term Liabilities | ' | ' |
Subordirated convertible notes to realted party | 3,497,900 | 3,407,000 |
Long term debt to related party, less current maturities | 1,104,900 | ' |
Long term debt – others | ' | 3,982,400 |
Long term lease, less current maturities | 17,700 | ' |
Total Long-Term Liabilities | 4,620,500 | 7,389,400 |
Total Liabilities | 18,233,000 | 18,347,900 |
Stockholders' Equity | ' | ' |
Preferred stock, Series A, no par value, with liquidation preference of $1 per share; 10,000,000 shares authorized, 227,600 shares issued and outstanding | 227,600 | 227,600 |
Common stock, no par value 30,000,000 shares authorized, 12,611,133 shares issued and outstanding | 15,100,300 | 15,100,300 |
Accumulated comprehensive income | 413,700 | 406,400 |
Accumulated deficit | -14,707,600 | -13,830,700 |
Total Stockholders' Equity | 1,034,000 | 1,903,600 |
Total Liabilities and Stockholders' Equity | $19,267,000 | $20,251,500 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Financial Position [Abstract] | ' | ' |
Preferred stock, Series A, liquidation preference per share | $1 | $1 |
Preferred stock, no par value | ' | ' |
Preferred stock, Series A, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, Series A, shares issued | 227,600 | 227,600 |
Preferred stock, Series A, shares outstanding | 227,600 | 227,600 |
Common stock, no par value | ' | ' |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 12,611,133 | 12,611,133 |
Common stock, shares outstanding | 12,611,133 | 12,611,133 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations and Comprehensive Income (Loss) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Statement [Abstract] | ' | ' |
Sales | $36,418,200 | $40,335,900 |
Less excise tax | 782,300 | 1,091,300 |
Net sales | 35,635,900 | 39,244,600 |
Cost of goods sold | 25,770,300 | 28,442,100 |
Gross profit | 9,865,600 | 10,802,500 |
Operating expenses | ' | ' |
Marketing | 5,432,000 | 5,631,000 |
General and administrative | 4,699,200 | 4,236,300 |
Total operating expenses | 10,131,200 | 9,867,300 |
Income (Loss) from Operations | -265,600 | 935,200 |
Other Income (Expense): | ' | ' |
Miscellaneous income | 44,500 | 66,500 |
Gain (loss) on disposal of assets | -74,600 | 9,400 |
Interest expense | -577,100 | -450,000 |
Total Other Expense, net | -607,200 | -374,100 |
Income (Loss) before income taxes | -872,800 | 561,100 |
Provision for income taxes | 4,100 | 2,700 |
Net Income (Loss) | -876,900 | 558,400 |
Other Comprehensive Income (Loss) - Foreign currency translation adjustment | 7,300 | -117,200 |
Comprehensive Income (loss) | ($869,600) | $441,200 |
Net income (loss) per common share - | ' | ' |
Basic and Diluted | ($0.07) | $0.04 |
Weighted average common shares outstanding - | ' | ' |
Basic | 12,611,133 | 12,611,133 |
Diluted | 12,611,133 | 14,899,235 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements' Equity (USD $) | Series A Preferred Shares [Member] | Common Shares [Member] | Other Accumulated Comprehensive Income [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2011 | $227,600 | $15,100,300 | $523,600 | ($14,389,100) | $1,462,400 |
Balance, shares at Dec. 31, 2011 | 227,600 | 12,611,133 | ' | ' | ' |
Net income (loss) | ' | ' | ' | 558,400 | 558,400 |
Currency translation adjustment | ' | ' | -117,200 | ' | -117,200 |
Balance at Dec. 31, 2012 | 227,600 | 15,100,300 | 406,400 | -13,830,700 | 1,903,600 |
Balance, shares at Dec. 31, 2012 | 227,600 | 12,611,133 | ' | ' | ' |
Net income (loss) | ' | ' | ' | -876,900 | -876,900 |
Currency translation adjustment | ' | ' | 7,300 | ' | 7,300 |
Balance at Dec. 31, 2013 | $227,600 | $15,100,300 | $413,700 | ($14,707,600) | $1,034,000 |
Balance, shares at Dec. 31, 2013 | 227,600 | 12,611,133 | ' | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net income (loss) | ($876,900) | $558,400 |
Adjustments to reconcile net loss to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 1,105,400 | 1,048,100 |
Provision for doubtful accounts | -49,400 | -40,000 |
(Gain) loss on the disposal of assets | 74,600 | -9,400 |
Interest accrued on related party notes | 90,900 | 91,300 |
Changes in operating assets and liabilities: | ' | ' |
(Increase) decrease in accounts receivable | 1,395,400 | 164,000 |
(Increase) decrease in inventories | -330,100 | -110,900 |
(Increase) decrease in prepaid expenses | -68,100 | -86,100 |
(Increase) decrease in deposits and other assets | -107,900 | 76,000 |
Increase (decrease) in accounts payable | -776,500 | -1,221,300 |
Increase (decrease) in accrued liabilities | -181,300 | -2,000 |
Net cash provided by operating activities | 276,100 | 468,100 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Purchases of property, equipment and leasehold improvements | -819,000 | -1,503,100 |
Proceeds from sale of fixed assets | 3,000 | 12,200 |
Net cash used in investing activities | -816,000 | -1,490,900 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Net borrowing (repayment) on lines of credit | -907,200 | 1,360,500 |
Borrowing on long term debts, related party | 1,564,200 | ' |
Borrowing on long term debts, others | 539,700 | 184,700 |
Repayment on long-term notes | -524,100 | -456,800 |
Repayment on related party notes | ' | -95,100 |
Payments on obligations under capital leases | -3,100 | -64,700 |
Net cash provided by financing activities: | 669,500 | 928,600 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | -3,300 | -19,500 |
Net Change in Cash | 126,300 | -113,700 |
Cash at beginning of period | 198,500 | 312,200 |
Cash at end of period | 324,800 | 198,500 |
Cash paid during the period for: | ' | ' |
Interest | 486,200 | 358,700 |
Income taxes | 4,100 | 2,700 |
Non-cash investing and financing activities: | ' | ' |
Seller financed equipment | $23,000 | ' |
Description_of_Operations_and_
Description of Operations and Summary of Significant Accounting Policies | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
Description of Operations and Summary of Significant Accounting Policies | ' | ||||||||
1. Description of Operations and Summary of Significant Accounting Policies | |||||||||
Description of Operations | |||||||||
Mendocino Brewing Company, Inc., was formed in 1983 in California, and has two operating subsidiaries: Releta Brewing Company, LLC, (“Releta”), and United Breweries International (UK) Limited (“UBIUK”). In the United States (“US”), MBC and its subsidiary, Releta, operate two breweries that produce beer for the specialty “craft” segment of the beer market. The breweries are located in Ukiah, California and Saratoga Springs, New York. The majority of sales for Mendocino Brewing Company in the US are in California. The Company brews several brands, of which Red Tail Ale is the flagship brand. In addition, the Company performs contract brewing for several other brands, and MBC holds the license to distribute Kingfisher Premium Lager Beer in the US and Canada. Generally, product shipments are made directly from the breweries to the wholesalers or distributors in accordance with state and local laws. In these notes, the term “the Company” and its variants and the terms “we,” “us,” and “our” and their variants are generally used to refer to Mendocino Brewing Company, Inc. together with its subsidiaries, while the term “MBC” is used to refer to Mendocino Brewing Company, Inc. as an individual entity. | |||||||||
The Company’s United Kingdom (“UK”) subsidiary, UBIUK, is a holding company for Kingfisher Beer Europe Limited (“KBEL”). KBEL is a distributor of Kingfisher Premium Lager Beer, in the United Kingdom and Europe. The distributorship is located in Maidstone, Kent in the UK. | |||||||||
Subsequent Events | |||||||||
The Company evaluates events that occur subsequent to the balance sheet date of periodic reports, but before financial statements are issued for periods ending on such balance sheet dates, for possible adjustment to such financial statements or other disclosure. This evaluation generally occurs through the date at which the Company’s financial statements are electronically prepared for filing with the Securities and Exchange Commission (“SEC”). | |||||||||
Principles of Consolidation | |||||||||
The consolidated financial statements present the accounts of Mendocino Brewing Company, Inc., and its wholly-owned subsidiaries, Releta and UBIUK. All material intracompany and inter-company balances, profits and transactions have been eliminated. | |||||||||
Basis of Presentation and Organization | |||||||||
The financial statements for the years ended December 31, 2013 and 2012 have been prepared in accordance with accounting principles generally accepted in the United States. The financial statements and notes are representations of the management and the Board of Directors, who are responsible for their integrity and objectivity. | |||||||||
Reclassifications | |||||||||
Certain items in the financial statements for the prior year have been reclassified to conform to the current year presentation. These reclassifications had no effect on net income or equity. | |||||||||
Cash and Cash Equivalents, Short- and Long-Term Investments | |||||||||
For purposes of cash flows, the Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. | |||||||||
Foreign Operations | |||||||||
Approximately 23% of the Company’s assets are located in the UK. Although this country is considered economically stable and the Company has experienced no notable burden from foreign exchange transactions, export duties, or government regulations, it is always possible that unanticipated events in foreign countries could disrupt the Company’s operations. | |||||||||
Trade Accounts Receivable and Allowance for Doubtful Accounts | |||||||||
Trade accounts receivable are stated at the invoiced amount and are the amount the Company expects to collect. Sales are made to approved customers on an open account basis, subject to established credit limits, and generally no collateral is required. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable; however, changes in circumstances relating to accounts receivable may result in a requirement for additional allowances in the future. | |||||||||
Allowance for Doubtful Accounts | |||||||||
The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. Management considers the following factors when determining the collectibility of specific customer accounts: customer credit-worthiness, past transaction history with the customer, current economic and industry trends and changes in customer payment terms. Past due balances over 90 days and other higher risk amounts are reviewed individually for collectibility. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. Based on management’s assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and a credit to a valuation allowance. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. The Company had allowances of $68,200 and $207,800 for doubtful accounts receivable as of December 31, 2013 and 2012, respectively. | |||||||||
Inventories | |||||||||
Inventories are stated at the lower of average cost, which approximates the first-in, first-out method, or market (net realizable value). The Company regularly reviews its inventories for the presence of obsolete product attributed to age, seasonality and quality. Inventories that are considered obsolete are written off or adjusted to carrying value. | |||||||||
Prepaid Expenses and Other Assets | |||||||||
Prepaid expenses and other assets generally consist of deposits, other receivables, and prepayments for future services. Prepayments are expensed when the services are received. | |||||||||
Property and Equipment | |||||||||
Property and equipment are stated at cost and depreciated or amortized using the straight-line method over the assets’ estimated useful lives. Leasehold improvements are amortized over the shorter of the life of the improvement or the life of the related lease. The Company uses other depreciation methods (generally, accelerated depreciation methods) for tax purposes where appropriate. Costs of maintenance and repairs are charged to expense as incurred; significant renewals and betterments are capitalized. When property and equipment are retired, sold, or otherwise disposed of, the asset’s carrying amount and related accumulated depreciation are removed from the accounts and any gain or loss is included in the statement of operations. | |||||||||
Estimated useful lives of property and equipment are as follows: | |||||||||
Building | 40 years | ||||||||
Machinery and equipment | 3 - 40 years | ||||||||
Vehicles | 3 - 5 years | ||||||||
Furniture and fixtures | 5 - 10 years | ||||||||
Assets Held under Capital Leases | |||||||||
Assets held under capital leases are recorded at the lower of the net present value of the minimum lease payments or the fair value of the leased asset at the inception of the lease. Amortization expense is computed using the straight-line method over the shorter of the estimated useful lives of the assets or the period of the related lease. | |||||||||
Impairment of Long-Lived Assets | |||||||||
The Company assesses the impairment of its long-lived assets periodically in accordance with the provisions of Accounting Standards Codification (ASC) 360, (Accounting for the Impairment and Disposal of Long-Lived Assets). The Company reviews the carrying value of property and equipment and any other long-lived assets for impairment annually or whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends, and prospects, as well as the effects of obsolescence, demand, competition, and other economic factors. Long-lived assets that management commits to sell or abandon are reported at the lower of carrying amount or fair value less cost to sell. During the year ended December 31, 2013 and 2012 the Company recorded no impairment losses related to long-lived assets. | |||||||||
Deferred Financing Costs | |||||||||
Costs relating to obtaining financing are capitalized and amortized over the term of the related debt. When a loan is paid in full, any unamortized financing costs are removed from the related accounts and charged to operations. Deferred financing costs related to borrowing made in June 2011 were $225,000. Amortization of deferred financing costs charged to operations was $45,000 for the years ended December 31, 2013 and 2012. | |||||||||
Income Taxes | |||||||||
The Company accounts for income taxes in accordance with ASC 750 which requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are recognized for deductible temporary differences and operating loss, and tax credit carryforwards. A valuation allowance is established to reduce the deferred tax asset if it is more likely than not that the related tax benefits will not be realized. | |||||||||
The Company periodically assesses uncertain tax positions that the Company has taken or expects to take on a tax return (including a decision whether to file or not to file a return in a particular jurisdiction). The Company evaluated its tax positions and determined that there were no uncertain tax benefits for the years ending December 31, 2013 and 2012. | |||||||||
Revenue Recognition | |||||||||
The Company recognizes revenue from brewing and distribution operations in accordance with ASC 605. The Company recognizes revenue from product sales, net of discounts. | |||||||||
The Company recognizes revenue only when all of the following criteria have been met: | |||||||||
● | Persuasive evidence of an arrangement exists; | ||||||||
● | Delivery has occurred or services have been rendered; | ||||||||
● | The fee for the arrangement is fixed or determinable; and | ||||||||
● | Collectibility is reasonably assured. | ||||||||
“Persuasive Evidence of an Arrangement” – The Company documents all terms of an arrangement in a written contract or purchase order signed by the customer prior to recognizing revenue. | |||||||||
“Delivery Has Occurred or Services Have Been Performed” – The Company delivers the products prior to recognizing revenue or performs services as per contractual terms. Product is considered delivered upon delivery to a customer’s designated location and services are considered performed upon completion of Company’s contractual obligations. | |||||||||
“The Fee for the Arrangement is Fixed or Determinable” – Prior to recognizing revenue, an amount is either fixed or determinable under the terms of the written contract. The price is negotiated at the outset of the arrangement and is not subject to refund or adjustment during the initial term of the arrangement. | |||||||||
“Collectibility is Reasonably Assured” – The Company determines that collectibility is reasonably assured prior to recognizing revenue. Collectibility is assessed on a customer-by-customer basis based on criteria outlined by management. The Company does not enter into arrangements unless collectibility is reasonably assured at the outset. Existing customers are subject to ongoing credit evaluations based on payment history and other factors. If it is determined during the arrangement that collectibility is not reasonably assured, revenue is recognized on a cash basis. | |||||||||
The Company records certain consideration paid to customers for services or placement fees as a reduction in revenue rather than as an expense. The Company reports these items on the statement of operations as a reduction in revenue and as a corresponding reduction in marketing and selling expenses. | |||||||||
Revenues from the brewpub and gift store are recognized when sales have been completed. | |||||||||
Excise Taxes | |||||||||
The federal government levies excise taxes on the sale of alcoholic beverages, including beer. For brewers producing less than 2.0 million barrels of beer per calendar year, the federal excise tax is $7 per barrel on the first 60,000 barrels of beer removed for consumption or sale during a calendar year, and $18 per barrel for each barrel in excess of 60,000. Individual states also impose excise taxes on alcoholic beverages in varying amounts, which have also been subject to change. Sales as presented in the Company’s statements of operations reflect the amount invoiced to the Company’s wholesalers and other customers. Excise taxes due to federal and state agencies are not collected from the Company’s customers, but rather are the responsibility of the Company. Net sales, as presented in the Company’s statements of operations, are reduced by applicable federal and state excise taxes. In the UK, excise taxes are paid by the manufacturer and not by the Company. | |||||||||
Discounts | |||||||||
To further promote retail sales of its products and in response to local competitive conditions, the Company regularly offers price discounts to distributors and retailers in most of its markets. Sales for the years 2013 and 2012, as presented in the Company’s statements of operations, are reduced by $1,165,100 and $1,330,800 respectively, related to such discounts. | |||||||||
Chargebacks and Sales Reserves | |||||||||
The Company has estimated reserves for chargebacks for promotional expenses by distributors. The Company estimates its reserves by utilizing historical information and current contracts. In estimating chargeback reserves, the Company analyzes actual chargeback amounts and applies historical chargeback rates to estimate potential chargeback. The Company routinely assesses its experience with distributors and adjusts the reserves accordingly. If actual chargebacks and other rebates are greater than the Company’s estimates, additional reserves may be required. Revisions to estimates are charged to income in the period in which the facts that give rise to the revision become known. | |||||||||
Seasonality | |||||||||
Sales of the Company’s products are somewhat seasonal, with the first and fourth quarters historically being the slowest and the rest of the year generating stronger sales. The volume of sales may also be affected by weather conditions. Because of the seasonality of the Company’s business, results for any one quarter are not necessarily indicative of the results that may be achieved for the full fiscal year. | |||||||||
Taxes Collected From Customers | |||||||||
Taxes collected from customers and remitted to tax authorities are sales tax collected from our retail customers. State and federal excise taxes on beer shipments are the responsibility of the company and included in our selling price. Excise taxes on shipments are shown in a separate line item in the consolidated statement of operations as reduction of gross sales. Sales taxes collected from customers are recognized as a liability, with the liability subsequently reduced when the taxes are remitted to the tax authority. Total sales taxes collected from customers and remitted to tax authorities were not material in 2013 and 2012. | |||||||||
Delivery Costs | |||||||||
In accordance with ASC 605, (Shipping and Handling Fees and Costs) the company reports pass-through freight costs on beer shipped to independent beer wholesalers in cost of sales. Reimbursements of these costs by wholesalers are reported in sales. | |||||||||
Non-pass-through costs incurred by the Company to deliver beer to wholesalers are included in marketing, distribution and administrative expenses. These costs are considered marketing related because in addition to product delivery, wholesalers provide marketing and other customer service functions to customers including product display, shelf space management, distribution of promotional materials, and product rotation. Shipping costs included in marketing expense totaled $911,200 and $914,200, for the years ended December 31, 2013 and 2012, respectively. | |||||||||
Basic and Diluted Income per Share | |||||||||
The basic earnings per share is computed by dividing the earnings attributable to common stockholders by the weighted average number of common shares outstanding during the period. In 2013, the effect of any potentially dilutive securities would have been anti-dilutive. Therefore, the conversion of the related party notes has been excluded from the calculation of net earnings per share for the year ended December 31, 2013. Basic net earnings per share exclude the dilutive effect of stock options or warrants and convertible notes. The computations of basic and dilutive net earnings per share are as follows: | |||||||||
Year Ended December 31 | |||||||||
2013 | 2012 | ||||||||
Net income (loss) | $ | (876,900 | ) | 558,400 | |||||
Weighted average common shares outstanding | 12,611,133 | 12,611,133 | |||||||
Basic net income (loss) per share | $ | (0.07 | ) | 0.04 | |||||
Interest expense on convertible notes | $ | — | 91,300 | ||||||
Income (loss) for purpose of computing diluted net income per share | $ | (876,900 | ) | 649,700 | |||||
Incremental shares from assumed exercise of dilutive securities | — | 2,288,102 | |||||||
Dilutive potential common shares | 12,611,133 | 14,899,235 | |||||||
Diluted net earnings (loss) per share | $ | (0.07 | ) | 0.04 | |||||
Foreign Currency Translation | |||||||||
The Company has subsidiaries located in the UK, where the local currency, UK Pound Sterling, is the functional currency. Financial statements of these subsidiaries are translated into U.S. dollars using period-end exchange rates for assets and liabilities and average exchange rates during the period for revenues and expenses. Cumulative translation adjustments associated with net assets or liabilities are reported in non-owner changes in equity. Any exchange rate gains or losses related to foreign currency transactions are recognized in the income statement as incurred, in the same financial statement caption as the underlying transaction, and are not material for any year shown. | |||||||||
Cash at UBIUK was translated at exchange rates in effect at December 31, 2013 and 2012, and its cash flows were translated at the average exchange rates for the years then ended. Changes in cash resulting from the translations are presented as a separate item in the statements of cash flows. | |||||||||
Use of Estimates | |||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America includes having the Company make estimates and assumptions affecting the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities. The amounts estimated could differ from actual results. Significant estimates include, allowance for doubtful accounts, depreciation and amortization periods, and the future utilization of deferred tax assets. | |||||||||
Advertising | |||||||||
Advertising costs are expensed as incurred and were $755,600 and $900,700 for the years ended December 31, 2013 and 2012, respectively. | |||||||||
Fair Value of Financial Instruments | |||||||||
Fair Value | |||||||||
The fair value of the Company’s financial instruments reflects the amounts that the Company estimates to receive in connection with the sale of an asset or paid in connection with the transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). For financial assets and liabilities that are periodically re-measured to fair value, the Company discloses a fair value hierarchy that prioritizes the use of inputs used in valuation techniques into the following three levels: | |||||||||
Level 1 – quoted prices in active markets for identical assets and liabilities. | |||||||||
Level 2 – observable inputs other than quoted prices in active markets for identical assets and liabilities. | |||||||||
Level 3 – unobservable inputs. | |||||||||
At December 31, 2013 and 2012, the Company had no financial assets or liabilities that required periodic re-measurement at fair value. | |||||||||
The recorded value of certain financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable, other current assets, accounts payable and accrued expenses, approximate the fair value of the respective assets and liabilities at December 31, 2013 and December 31, 2012 based upon the short-term nature of the assets and liabilities. Based on borrowing rates currently available to the Company for loans with similar terms, the carrying value of short and long term notes payable approximate fair value. | |||||||||
Comprehensive Income | |||||||||
Comprehensive income is composed of the Company’s net income and changes in equity from all other non-stockholder sources. The changes from these non-stockholder sources are reflected as a separate item in the statements of operations and comprehensive income. | |||||||||
Reportable Segments | |||||||||
The Company manages its operations through two business segments: (i) brewing operations, tavern and tasting room operations in the US and Canada (the “North American Territory”) and (ii) distributor operations in Europe (including Austria, Belgium, Denmark, Ireland, Italy, the Netherlands, France, Finland, Germany, Greece, Iceland, Liechtenstein, Luxembourg, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom) (the “Foreign Territory”). The Company evaluates performance based on net operating profit. Where applicable, portions of the administrative function expenses are allocated between the operating segments. The operating segments do not share manufacturing or distribution facilities. In the event any materials and/or services are provided to one operating segment by the other, the transaction is valued according to the Company’s transfer policy, which approximates market price. The costs of operating the manufacturing plants are captured discretely within each segment. The Company’s property, plant and equipment, inventory, and accounts receivable are captured and reported discretely within each operating segment. | |||||||||
Recent Accounting Pronouncements | |||||||||
In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income requiring new disclosures regarding reclassification adjustments from accumulated other comprehensive income (“AOCI”). ASU No. 2013-02 requires disclosure of amounts reclassified out of AOCI in its entirety, by component, on the face of the statement of operations or in the notes. The standard is effective for fiscal years beginning after December 15, 2012. The Company adopted this guidance beginning in the first quarter of 2013. Adoption of this guidance does not have a material impact on the Company’s consolidated financial statements. | |||||||||
In July 2013, the FASB issued guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The guidance is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013, with an option for early adoption. The Company does not believe the adoption of this standard will have a material impact on its consolidated financial statements. | |||||||||
Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force (“EITF”)), the American Institute of Certified Public Accountants (“AICPA”), and the SEC did not or are not believed by management to have a material impact on the Company’s present or future financial statements. |
Liquidity_and_Management_Plans
Liquidity and Management Plans | 12 Months Ended |
Dec. 31, 2013 | |
Liquidity And Management Plans | ' |
Liquidity and Management Plans | ' |
2. Liquidity and Management Plans | |
On June 23, 2011, MBC and Releta entered into a Credit and Security Agreement (the “Agreement”) with Cole Taylor Bank, an Illinois banking corporation (“Cole Taylor”). The Agreement provides a credit facility with a maturity date of June 23, 2016 of up to $10,000,000 consisting of a $4,119,000 revolving facility, a $1,934,000 machinery and equipment term loan, a $2,947,000 real estate term loan and a $1,000,000 capital expenditure line of credit. A significant portion of the proceeds received under the Agreement were used to repay credit facilities provided by Marquette Business Credit, Inc. and Grand Pacific Financing Corporation. Convertible promissory notes issued to United Breweries of America, Inc. (“UBA”), one of the Company’s principal shareholders, are subordinated to the Cole Taylor facility. | |
The Agreement requires MBC and Releta to maintain certain minimum fixed charge coverage ratios for trailing twelve month periods and minimum tangible net worth. The minimum tangible net worth MBC and Releta are required to maintain is subject to increase based on the net income of MBC and Releta. On March 29, 2013, MBC, Releta, and Cole Taylor entered into a First Amendment (the “Amendment”) to the Agreement to clarify the method by which the fixed charge coverage ratio is calculated, with retrospective application. | |
The required fixed charge coverage ratio for the trailing twelve month periods ended March 31, 2013 onwards fell short of the required ratio. The tangible net worth fell short of the required amount for the period beginning June 1, 2013 onwards. | |
On September 18, 2013, MBC and Releta received a notice (the “Default Notice”) from Cole Taylor regarding its intention to exercise certain rights with respect to events of default of the Company pursuant to the Agreement. | |
The Agreement provides that the failure of MBC and Releta to observe any covenant will constitute an event of default under the Agreement. Under the Agreement, upon the occurrence of an event of default, all of MBC’s and Releta’s obligations under the Agreement may, at the option of Cole Taylor, be declared, and immediately shall become, due and payable, without notice of any kind. The event of default shall be deemed continuing until waived in writing by Cole Taylor. The Default Notice states that Cole Taylor has elected to charge a default interest rate equal to two percent (2%) per annum in excess of the interest rate otherwise payable under the Agreement effective September 1, 2013. The Company estimates that the increased rate currently results in approximately $120,000 additional annual interest expense. Cole Taylor has not waived the events of default described in the Default Notice and has reserved all other available rights and remedies under the Agreement, certain other related documents and applicable law. Cole Taylor could declare the full amount owed under the Agreement due and payable at any time for any reason or no reason. The Company has not received any notice or other communication from Cole Taylor that it intends to exercise any of the remedies available to it under the Agreement in connection with the events of default. The exercise of additional remedies by Cole Taylor may have a material adverse effect on the Company’s financial condition and the Company’s ability to continue to operate. If it becomes necessary for MBC and Releta to seek additional financing, there is no guarantee that MBC and Releta will be able to obtain such financing on terms favorable to the Company or on any terms. | |
As of December 31, 2013, the fixed charge coverage ratio was required to be 1.10 to 1. The Company calculated that the fixed charge coverage ratio as of December 31, 2013 was -0.58 to 1. The Company calculated that the required tangible net worth of MBC and Releta was $6,181,400 as of December 31, 2013 and the actual tangible net worth on such date was $4,848,200. The Company does not anticipate that it will regain compliance with the required fixed charge coverage ratio or the minimum tangible net worth in the immediate future. | |
We have several loans, lines of credit, other credit facilities and lease agreements which are currently outstanding (collectively, “Indebtedness”). We currently make timely payments of principal and interest relating to the Indebtedness as they fall due and anticipate that we will continue to make such timely payments in the immediate future. However, if we fail to maintain any of the financial covenants under the various agreements governing Indebtedness (such as the default under the Agreement described above), fail to make timely payments of amounts due under the Indebtedness, or commit any other breach resulting in an event of default under the agreements governing Indebtedness, such events of default (including cross-defaults) could have a material adverse effect on our financial condition. If our existing debt were accelerated and terminated, we would need to obtain replacement financing, the lack of which would have a material adverse effect on our financial condition and ability to continue operations. In addition, actions taken by secured parties against the Company’s assets which have been pledged as collateral could have a material adverse effect on our financial condition and operations. | |
At December 31, 2013, we had cash and cash equivalents of $324,800, an accumulated deficit of $14,707,600, and a working capital deficit of $6,334,800 due to losses incurred and reclassification of debts owing to Cole Taylor as a result of the default under the Agreement described above. | |
On November 8, 2013, United Breweries Holding Limited (“UBHL”), Company’s indirect majority shareholder issued a letter of financial support on behalf of MBC (the “Letter of Support”) to MBC’s accountants to confirm that UBHL had agreed to provide funding on an as needed basis to ensure that MBC is able to meet its financial obligations when they fall due. The Letter of Support do not specify either the terms of UBHL’s support, or a maximum dollar limit. UBHL’s financial support is contingent upon compliance with any applicable exchange control requirements and other applicable laws and regulations relating to the transfer of funds from India. The MBC Letter of Support was issued for a period through December 31, 2014, but, if necessary, management intends to seek UBHL’s consent to extend the stated support. UBHL controls the Company’s two largest shareholders, UBA and Inversiones Mirabel S.A., and as such, UBHL is the Company’s indirect majority shareholder. The Chairman of the Company’s Board of Directors, Dr. Vijay Mallya, is also the chairman of the board of directors of UBHL. | |
The Company received a letter dated November 11, 2013 from UBHL expressing its willingness to commit to invest $2,000,000 in the Company in four installments to be paid every six months over a two year period. The letter did not state definitive terms for the proposed investment. UBHL would consider additional investment based on a business plan to be provided by the Company. | |
Management has taken several actions to enable us to meet our working capital needs through December 31, 2014, including reducing discretionary expenditures, expanding business in new territories, reducing manpower and securing additional brewing contracts in an effort to utilize a portion of excess production capacity. We may also seek additional capital infusions to support our operations. | |
If it becomes necessary to seek UBHL’s financial assistance under the Letter of Support and UBHL does not fulfill its commitment to MBC, it may result in a material adverse effect on our financial position and on our ability to continue operations. In addition, our lenders may seek to satisfy any outstanding obligations through recourse against the applicable pledged collateral which may include our real property and fixed and current assets. The loss of any material pledged asset would likely have a material adverse effect on our financial position and results of operations. |
Inventories
Inventories | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventories | ' | ||||||||
3. Inventories | |||||||||
Inventories, consisting of materials, materials overhead, labor, and manufacturing overhead, are stated at the lower of average cost or market (net realizable value) and consist of the following at December 31: | |||||||||
2013 | 2012 | ||||||||
Raw materials | $ | 813,000 | $ | 807,000 | |||||
Work-in-progress | 357,700 | 323,600 | |||||||
Finished goods | 967,600 | 732,300 | |||||||
Merchandise | 103,700 | 47,600 | |||||||
$ | 2,242,000 | $ | 1,910,500 |
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Property and Equipment | ' | ||||||||
4. Property and Equipment | |||||||||
The following is a summary of property and equipment, at cost less accumulated depreciation, at December 31: | |||||||||
2013 | 2012 | ||||||||
Machinery and equipment | $ | 12,468,400 | $ | 11,772,000 | |||||
Buildings | 7,218,900 | 7,222,100 | |||||||
Equipment under capital lease | 23,000 | 183,700 | |||||||
Land | 810,900 | 810,900 | |||||||
Leasehold improvements | 1,397,200 | 1,459,600 | |||||||
Vehicles | 111,200 | 190,000 | |||||||
Furniture and fixtures | 352,500 | 359,600 | |||||||
Equipment in progress | 217,800 | 663,500 | |||||||
22,599,900 | 22,661,400 | ||||||||
Accumulated depreciation and amortization | (10,935,100 | ) | (10,724,200 | ) | |||||
$ | 11,664,800 | $ | 11,937,200 | ||||||
The total depreciation and amortization expense for the years ended December 31, 2013 and 2012 was $1,105,400 and $1,048,100, respectively. |
Secured_Lines_of_Credit
Secured Lines of Credit | 12 Months Ended |
Dec. 31, 2013 | |
Line of Credit Facility [Abstract] | ' |
Secured Lines of Credit | ' |
5. Secured Lines of Credit | |
In June 2011, Cole Taylor provided a line of credit drawable up to 85% of eligible receivables and 60% of eligible inventory for a period up to June 2016. The borrowings are collateralized, with recourse, by MBC’s and Releta’s trade receivables and inventory located in the US. This facility carries interest at a rate of either LIBOR plus 3.5% or prime plus 1% and is secured by substantially all of the assets, excluding real property, of Releta and MBC. The amount outstanding on this line of credit as of December 31, 2013 was approximately $1,517,200. Included in the Company’s balance sheet as accounts receivable at December 31, 2013, are account balances totaling $1,512,300 of accounts receivables and $2,217,300 of inventory collateralized to Cole Taylor under this facility. | |
On April 26, 2005, Royal Bank of Scotland Commercial Services Limited (“RBS”) provided an invoice discounting facility to KBEL for a maximum amount of £1,750,000 based on 80% prepayment against qualified accounts receivable related to KBEL’s UK customers. The initial term of the facility was for a one year period after which time the facility could be terminated by either party by providing the other party with six months’ notice. The facility carries an interest rate of 1.38% above the RBS base rate and a service charge of 0.10% of each invoice discounted. The amount outstanding on this line of credit as of December 31, 2013 was approximately $727,800. |
LongTerm_Debt
Long-Term Debt | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Long-term Debt, Unclassified [Abstract] | ' | ||||||||
Long-Term Debt | ' | ||||||||
6. Long-Term Debt | |||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
Loan from Cole Taylor, payable in monthly installments of $12,300, plus interest at prime plus 4% with a balloon payment of approximately $2,210,300 in June 2016; secured by real property at Ukiah. | 2,570,900 | 2,718,300 | |||||||
Loan from Cole Taylor, payable in monthly installments of $23,000 including interest at prime plus 3.5% with a balloon payment of approximately $552,600 in June 2016; secured by all assets of Releta and MBC, excluding real property at Ukiah. | 1,877,100 | 1,714,100 | |||||||
4,448,000 | 4,432,400 | ||||||||
Less current maturities | 4,448,000 | 450,000 | |||||||
$ | - | $ | 3,982,400 |
LongTerm_Debt_Related_Party
Long-Term Debt - Related Party | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Long-Term Debt - Related Party | ' | ||||||||
Long-Term Debt - Related Party | ' | ||||||||
7. Long-Term Debt – Related Party | |||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
Loan from Heineken UK Limited, payable in quarterly installments of $138,100, plus interest at UK prime plus 5% maturing on October 9, 2016, secured by licensing rights pursuant to the Sub-License Agreement. | 1,657,400 | - | |||||||
1,657,400 | - | ||||||||
Less current maturities | 552,500 | - | |||||||
$ | 1,104,900 | $ | - | ||||||
Maturities of debt for succeeding years are as follows: | |||||||||
Year ended December 31, 2014 | $ | 552,500 | |||||||
Year ended December 31, 2015 | $ | 552,500 | |||||||
Year ended December 31, 2016 | $ | 552,400 | |||||||
On April 18, 2013, KBEL entered into a Loan Agreement (the “Loan Agreement”) with Heineken UK Limited (“HUK”) pursuant to which HUK provided KBEL with a secured term loan of £1,000,000 on October 9, 2013 to be repaid in twelve quarterly installment of £83,333.33 each, commencing from January 9, 2014 along with interest at the rate of 5% above the Bank of England base rate. Prepayment is permitted. Upon an Event of Default, as defined in the Loan Agreement, if HUK and KBEL fail to agree on a payment plan acceptable to HUK, HUK may, among other remedies, declare the loan immediately due and repayable or exercise its right to an exclusive license pursuant to the Sub-License Agreement as described and defined in the Loan Agreement. |
Capital_Lease_Obligations
Capital Lease Obligations | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Capital Lease Obligations [Abstract] | ' | ||||
Capital Lease Obligations | ' | ||||
8. Capital Lease Obligations | |||||
The Company leases certain brewing equipment, vehicles and office equipment under agreements that are classified as capital leases. The future minimum lease payments required under the capital lease and the present value of the net minimum lease payments as of December 31, 2013, are as follows: | |||||
Year Ending December 31, 2014 | $ | 6,400 | |||
Year Ending December 31, 2015 | $ | 6,400 | |||
Year Ending December 31, 2016 | $ | 6,400 | |||
Year Ending December 31, 2017 | $ | 6,400 | |||
25,600 | |||||
Less amounts representing interest | (2,600 | ) | |||
Present value of minimum lease payments | 23,000 | ||||
Less current maturities | 5,300 | ||||
Non-current leases payable | $ | 17,700 |
Notes_to_Related_Parties
Notes to Related Parties | 12 Months Ended |
Dec. 31, 2013 | |
Designated Series A Preferred Stock, number | ' |
Notes to Related Party | ' |
9. Notes to Related Party | |
Subordinated Convertible Notes Payable | |
Notes payable to related parties includes unsecured convertible notes to UBA for a total value including interest (at the prime rate plus 1.5%, but not to exceed 10% per year) of $3,497,900 and $3,407,000 as of December 31, 2013 and 2012. Thirteen of the UBA notes are convertible into common stock at $1.50 per share and one UBA note is convertible at a rate of $1.44 per share. The UBA notes have been extended until June 2014 but have automatic renewals after such maturity date for successive one year terms, provided that either the Company or UBA may elect not to extend the term upon written notice given to the other party no more than 60 days and no fewer than 30 days prior to the expiration of such term. UBA may demand payment within 60 days of the end of the extension period but is precluded from doing so because the notes are subordinated to long-term debt agreements with Cole Taylor maturing in June 2016. Therefore, the Company will not require the use of working capital to repay any of the UBA notes until the Cole Taylor facilities are repaid. The UBA notes included $1,582,500 and $1,491,600 of accrued interest at December 31, 2013 and December 31, 2012, respectively. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||||
Dec. 31, 2013 | ||||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||||
Commitments and Contingencies | ' | |||||
10. Commitments and Contingencies | ||||||
Purchase of raw materials | ||||||
Production of the Company’s beverages requires quantities of various processed agricultural products, including malt and hops for beer. The Company fulfills its commodities requirements through purchases from various sources, some through contractual arrangements and others on the open market. Future payments under existing contractual arrangements are as follows: | ||||||
Year Ending December 31, | ||||||
2014 | $ | 1,938,800 | ||||
Total | $ | 1,938,800 | ||||
Legal | ||||||
The Company is periodically involved in legal actions and claims that arise as a result of events that occur in the normal course of operations. The Company’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. | ||||||
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. | ||||||
The Company is not currently aware of any legal proceedings or claims that the Company believes will have, individually or in the aggregate, a material adverse effect on the Company’s financial position or results of operations | ||||||
Operating Leases | ||||||
The Company leases some of its operating and office facilities for various terms under long-term, non-cancelable operating lease agreements. The leases expire at various dates through 2019 and provide for renewal options ranging from month-to-month to five years. In the normal course of business, it is expected that these leases will be renewed or replaced by leases on similar properties. The leases provide for increases in future minimum annual rental payments based on defined increases which are generally meant to correlate with the Consumer Price Index, subject to certain minimum increases. Also, the agreements generally require the Company to pay certain costs (real estate taxes, insurance and repairs). | ||||||
The Company and its subsidiaries have various lease agreements for the brewpub and gift store in Ukiah, California; land at its Saratoga Springs, New York, facility; a building in the UK; and certain equipment. The New York lease includes renewal options for three additional five-year periods beginning in 2014, which the Company intends to exercise, and some leases are adjusted annually for changes in the consumer price index. Rent expense charged to operations was $359,300 and $324,400 for the years ended December 31, 2013 and 2012. | ||||||
Future minimum lease payments under these agreements are as follows: | ||||||
Year Ending December 31, | ||||||
2014 | $ | 400,500 | ||||
2015 | 310,200 | |||||
2016 | 215,000 | |||||
2017 | 195,000 | |||||
2018 | 191,600 | |||||
Thereafter | 103,800 | |||||
$ | 1,416,100 | |||||
Keg Management Agreement | ||||||
In September 2009, the Company renewed the keg management agreement with MicroStar Keg Management LLC. Under this arrangement, MicroStar provides all kegs for which the Company pays a service fee depending on the applicable territory. The agreement is effective for five years ending in September 2014. If the agreement is terminated, the Company is required to purchase four times the average monthly keg usage for the preceding six-month period from MicroStar. The Company expects to continue this relationship. Rental expense associated with this agreement was $102,000 and $82,100 for the years ended December 31, 2013 and 2012, respectively. This annual fee is not included in the above future minimum lease payments. |
RelatedParty_Transactions
Related-Party Transactions | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Related Party Transactions [Abstract] | ' | ||||||||
Related-Party Transactions | ' | ||||||||
11. Related-Party Transactions | |||||||||
The Company conducts business with United Breweries of America (UBA), which owns approximately 25% of the Company’s common stock. KBEL had significant transactions with Shepherd Neame, Ltd., which is a related party to a former Board member. KBEL also had significant transactions with HUK, a related party with respect to one of MBC’s Board members. The following table reflects balances outstanding as of December 31, 2013 and 2012 and the value of the transactions with these related parties for the years ended December 31, 2013 and 2012: | |||||||||
2013 | 2012 | ||||||||
TRANSACTIONS | |||||||||
Gross sales to Shepherd Neame Ltd. | $ | 2,400,400 | $ | 3,527,000 | |||||
Purchases from Shepherd Neame Ltd. | 11,367,700 | 16,192,200 | |||||||
Expenses reimbursement to Shepherd Neame Ltd. | 865,100 | 1,030,900 | |||||||
Purchases from HUK | 3,006,100 | — | |||||||
Expenses reimbursement to HUK | 375,500 | — | |||||||
Interest expenses associated with UBA notes | 90,900 | 91,300 | |||||||
Interest paid to Shepherd Neame Ltd. | 2,400 | 2,400 | |||||||
ACCOUNT BALANCES | |||||||||
Accounts payable and accrued liabilities to Shepherd Neame Ltd. | 70,400 | 3,894,900 | |||||||
Accounts receivable and prepayments to Shepherd Neame Ltd. | 5,000 | 356,300 | |||||||
Accounts payable and accrued liabilities to HUK | 1,746,800 | — | |||||||
Independent outside members of the Board of Directors are compensated for their services. Expenses related to this compensation totaled $152,800 and $114,000 for the years ended December 31, 2013 and 2012 and are included in general and administrative expenses on the statements of operations and comprehensive income. |
Concentrations_and_Credit_Risk
Concentrations and Credit Risk | 12 Months Ended |
Dec. 31, 2013 | |
Risks and Uncertainties [Abstract] | ' |
Concentrations and Credit Risk | ' |
12. Concentrations and Credit Risk | |
Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents, and accounts receivable. Substantially all of the Company’s cash and cash equivalents are deposited with commercial banks that have minimal credit risk, in the US and the UK. Accounts receivable are generally unsecured and customers are subject to an initial credit review and ongoing monitoring. Wholesale distributors account for substantially all accounts receivable; therefore, this risk concentration is limited due to the number of distributors and the laws regulating the financial affairs of distributors of alcoholic beverages. The Company has approximately $211,100 in cash deposits and $2,607,000 of accounts receivable due from customers located in the UK as of December 31, 2013. | |
The Company could experience labor disputes, work stoppages or other disruptions in production that could adversely affect it. As of December 31, 2013, a union represented approximately 18% of the Company’s US-based workforce. On that date, the Company had approximately fourteen employees at its California (“CA”) facility who were working under a collective bargaining agreement. The agreement covering the CA facility expired on July 31, 2013 and the Company and the union are negotiating a new agreement. | |
Gross sales to the top five customers totaled $7,575,900 and $9,245,700 for the years ended December 31, 2013 and 2012, which represents 21% and 23% of sales for the years ended December 31, 2013 and 2012, respectively. Gross sales to Shepherd Neame for the years ended December 31, 2013 and 2012 was $2,373,400 and $3,527,000, which represented 7% and 9% of sales for those years respectively. No other customer individually represented greater than 5% of revenue. |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2013 | |
Equity [Abstract] | ' |
Stockholders' Equity | ' |
13. Stockholders’ Equity | |
Preferred Stock | |
Ten million shares of preferred stock have been authorized, of which 227,600 are designated as Series A. Series A shareholders are entitled to receive cash dividends and/or liquidation proceeds equal, in the aggregate, to $1.00 per share before any cash dividends are paid on the common stock or any other series of preferred stock. When the entire Series A dividend/liquidation proceeds have been paid, the Series A shares are automatically canceled and will cease to be outstanding. Only a complete corporate dissolution will cause a liquidation preference to be paid. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Income Taxes | ' | ||||||||
14. Income Taxes | |||||||||
The large accumulated losses from past operations have resulted in the Company determining that the deferred tax assets associated with net operating loss carryforwards may expire prior to utilization. Because of the uncertainty of realization of any tax assets, the Company provided a full valuation allowance against its net deferred tax assets at December 31, 2013 and 2012. Consequently, no benefit for deferred tax assets appears on the Company’s financial statements. | |||||||||
The Company’s income tax expense is summarized as follows: | |||||||||
2013 | 2012 | ||||||||
Provision for income taxes | |||||||||
US Federal | $ | - | $ | - | |||||
US States | 4,100 | 2,700 | |||||||
Current provision | 4,100 | 2,700 | |||||||
Change in deferred income taxes | - | - | |||||||
Total provision for income taxes | $ | 4,100 | $ | 2,700 | |||||
The difference between the actual income tax provision and the tax provision computed by applying the statutory US federal and United Kingdom income tax rates to earnings before taxes is attributable to the following: | |||||||||
2013 | 2012 | ||||||||
US Federal income tax expense (benefit) at 34% | $ | (517,600 | ) | $ | (26,600 | ) | |||
US State income tax expense (benefit) | (77,200 | ) | 21,800 | ||||||
United Kingdom income tax expense (benefit) at 20% | 129,900 | 127,900 | |||||||
Non deductible expenses | 23,400 | 17,400 | |||||||
Other | 4,800 | 1,800 | |||||||
Change in valuation allowance | 440,800 | (139,600 | ) | ||||||
Total | $ | 4,100 | $ | 2,700 | |||||
Temporary differences and carryforwards that give rise to deferred tax assets and liabilities are as follows: | |||||||||
2013 | 2012 | ||||||||
Benefit of net operating loss carryforwards | $ | 5,572,100 | $ | 5,282,300 | |||||
Depreciation and amortization | (1,653,800 | ) | (1,827,900 | ) | |||||
Other | 80,500 | 103,600 | |||||||
Subtotal | 3,998,800 | 3,558,000 | |||||||
Less valuation allowance | (3,998,800 | ) | (3,558,000 | ) | |||||
Total | $ | - | $ | - | |||||
Change in valuation allowance | $ | 440,800 | $ | (139,600 | ) | ||||
The Company has net operating losses available for carry forward. The US Federal net operating losses total approximately $14,537,400 and expire beginning 2017 and ending in 2033. The US state operating losses total approximately $1,405,500 and expire beginning in 2014 and ending in 2033. The Company’s UK operating losses total approximately $2,525,400 and they do not expire. | |||||||||
Tax years that remain open for examination by the Internal Revenue Service and the US states include 2010, 2011, and 2012; the Company expects to file its 2013 returns in the summer of 2014. California may still examine 2009 because of its longer statute of limitations. Additional years may be examined in the event of criminal tax fraud, and any year may be subject to examination to the extent that the Company utilizes the net operating losses from those years in its current or future tax returns. |
Segment_Information
Segment Information | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Segment Information | ' | ||||||||||||||||
15. Segment Information | |||||||||||||||||
The Company’s business presently consists of two segments – the North American Territory and the Foreign Territory. | |||||||||||||||||
The Company’s operations in the North American Territory consist primarily of brewing and marketing proprietary craft beers. For distribution in the North American Territory, the Company brews its brands in its own facilities, which are located in Ukiah, California and Saratoga Springs, New York. This segment accounted for approximately 41% and 43% of the Company’s gross sales during the years 2013 and 2012, respectively. | |||||||||||||||||
The Company’s operations in the Foreign Territory, which are conducted through its wholly-owned subsidiary UBIUK and UBIUK’s wholly-owned subsidiary KBEL, consist primarily of the marketing and distribution of Kingfisher Premium Lager in the Foreign Territory through Indian restaurants, chain retail grocers, liquor stores, and other retail outlets (such as convenience stores). This segment accounted for approximately 59% and 57% of the Company’s gross sales during 2013 and 2012 respectively. | |||||||||||||||||
A summary of each segment is as follows: | |||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
North American Territory | Foreign Territory | Corporate | Total | ||||||||||||||
and Other | |||||||||||||||||
Sales | $ | 14,806,700 | $ | 21,611,500 | $ | 36,418,200 | |||||||||||
Operating income (loss) | (1,037,400 | ) | 771,800 | (265,600 | ) | ||||||||||||
Identifiable assets | 12,736,500 | 4,414,500 | 2,116,000 | 19,267,000 | |||||||||||||
Depreciation and amortization | 677,800 | 427,600 | 1,105,400 | ||||||||||||||
Capital expenditures | 342,000 | 477,000 | 819,000 | ||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||
North American Territory | Foreign Territory | Corporate | Total | ||||||||||||||
and Other | |||||||||||||||||
Sales | $ | 17,319,600 | $ | 23,016,300 | $ | 40,335,900 | |||||||||||
Operating income | 239,300 | 695,900 | 935,200 | ||||||||||||||
Identifiable assets | 12,775,100 | 4,440,800 | 3,035,600 | 20,251,500 | |||||||||||||
Depreciation and amortization | 616,000 | 432,100 | 1,048,100 | ||||||||||||||
Capital expenditures | 1,086,600 | 416,500 | 1,503,100 | ||||||||||||||
Unrestricted_Net_Assets
Unrestricted Net Assets | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Unrestricted Net Assets | ' | ||||||||
Unrestricted Net Assets | ' | ||||||||
16. Unrestricted Net Assets | |||||||||
The Company’s wholly-owned subsidiary, UBIUK, has cumulative losses of approximately $1,717,400 as of December 31, 2013. Under KBEL’s line of credit agreement with RBS, distributions and other payments to the Company from its subsidiary are not permitted if the subsidiary’s retained earnings drop below $1,657,400. Condensed financial information of the United States operations is as follows: | |||||||||
Balance Sheets | 2013 | 2012 | |||||||
Assets | |||||||||
Cash and cash equivalents | $ | 113,700 | $ | 123,200 | |||||
Accounts receivable, net | 1,512,300 | 2,531,700 | |||||||
Inventories | 2,217,300 | 1,910,500 | |||||||
Other current assets | 165,500 | 111,900 | |||||||
Total current assets | 4,008,800 | 4,677,300 | |||||||
Investment in subsidiary | 1,225,000 | 1,225,000 | |||||||
Property and equipment | 10,519,200 | 10,864,600 | |||||||
Intercompany receivable | 716,700 | 471,400 | |||||||
Other assets | 324,500 | 268,800 | |||||||
Total assets | $ | 16,794,200 | $ | 17,507,100 | |||||
Liabilities | |||||||||
Line of credit | $ | 1,517,200 | $ | 1,887,700 | |||||
Accounts payable | 2,524,500 | 1,584,300 | |||||||
Accrued liabilities | 1,001,700 | 884,300 | |||||||
Current maturities of debt and capital leases | 4,453,300 | 453,100 | |||||||
Total current liabilities | 9,496,700 | 4,809,400 | |||||||
Long-term debt and capital leases | 17,700 | 3,982,400 | |||||||
Notes to related parties | 3,497,900 | 3,407,000 | |||||||
Total liabilities | 13,012,300 | 12,198,800 | |||||||
Stockholders’ equity | |||||||||
Common stock | 15,100,300 | 15,100,300 | |||||||
Preferred stock | 227,600 | 227,600 | |||||||
Accumulated deficit | (11,546,000 | ) | (10,019,600 | ) | |||||
Total stockholders’ equity | 3,781,900 | 5,308,300 | |||||||
Total liabilities and stockholders’ equity | $ | 16,794,200 | $ | 17,507,100 | |||||
Statement of Operations | 2013 | 2012 | |||||||
Net sales | $ | 14,024,400 | $ | 16,228,300 | |||||
Cost of goods sold | 11,354,400 | 12,383,900 | |||||||
Selling, marketing, and retail expenses | 1,710,600 | 1,754,500 | |||||||
General and administrative expenses | 2,094,200 | 1,984,600 | |||||||
Income (loss) from operations | (1,134,800 | ) | 105,300 | ||||||
Other income and (expense) | |||||||||
Interest expenses | (448,200 | ) | (380,000 | ) | |||||
Loss on disposal of assets | (77,600 | ) | |||||||
Other income | 138,300 | 196,500 | |||||||
Provision for taxes | (4,100 | ) | (2,700 | ) | |||||
(391,600 | ) | (186,200 | ) | ||||||
Net loss | $ | (1,526,400 | ) | $ | (80,900 | ) | |||
Statements of Cash Flows | 2013 | 2012 | |||||||
Cash flows from operating activities | $ | 935,800 | $ | 583,700 | |||||
Cash flow from investing activities | |||||||||
Purchase of property and equipment | (342,000 | ) | (1,086,600 | ) | |||||
Proceeds from sale of equipment | - | 5,000 | |||||||
Net cash flows from investing | (342,000 | ) | (1,081,600 | ) | |||||
Cash flow from financing activities | |||||||||
Net borrowings (repayments) on line of credit | (370,500 | ) | 992,400 | ||||||
Borrowings on long term debt | 539,700 | 184,700 | |||||||
Repayment of long-term debt | (524,100 | ) | (456,800 | ) | |||||
Payment on obligations under capital leases | (3,100 | ) | (46,400 | ) | |||||
Net change in intercompany payable | (245,300 | ) | (240,000 | ) | |||||
Net cash flows from financing activities | (603,300 | ) | 433,900 | ||||||
Cash, beginning of year | 123,200 | 187,200 | |||||||
Cash, end of year | $ | 113,700 | $ | 123,200 |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
18. Subsequent Events | |
On January 22, 2014, MBC issued a promissory note (the “Catamaran Note”) to Catamaran Services, Inc., a Delaware corporation (“Catamaran”) in the principal amount of $500,000. Catamaran Holdings, Ltd., the sole shareholder of Catamaran, has directors in common with Inversiones, one of the major shareholders of MBC. The indirect beneficial owner of Inversiones is UBHL. Dr. Vijay Mallya, the Chairman of the board of directors of the Company is also the Chairman of the board of directors of UBHL. | |
Pursuant to the terms of the Catamaran Note, MBC promises to pay the principal sum of $500,000 with accrued interest, as described below, to Catamaran within six months following the date of the Catamaran Note, subject to the receipt by MBC of an equity investment by its majority shareholder (the “Shareholder Investment”) in an amount sufficient either (a) to pay the Catamaran Note through Permitted Payments, as defined below, or (b) to pay both the Catamaran Note and certain existing obligations of MBC to Cole Taylor pursuant to the Credit and Security Agreement dated as of June 23, 2011 (as amended, modified or supplemented from time to time) among MBC, Releta, and Cole Taylor (the “Agreement”) in full. “Permitted Payments” on the Catamaran Note are payments made from the portion of a Shareholder Investment that is in excess of $500,000. | |
If MBC is not able to satisfy its obligations on the Catamaran Note within six month following the date of the Catamaran Note, the Catamaran Note shall be automatically extended for additional six month terms. Interest shall accrue from the date of the Catamaran Note on the unpaid principal at a rate equal to the lesser of (i) one and one-half percent (1.5%) per annum above the prime rate offered from time to time by the Bank of America Corporation in San Francisco, California, or (ii) ten percent (10%) per annum, until the principal is fully paid. | |
The Catamaran Note may be prepaid without penalty at the option of MBC; however, no payments on the Catamaran Note may be made unless such payment is a Permitted Payment or certain existing obligations of MBC to Cole Taylor pursuant to the Agreement have been satisfied in full. The Catamaran Note may not be amended without the prior written consent of Cole Taylor. |
Description_of_Operations_and_1
Description of Operations and Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
Description of Operations | ' | ||||||||
Description of Operations | |||||||||
Mendocino Brewing Company, Inc., was formed in 1983 in California, and has two operating subsidiaries: Releta Brewing Company, LLC, (“Releta”), and United Breweries International (UK) Limited (“UBIUK”). In the United States (“US”), MBC and its subsidiary, Releta, operate two breweries that produce beer for the specialty “craft” segment of the beer market. The breweries are located in Ukiah, California and Saratoga Springs, New York. The majority of sales for Mendocino Brewing Company in the US are in California. The Company brews several brands, of which Red Tail Ale is the flagship brand. In addition, the Company performs contract brewing for several other brands, and MBC holds the license to distribute Kingfisher Premium Lager Beer in the US and Canada. Generally, product shipments are made directly from the breweries to the wholesalers or distributors in accordance with state and local laws. In these notes, the term “the Company” and its variants and the terms “we,” “us,” and “our” and their variants are generally used to refer to Mendocino Brewing Company, Inc. together with its subsidiaries, while the term “MBC” is used to refer to Mendocino Brewing Company, Inc. as an individual entity. | |||||||||
The Company’s United Kingdom (“UK”) subsidiary, UBIUK, is a holding company for Kingfisher Beer Europe Limited (“KBEL”). KBEL is a distributor of Kingfisher Premium Lager Beer, in the United Kingdom and Europe. The distributorship is located in Maidstone, Kent in the UK. | |||||||||
Subsequent Events | ' | ||||||||
Subsequent Events | |||||||||
The Company evaluates events that occur subsequent to the balance sheet date of periodic reports, but before financial statements are issued for periods ending on such balance sheet dates, for possible adjustment to such financial statements or other disclosure. This evaluation generally occurs through the date at which the Company’s financial statements are electronically prepared for filing with the Securities and Exchange Commission (“SEC”). | |||||||||
Principles of Consolidation | ' | ||||||||
Principles of Consolidation | |||||||||
The consolidated financial statements present the accounts of Mendocino Brewing Company, Inc., and its wholly-owned subsidiaries, Releta and UBIUK. All material intracompany and inter-company balances, profits and transactions have been eliminated. | |||||||||
Basis of Presentation and Organization | ' | ||||||||
Basis of Presentation and Organization | |||||||||
The financial statements for the years ended December 31, 2013 and 2012 have been prepared in accordance with accounting principles generally accepted in the United States. The financial statements and notes are representations of the management and the Board of Directors, who are responsible for their integrity and objectivity. | |||||||||
Reclassifications | ' | ||||||||
Reclassifications | |||||||||
Certain items in the financial statements for the prior year have been reclassified to conform to the current year presentation. These reclassifications had no effect on net income or equity. | |||||||||
Cash and Cash Equivalents, Short and Long-Term Investments | ' | ||||||||
Cash and Cash Equivalents, Short- and Long-Term Investments | |||||||||
For purposes of cash flows, the Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. | |||||||||
Foreign Operations | ' | ||||||||
Foreign Operations | |||||||||
Approximately 23% of the Company’s assets are located in the UK. Although this country is considered economically stable and the Company has experienced no notable burden from foreign exchange transactions, export duties, or government regulations, it is always possible that unanticipated events in foreign countries could disrupt the Company’s operations. | |||||||||
Trade Accounts Receivable and Allowance for Doubtful Accounts | ' | ||||||||
Trade Accounts Receivable and Allowance for Doubtful Accounts | |||||||||
Trade accounts receivable are stated at the invoiced amount and are the amount the Company expects to collect. Sales are made to approved customers on an open account basis, subject to established credit limits, and generally no collateral is required. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable; however, changes in circumstances relating to accounts receivable may result in a requirement for additional allowances in the future. | |||||||||
Allowance for Doubtful Accounts | |||||||||
The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. Management considers the following factors when determining the collectibility of specific customer accounts: customer credit-worthiness, past transaction history with the customer, current economic and industry trends and changes in customer payment terms. Past due balances over 90 days and other higher risk amounts are reviewed individually for collectibility. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. Based on management’s assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and a credit to a valuation allowance. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. The Company had allowances of $68,200 and $207,800 for doubtful accounts receivable as of December 31, 2013 and 2012, respectively. | |||||||||
Inventories | ' | ||||||||
Inventories | |||||||||
Inventories are stated at the lower of average cost, which approximates the first-in, first-out method, or market (net realizable value). The Company regularly reviews its inventories for the presence of obsolete product attributed to age, seasonality and quality. Inventories that are considered obsolete are written off or adjusted to carrying value. | |||||||||
Prepaid Expenses and Other Assets | ' | ||||||||
Prepaid Expenses and Other Assets | |||||||||
Prepaid expenses and other assets generally consist of deposits, other receivables, and prepayments for future services. Prepayments are expensed when the services are received. | |||||||||
Property and Equipment | ' | ||||||||
Property and Equipment | |||||||||
Property and equipment are stated at cost and depreciated or amortized using the straight-line method over the assets’ estimated useful lives. Leasehold improvements are amortized over the shorter of the life of the improvement or the life of the related lease. The Company uses other depreciation methods (generally, accelerated depreciation methods) for tax purposes where appropriate. Costs of maintenance and repairs are charged to expense as incurred; significant renewals and betterments are capitalized. When property and equipment are retired, sold, or otherwise disposed of, the asset’s carrying amount and related accumulated depreciation are removed from the accounts and any gain or loss is included in the statement of operations. | |||||||||
Estimated useful lives of property and equipment are as follows: | |||||||||
Building | 40 years | ||||||||
Machinery and equipment | 3 - 40 years | ||||||||
Vehicles | 3 - 5 years | ||||||||
Furniture and fixtures | 5 - 10 years | ||||||||
Assets Held under Capital Leases | |||||||||
Assets held under capital leases are recorded at the lower of the net present value of the minimum lease payments or the fair value of the leased asset at the inception of the lease. Amortization expense is computed using the straight-line method over the shorter of the estimated useful lives of the assets or the period of the related lease. | |||||||||
Impairment of Long-Lived Assets | |||||||||
The Company assesses the impairment of its long-lived assets periodically in accordance with the provisions of Accounting Standards Codification (ASC) 360, (Accounting for the Impairment and Disposal of Long-Lived Assets). The Company reviews the carrying value of property and equipment and any other long-lived assets for impairment annually or whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends, and prospects, as well as the effects of obsolescence, demand, competition, and other economic factors. Long-lived assets that management commits to sell or abandon are reported at the lower of carrying amount or fair value less cost to sell. During the year ended December 31, 2013 and 2012 the Company recorded no impairment losses related to long-lived assets. | |||||||||
Deferred Financing Costs | ' | ||||||||
Deferred Financing Costs | |||||||||
Costs relating to obtaining financing are capitalized and amortized over the term of the related debt. When a loan is paid in full, any unamortized financing costs are removed from the related accounts and charged to operations. Deferred financing costs related to borrowing made in June 2011 were $225,000. Amortization of deferred financing costs charged to operations was $45,000 for the years ended December 31, 2013 and 2012. | |||||||||
Income Taxes | ' | ||||||||
Income Taxes | |||||||||
The Company accounts for income taxes in accordance with ASC 750 which requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are recognized for deductible temporary differences and operating loss, and tax credit carryforwards. A valuation allowance is established to reduce the deferred tax asset if it is more likely than not that the related tax benefits will not be realized. | |||||||||
The Company periodically assesses uncertain tax positions that the Company has taken or expects to take on a tax return (including a decision whether to file or not to file a return in a particular jurisdiction). The Company evaluated its tax positions and determined that there were no uncertain tax benefits for the years ending December 31, 2013 and 2012. | |||||||||
Revenue Recognition | ' | ||||||||
Revenue Recognition | |||||||||
The Company recognizes revenue from brewing and distribution operations in accordance with ASC 605. The Company recognizes revenue from product sales, net of discounts. | |||||||||
The Company recognizes revenue only when all of the following criteria have been met: | |||||||||
● | Persuasive evidence of an arrangement exists; | ||||||||
● | Delivery has occurred or services have been rendered; | ||||||||
● | The fee for the arrangement is fixed or determinable; and | ||||||||
● | Collectibility is reasonably assured. | ||||||||
“Persuasive Evidence of an Arrangement” – The Company documents all terms of an arrangement in a written contract or purchase order signed by the customer prior to recognizing revenue. | |||||||||
“Delivery Has Occurred or Services Have Been Performed” – The Company delivers the products prior to recognizing revenue or performs services as per contractual terms. Product is considered delivered upon delivery to a customer’s designated location and services are considered performed upon completion of Company’s contractual obligations. | |||||||||
“The Fee for the Arrangement is Fixed or Determinable” – Prior to recognizing revenue, an amount is either fixed or determinable under the terms of the written contract. The price is negotiated at the outset of the arrangement and is not subject to refund or adjustment during the initial term of the arrangement. | |||||||||
“Collectibility is Reasonably Assured” – The Company determines that collectibility is reasonably assured prior to recognizing revenue. Collectibility is assessed on a customer-by-customer basis based on criteria outlined by management. The Company does not enter into arrangements unless collectibility is reasonably assured at the outset. Existing customers are subject to ongoing credit evaluations based on payment history and other factors. If it is determined during the arrangement that collectibility is not reasonably assured, revenue is recognized on a cash basis. | |||||||||
The Company records certain consideration paid to customers for services or placement fees as a reduction in revenue rather than as an expense. The Company reports these items on the statement of operations as a reduction in revenue and as a corresponding reduction in marketing and selling expenses. | |||||||||
Revenues from the brewpub and gift store are recognized when sales have been completed. | |||||||||
Excise Taxes | ' | ||||||||
Excise Taxes | |||||||||
The federal government levies excise taxes on the sale of alcoholic beverages, including beer. For brewers producing less than 2.0 million barrels of beer per calendar year, the federal excise tax is $7 per barrel on the first 60,000 barrels of beer removed for consumption or sale during a calendar year, and $18 per barrel for each barrel in excess of 60,000. Individual states also impose excise taxes on alcoholic beverages in varying amounts, which have also been subject to change. Sales as presented in the Company’s statements of operations reflect the amount invoiced to the Company’s wholesalers and other customers. Excise taxes due to federal and state agencies are not collected from the Company’s customers, but rather are the responsibility of the Company. Net sales, as presented in the Company’s statements of operations, are reduced by applicable federal and state excise taxes. In the UK, excise taxes are paid by the manufacturer and not by the Company. | |||||||||
Discounts | ' | ||||||||
Discounts | |||||||||
To further promote retail sales of its products and in response to local competitive conditions, the Company regularly offers price discounts to distributors and retailers in most of its markets. Sales for the years 2013 and 2012, as presented in the Company’s statements of operations, are reduced by $1,165,100 and $1,330,800 respectively, related to such discounts. | |||||||||
Chargebacks and Sales Reserves | ' | ||||||||
Chargebacks and Sales Reserves | |||||||||
The Company has estimated reserves for chargebacks for promotional expenses by distributors. The Company estimates its reserves by utilizing historical information and current contracts. In estimating chargeback reserves, the Company analyzes actual chargeback amounts and applies historical chargeback rates to estimate potential chargeback. The Company routinely assesses its experience with distributors and adjusts the reserves accordingly. If actual chargebacks and other rebates are greater than the Company’s estimates, additional reserves may be required. Revisions to estimates are charged to income in the period in which the facts that give rise to the revision become known. | |||||||||
Seasonality | ' | ||||||||
Seasonality | |||||||||
Sales of the Company’s products are somewhat seasonal, with the first and fourth quarters historically being the slowest and the rest of the year generating stronger sales. The volume of sales may also be affected by weather conditions. Because of the seasonality of the Company’s business, results for any one quarter are not necessarily indicative of the results that may be achieved for the full fiscal year. | |||||||||
Taxes Collected From Customers | ' | ||||||||
Taxes Collected From Customers | |||||||||
Taxes collected from customers and remitted to tax authorities are sales tax collected from our retail customers. State and federal excise taxes on beer shipments are the responsibility of the company and included in our selling price. Excise taxes on shipments are shown in a separate line item in the consolidated statement of operations as reduction of gross sales. Sales taxes collected from customers are recognized as a liability, with the liability subsequently reduced when the taxes are remitted to the tax authority. Total sales taxes collected from customers and remitted to tax authorities were not material in 2013 and 2012. | |||||||||
Delivery Costs | ' | ||||||||
Delivery Costs | |||||||||
In accordance with ASC 605, (Shipping and Handling Fees and Costs) the company reports pass-through freight costs on beer shipped to independent beer wholesalers in cost of sales. Reimbursements of these costs by wholesalers are reported in sales. | |||||||||
Non-pass-through costs incurred by the Company to deliver beer to wholesalers are included in marketing, distribution and administrative expenses. These costs are considered marketing related because in addition to product delivery, wholesalers provide marketing and other customer service functions to customers including product display, shelf space management, distribution of promotional materials, and product rotation. Shipping costs included in marketing expense totaled $911,200 and $914,200, for the years ended December 31, 2013 and 2012, respectively. | |||||||||
Basic and Diluted Income per Share | ' | ||||||||
Basic and Diluted Income per Share | |||||||||
The basic earnings per share is computed by dividing the earnings attributable to common stockholders by the weighted average number of common shares outstanding during the period. In 2013, the effect of any potentially dilutive securities would have been anti-dilutive. Therefore, the conversion of the related party notes has been excluded from the calculation of net earnings per share for the year ended December 31, 2013. Basic net earnings per share exclude the dilutive effect of stock options or warrants and convertible notes. The computations of basic and dilutive net earnings per share are as follows: | |||||||||
Year Ended December 31 | |||||||||
2013 | 2012 | ||||||||
Net income (loss) | $ | (876,900 | ) | 558,400 | |||||
Weighted average common shares outstanding | 12,611,133 | 12,611,133 | |||||||
Basic net income (loss) per share | $ | (0.07 | ) | 0.04 | |||||
Interest expense on convertible notes | $ | — | 91,300 | ||||||
Income (loss) for purpose of computing diluted net income per share | $ | (876,900 | ) | 649,700 | |||||
Incremental shares from assumed exercise of dilutive securities | — | 2,288,102 | |||||||
Dilutive potential common shares | 12,611,133 | 14,899,235 | |||||||
Diluted net earnings (loss) per share | $ | (0.07 | ) | 0.04 | |||||
Foreign Currency Translation | ' | ||||||||
Foreign Currency Translation | |||||||||
The Company has subsidiaries located in the UK, where the local currency, UK Pound Sterling, is the functional currency. Financial statements of these subsidiaries are translated into U.S. dollars using period-end exchange rates for assets and liabilities and average exchange rates during the period for revenues and expenses. Cumulative translation adjustments associated with net assets or liabilities are reported in non-owner changes in equity. Any exchange rate gains or losses related to foreign currency transactions are recognized in the income statement as incurred, in the same financial statement caption as the underlying transaction, and are not material for any year shown. | |||||||||
Cash at UBIUK was translated at exchange rates in effect at December 31, 2013 and 2012, and its cash flows were translated at the average exchange rates for the years then ended. Changes in cash resulting from the translations are presented as a separate item in the statements of cash flows. | |||||||||
Use of Estimates | ' | ||||||||
Use of Estimates | |||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America includes having the Company make estimates and assumptions affecting the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities. The amounts estimated could differ from actual results. Significant estimates include, allowance for doubtful accounts, depreciation and amortization periods, and the future utilization of deferred tax assets. | |||||||||
Advertising | ' | ||||||||
Advertising | |||||||||
Advertising costs are expensed as incurred and were $755,600 and $900,700 for the years ended December 31, 2013 and 2012, respectively. | |||||||||
Fair Value of Financial Instruments | ' | ||||||||
Fair Value of Financial Instruments | |||||||||
Fair Value | |||||||||
The fair value of the Company’s financial instruments reflects the amounts that the Company estimates to receive in connection with the sale of an asset or paid in connection with the transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). For financial assets and liabilities that are periodically re-measured to fair value, the Company discloses a fair value hierarchy that prioritizes the use of inputs used in valuation techniques into the following three levels: | |||||||||
Level 1 – quoted prices in active markets for identical assets and liabilities. | |||||||||
Level 2 – observable inputs other than quoted prices in active markets for identical assets and liabilities. | |||||||||
Level 3 – unobservable inputs. | |||||||||
At December 31, 2013 and 2012, the Company had no financial assets or liabilities that required periodic re-measurement at fair value. | |||||||||
The recorded value of certain financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable, other current assets, accounts payable and accrued expenses, approximate the fair value of the respective assets and liabilities at December 31, 2013 and December 31, 2012 based upon the short-term nature of the assets and liabilities. Based on borrowing rates currently available to the Company for loans with similar terms, the carrying value of short and long term notes payable approximate fair value. | |||||||||
Comprehensive Income | ' | ||||||||
Comprehensive Income | |||||||||
Comprehensive income is composed of the Company’s net income and changes in equity from all other non-stockholder sources. The changes from these non-stockholder sources are reflected as a separate item in the statements of operations and comprehensive income. | |||||||||
Reportable Segments | ' | ||||||||
Reportable Segments | |||||||||
The Company manages its operations through two business segments: (i) brewing operations, tavern and tasting room operations in the US and Canada (the “North American Territory”) and (ii) distributor operations in Europe (including Austria, Belgium, Denmark, Ireland, Italy, the Netherlands, France, Finland, Germany, Greece, Iceland, Liechtenstein, Luxembourg, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom) (the “Foreign Territory”). The Company evaluates performance based on net operating profit. Where applicable, portions of the administrative function expenses are allocated between the operating segments. The operating segments do not share manufacturing or distribution facilities. In the event any materials and/or services are provided to one operating segment by the other, the transaction is valued according to the Company’s transfer policy, which approximates market price. The costs of operating the manufacturing plants are captured discretely within each segment. The Company’s property, plant and equipment, inventory, and accounts receivable are captured and reported discretely within each operating segment. | |||||||||
Recent Accounting Pronouncements | ' | ||||||||
Recent Accounting Pronouncements | |||||||||
In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income requiring new disclosures regarding reclassification adjustments from accumulated other comprehensive income (“AOCI”). ASU No. 2013-02 requires disclosure of amounts reclassified out of AOCI in its entirety, by component, on the face of the statement of operations or in the notes. The standard is effective for fiscal years beginning after December 15, 2012. The Company adopted this guidance beginning in the first quarter of 2013. Adoption of this guidance does not have a material impact on the Company’s consolidated financial statements. | |||||||||
In July 2013, the FASB issued guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The guidance is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013, with an option for early adoption. The Company does not believe the adoption of this standard will have a material impact on its consolidated financial statements. | |||||||||
Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force (“EITF”)), the American Institute of Certified Public Accountants (“AICPA”), and the SEC did not or are not believed by management to have a material impact on the Company’s present or future financial statements. |
Description_of_Operations_and_2
Description of Operations and Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
Schedule of Estimated Useful Life of Property and Equipment | ' | ||||||||
Estimated useful lives of property and equipment are as follows: | |||||||||
Building | 40 years | ||||||||
Machinery and equipment | 3 - 40 years | ||||||||
Vehicles | 3 - 5 years | ||||||||
Furniture and fixtures | 5 - 10 years | ||||||||
Schedule of Basic and Dilutive Net Loss Per Share | ' | ||||||||
The computations of basic and dilutive net earnings per share are as follows: | |||||||||
Year Ended December 31 | |||||||||
2013 | 2012 | ||||||||
Net income (loss) | $ | (876,900 | ) | 558,400 | |||||
Weighted average common shares outstanding | 12,611,133 | 12,611,133 | |||||||
Basic net income (loss) per share | $ | (0.07 | ) | 0.04 | |||||
Interest expense on convertible notes | $ | — | 91,300 | ||||||
Income (loss) for purpose of computing diluted net income per share | $ | (876,900 | ) | 649,700 | |||||
Incremental shares from assumed exercise of dilutive securities | — | 2,288,102 | |||||||
Dilutive potential common shares | 12,611,133 | 14,899,235 | |||||||
Diluted net earnings (loss) per share | $ | (0.07 | ) | 0.04 |
Inventories_Tables
Inventories (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Schedule of Inventories | ' | ||||||||
Inventories, consisting of materials, materials overhead, labor, and manufacturing overhead, are stated at the lower of average cost or market (net realizable value) and consist of the following at December 31: | |||||||||
2013 | 2012 | ||||||||
Raw materials | $ | 813,000 | $ | 807,000 | |||||
Work-in-progress | 357,700 | 323,600 | |||||||
Finished goods | 967,600 | 732,300 | |||||||
Merchandise | 103,700 | 47,600 | |||||||
$ | 2,242,000 | $ | 1,910,500 |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Schedule of Property, Plant and Equipment | ' | ||||||||
The following is a summary of property and equipment, at cost less accumulated depreciation, at December 31: | |||||||||
2013 | 2012 | ||||||||
Machinery and equipment | $ | 12,468,400 | $ | 11,772,000 | |||||
Buildings | 7,218,900 | 7,222,100 | |||||||
Equipment under capital lease | 23,000 | 183,700 | |||||||
Land | 810,900 | 810,900 | |||||||
Leasehold improvements | 1,397,200 | 1,459,600 | |||||||
Vehicles | 111,200 | 190,000 | |||||||
Furniture and fixtures | 352,500 | 359,600 | |||||||
Equipment in progress | 217,800 | 663,500 | |||||||
22,599,900 | 22,661,400 | ||||||||
Accumulated depreciation and amortization | (10,935,100 | ) | (10,724,200 | ) | |||||
$ | 11,664,800 | $ | 11,937,200 |
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Long-term Debt, Unclassified [Abstract] | ' | ||||||||
Summary of Long-term Debt | ' | ||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
Loan from Cole Taylor, payable in monthly installments of $12,300, plus interest at prime plus 4% with a balloon payment of approximately $2,210,300 in June 2016; secured by real property at Ukiah. | 2,570,900 | 2,718,300 | |||||||
Loan from Cole Taylor, payable in monthly installments of $23,000 including interest at prime plus 3.5% with a balloon payment of approximately $552,600 in June 2016; secured by all assets of Releta and MBC, excluding real property at Ukiah. | 1,877,100 | 1,714,100 | |||||||
4,448,000 | 4,432,400 | ||||||||
Less current maturities | 4,448,000 | 450,000 | |||||||
$ | - | $ | 3,982,400 |
LongTerm_Debt_Related_Party_Ta
Long-Term Debt - Related Party (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Long-Term Debt - Related Party | ' | ||||||||
Schedule of Related Party Debt | ' | ||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
Loan from Heineken UK Limited, payable in quarterly installments of $138,100, plus interest at UK prime plus 5% maturing on October 9, 2016, secured by licensing rights pursuant to the Sub-License Agreement. | 1,657,400 | - | |||||||
1,657,400 | - | ||||||||
Less current maturities | 552,500 | - | |||||||
$ | 1,104,900 | $ | - | ||||||
Schedule of Maturities of Long Term Debt | ' | ||||||||
Maturities of debt for succeeding years are as follows: | |||||||||
Year ended December 31, 2014 | $ | 552,500 | |||||||
Year ended December 31, 2015 | $ | 552,500 | |||||||
Year ended December 31, 2016 | $ | 552,400 |
Capital_Lease_Obligations_Tabl
Capital Lease Obligations (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Capital Lease Obligations [Abstract] | ' | ||||
Schedule of Future Minimum Lease Payments for Capital Lease Payments | ' | ||||
The future minimum lease payments required under the capital lease and the present value of the net minimum lease payments as of December 31, 2013, are as follows: | |||||
Year Ending December 31, 2014 | $ | 6,400 | |||
Year Ending December 31, 2015 | $ | 6,400 | |||
Year Ending December 31, 2016 | $ | 6,400 | |||
Year Ending December 31, 2017 | $ | 6,400 | |||
25,600 | |||||
Less amounts representing interest | (2,600 | ) | |||
Present value of minimum lease payments | 23,000 | ||||
Less current maturities | 5,300 | ||||
Non-current leases payable | $ | 17,700 |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||||
Dec. 31, 2013 | ||||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||||
Schedule of Future Payments under Existing Contractual Agreements | ' | |||||
Future payments under existing contractual arrangements are as follows: | ||||||
Year Ending December 31, | ||||||
2014 | $ | 1,938,800 | ||||
Total | $ | 1,938,800 | ||||
Schedule of Future Minimum Lease Payments for Operating Lease | ' | |||||
Future minimum lease payments under these agreements are as follows: | ||||||
Year Ending December 31, | ||||||
2014 | $ | 400,500 | ||||
2015 | 310,200 | |||||
2016 | 215,000 | |||||
2017 | 195,000 | |||||
2018 | 191,600 | |||||
Thereafter | 103,800 | |||||
$ | 1,416,100 |
RelatedParty_Transactions_Tabl
Related-Party Transactions (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Related Party Transactions [Abstract] | ' | ||||||||
Schedule of Related-Party Transactions | ' | ||||||||
The following table reflects balances outstanding as of December 31, 2013 and 2012 and the value of the transactions with these related parties for the years ended December 31, 2013 and 2012: | |||||||||
2013 | 2012 | ||||||||
TRANSACTIONS | |||||||||
Gross sales to Shepherd Neame Ltd. | $ | 2,400,400 | $ | 3,527,000 | |||||
Purchases from Shepherd Neame Ltd. | 11,367,700 | 16,192,200 | |||||||
Expenses reimbursement to Shepherd Neame Ltd. | 865,100 | 1,030,900 | |||||||
Purchases from HUK | 3,006,100 | — | |||||||
Expenses reimbursement to HUK | 375,500 | — | |||||||
Interest expenses associated with UBA notes | 90,900 | 91,300 | |||||||
Interest paid to Shepherd Neame Ltd. | 2,400 | 2,400 | |||||||
ACCOUNT BALANCES | |||||||||
Accounts payable and accrued liabilities to Shepherd Neame Ltd. | 70,400 | 3,894,900 | |||||||
Accounts receivable and prepayments to Shepherd Neame Ltd. | 5,000 | 356,300 | |||||||
Accounts payable and accrued liabilities to HUK | 1,746,800 | — |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Schedule of Income Tax Expense (Benefit) | ' | ||||||||
The Company’s income tax expense is summarized as follows: | |||||||||
2013 | 2012 | ||||||||
Provision for income taxes | |||||||||
US Federal | $ | - | $ | - | |||||
US States | 4,100 | 2,700 | |||||||
Current provision | 4,100 | 2,700 | |||||||
Change in deferred income taxes | - | - | |||||||
Total provision for income taxes | $ | 4,100 | $ | 2,700 | |||||
Schedule of Domestic and Foreign Income Tax Rates to Earnings Before Income Taxes | ' | ||||||||
The difference between the actual income tax provision and the tax provision computed by applying the statutory US federal and United Kingdom income tax rates to earnings before taxes is attributable to the following: | |||||||||
2013 | 2012 | ||||||||
US Federal income tax expense (benefit) at 34% | $ | (517,600 | ) | $ | (26,600 | ) | |||
US State income tax expense (benefit) | (77,200 | ) | 21,800 | ||||||
United Kingdom income tax expense (benefit) at 20% | 129,900 | 127,900 | |||||||
Non deductible expenses | 23,400 | 17,400 | |||||||
Other | 4,800 | 1,800 | |||||||
Change in valuation allowance | 440,800 | (139,600 | ) | ||||||
Total | $ | 4,100 | $ | 2,700 | |||||
Schedule of Deferred Tax Assets and Liabilities | ' | ||||||||
Temporary differences and carryforwards that give rise to deferred tax assets and liabilities are as follows: | |||||||||
2013 | 2012 | ||||||||
Benefit of net operating loss carryforwards | $ | 5,572,100 | $ | 5,282,300 | |||||
Depreciation and amortization | (1,653,800 | ) | (1,827,900 | ) | |||||
Other | 80,500 | 103,600 | |||||||
Subtotal | 3,998,800 | 3,558,000 | |||||||
Less valuation allowance | (3,998,800 | ) | (3,558,000 | ) | |||||
Total | $ | - | $ | - | |||||
Change in valuation allowance | $ | 440,800 | $ | (139,600 | ) |
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Schedule of Segment Information | ' | ||||||||||||||||
A summary of each segment is as follows: | |||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
North American Territory | Foreign Territory | Corporate | Total | ||||||||||||||
and Other | |||||||||||||||||
Sales | $ | 14,806,700 | $ | 21,611,500 | $ | 36,418,200 | |||||||||||
Operating income (loss) | (1,037,400 | ) | 771,800 | (265,600 | ) | ||||||||||||
Identifiable assets | 12,736,500 | 4,414,500 | 2,116,000 | 19,267,000 | |||||||||||||
Depreciation and amortization | 677,800 | 427,600 | 1,105,400 | ||||||||||||||
Capital expenditures | 342,000 | 477,000 | 819,000 | ||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||
North American Territory | Foreign Territory | Corporate | Total | ||||||||||||||
and Other | |||||||||||||||||
Sales | $ | 17,319,600 | $ | 23,016,300 | $ | 40,335,900 | |||||||||||
Operating income | 239,300 | 695,900 | 935,200 | ||||||||||||||
Identifiable assets | 12,775,100 | 4,440,800 | 3,035,600 | 20,251,500 | |||||||||||||
Depreciation and amortization | 616,000 | 432,100 | 1,048,100 | ||||||||||||||
Capital expenditures | 1,086,600 | 416,500 | 1,503,100 |
Unrestricted_Net_Assets_Tables
Unrestricted Net Assets (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Unrestricted Net Assets | ' | ||||||||
Condensed Balance Sheets | ' | ||||||||
Balance Sheets | 2013 | 2012 | |||||||
Assets | |||||||||
Cash and cash equivalents | $ | 113,700 | $ | 123,200 | |||||
Accounts receivable, net | 1,512,300 | 2,531,700 | |||||||
Inventories | 2,217,300 | 1,910,500 | |||||||
Other current assets | 165,500 | 111,900 | |||||||
Total current assets | 4,008,800 | 4,677,300 | |||||||
Investment in subsidiary | 1,225,000 | 1,225,000 | |||||||
Property and equipment | 10,519,200 | 10,864,600 | |||||||
Intercompany receivable | 716,700 | 471,400 | |||||||
Other assets | 324,500 | 268,800 | |||||||
Total assets | $ | 16,794,200 | $ | 17,507,100 | |||||
Liabilities | |||||||||
Line of credit | $ | 1,517,200 | $ | 1,887,700 | |||||
Accounts payable | 2,524,500 | 1,584,300 | |||||||
Accrued liabilities | 1,001,700 | 884,300 | |||||||
Current maturities of debt and capital leases | 4,453,300 | 453,100 | |||||||
Total current liabilities | 9,496,700 | 4,809,400 | |||||||
Long-term debt and capital leases | 17,700 | 3,982,400 | |||||||
Notes to related parties | 3,497,900 | 3,407,000 | |||||||
Total liabilities | 13,012,300 | 12,198,800 | |||||||
Stockholders’ equity | |||||||||
Common stock | 15,100,300 | 15,100,300 | |||||||
Preferred stock | 227,600 | 227,600 | |||||||
Accumulated deficit | (11,546,000 | ) | (10,019,600 | ) | |||||
Total stockholders’ equity | 3,781,900 | 5,308,300 | |||||||
Total liabilities and stockholders’ equity | $ | 16,794,200 | $ | 17,507,100 | |||||
Condensed Statement of Operations | ' | ||||||||
Statement of Operations | 2013 | 2012 | |||||||
Net sales | $ | 14,024,400 | $ | 16,228,300 | |||||
Cost of goods sold | 11,354,400 | 12,383,900 | |||||||
Selling, marketing, and retail expenses | 1,710,600 | 1,754,500 | |||||||
General and administrative expenses | 2,094,200 | 1,984,600 | |||||||
Income (loss) from operations | (1,134,800 | ) | 105,300 | ||||||
Other income and (expense) | |||||||||
Interest expenses | (448,200 | ) | (380,000 | ) | |||||
Loss on disposal of assets | (77,600 | ) | |||||||
Other income | 138,300 | 196,500 | |||||||
Provision for taxes | (4,100 | ) | (2,700 | ) | |||||
(391,600 | ) | (186,200 | ) | ||||||
Net loss | $ | (1,526,400 | ) | $ | (80,900 | ) | |||
Condensed Statement of Cash Flows | ' | ||||||||
Statements of Cash Flows | 2013 | 2012 | |||||||
Cash flows from operating activities | $ | 935,800 | $ | 583,700 | |||||
Cash flow from investing activities | |||||||||
Purchase of property and equipment | (342,000 | ) | (1,086,600 | ) | |||||
Proceeds from sale of equipment | - | 5,000 | |||||||
Net cash flows from investing | (342,000 | ) | (1,081,600 | ) | |||||
Cash flow from financing activities | |||||||||
Net borrowings (repayments) on line of credit | (370,500 | ) | 992,400 | ||||||
Borrowings on long term debt | 539,700 | 184,700 | |||||||
Repayment of long-term debt | (524,100 | ) | (456,800 | ) | |||||
Payment on obligations under capital leases | (3,100 | ) | (46,400 | ) | |||||
Net change in intercompany payable | (245,300 | ) | (240,000 | ) | |||||
Net cash flows from financing activities | (603,300 | ) | 433,900 | ||||||
Cash, beginning of year | 123,200 | 187,200 | |||||||
Cash, end of year | $ | 113,700 | $ | 123,200 |
Description_of_Operations_and_3
Description of Operations and Summary of Significant Accounting Policies - Schedule of Estimated Useful Life of Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Building [Member] | ' |
Property and equipment, estimated useful life | '40 years |
Machinery And Equipment [Member] | Minimum [Member] | ' |
Property and equipment, estimated useful life | '3 years |
Machinery And Equipment [Member] | Maximum [Member] | ' |
Property and equipment, estimated useful life | '40 years |
Vehicles [Member] | Minimum [Member] | ' |
Property and equipment, estimated useful life | '3 years |
Vehicles [Member] | Maximum [Member] | ' |
Property and equipment, estimated useful life | '5 years |
Furniture And Fixtures [Member] | Minimum [Member] | ' |
Property and equipment, estimated useful life | '5 years |
Furniture And Fixtures [Member] | Maximum [Member] | ' |
Property and equipment, estimated useful life | '10 years |
Description_of_Operations_and_4
Description of Operations and Summary of Significant Accounting Policies - Schedule of Basic and Dilutive Net Loss Per Share (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Accounting Policies [Abstract] | ' | ' |
Net income (loss) | ($876,900) | $558,400 |
Weighted average common shares outstanding | 12,611,133 | 12,611,133 |
Basic net income (loss) per share | ($0.07) | $0.04 |
Interest expense on convertible notes | ' | 91,300 |
Income (loss) for computing diluted net income per share | ($876,900) | $649,700 |
Incremental shares from assumed exercise of dilutive securities | ' | 2,288,102 |
Dilutive potential common shares | 12,611,133 | 14,899,235 |
Diluted net earnings (loss) per share | ($0.07) | $0.04 |
Description_of_Operations_and_5
Description of Operations and Summary of Significant Accounting Policies (Details Narrative) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2011 | |
Accounting Policies [Abstract] | ' | ' | ' |
Percentage of assets located in UK | 23.00% | 22.00% | ' |
Allowance for doubtful accounts receivables, reserve | $68,200 | $207,800 | ' |
Impairment loss on long-lived assets | 0 | 0 | ' |
Deferred financing costs on borrowings | ' | ' | 225,000 |
Amortization of deferred financing costs charged to operations | 45,000 | 45,000 | ' |
Uncertain tax positions | 0 | 0 | ' |
Excise taxes on beverages description | ' | ' | ' |
For brewers producing less than 2.0 million barrels of beer per calendar year, the federal excise tax is $7 per barrel on the first 60,000 barrels of beer removed for consumption or sale during a calendar year, and $18 per barrel for each barrel in excess of 60,000. | |||
Sales discounts | 1,165,100 | 1,330,800 | ' |
Shipping costs included in marketing expenses | 911,200 | 914,200 | ' |
Advertising expense | $755,600 | $900,700 | ' |
Liquidity_and_Management_Plans1
Liquidity and Management Plans (Details Narrative) (USD $) | 0 Months Ended | 0 Months Ended | |||||||||
Sep. 01, 2013 | Jun. 23, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Nov. 11, 2013 | Dec. 31, 2013 | Jun. 23, 2011 | Jun. 23, 2011 | Jun. 23, 2011 | Jun. 23, 2011 | |
United Breweries Holding Limited [Member] | Fixed Charges Coverage Trailing 12 Months [Member] | Revolving Credit Facility [Member] | Machinery And Equipment Term Loan [Member] | Real Estate Term Loan [Member] | Capital Expenditure Line Of Credit [Member] | ||||||
Number | |||||||||||
Credit facility, maturity date | ' | 23-Jun-16 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Credit facility, agreement amount | ' | $10,000,000 | ' | ' | ' | ' | ' | $4,119,000 | $1,934,000 | $2,947,000 | $1,000,000 |
Payment of interest increase | 120,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percenatge of increase interest by Cole Taylor | 2.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fixed charge coverage ratio - Required | ' | ' | ' | ' | ' | ' | 1.1 | ' | ' | ' | ' |
Fixed charge coverage ratio - Actual | ' | ' | ' | ' | ' | ' | -0.58 | ' | ' | ' | ' |
Tangible net worth Required MBC and Releta | ' | ' | 6,181,400 | ' | ' | ' | ' | ' | ' | ' | ' |
Actual tangible net worth | ' | ' | 4,848,200 | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | ' | ' | 324,800 | 198,500 | 312,200 | ' | ' | ' | ' | ' | ' |
Accumulated deficit | ' | ' | 14,707,600 | 13,830,700 | ' | ' | ' | ' | ' | ' | ' |
Working capital deficit | ' | ' | 6,334,800 | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from investments to meet the obligations | ' | ' | ' | ' | ' | $2,000,000 | ' | ' | ' | ' | ' |
Inventories_Schedule_of_Invent
Inventories - Schedule of Inventories (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Inventory Disclosure [Abstract] | ' | ' |
Raw Materials | $813,000 | $807,000 |
Beer-in-process | 357,700 | 323,600 |
Finished Goods | 967,600 | 732,300 |
Merchandise | 103,700 | 47,600 |
Inventories, Total | $2,242,000 | $1,910,500 |
Property_and_Equipment_Schedul
Property and Equipment - Schedule of Property and Equipment (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Property, Plant and Equipment [Abstract] | ' | ' |
Machinery and equipment | $12,468,400 | $11,772,000 |
Buildings | 7,218,900 | 7,222,100 |
Equipment under capital lease | 23,000 | 183,700 |
Land | 810,900 | 810,900 |
Leasehold improvements | 1,397,200 | 1,459,600 |
Vehicles | 111,200 | 190,000 |
Furniture and fixtures | 352,500 | 359,600 |
Equipment in progress | 217,800 | 663,500 |
Property, plant and equipment, gross | 22,599,900 | 22,661,400 |
Accumulated depreciation and amortization | -10,935,100 | -10,724,200 |
Property, plant and equipment, net | $11,664,800 | $11,937,200 |
Property_and_Equipment_Details
Property and Equipment (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Property, Plant and Equipment [Abstract] | ' | ' |
Depreciation and amortization expense | $1,105,400 | $1,048,100 |
Secured_Lines_of_Credit_Detail
Secured Lines of Credit (Details Narrative) | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 23, 2011 | Dec. 31, 2011 | Dec. 31, 2013 | Apr. 26, 2005 | Dec. 31, 2013 | Apr. 26, 2005 |
USD ($) | USD ($) | USD ($) | Cole Taylor [Member] | Cole Taylor [Member] | RBS [Member] | RBS [Member] | RBS [Member] | |
USD ($) | USD ($) | GBP [Member] | ||||||
GBP (£) | ||||||||
Percentage of line of credit drawn on receivables, maximum | ' | ' | ' | 85.00% | ' | ' | ' | ' |
Percentage of line of credit drawn on inventory, maximum | ' | ' | ' | 60.00% | ' | ' | ' | ' |
Facility maturity date | ' | ' | ' | 23-Jun-16 | ' | ' | ' | ' |
Facility interest rate above prime lending rate | ' | ' | ' | 1.00% | ' | 1.38% | ' | ' |
Percentage of LIBOR plus interest rate | ' | ' | ' | 3.50% | ' | ' | ' | ' |
Line of credit, outstanding amount | ' | ' | ' | ' | $1,517,200 | ' | $1,328,700 | ' |
Account receivables | ' | ' | ' | ' | 1,512,300 | ' | ' | ' |
Inventory | 2,242,000 | 1,910,500 | ' | ' | 2,217,300 | ' | ' | ' |
Maximum amount of facility | ' | ' | $10,000,000 | ' | ' | ' | ' | £ 1,750,000 |
Initial term of facility | ' | ' | ' | ' | ' | '1 year | ' | ' |
Percentage of prepayment against qualified accounts receivable | ' | ' | ' | ' | ' | 80.00% | ' | ' |
Percentage of service charge on each invoice discounted | ' | ' | ' | ' | ' | 0.10% | ' | ' |
LongTerm_Debt_Summary_of_LongT
Long-Term Debt - Summary of Long-Term Debt (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Long term debt, total | $4,448,000 | $4,432,400 |
Less current maturities | 4,448,000 | 450,000 |
Long-term debt non-current | ' | 3,982,400 |
Cole Taylor Notes With 4% Prime Plus Interest Rate [Member] | ' | ' |
Long term debt, total | 2,570,900 | 2,718,300 |
Cole Taylor Notes With 3.5% Prime Plus Interest Rate [Member] | ' | ' |
Long term debt, total | $1,877,100 | $1,714,100 |
LongTerm_Debt_Summary_of_LongT1
Long-Term Debt - Summary of Long-Term Debt (Details) (Parenthetical) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Cole Taylor Notes With 4% Prime Plus Interest Rate [Member] | ' | ' |
Loans payable in monthly installments | $12,300 | $12,300 |
Balloon payment of loans | 2,210,300 | 2,210,300 |
Loans payable, interest rate above prime rate | 4.00% | 4.00% |
Debt instrument maturity date | 30-Jun-16 | 30-Jun-16 |
Cole Taylor Notes With 3.5% Prime Plus Interest Rate [Member] | ' | ' |
Loans payable in monthly installments | 23,000 | 23,000 |
Balloon payment of loans | $552,600 | $552,600 |
Loans payable, interest rate above prime rate | 3.50% | 3.50% |
Debt instrument maturity date | 30-Jun-16 | 30-Jun-16 |
LongTerm_Debt_Related_Party_Sc
Long-Term Debt - Related Party - Schedule of Related Party Debt (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Long term debt, total | $1,657,400 | ' |
Less current maturities | 552,500 | ' |
Long-term debt non-current | 1,104,900 | ' |
Loan from Heineken UK Limited Notes With 5% Prime Plus Interest Rate [Member] | ' | ' |
Long term debt, total | $1,657,400 | ' |
LongTerm_Debt_Related_Party_Sc1
Long-Term Debt - Related Party - Schedule of Related Party Debt (Details) (Parenthetical) (Loan from Heineken UK Limited Notes With 5% Prime Plus Interest Rate [Member], USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Loan from Heineken UK Limited Notes With 5% Prime Plus Interest Rate [Member] | ' | ' |
Loans payable in monthly installments | $138,100 | ' |
Loans payable, interest rate above prime rate | 5.00% | 5.00% |
Debt instrument maturity date | 9-Oct-16 | 9-Oct-16 |
LongTerm_Debt_Related_Party_Su
Long-Term Debt - Related Party - Summary of Maturities of Long-Term Debt for Succeeding Years (Details) (Loan from Heineken UK Limited Notes With 5% Prime Plus Interest Rate [Member], USD $) | Dec. 31, 2013 |
Loan from Heineken UK Limited Notes With 5% Prime Plus Interest Rate [Member] | ' |
Year ended December 31, 2014 | $552,500 |
Year ended December 31, 2015 | 552,500 |
Year ended December 31, 2016 | $552,400 |
LongTerm_Debt_Related_Party_De
Long-Term Debt - Related Party (Details Narrative) (Heineken UK Limited [Member], GBP £) | 0 Months Ended | |
Oct. 09, 2013 | Apr. 18, 2013 | |
Heineken UK Limited [Member] | ' | ' |
Secured debt | ' | £ 1,000,000 |
Repayment of secured loan by twelve equal installments | £ 83,333 | ' |
Capital_Lease_Obligations_Sche
Capital Lease Obligations - Schedule of Future Minimum Lease Payments for Capital Lease Payments (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Capital Lease Obligations [Abstract] | ' | ' |
Year Ending December 31, 2014 | $6,400 | ' |
Year Ending December 31, 2015 | 6,400 | ' |
Year Ending December 31, 2016 | 6,400 | ' |
Year Ending December 31, 2017 | 6,400 | ' |
Capital lease future minimum payment due, total | 25,600 | ' |
Less amounts representing interest | -2,600 | ' |
Present value of minimum lease payments | 23,000 | ' |
Less current maturities | 5,300 | 3,100 |
Non-current leases payable | $17,700 | ' |
Notes_to_Related_Parties_Detai
Notes to Related Parties (Details Narrative) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
Thirteen UBA Notes [Member] | One UBA Note [Member] | Subordinated Convertible Notes Payable [Member] | |||
Unsecured convertible notes | $3,497,900 | $3,407,000 | ' | ' | ' |
Percentage of convertible notes interest, prime rate plus | ' | ' | ' | ' | 1.50% |
Percentage of convertible notes interest rate, maximum | ' | ' | ' | ' | 10.00% |
Debt instruments conversion price per share | ' | ' | $1.50 | $1.44 | ' |
Convertible notes payable maturity date, description | ' | ' | ' | ' | ' |
The UBA Notes have been extended until June 2014 and have automatic renewals after such maturity date for successive one year terms, provided that either we or UBA may elect not to extend the term upon written notice given to the other party no more than 60 days and no fewer than 30 days prior to the expiration of the applicable term. Under the terms of the UBA Notes, UBA may demand payment within 60 days following the end of the extension period, but UBA has agreed to subordinate the UBA Notes to our long-term debt agreements with Cole Taylor, which mature in June 2016. | |||||
Accrued interest | $1,582,500 | $1,491,600 | ' | ' | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies - Schedule of Future Payments under Existing Contractual Agreements (Details) (USD $) | Dec. 31, 2013 |
Commitments and Contingencies Disclosure [Abstract] | ' |
Year Ending December 31, 2014 | $1,938,800 |
Total | $1,938,800 |
Commitments_and_Contingencies_2
Commitments and Contingencies - Schedule of Future Minimum Lease Payments for Operating Lease (Details) (USD $) | Dec. 31, 2013 |
Commitments and Contingencies Disclosure [Abstract] | ' |
Year Ending December 31, 2014 | $400,500 |
Year Ending December 31, 2015 | 310,200 |
Year Ending December 31, 2016 | 215,000 |
Year Ending December 31, 2017 | 195,000 |
Year Ending December 31, 2018 | 191,600 |
Thereafter | 103,800 |
Total operating lease payments | $1,416,100 |
Commitments_and_Contingencies_3
Commitments and Contingencies (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Rent expenses | $359,300 | $324,400 |
MicroStar [Member] | ' | ' |
Keg rent | $102,000 | $82,100 |
RelatedParty_Transactions_Sche
Related-Party Transactions - Schedule of Related-Party Transactions (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Shepherd Neame Ltd [Member] | ' | ' |
Gross sales to related parties | $2,400,400 | $3,527,000 |
Purchases from related parties | 11,367,700 | 16,192,200 |
Expenses reimbursement to related parties | 865,100 | 1,030,900 |
Interest paid to related parties | 2,400 | 2,400 |
Accounts payable and accrued liabilities to related parties | 70,400 | 3,894,900 |
Accounts receivable and prepayments to related parties | 5,000 | 356,300 |
Heineken UK Limited [Member] | ' | ' |
Purchases from related parties | 3,006,100 | ' |
Expenses reimbursement to related parties | 375,500 | ' |
Accounts payable and accrued liabilities to related parties | 1,746,800 | ' |
United Breweries of America [Member] | ' | ' |
Interest expenses associated with UBA notes (see note 8) | $90,900 | $91,300 |
RelatedParty_Transactions_Deta
Related-Party Transactions (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Related Party Transactions [Abstract] | ' | ' |
Percentage ownership of UBA | 25.00% | ' |
Directors compensation | $152,800 | $114,000 |
Concentrations_and_Credit_Risk1
Concentrations and Credit Risk (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Cash deposits | $211,100 | ' |
Accounts receivable due from UK customers | 2,607,000 | ' |
Percentage of union members of domestic work force | 18.00% | ' |
Gross sales to five major customers during period | 7,575,900 | 9,245,700 |
Percentage of gross sales from five major customers during period | 21.00% | 23.00% |
Shepherd Neame Ltd [Member] | ' | ' |
Gross sales to Shepherd Neame | $2,373,400 | $3,527,000 |
Percentage of gross sales to Shepherd Neame during period | 7.00% | 9.00% |
Stockholders_Equity_Details_Na
Stockholders' Equity (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Equity [Abstract] | ' | ' |
Preferred stock, Series A, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, Series A, shares issued | 227,600 | 227,600 |
Preferred stock, cash dividends, per share entitlement | $1 | ' |
Income_Taxes_Schedule_of_Incom
Income Taxes - Schedule of Income Tax Expense (Benefit) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | ' | ' |
Provision for income taxes, US Federal | ' | ' |
Provision for income taxes, US States | 4,100 | 2,700 |
Current provision | 4,100 | 2,700 |
Change in deferred income taxes | ' | ' |
Total provision for income taxes | $4,100 | $2,700 |
Income_Taxes_Schedule_of_Domes
Income Taxes - Schedule of Domestic and Foreign Income Tax Rates to Earnings Before Income Taxes (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | ' | ' |
US Federal income tax expense (benefit) at 34% | ($517,600) | ($26,600) |
US State income tax expense (benefit) | -77,200 | 21,800 |
United Kingdom income tax expense (benefit) at 20% | 129,900 | 127,900 |
Nondeductible expenses | 23,400 | 17,400 |
Change in tax assumptions | 4,800 | 1,800 |
Change in valuation allowance | 440,800 | -139,600 |
Total | $4,100 | $2,700 |
Income_Taxes_Schedule_of_Domes1
Income Taxes - Schedule of Domestic and Foreign Income Tax Rates to Earnings Before Income Taxes (Details) (Parenthetical) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | ' | ' |
US Federal income tax expense (benefit), rate | 34.00% | 34.00% |
United Kingdom income tax expense (benefit), rate | 20.00% | 20.00% |
Income_Taxes_Schedule_of_Tempo
Income Taxes - Schedule of Temporary Differences and Carryforwards of Deferred Tax Assets and Liabilities (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | ' | ' |
Benefit of net operating loss carryforwards | $5,572,100 | $5,282,300 |
Depreciation and amortization | -1,653,800 | -1,827,900 |
Other | 80,500 | 103,600 |
Subtotal | 3,998,800 | 3,558,000 |
Less valuation allowance | -3,998,800 | -3,558,000 |
Total | ' | ' |
Change in valuation allowance | $440,800 | ($139,600) |
Income_Taxes_Details_Narrative
Income Taxes (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
US Federal net operating losses total | $14,537,400 | ' |
US state operating losses total | 1,405,500 | ' |
UK operating losses total | $2,525,400 | ' |
US federal statutory tax rate | 34.00% | 34.00% |
US Federal [Member] | ' | ' |
Operating loss carryforwards, expiration dates | '2017 and ending in 2033 | ' |
US State [Member] | ' | ' |
Operating loss carryforwards, expiration dates | '2014 and ending in 2033 | ' |
Segment_Information_Schedule_o
Segment Information - Schedule of Segment Information (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Net Sales | $36,418,200 | $40,335,900 |
Operating Income (loss) | -265,600 | 935,200 |
Identifiable Assets | 19,267,000 | 20,251,500 |
Depreciation & Amortization | 1,105,400 | 1,048,100 |
Capital Expenditures | 819,000 | 1,503,100 |
North American Territory Operations [Member] | ' | ' |
Net Sales | 14,806,700 | ' |
Operating Income (loss) | -1,037,400 | ' |
Identifiable Assets | 12,736,500 | ' |
Depreciation & Amortization | 677,800 | ' |
Capital Expenditures | 342,000 | ' |
Foreign Territory [Member] | ' | ' |
Net Sales | 21,611,500 | 23,016,300 |
Operating Income (loss) | 771,800 | 695,900 |
Identifiable Assets | 4,414,500 | 4,440,800 |
Depreciation & Amortization | 427,600 | 432,100 |
Capital Expenditures | 477,000 | 416,500 |
Corporate And Other [Member] | ' | ' |
Identifiable Assets | 2,116,000 | 3,035,600 |
North American Territory [Member] | ' | ' |
Net Sales | ' | 17,319,600 |
Operating Income (loss) | ' | 239,300 |
Identifiable Assets | ' | 12,775,100 |
Depreciation & Amortization | ' | 616,000 |
Capital Expenditures | ' | $1,086,600 |
Segment_Information_Details_Na
Segment Information (Details Narrative) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
North American Territory Operations [Member] | ' | ' |
Percentage of gross sales from different segments | 41.00% | 43.00% |
Foreign Territory Operations [Member] | ' | ' |
Percentage of gross sales from different segments | 59.00% | 57.00% |
Unrestricted_Net_Assets_Conden
Unrestricted Net Assets - Condensed Balance Sheets of US Operations (Details) (Mendocino, MBC And Releta Company [Member], USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Mendocino, MBC And Releta Company [Member] | ' | ' |
Cash and cash equivalents | $113,700 | $123,200 |
Accounts receivable, net | 1,512,300 | 2,531,700 |
Inventories | 2,217,300 | 1,910,500 |
Other current assets | 165,500 | 111,900 |
Total current assets | 4,008,800 | 4,677,300 |
Investment in subsidiary | 1,225,000 | 1,225,000 |
Property and equipment | 10,519,200 | 10,864,600 |
Intercompany receivable | 716,700 | 471,400 |
Other assets | 324,500 | 268,800 |
Total assets | 16,794,200 | 17,507,100 |
Line of credit | 1,517,200 | 1,887,700 |
Accounts payable | 2,524,500 | 1,584,300 |
Accrued liabilities | 1,001,700 | 884,300 |
Current maturities of debt and capital leases | 4,453,300 | 453,100 |
Total current liabilities | 9,496,700 | 4,809,400 |
Long-term debt and capital lease | 17,700 | 3,982,400 |
Notes to related parties | 3,497,900 | 3,407,000 |
Total liabilities | 13,012,300 | 12,198,800 |
Common stock | 15,100,300 | 15,100,300 |
Preferred stock | 227,600 | 227,600 |
Accumulated deficit | -11,546,000 | -10,019,600 |
Total stockholders' equity | 3,781,900 | 5,308,300 |
Total liabilities and stockholders' equity | $16,794,200 | $17,507,100 |
Unrestricted_Net_Assets_Conden1
Unrestricted Net Assets - Condensed Statement of Operations of US Operations (Details) (Mendocino, MBC And Releta Company [Member], USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Mendocino, MBC And Releta Company [Member] | ' | ' |
Net sales | $14,024,400 | $16,228,300 |
Cost of goods sold | 11,354,400 | 12,383,900 |
Selling, marketing, and retail expenses | 1,710,600 | 1,754,500 |
General and administrative expenses | 2,094,200 | 1,984,600 |
Income (loss) from operations | -1,134,800 | 105,300 |
Interest expense | -448,200 | -380,000 |
Loss on disposal of assets | -77,600 | ' |
Other income | 138,300 | 196,500 |
Provision for taxes | -4,100 | -2,700 |
Other income and (expense), total | -391,600 | -186,200 |
Net income (loss) | ($1,526,400) | ($80,900) |
Unrestricted_Net_Assets_Conden2
Unrestricted Net Assets - Condensed Statement of Cash Flows of US Operations (Details) (Mendocino, MBC And Releta Company [Member], USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Mendocino, MBC And Releta Company [Member] | ' | ' |
Cash flows from operating activities | $935,800 | $583,700 |
Purchase of property and equipment | -342,000 | -1,086,600 |
Proceeds from sale of equipment | ' | 5,000 |
Net cash flows from investing | -342,000 | -1,081,600 |
Net borrowings (repayments) on line of credit | -370,500 | 992,400 |
Borrowings on long term debt | 539,700 | 184,700 |
Repayment of long-term debt | -524,100 | -456,800 |
Payment on obligations under capital leases | -3,100 | -46,400 |
Net change in intercompany payable | -245,300 | -240,000 |
Net cash flows from financing activities | -603,300 | 433,900 |
Cash, beginning of period | 123,200 | 187,200 |
Cash, end of period | $113,700 | $123,200 |
Unrestricted_Net_Assets_Detail
Unrestricted Net Assets (Details Narrative) (UBIUK [Member], USD $) | Dec. 31, 2013 |
UBIUK [Member] | ' |
Accumulated deficit of UBIUK | $1,717,400 |
Minimum Retained Earning required for distributions and other payments to MBC from KBEL | $1,657,400 |
Subsequent_Events_Details_Narr
Subsequent Events (Details Narrative) (Catamaran Services, Inc [Member], Subsequent Event [Member], USD $) | 0 Months Ended | |
Jun. 22, 2014 | Jan. 22, 2014 | |
Catamaran Services, Inc [Member] | Subsequent Event [Member] | ' | ' |
Debt instrument, principal amount | ' | $500,000 |
Percentage of convertible notes interest, prime rate plus | 1.50% | ' |
Percentage of convertible notes interest rate, maximum | 10.00% | ' |