UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

(Mark One)

Form 10-Q/A

(Amendment No. 1)

 

[√]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended  September 30,  2013

 

or

 

[ ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from __________________ to __________________________

Commission file number: 333-173309

 

Drewrys brewing company

(Name of registrant as specified in its charter)

 

Nevada	27-2153794
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

 

5402 Brittany Drive,   Mc  Henry, IL	60050
(Address of principal executive offices)	(Zip Code)

 

(815) 575-4815

(Registrant's telephone number, including area code)

 

not applicable

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. xYes oNo

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). oYes x No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) oYes xNo

 

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 12,100,500 shares of common stock are issued and outstanding as of September 30, 2013.

 

 

EXPLANATORY NOTE

 

This Amendment No. 1 (this "Amendment") to the Quarterly Report on Form 10-Q of Drewrys Brewing Company (the "Company") for the quarter ended September 30, 2013, originally filed with the U.S. Securities and Exchange Commission (the "SEC") on November 19, 2013, (the "Original Filing"), is being filed to correct the number of shares outstanding on the cover page of the Original Filing and on the Balance Sheets, which number was stated incorrectly as a result of a scrivener’s error, to reflect the Refundable Subscription Payable Amount on the Balance Sheet as of September 30, 2013, to disclose that the Company’s Controls and Procedures were not effective as of September 30, 2013, and to include new certifications pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

	TABLE OF CONTENTS	Page No.
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements.	4
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	16
Item 3.	Quantative and Qualitative Disclosures About Market Risk.	18
Item 4.	Controls and Procedures.	18
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings.	21
Item 1A.	Risk Factors.	21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	21
Item 3.	Defaults Upon Senior Securities.	21
Item 4.	Mine Safety Disclosure	21
Item 5.	Other Information.	21
Item 6.	Exhibits.	22

 

 

PART I - FINANCIAL INFORMATION

 

Item 1.  Financial Statements.

 

 

 

 

 

 

 

 

DREWRYS BREWING CORPORATION

 (A DEVELOPMENT STAGE COMPANY)

 

CONTENTS

 

PAGE	5	CONDENSED BALANCE SHEETS AS OF SEPTEMBER 30, 2013 (UNAUDITED) AND AS OF DECEMBER 31, 2012 (AUDITED).
PAGE	6	CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012 AND FOR THE PERIOD OCTOBER 11, 2010 (INCEPTION) TO SEPTEMBER 30, 2013 (UNAUDITED).
PAGE	7	CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE PERIOD FROM OCTOBER 11, 2010 (INCEPTION) TO SEPTEMBER 30, 2013(UNAUDITED).
PAGE	8	CONDENSED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012 AND FOR THE PERIOD OCTOBER 11, 2010 (INCEPTION) TO SEPTEMBER 30, 2013(UNAUDITED).
PAGES	9-15	NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED).

 

 

 

 

 

 

 

DREWRYS BREWING COMPANY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED BALANCE SHEETS
ASSETS
		As of				As of
		September 30, 2013				December 31, 2012
		(Unaudited)				(Audited)
CURRENT ASSETS:
Cash and equivalents		$	45,395			$	128
Prepaid expenses			137,727				—
Total Current Assets			183,122				128
OTHER ASSETS:
Trademarks			560				560
Total Other Assets			560				560
Total Assets		$	183,682			$	688
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES:
Accounts payable and accrued liabilities		$	23,711			$	22,195
Refundable Subscription Payable			9,900				—
Advances from related parties			14,016				5,043
Note payable, current portion			62,727				—
Total Current Liabilities			110,354				27,238
LONG TERM LIABILITIES:
Note payable, net of current portion			22,273				—
Total Long Term Liabilities			22,273				—
Total Liabilities			132,627				27,238
STOCKHOLDERS' EQUITY (DEFICIENCY):
Common stock , par value $.001;  75,000,000 shares authorized;
12,100,500 shares issued as of September 30, 2013 and
9,023,500 as of December 31, 2012		$	12,101			$	9,024
Subscription receivable			—				—
Additional paid in capital			307,008				2,385
Deficit accumulated during the development stage			(268,054	)			(37,959	)
Total Stockholders' Equity/(Deficiency)			51,055				(26,550	)
Total Liabilities and Stockholders' Equity/(Deficiency)		$	183,682			$	688

 

 See Accompanying Notes to Condensed Unaudited Financial Statements.

 

DREWRYS BREWING COMPANY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
		For the				For the				For the				For the				For the period
		three month				three month				nine month				nine month				from Inception
		period ended				period ended				period ended				period ended				(October 11, 2010) to
		September 30, 2013				September 30, 2012				September 30, 2013				September 30, 2012				September 30, 2013
REVENUES		$	10,727			$	—			$	11,176			$	—			$	11,176
Cost of Goods Sold			6,394				—				6,394				—				6,394
Gross Profit			4,333				—				4,782				—				4,782
OPERATING EXPENSES
Advertising and Promotion			20,103				—				28,670				—				29,493
Contract Brewing Fees			—				—				5,000				—				5,000
General and Administrative			5,252				1,973				6,966				4,353				24,352
Outside Consulting			125,485				—				171,564				—				171,564
Professional Fees			9,387				500				19,627				1,500				38,877
Impairment			—				—				—				—				500
Total Operating Expenses			160,227				2,473				231,827				5,853				269,786
Loss from Operations			(155,894	)			(2,473	)			(227,045	)			(5,853	)			(265,004	)
Other Expenses
Interest Expense			(2,550	)			—				(3,050	)			—				(3,050	)
Total Other Expenses			(2,550	)			—				(3,050	)			—				(3,050	)
Income (Loss) Before Income Taxes			(158,444	)			(2,473	)			(230,095	)			(5,853	)			(268,054	)
Provision for Income Taxes			—				—				—				—				—
Net (loss)		$	(158,444	)		$	(2,473	)		$	(230,095	)		$	(5,853	)		$	(268,054	)
Basic and diluted net loss per common share			**												**
Weighted average number of common shares outstanding			12,100,500				9,002,772				10,371,751				9,000,931
** Less than $.01

 

 See Accompanying Notes to Condensed Unaudited Financial Statements.

 

DREWRYS BREWING COMPANY
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY/(DEFICIT)
FROM OCTOBER 11, 2010 (INCEPTION) THROUGH SEPTEMBER 30, 2013
(UNAUDITED)
														Additional				Accumulated				Total
		Common Stock								Subscription				Paid in				(Deficit) During				Stockholders'
Par Value of $0.001		Shares				Amount				Receivable				Capital				Development Stage				Equity/(Deficit)
Inception - October 11, 2010			—			$	—			$	—			$	—			$	—			$	—
Common shares issued to founder for
subscription agreement on October 11, 2010			9,000,000				9,000				(9,000	)			—				—				—
Capital contribution			—				—				—				59				—				59
Payments on subscription receivable			—				—				2,550				—				—				2,550
Loss for the period from inception on October 11,
2010 to December 31, 2010			—				—				—				—				(8,399	)			(8,399	)
Balance at December 31, 2010			9,000,000				9,000				(6,450	)			59				(8,399	)			(5,790	)
Payments on subscription receivable			—				—				3,320				—				—				3,320
Net Loss for the year ended December 31, 2011			—				—				—				—				(10,307	)			(10,307	)
Balance at December 31, 2011			9,000,000				9,000				(3,130	)			59				(18,706	)			(12,777	)
Payments on subscription receivable			—				—				3,130				—				—				3,130
Common shares issued for cash ($0.10/share)			13,500				14				—				1,336				—				1,350
Common shares issued for services ($0.10/share)			10,000				10				—				990				—				1,000
Net Loss for the year ended December 31, 2012			—				—				—				—				(19,253	)			(19,253	)
Balance at December 31, 2012			9,023,500				9,024				—				2,385				(37,959	)			(26,550	)
Common shares issued for service ($0.10/share)			3,033,000				3,033				—				300,267								303,300
Common shares issued for cash ($0.10/share)			44,000				44				—				4,356								4,400
Net Loss for the nine months ended September 30, 2013			—				—				—				—				(230,095	)			(230,095	)
Balance at September 30, 2013			12,100,500			$	12,101			$	—			$	307,008			$	(268,054	)		$	51,055

 

See Accompanying Notes to Condensed Unaudited Financial Statements.

DREWRYS BREWING COMPANY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
		For the nine months ended September 30, 2013				For the nine months ended September 30, 2012				For the period from Inception (October 11, 2010) to September 30, 2013
OPERATING ACTIVITIES:
Net loss		$	(230,095	)		$	(5,853	)		$	(268,054	)
Adjustments to reconcile net loss to net cash used in operating activities:
Impairment loss			—				—				500
Stock issued for services			303,300				—				304,300
Changes in operating assets and liabilities:
(Increase)/decrease in prepaid expenses			(137,727	)			—				(137,727	)
Increase/(decrease) in accounts payable and accrued expenses			1,516				(2,170	)			23,711
Net cash used in operating activities			(63,006	)			(8,023	)			(77,270	)
INVESTING ACTIVITIES:
Acquisition of trademarks			—				—				(560	)
Acquisition of label designs			—				—				(500	)
Net cash provided by (used in) investing activities			—				—				(1,060	)
FINANCING ACTIVITIES:
Advances from related parties, net			8,973				4,570				14,016
Proceeds from note payable			85,000				—				85,000
Payments on subscription agreement			—				3,130				9,000
Issuance of stock for cash			4,400				500				5,750
Refundable Subscriptions			10,300				10,300
Refunded Subscriptions			(400	)			(400	)
Capital contribution			—				—				59
Net cash provided by (used in) financing activities			108,273				8,200				123,725
NET INCREASE IN CASH			45,267				177				45,395
CASH BEGINNING BALANCE			128				51				—
CASH ENDING BALANCE		$	45,395			$	228			$	45,395
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Taxes paid		$	—			$	—			$	—
Interest paid		$	—			$	—			$	—
NONCASH TRANSACTIONS AFFECTING OPERATING, INVESTING, AND FINANCING ACTIVITIES:
Issuance of common stock for subscription agreement		$	—			$	—			$	9,000

 

See Accompanying Notes to Condensed Unaudited Financial Statements.

DREWRYS BREWING COMPANY

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

(AS OF SEPTEMBER 30, 2013)

(UNAUDITED)

 

NOTE 1. GENERAL ORGANIZATION AND BUSINESS

 

Drewrys Brewing Company (“the Company”) is a development stage company, incorporated in the State of Nevada on, October 11, 2010, to develop and market a line of low-priced and craft beers. The intent is to provide consumers with malt beverages that appeal to their price point.

 

Drewrys’ plan is to sell their beers in the wholesale market, targeting select regional wholesalers and distributors in the Midwest and Atlantic/New England regions.

 

The Company’s fiscal year ends on December 31^st. The Company has a limited operating history upon which to base an evaluation of the current business and future prospects and has yet to achieve substantial commercial sales of its initial products. The Company will continue to be considered a development stage entity until it has begun significant operations and is generating significant revenues.

 

The Company has minimal revenues to date. Since its inception, the Company has been dependent upon the receipt of capital investment to fund its continuing activities. In addition to the normal risks associated with a new business venture, there can be no assurance that the Company's business plan will be successfully executed. Our ability to execute our business model will depend on our ability to obtain additional financing and achieve a profitable level of operations. There can be no assurance that sufficient financing will be obtained, or can we give any assurance that we will generate substantial revenues or that our business operations will prove to be profitable.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. These matters, among others, raise substantial doubt about the ability of the Company to continue as a going concern. These financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern. (See Note 7)

 

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES

 

Basis of Presentation

 

The unaudited financial statements included in this report have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting and include all adjustments (consisting only of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation. These financial statements have not been audited.

 

Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations for interim reporting. The Company believes that the disclosures contained herein are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the financial statements and notes for the year ended December 31, 2012 included in the Company’s annual report on Form 10-K. The financial data for the nine months ended September 30, 2013, may not necessarily reflect the results to be anticipated for the complete year ended December 31, 2013.

DREWRYS BREWING COMPANY

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

(AS OF SEPTEMBER 30, 2013)

(UNAUDITED)

 

Development Stage Company

 

The Company has earned limited revenue from operations. Accordingly, the Company’s activities have been accounted for as those of a “Development Stage Enterprise” as set forth in Accounting Standards Codification ("ASC") 915 "Development Stage Entities". Among the disclosures required by ASC 915 are that the Company’s financial statements be identified as those of a development stage company, and that the statements of operations, stockholders’ equity/(deficiency) and cash flows disclose activity since the date of the Company’s inception.

 

Accounting Basis

 

These financial statements are prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America.

 

Cash and Cash Equivalents

 

For the purpose of the financial statements cash equivalents include all highly liquid investments with maturity of three months or less. As of September 30, 2013 and December 31, 2012, the Company has no cash equivalents.

 

Earnings (Loss) per Share

 

In accordance with accounting guidance now codified as FASB ASC Topic 260, “Earnings per Share,” the basic earnings (loss) per share are calculated by dividing the Company's net income available to common shareholders by the weighted average number of common shares outstanding during the year. The diluted earnings (loss) per share are calculated by dividing the Company's net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted as of the first of the year for any potentially dilutive debt or equity. There are no diluted shares outstanding for any periods reported.

 

Dividends

 

The Company has not adopted any policy regarding payment of dividends. No dividends have been paid during the periods shown, and none are contemplated in the near future.

 

Income Taxes

 

The Company adopted FASB ASC 740, Income Taxes, at its inception. Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carry forwards, 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. The effect on deferred tax assets and liabilities of a change in tax rates are recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. No deferred tax assets or liabilities were recognized as of September 30, 2013 or December 31, 2012.

DREWRYS BREWING COMPANY

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

(AS OF SEPTEMBER 30, 2013)

(UNAUDITED)

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

Revenue Recognition

 

The Company recognizes revenue when:

 

•  Persuasive evidence of an arrangement exists;

•  Shipment has occurred;

•  Price is fixed or determinable; and

•  Collectability is reasonably assured

 

The Company closely follows the provisions of Staff Accounting Bulletin No. 104 as described above. For the three and nine month periods ended September 30, 2013 and 2012, the Company has recognized revenue of $10,727 and $11,176, and $0 and $0, respectively, and for the period from October 10, 2010 (inception) through September 30, 2013 the Company has recognized $11,176 in revenue.

 

Cost of Goods Sold

 

Cost of goods sold includes cost of inventories sold.

 

Property

 

The company does not own any real estate or other properties. The company's office is located 5402 Brittany Drive, McHenry Illinois 60050. Our contact number is 815- 575-4815. The business office is located at the home of Francis Manzo, the CEO of the company at no charge to the company.

 

Recently Issued Accounting Pronouncements

 

The Company has adopted all recently issued accounting pronouncements. The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.

 

Identifiable Intangible Assets

 

As of September 30, 2013 and December 31, 2012, $560 and $560, respectively, of costs related to registering our trademarks, have been capitalized. It has been determined that the trademarks have an indefinite useful life and are not subject to amortization. However, the trademark will be reviewed for impairment annually or more frequently if impairment indicators arise.

DREWRYS BREWING COMPANY

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

(AS OF SEPTEMBER 30, 2013)

(UNAUDITED)

 

Impairment of Long-Lived Assets

 

The Company accounts for its long-lived assets in accordance with ASC Topic 360-10-05, “Accounting for the Impairment or Disposal of Long-Lived Assets.” ASC Topic 360-10-05 requires that long-lived assets, such as our trademarks, be reviewed for impairment annually, or whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value. No impairments were recorded for the three months ended September 30, 2013 and 2012.

 

Stock-Based Compensation

 

In December 2004, the FASB issued FASB Accounting Standards Codification No. 718, Compensation – Stock Compensation.  Under FASB Accounting Standards Codification No. 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans.  As such, compensation cost is measured on the date of grant at their fair value.  Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.  The Company applies this statement prospectively.

 

Equity instruments (“instruments”) issued to other than employees are recorded on the basis of the fair value of the instruments, as required by FASB Accounting Standards Codification No. 718.  FASB Accounting Standards Codification No. 505, Equity Based Payments to Non-Employees defines the measurement date and recognition period for such instruments.  In general, the measurement date is when either a (a) performance commitment, as defined, is reached or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the FASB Accounting Standards Codification.

 

Fair value of Financial Instruments

 

The Company considers that the carrying amount of financial instruments, including accounts payable and accrued liabilities, and advances from related parties approximate fair value because of the short maturity of these instruments.

 

Related Parties

 

Related parties, which can be a corporation, individual, investor or another entity are considered to be related if the party has the ability, directly or indirectly, to control the other party or exercise significant influence over the Company in making financial and operation decisions. Companies are also considered to be related if they are subject to common control or common significant influence. The Company has these relationships.

DREWRYS BREWING COMPANY

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

(AS OF SEPTEMBER 30, 2013)

(UNAUDITED)

 

Business Segments

 

The Company operates in one segment and therefore segment information is not presented.

 

Reclassification

 

Certain amounts from prior periods have been reclassified to conform to the current period presentation. These reclassifications had no impact on the Company's net loss or cash flows.

 

Subsequent Events

 

We evaluated subsequent events through the date and time our financial statements were issued for potential recognition or disclosure in the accompanying financial statements. Other than the disclosures included in Note 9 to these financial statements, we did not identify any events or transactions that should be recognized or disclosed in the accompanying financial statements.

 

NOTE 3. INCOME TAXES

 

The Company adopted FASB ASC 740, Income Taxes, at its inception. Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carry forwards, 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. The effect on deferred tax assets and liabilities of a change in tax rates are recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. No deferred tax assets or liabilities were recognized as of September 30, 2013 or December 31, 2012.

 

NOTE 4. STOCKHOLDERS' EQUITY

 

Common Stock

 

There are 75,000,000 Common Shares at $0.001 par value authorized with 12, issued and outstanding as of September 30, 2013. The sole officer and director of the Company owns 9,000,000 of these shares.

 

For the year ended December 31, 2010, the Company issued 9,000,000 shares of common stock for cash of $9,000 ($0.10/share), of which $9,000 was a subscription receivable. During the year ended 2010, $2,550 of capital contribution was collected against the stock subscription receivable. During 2011, $3,320 of stock subscription receivable was collected. During 2012, $3,130 of stock subscription receivable was collected.

 

For the year ended December 31, 2012, the Company issued 13,500 shares of common stock for cash of $1,350 ($0.10/share).

DREWRYS BREWING COMPANY

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

(AS OF SEPTEMBER 30, 2013)

(UNAUDITED)

 

For the year ended December 31, 2012, the Company issued 10,000 shares of common stock having a value of $1,000 ($0.10/share) in exchange for services rendered.

 

On June 3, 2013, the Company issued 3,033,000 shares of restricted stock ($0.10/share) in exchange for consulting services to be provided by Venture Capital Clinic Corp. through December 31, 2013.

 

For the nine months ended September 30, 2013, the Company sold 44,000 shares of common stock for cash of $4,400 ($0.10/share).

 

During the nine months ended September 30, 2013 the company received $9,900 from stock subscriptions and the funds were returned subsequent to September 30, 2013.

 

NOTE 5. RELATED PARTY TRANSACTIONS

 

Advances from related parties represent advances granted by Francis Manzo, III. Mr. Manzo pays for certain administrative expenses and is reimbursed by the Company. These advances have no fixed terms of repayment, are unsecured, and bear no interest. During the nine months ended September 30, 2013, Mr. Manzo advanced the company $8,973 net, for purposes of paying operating expenses on behalf of the Company. As of September 30, 2013 and December 31, 2012, the Company has a loan from Mr. Manzo with an outstanding balance of $14,016 and $5,043 respectively.

 

The officer and director of the Company is involved in other business activities and may, in the future, become involved in other business opportunities that become available. They may face a conflict in selecting between the Company and other business interests. The Company has not formulated a policy for the resolution of such conflicts.

 

NOTE 6. NOTE PAYABLE

 

On June 3, 2013, the Company acquired a $85,000 note payable secured by the Company’s total assets. The note bears a fixed interest rate of 12% per annum, compounded annually, and matures on December 1, 2014. Interest shall accrue for the first 6 months and be due and payable in one lump sum installment in the amount of $4,750 on December 1, 2013. Thereafter, principal and accrued interest shall be due and payable in 12 consecutive monthly installments in the amount of $7,552.15 beginning on January 1, 2014 and ending on December 1, 2014.

 

NOTE 7. GOING CONCERN

 

As reflected in the accompanying financial statements, the Company is in the development stage with no operations, has an accumulated deficit during the development stage of $268,054 for the period from October 11, 2010 (inception) to September 30, 2013, and has a negative cash flow from operations of $77,270 from inception. This raises substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

DREWRYS BREWING COMPANY

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

(AS OF SEPTEMBER 30, 2013)

(UNAUDITED)

 

As of September 30, 2013, the Company has not emerged from the development stage. In view of these matters, recoverability of any asset amounts shown in the accompanying financial statements is dependent upon the Company's ability to begin operations and to achieve a level of profitability. Since inception, the Company has financed its activities principally from the sale of equity securities and loans from principal stockholder. The Company intends on financing its future development activities and its working capital needs largely from loans and the sale of public equity securities with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements.

 

Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.

 

NOTE 8. TRADEMARKS AND LABEL DESIGNS

 

The Company owns trademarks for its’ various brands of beer. These costs provide future benefit to the Company and are considered to have an infinite life at this time. The life of these assets will be re-evaluated when they are placed into service.

 

The trademarks were purchased from Francis Manzo, Chief Executive Officer of Drewrys (a related party), for $560. These intangible assets are being valued at cost, and are not considered to be impaired at this time.

 

NOTE 9. SUBSEQUENT EVENTS

 

The Company refunded $9,900 from Stock Subscriptions in October of 2013 and December of 2013.

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

FORWARD LOOKING INFORMATION

 

The following discussion and analysis of the Company’s financial condition and results of operations should be read with the condensed financial statements and related notes contained in this quarterly report on Form 10-Q (“Form 10-Q”). All statements other than statements of historical fact included in this Form 10-Q are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, levels of activity, performance or achievements to be materially different than any expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue," or the negative of these terms or other comparable terminology. Important factors that could cause actual results to differ materially from those discussed in such forward-looking statements include: 1. General economic factors including, but not limited to, changes in interest rates and trends in disposable income; 2. Information and technological advances; 3. Cost of products sold; 4. Competition; and 5. Success of marketing, advertising and promotional campaigns. The Company is subject to specific risks and uncertainties related to its business model, strategies, markets and legal and regulatory environment. You should carefully review the risks described in this Form 10-Q and in other documents the Company files from time to time with the SEC. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this Form 10-Q. The Company undertakes no obligation to publicly release any revisions to the forward-looking statements to reflect events or circumstances after the date of this document.

 

OVERVIEW

 

Business

 

We were incorporated in Nevada on October 11, 2010, and subsequently acquired the registered trademarks DREWRYS, HOLIHAN and CANADIAN ACE from Francis Manzo, III, the President and Founder of the Company, and from corporate entities owned by him. Ownership was transferred by a ‘Bill of Sale’ Document on October 15, 2010, and in February, 2012. We are an early entry stage company in a very competitive market. We have limited operating history upon which an evaluation of our future success or failure can be made.

 

We were formed to develop and market craft beers. We have sold our first complete production run of keg beer our second production of keg and bottled beer was produced and partially sold on November 4, 2013, subsequent to the end of the quarter. While we expect to continue producing our products and selling into the marketplace, we cannot assure you that we will have profitable operations.

 

Results of Operations

 

In the three months ended September 30, 2013, the Company had $10,727 in sales of products and $6,394 in cost of sales. Selling, general and administrative expenses were $160,227. The sales were a result of our first production run. Our increase in selling and administrative expense was a result of promotion of our brand and consulting fees. As a result the Company lost $158,444 in the three months ended September 30, 2013.

 

In the three months ended September 30, 2012 the Company had $0 in sales of products and $0 in Cost of Sales. Selling, general and administrative expenses were $2,473. As a result the Company lost $2,473 in the three months ended September 30, 2012.

 

In the nine months ended September 30, 2013 the Company had $11,176 in sales of products and $6,394 in Cost of Sales. Selling, general and administrative expenses were $227,045. The sales were a result of our first production run. Our increase in selling and administrative expense were a result of promotion of our brand and consulting fees As a result the Company lost $230,095 in the nine months ended September 30, 2013.

In the nine months ended September 30, 2012 the Company had $0 in sales of products and $0 in Cost of Sales. Selling, general and administrative expenses were $5,853 As a result the Company lost $5,853 in the nine months ended September 30, 2012.

 

Liquidity and Capital Resources

 

During the nine months ended September 30, 2013, working capital increased $170,754 to a surplus of $72,768 from a deficit of $27,110. The primary reason for the increase was the increase in cash of $45,267 and $137,727 in prepaid expenses and offset by an increase in due to shareholder of $8,573, and an increase in accounts payable of $3,667. During this same period, stockholders’ equity increased $77,605. The increase in stockholders’ equity is due to the net proceeds from the sale of the common stock of $4,400 and shares issued for services of $303,300 offset by the net loss for the period of ($230,095).

 

Cash flows

 

Net cash used in operating activities was $63,006 for the nine months ended September 30, 2013. In the 2013 period, cash was used by our loss from operations and decreases in accrued expenses offset by cash provided by our increase in due to shareholder and accounts payable and issuance of common stock for services.

 

Net cash used in operating activities was $8,023 for the nine months ended September 30, 2012. In the 2012 period, cash was used by our loss from operations and increases in inventories and prepaid expenses and decreases in accrued expenses and due to shareholder offset by cash provided by our increase in accounts payable.

 

Net cash provided by financing activities for the nine months ended September 30, 2013, was $108,223 and reflects common stock issued for cash described below and loan proceeds of $85,000.

 

Net cash provided by financing activities for the nine months ended September 30, 2012, was $8,200 and reflects stock issued for cash and advances from related parties.

 

Recent Financing Transactions

 

During the nine months ended September 30, 2013, the Company sold 160,000 shares of Common Stock at $0.10 per share, for a total of $5,750. Such shares were sold pursuant to the Form S-1 Registration Statement of the Company (Registration No. 333-173309).

 

During the nine months ended September 30, 2013, the Company issued 3,033,000 shares of Common Stock for consulting services valued at $0.10 per share for a total of $303,300.

 

Off Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements that we are required to disclose pursuant to these regulations. In the ordinary course of business, we enter into operating lease commitments, purchase commitments and other contractual obligations. These transactions are recognized in our financial statements in accordance with generally accepted accounting principles in the United States.

Critical Accounting Policies and Estimates

 

Management’s discussion and analysis of its financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to the reported amounts of revenues and expenses and the valuation of our assets and contingencies. We believe our estimates and assumptions to be reasonable under the circumstances. However, actual results could differ from those estimates under different assumptions or conditions. Our financial statements are based on the assumption that we will continue as a going concern. If we are unable to continue as a going concern we would experience additional losses from the write-down of assets.

 

Going Concern

 

The Company is currently a development stage company and its continued existence is dependent upon the Company’s ability to resolve its liquidity problems, principally by obtaining additional debt financing and/or equity capital. The Company has yet to generate a significant internal cash flow, and until sales of products increase significantly from current levels, the Company is highly dependent upon debt and equity funding, should continuing debt and equity funding requirements not be met the Company’s operations may cease to exist.

 

New Accounting Pronouncements

 

The Company has adopted all recently issued accounting pronouncements. The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

Not applicable for a smaller reporting company.

 

Item 4. Controls and Procedures.

 

We maintain disclosure controls and procedures that are designed to ensure that the information required to be disclosed in the reports that we file under the Securities Exchange Act of 1934 (the "Exchange Act") is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our President and Treasurer, as appropriate, to allow timely decisions regarding required disclosures.  In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting.  Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as a process designed by, or under the supervision of, the Company’s principal executive and financial officer and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

 

·

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

·

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

·

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, 2013.  In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework.  The COSO framework is based upon five integrated components of control: control environment, risk assessment, control activities, information and communications and ongoing monitoring.

 

Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer has concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were not effective as of September 30, 2013 (the “Evaluation Date”), to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.   Each of the following is deemed a material weakness in our internal control over financial reporting:

 

•

We do not have an audit committee.  While we are not currently obligated to have an audit committee, including a member who is an “audit committee financial expert,” as defined in Item 407 of Regulation S-K, under applicable regulations or listing standards; however, it is management’s view that such a committee is an important internal control over financial reporting, the lack of which may result in ineffective oversight in the establishment and monitoring of internal controls and procedures.

•

We did not maintain proper segregation of duties for the preparation of our financial statements.  We currently have only one officer overseeing all transactions.  This has resulted in several deficiencies, including the lack of control over preparation of financial statements and proper application of accounting

 

Management believes that the material weaknesses set forth in the two items above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

Management's Remediation Initiatives

 

In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we plan to initiate the following series of measures once we have the financial resources to do so:

 

We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. And, we plan to appoint one or more outside directors to an audit committee resulting in a fully functioning audit committee, which will undertake the oversight in the establishment and monitoring of required internal controls and procedures, such as reviewing and approving estimates and assumptions made by management when funds are available to us.

 

Management believes that the appointment of outside directors to a fully functioning audit committee, would remedy the lack of a functioning audit committee.

 

Changes in Internal Control Over Financial Reporting

 

There were no changes in our internal controls over financial reporting that occurred during the period covered by this report, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

This quarterly report does not include an attestation report of the Company’s registered independent public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this quarterly report.

 PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

The Company is not a party to, and its property is not the subject of, any material pending legal proceedings.

 

Item 1A. Risk Factors.

 

Not Required

 

Item 2. Unregistered Sale of Equity Securities and Use of Proceeds.

 

During the nine months ended September 30, 2013, the Company issued 3,033,000 shares of Common Stock for consulting services valued at $0.10 per share for a total of $303,300, involving sales of our securities that were not registered under the Securities Act of 1933, as amended (the “Securities Act”).  Such offer and sale was made in reliance on Section 4(2) of the Securities Act, as a transaction by an issuer not involving any public offering.  The purchaser was an “accredited investor,” and known to the Company and its management through pre-existing business and/or personal relationships.  Such purchaser was provided access to all material information, which he requested, and all information necessary to verify such information and was afforded access to management of the Company in connection with his purchase. Such purchaser acquired such securities for investment and not with a view toward distribution, acknowledging such intent to the Company. The stock certificate representing such securities that were issued contained a restrictive legend, prohibiting further transfer of the stock certificate representing such securities, without such securities either being first registered or otherwise exempt from registration under the Securities Act, in any further resale or disposition.

 

On August 6, 2012, the Company commenced its public offering pursuant to its Form S-1 Registration Statement (Registration No. 333-173309).  The proceeds of such offering in the amount of $5,750 were deposited in the Company’s non-interest bearing bank account, and have been used by us in the business, as of September 30, 2013, as follows:

 

Marketing, Promotion and Advertising		$	4,400
Miscellaneous		$	1,350
Total		$	5,750

 

Item 3. Defaults Upon Senior Securities.

 

None

 

Item 4. Mine Safety Disclosure.

 

None

 

Item 5. Other Information.

 

None

Item 6. Exhibits.

 

31.1 Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a)

 

32.1 Certification pursuant to 18 U.S.C. Section 1350

 

XBRL data files of Financial Statements and Notes contained in this Quarterly Report on Form 10-Q*

 

101.INS XBRL Instance Document**

 

101.SCH XBRL Taxonomy Extension Schema Document**

 

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document**

 

101.DEF XBRL Taxonomy Extension Definition Linkbase Document**

 

101.LAB XBRL Taxonomy Extension Labels Linkbase Document**

 

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document**

____________

 

* In accordance with Regulation S-T, the Interactive Data Files in Exhibit 101 to the Quarterly Report on Form 10-Q/A shall be deemed “furnished” and not “filed.”

 

** Pursuant to Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q/A shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be part of any registration statement or other document filed under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

DREWRYS BREWING COMPANY

 

DATE:  March 21, 2014

 

By: /s/  Francis P. Manzo III

Francis P. Manzo III

President (Principal Accounting Officer

and Authorized Officer)