Form 10-KSB
U.S. Securities and Exchange Commission
Washington, D.C. 20549
(Mark One)
[X] Annual report under section 13 or 15(d) of the Securities Exchange Act of
1934
For the fiscal year ended February 28, 1999.
[ ] Transition report pursuant section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from ................to.................
Commission file number: 0-25319
Mesa County Brewing Co.
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(Exact name of small business issuer as specified in its charter)
Colorado 84-1191355
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4155 E. Jewell Ave., #909, Denver, Colorado 80222
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, (303) 691-6163
Issuer's facsimile number, (303) 6915154
NONE
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer
(1) filed all reports required to be filed by Section 13 or 15(d) of the
Exchange Act during the past 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. Yes: No: X
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X] State issuer's revenues for its most
recent fiscal year: $0.00 State the aggregate market value of the voting and
non-voting common equity held by non-affiliates computed by reference to the
price at which the common equity was sold, or the average bid and asked price of
such common equity, as of a specified date within the past 60 days. (See
definition of affiliate in Rule 12b-2 of the Exchange Act.) $0.00. Note: If
determining whether a person is an affiliate will involve an unreasonable effort
and expense, the issuer may calculate the aggregate market value of the common
equity held by non-affiliates on the basis of reasonable assumptions, if the
assumptions are stated.
<PAGE>
(Issuers involved in bankruptcy proceeding during the past five years)
Check whether the issuer has filed all documents and reports required to be
filed by Section 12,13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ] NOT APPLICABLE
(Applicable only to corporate registrants)
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 2,240,000.
Documents incorporated by reference
If the following documents are incorporated by reference, briefly describe them
and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated: (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"). The listed
documents should be clearly described for identification purposes (e.g., annual
report to security holders for fiscal year ended December 24, 1990).
Transitional Small Business Disclosure Format (check one):Yes.[X]; No...
In accordance with paragraph H of the General Instructions the registrant
has elected to provide the information set forth under "Information Required in
Annual Report of Transitional Small Business Issuers."
PART I
Alternative 1.
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The Company has elected to furnish the information required by Questions 1,
3, 4, 11, 14- 20, 28-43, 45, and 47-50 of Model A of Form 1-A, as follows:
THE COMPANY
2. Exact corporate name: Mesa County Brewing Co.
State and date of incorporation: Colorado - September 16, 1991.
Street address of principal office: 4155 East Jewell Avenue, Suite 909,
Denver, Colorado 80222
Company Telephone Number: 303-691-6163 Fiscal Year: February 28.
Person(s) to contact at Company: Edward H. Hawkins
Telephone Number (if different from above:) N/A
BUSINESS AND PROPERTIES/
3. With respect to the business of the Company and its properties:
<PAGE>
(a) Describe in detail what business the Company does and proposes to do,
including what products or goods are or will be produced or services that are or
will be rendered.
The Company is a small organization, just beginning its operation,
despite the fact the Company was incorporated in 1991. The officers
and directors as well as some of the shareholders are admirers of
various types of beers being brewed by small breweries, and have
observed that, although each brewing facility distributes information
about its organization and products, there is no consolidated printed
information which can be distributed to the general beer drinking
public by microbreweries and brewpubs as promotional materials.
Information by trade associations is slanted toward brewers rather
than the beer drinking public. As a result the Company believes that
is a niche that can be filled in disbursing information about craft
beers and the people and organizations who brew them.
The Company produces and proposes to produce consolidated information
and data relating to brewpubs and microbreweries located in the area
generally described as the Rocky Mountain area, comprised of the
states of Montana, Wyoming, Utah, Colorado, Arizona and New Mexico,
and the various beers which are brewed by these establishments.
(b) Describe how these products or services are to be produced or rendered
and how and when the Company intends to carry out its activities. If the Company
plans to offer a new product(s), state the present stage of development,
including whether or not a working prototype(s) is in existence. Indicate if
completion of development of the product would require a material amount of the
resources of the Company, and the estimated amount. If the Company is or is
expected to be dependent upon one or a limited number of suppliers for essential
raw materials, energy or other items, describe. Describe any major existing
supply contracts.
Information and data about brewpubs and microbreweries are collected
and assembled in part from public state and federal data banks
relating to liquor and restaurant licensing. In addition, the Company
acquires information and retail documentation from various trade
associations and organizations. This information is compiled,
catalogued and disbursed in several ways including printed brochures,
pamphlets, promotional items, and through internet sites.
Preliminarily, the acquisition and assemblage of the information and
data will not require a material amount of resources of the Company.
(c) Describe the industry in which the Company is selling or expects to
sell its products or services and, where applicable, any recognized trends
within that industry. Describe that part of the industry and the geographic area
in which the business competes or will compete.
Indicate whether competition is or is expected to be by price, service, or
other basis. Indicate (by attached table if appropriate) the current or
anticipated prices or price ranges for the Company's products or services, or
the formula for determining prices, and how these prices compare with those of
competitors' products or services, including a description of any variations in
<PAGE>
product or service features. Name the principal competitors that the Company has
or expects to have in its area of competition. Indicate the relative size and
financial and market strengths of the Company's competitors in the area of
competition in which the Company is or will be operating. State why the Company
believes it can effectively compete with these and other companies in its area
of competition.
According to numerous sources, there are approximately thirty-three
specialty breweries in the United States, four hundred fifty
microbreweries, and eight hundred, fifty brewpubs. A specialty brewery
is defined in the brewing industry as a brewery which specializes in
an all-malt, specialty, proprietary beer. A microbrewery is defined as
a brewery which brews its beer in small amounts, less than 15,000
barrels per year and distributes only in its local area. A brewpub is
a brewery which is self contained within, or adjacent to, a restaurant
and is generally designed to mimic a British or Irish pub. Brewers of
these types are generally lumped together in a term known as
"craft-brewers."
Additionally there are approximately 142 contract brewers that brew or
sell private label beer for their clients. These brewers may or may
not brew one or more specialty beers with their own label. The
Institute for Brewing Studies, a division of the Association of
Brewers reports that the total craft-brewing industry dollar volume
for 1996 was $2.867 trillion.
In the company's target sales area, there are approximately 145
microbrewers and brewpubs in the State of Colorado with the largest
grouping in metropolitan Denver numbering 54. The next largest
grouping is north of Denver encompassing Boulder and Ft. Collins, each
being college towns and numbering in total 31. There are approximately
14 of such establishments in Arizona, 14 in Montana, 3 in Wyoming, 11
in Utah, and 13 in New Mexico. The exact number of establishments
changes frequently as some organizations founder and close, others
consolidate and merge, while other new ones emerge from time to time.
The Company sees this fluctuating number of microbrewers and brewpubs
as an advantage to its business as the documentation of these
organizations and the products they produce will, of necessity, need
to be updated monthly or quarterly.
Exact data for microbreweries and brewpubs from trade associations and
other data banks have been, and will likely continue to be, difficult
to obtain and the most recent reliable information is for the product
year 1996. The Company has been able to generate only a smattering of
national information for the years 1997 and 1998. Although the
craft-brewing industry does not attempt to discourage the gathering of
such information, the units of the industry are so wide-spread,
fast-growing and diversified that the industry associations may quite
possibly find it difficult to keep up with the facts.
The Company does not intend to become a gathering or source depository
for industry data, but will report such data to media and promotional
organizations. The primary thrust of the Company is the coordinate a
<PAGE>
listing of microbrews and brewpubs for release to the general public
as an encouragement to patronize these establishments and products. To
facilitate this publishing effort, the Company will rely on
advertising revenue for space sales in printed and internet media. The
printed materials will be made available to advertisers for free
handouts at various public events, gatherings, concerts, etc.
Competition from other companies which may or may not be engaged in
the same or similar business is difficult to ascertain at the present
time. General circulation newspapers publish local restaurant and bar
information from time to time in restaurant and entertainment guides,
but the Company has determined that these listings are infrequent and
often times obsolete after several months. Some data are disbursed by
industry associations but this information is usually of a technical
nature and of small use to retail customers of microbrewery products
and brewpubs. The Company believes it can compete successfully as it
has determined that although the information and data are available
from many scattered sources in numerous forms, no company to the
Company's knowledge has yet compiled such information in an organized
and useful manner with the thrust to the retail customer and beer
affectionados.
(d) Describe specifically the marketing strategies the Company is employing
or will employ in penetrating its market or in developing a new market. Set
forth in response to Question 4 below the timing and size of the results of this
effort which will be necessary in order for the Company to be profitable.
Indicate how and by whom its products or services are or will be marketed (such
as by advertising, personal contact by sales representatives, etc.), how its
marketing structure operates or will operate and the basis of its marketing
approach, including any market studies. Name any customers that account for, or
based upon existing orders will account for a major portion (20% or more) of the
Company's sales. Describe any major existing sales contracts.
The Company intends to market its products to microbreweries and brewpubs
as advertisers in its printed and other media. The Company will use its
officers to accomplish the commencement of its sales advertising efforts
and may, at the Company's option, employ independent advertising sales
organizations to sell its advertising on a commission basis. The Company
does not have any contracts at the time of this registration.
In addition, the Company will sell brochures and pamphlets to businesses as
"give-aways" carrying the business' advertising. The Company intends to
derive its revenues, among other things, from the sale of these brochures,
pamphlets, and advertising space in such publications. To accomplish some
of this activity the Company will attend brewing and beer tasting parties
to display and distribute samples of the advertising pieces. The Company
expects its first publications will be flyers and small brochures listing
brewpubs and microbreweries in the Denver metropolitan area.
(e) State the backlog of written firm orders for products and/or services
as of a recent date (within the last 90 days) and compare it with the backlog of
a year ago from that date:
<PAGE>
As of: 03/01/99 $ -0-
(a recent date)
As of: 03/01/99 $ -0-
(one year earlier)
Explain the reason for significant variations between the two figures, if
any. Indicate what types and amounts of orders are included in the backlog
figures. State the size of typical orders. If the Company's sales are
seasonal or cyclical, explain. NOT APPLICABLE
(f) State the number of the Company's recent employees and the number of
employees it anticipates it will have within the next 12 months. Also, indicate
the number of type of employee (i.e., clerical, operations, administrative,
etc.) The Company will use, whether or not any of them are subject to collective
bargaining agreements, and the expiration date(s) of any collective bargaining
agreement(s). If the Company's employees are on strike, or have been in the past
three years, or are threatening to strike, describe the dispute. Indicate any
supplemental benefits or incentive arrangements the Company has or will have
with its employees.
The only employees of the Company are its President and Secretary. The
Company has made no determination about additional employees. If the
revenues of the Company are obtained through its advertising sales,
the Company estimates that it may need to hire up to three staff
employees in a clerical jobs. Additionally, the Company may, as noted
above, employ contract sales persons or organizations on a commission
basis to assist in its marketing of advertising.
(g) Describe generally the principal properties (such as real estate, plant
and equipment, patents, etc.) That the Company owns, indicating also what
properties it leases and a summary of the terms under those leases, including
the amount of payments, expiration dates and the terms of any renewal options.
Indicate what properties the Company intends to acquire in the immediate future,
the cost of such acquisitions and the sources of financing it expects to use in
obtaining these properties, whether by purchase, lease or otherwise.
The Company owns no properties and does not contemplate any such
ownership in the near future.
(h) Indicate the extent to which the Company's operations depend or are
expected to depend upon patents, copyrights, trade secrets, know-how or other
proprietary information and the steps undertaken to secure and protect this
intellectual property, including any use of confidentiality agreements,
covenants-not-to-compete and the like. Summarize the principal terms and
expiration dates of any significant license agreements. Indicate the amounts
expended by the Company for research and development during the last fiscal
year, the amount expected to be spent this year and what percentage of revenues
research and development expenditures were for the last fiscal year.
<PAGE>
The Company does not depend on patents, copyrights, trade secrets,
proprietary know-how. The Company anticipates that some of its printed
and other materials will be copyrighted. The Company expended no
monies for research and development in previous years.
(i) If the Company's business, products, or properties are subject to
material regulation (including environmental regulation) by federal, state, or
local governmental agencies, indicate the nature and extent of regulation and
its effects or potential effects upon the Company.
The Company is not subject to governmental regulation in its
publishing efforts other than local state and municipal sales tax
licenses.
(j) State the names of any subsidiaries of the Company, their business
purposes and ownership, and indicate which are included in the Financial
Statements attached hereto. If not included, or if included by not consolidated,
please explain.
NONE
(k) Summarize the material events in the development of the Company
(including any material mergers or acquisitions) during the past five years, or
for whatever lesser period the Company has been in existence. Discuss any
pending or anticipated mergers, acquisitions, spin-offs or recapitalizations. If
the Company has recently undergone a stock split, stock dividend or
recapitalization in anticipation of this offering, describe (and adjust
historical per share figures elsewhere in this Offering Circular accordingly).
The Company is unable to ascertain what this last sentence means as this is not
an offering. Shares have already been sold.
The Company is substantially a start-up company which, although having
been incorporated in 1991, has had no operations to this date other
than the preparatory efforts by its officers and directors in the work
of identifying and gathering of information preliminary to designing
its advertising campaigns.
4.
(a)If the Company was not profitable during its last fiscal year, list
below in chronological order the events which in management's opinion must or
should occur or the milestones which in management's opinion the Company must or
should reach in order for the Company to become profitable, and indicate the
expected manner of occurrence or the expected method by which the Company will
achieve the milestones.
- --------------------------------------------------------------------------------
Date or number of months
Expected manner of occurrence after receipt of proceeds
Event of Milestone or method of achievement when should be accomplished
================================================================================
Continued gathering Officers' efforts 3 months
of data
Design of product Officers' efforts 4 months
Selling of advertising Officers' efforts 5 months
And commission
Sales persons
Publication of data Officers' efforts 6 months
<PAGE>
(b) State the probable consequences to the Company of delays in achieving
each of the events or milestones within the above time schedule, and
particularly the effect of any delays upon the Company's liquidity in view of
the Company's then anticipated level of operating costs. (See Question No. 11)
If the Company is unable to meet its deadline in the accomplishments
of the above milestones, the Company may be faced with the raising of
additional equity funds to continue its business plan. In this case
there is no assurance whatsoever that the Company will have these
funds available. If not, the Company may not be able to continue its
operation.
11. Indicate whether the Company is having or anticipates having within the
next 12 months any cash flow or liquidity problems and whether or not it is
in default or in breach of any note, loan, lease or other indebtedness or
financing arrangement requiring the Company to make payments. Indicate if a
significant amount of the Company's trade payables have not been paid
within the stated trade term. State whether the Company is subject to any
unsatisfied judgments, liens or settlement obligations and the amounts
thereof. Indicate the Company's plans to resolve any such problems.
The Company has no debt and no judgements pending or otherwise. The Company
does not anticipate any cash flow problems and believes it will have
sufficient cash to operate during the next twelve months. If in the event
the Company determines it needs to raise additional operating capital, the
Company believes the most appropriate form would be a debt offering rather
than additional equity formation. Since the Company does not contemplate
such an offering at the date of this registration statement, the Company
has not determined any amount to raise.
DIVIDENDS, DISTRIBUTIONS AND REDEMPTIONS
28. If the Company has within the last five years paid dividends, made
distributions upon its stock or redeemed any securities, explain how much and
when:
NONE
<PAGE>
OFFICERS AND KEY PERSONNEL OF THE COMPANY
28. Chief Executive Officer: Title: President
Name: Robert R. Turner Age: 52
Office Street Address: 4155 E. Jewell Avenue Telephone No: 303-691-6163
Denver, CO 80222
Name of employers, titles and dates of positions held during past five years
with an indication of job responsibilities:
ROBERT R. TURNER has been the Secretary and Director of the Company since
January 15, 1998. Mr. Turner is also the manager of Accoustic Music Revival, a
musical instrument retail store. Additionally, since 1965, Mr. Turner has been,
and currently is, the President of Turner Company, a privately owned
communications company based in Denver, Colorado and Unicorn Publishing Co., a
privately held music recording and publishing company. Mr. Turner is a
performing artist and musician with 30 years experience as a marketing,
communications and advertising executive in record and audio-visual production,
entertainment performing and management, public relations; and a professional
composer, writer, producer, artist in music, television, and motion pictures. As
a professional entertainer he has appeared at Hollywood Bowl, Hollywood,
California; Harrah's Club, Lake Tahoe (Andy Griffith Show); Sands Hotel, Las
Vegas (Jerry Lewis Show); Showboat Hotel, Las Vegas; London House, Chicago; Ice
House, Pasadena, California; College concerts and nightclubs across the country
and special concerts in England, Switzerland and France. He has received the
following awards for his creative work in advertising production: Grand ALFIE
AWARD, Denver Advertising Federation, "Colorado Department of Tourism" 1985;
ALFIE AWARD, D.A.F. "Wood Bros. Homes" 1985; ALFIE AWARD, D.A.F. "Colorado
Better Air" 1985; ALFIE AWARD, D.A.F. "J. C. Penney" 1981; and National Art
Directors, "J. C. Penney" 1981. Mr. Turner was also the Secretary of Pub Singin'
Inc., a private publishing company from January 15, 1997 to March 1 1998. Mr.
Turner attended the University of Colorado, Boulder, Colorado 1961-1964, Major:
Business Administration, Minor: Economics, and Colorado School of Mines, 1965,
Engineering. He has been a Guest Lecturer at Metro State College, Denver,
Colorado and the University of Colorado-Denver. Mr. Turner holds memberships in
the National Academy of Recording Arts and Science (NARAS), Screen Actors Guild
(SAG), American Federation of Television and Radio Artists (AFTRA), American
Federation of Musicians (AF of M), and Alpha Tau Omega Fraternity.
Education (degrees, school, and dates): Mr. Turner is a graduate of Lakewood,
Colorado High School. He attended the University of Colorado, Boulder, Colorado
1961-1964, Major: Business Administration, Minor: Economics, and Colorado School
of Mines, 1965, Engineering. He has been a Guest Lecturer at Metro State
College, Denver, Colorado and the University of Colorado-Denver.
Also a Director of the Company? [x] Yes [ ] No
<PAGE>
Indicate amount of time to be spend on Company matters if less than full time:
Two days per month until fully operational.
31. Chief Financial Officer: Title: Secretary
Name: Edward H. Hawkins Age: 74
Office Street Address: 4155 E. Jewell Avenue Telephone No: 303-691-6163
Denver, CO 80222
Name of employers, titles and dates of position held during past five years with
an indication of job responsibilities:
EDWARD H. HAWKINS has been the Secretary of the Company since January 15,
1998. Mr. Hawkins is a management and financial consultant employed by RH
Consulting Group, Inc., Denver, Colorado. He is also a published author of three
novels and a motion picture screenwriter, producer and director, having produced
over 100 motion pictures and television programs. He is also the Secretary of
Sheffield Rounds, Ltd., a private publisher of archery information.
Education (degrees, schools, and dates): Mr. Hawkins is a graduate of
Osawatomie, Kansas High School. He attended University of California - San
Francisco Art College and adult education classes at Colorado University. He has
been a guest media instructor at Arapahoe Community College, Littleton,
Colorado.
Also a Director of the Company? [X] Yes [ ] No
Indicate amount of time to be spend on Company matters if less than full
time: Four days a month until fully operational.
DIRECTORS OF THE COMPANY
33. Number of Directors: 2.
If Directors are not elected annually, or are elected under a voting trust
or other arrangement, explain: NOT APPLICABLE.
34. Information concerning outside or other Directors (i.e., those not
described above): NOT APPLICABLE.
1. Name: Age:
Office Street Address: Telephone No:
Names of employers, titles and dates of positions held during past five
years with an indication of job responsibilities: Education (degrees,
schools, and dates):
2. Name: Age:
Office Street Address: Telephone No:
Names of employers, titles and dates of positions held during past five
years with an indication of job responsibilities:
Education (degrees, schools, and dates):
<PAGE>
35. (a) Have any of the Officers or Directors ever worked for or managed a
company (including a separate subsidiary or division of a larger
enterprise) in the same business as the Company? [ ] Yes [x] No
Explain:
(b) If any of the Officers, Directors or other key personnel have ever
worked for or managed a company in the same business or industry as
the Company or in a related business or industry, describe what
precautions, if any, (including the obtaining of releases or consents
from prior employers) have been taken to preclude claims by prior
employers for conversion or theft of trade secrets, know-how or other
proprietary information.
The officers and directors have never worked for or been involved in
the operation of a company which assembles and publishes information
and date pertaining to the microbrew and brewpub industries.
(c) If the Company has never conducted operations or is otherwise in the
development stage, indicate whether any of the Officers or Directors
has ever managed any other company in the start-up or development
stage and describe the circumstances, including relevant dates.
The officers and directors of the Company have never managed any other
company in the development stage similar to the operations of the
Company.
(d) If any of the Company's key personnel are not employees but are
consultants or other independent contractors, state the details of
their engagement by the Company.
NONE
(e) If the Company has key man life insurance policies on any of its
Officers, Directors or key personnel, explain, including the names of
the persons insured, the amount of insurance, whether the insurance
proceeds are payable to the Company and whether there are arrangements
that require the proceeds to be used to redeem securities or pay
benefits to the estate of the insured person or a surviving spouse.
NONE
<PAGE>
36. If a petition under the Bankruptcy Act or any State insolvency law was
filed by or against the Company or its Officers, Directors or other key
personnel, or a receiver, fiscal agent or similar officer was appointed by
a court for the business or property of any such persons, or any
partnership in which any of such persons was a general partner at or within
the past five years, or any corporation or business association of which
any such person was an executive officer at or within the past five years,
set forth below the name of such persons, and the nature and date of such
actions.
NOT APPLICABLE.
PRINCIPAL STOCKHOLDERS
37. Principal owners of the Company at the date of this registration statement
(those who beneficially own directly or indirectly 10% or more of the
common and preferred stock presently outstanding) starting with the largest
common stockholder. Include separately all common stock issuable upon
conversion of convertible securities (identifying them by asterisk) and
show average price per share as if conversion has occurred. Indicate by
footnote if the price paid was for a consideration other than cash and the
nature of any such consideration.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Average No. of Shares
Class Price No. of % Held After %
of Per Shares of Offering if All of
Shares Share Now Held Total Securities Sold Total
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Name: Robert R. Turner Common $.0005 60,000 3% 3% 3%
Office Street Address:
4155 E. Jewell Avenue
Denver, CO 80222
Telephone No:
303.691-6163
Principal occupation:
Writer, Musician
Name: Edward H. Hawkins Common $.0005 60,000 3% 3% 3%
Office Street Address:
4155 E. Jewell Avenue
Denver, CO 80222
Telephone No:
303-691-6163
Principal occupation:
Multi-Media Consultant
Name: Eastbury Enterprises
Limited Preferred $.10 4,000 100% 100% 100%
Roger J. Bennett, President
Office Street Address
4th Floor, 54-58 Athol Street
</TABLE>
<PAGE>
Douglas, Isle of Man IM1 1JD
Principal occupation
Investment company:
38. Number of shares beneficially owned by Officers and Directors as a group:
(Note: This is not an offering. But Alternative 1, requires this item)
Before offering 120,000 shares (6% of total outstanding)
After offering: a) Assuming minimum securities sold:
120,000 shares (6 % of total outstanding)
b) Assuming maximum securities sold:
120,000 shares (6% of total outstanding)
(Assume all options exercised and all convertible securities converted.)
NOT APPLICABLE
MANAGEMENT RELATIONSHIPS, TRANSACTIONS AND REMUNERATION
39. (a) If any of the Officers, Directors, key personnel or principal
stockholders are related by blood or marriage, please describe.
NOT APPLICABLE
2. If the Company has made loans to or is doing business with any of its
Officers, Directors, key personnel or 10% stockholders, or any of
their relatives (or any entity controlled directly or indirectly by
any such persons) within the last two years, or proposes to do so
within the future, explain. (This includes sales or lease of goods,
property or services to or from the Company, employment or stock
purchase contracts, etc.) State the principal terms of any significant
loans, agreements, leases, financing or other arrangements.
NONE
3. If any of the Company's Officers, Directors, key personnel or 10%
stockholders has guaranteed or co-signed any of the Company's bank
debt or other obligations, including any indebtedness to be retired
from the proceeds of this offering, explain and state the amounts
involved.
NONE.
40. (a) List all remuneration by the Company to Officers, Directors and key
personnel for the last fiscal year:
No remuneration was paid to the officers or directors of the Company
during the past fiscal year.
41. (a) Number of shares subject to issuance under presently outstanding stock
purchase agreements, stock options, warrants or rights: shares ( % of
<PAGE>
total shares to be outstanding after the completion of the offering if
all securities sold, assuming exercise of options and conversion of
convertible securities). Indicate which have been approved by
shareholders. State the expiration dates, exercise prices and other
basic terms for these securities:
NOT APPLICABLE.
2. Number of common shares subject to issuance under existing stock
purchase or option plans but not yet covered by outstanding purchase
agreements, options or warrants: shares.
NOT APPLICABLE.
3. Describe the extent to which future stock purchase agreements, stock
options, warrants or rights must be approved by shareholders.
NOT APPLICABLE.
42. If the business is highly dependent on the services of certain key
personnel, describe any arrangements to assure that these persons will
remain with the Company and not compete upon any termination.
The business of the company is highly dependent upon the services of the
officers and directors of the Company. If these persons were not available
for any reason, the Company feels it would not be difficult to find other
persons with like-in-kind abilities, but it is undetermined whether the
Company could attract such persons at the price or salary which the Company
might be able to pay. The Company has no non-compete agreements with its
officers and directors and in the absence of such agreements, the Company
is at risk with respect to the competitiveness of its officers and
directors if such persons decide to leave the employ of the Company and
seek other employment with companies which may be in a position to compete.
After reviewing the above, potential investors should consider whether or
not the compensation to management and other key personnel directly or
indirectly, is reasonable in view of the present stage of the Company's
development.
LITIGATION
43. Describe any past, pending or threatened litigation or administrative
action which has had or may have a material effect upon the Company's
business, financial condition, or operations, including any litigation or
action involving the Company's Officers, Directors or other key personnel.
State the names of the principal parties, the nature and current status of
the matters, and amounts involved. Give an evaluation by management or
counsel, to the extent feasible, of the merits of the proceedings or
litigation and the potential impact on the Company's business, financial
condition, or operations.
The Company is not engaged in any litigation of any kind and none is
anticipated.
<PAGE>
MISCELLANEOUS FACTORS
45. Describe any other material factors, either adverse or favorable, that will
or could affect the Company or its business (for example, discuss any
defaults under major contracts, any breach of bylaw provisions, etc.) or
which are necessary to make any other information in this Offering Circular
[registration statement in this case as this is not an offering circular]
not misleading or incomplete.
The Company is just entering into an enterprise which may be designated as
a start-up business. The Company has never engaged in this type of business
and the members of management have had no experience in the business of the
Company, but have similar experience in publication and media. At the time
of this Annual Report the Company has no contracts and has had no revenues
or profits. The Company has registered its common stock under the
Securities Exchange Act of 1934, as amended, with the prospect that in the
future, if the Company is successful in its endeavors as described in its
business plan, the common stock of the Company will be traded on one or
more of the national exchanges and one of the major requirements of such
exchanges is that the Company must be a reporting company under the
provisions of the Securities Exchange Act of 1934, as amended. Therefore,
the directors of the Company determined that it was in the best interest of
the shareholders of the Company that the Company register the shares of
common stock to facilitate any future trading on one or more of the U.S.
stock exchanges, so the sale of the shares of the the Company held by the
shareholders will not be impeded or delayed by reason of any restrictions
attributable to the lack of registration by the Company.
At the date of this Annual Report, the Company does not know if it will
apply for listing of its shares of common stock on an exchange or market.
If in the event the Company elects to apply for listing on an exchange it
currently may qualify only for either the National Quotation Bureau ("Pink
Sheets") or the OTC Bulletin Board, promulgated by the National Association
of Securities Dealers, Inc. ("NASD"). However, should the Company elect to
apply for such listing, the approval for such listing is dependent upon the
affirmative decision of the market-maker(s), if any, and the concurrent
approval of NASD Regulation, Inc., If such approval is not forthcoming, the
shares of the Company's common stock may never be listed for trading.
Year 2000. The Company believes the effects of the end of the year 1999 and
the onset of the year 2000, as they might impinge on computers and other
associated electronic instruments and computer controlled mechanical
devices, may not affect the business of the Company to any large degree,
except in a derivative manner. The Company does not, per se, use computers
in its business, except for word processing and general secretarial work.
However, the printers and artists employed by the Company under contract to
produce some of the Company's products of brochures, booklets and pamphlets
may experience any number of difficulties which are, at present, unknown to
the Company. The printers and artists may not know or recognize them
either, so it is difficult to predict any disturbance or disruption of the
Company's business which may occur nine months hence. However, the Company
intends to keep a watchful eye on the situation.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
CERTAIN RELEVANT FACTORS
47. If the Company's financial statements show losses from operations, explain
the causes underlying these losses and what steps the Company has taken or
is taking to address these causes.
The Company has had no revenues or profits since its commencement. This is
due primarily to the Company's activities encompassing only the design,
collection and organization of information and data pursuant to its
business plan. The Company expects to continue this mode of operation until
it has completed its organization of material assemblage which will further
its business plan and make ready for sale of such information and data to
its expected customers.
48. Describe any trends in the Company's historical operating results. Indicate
any changes now occurring in the underlying economics of the industry or
the Company's business which, in the opinion of Management, will have a
significant impact (either favorable or adverse) upon the Company's results
of operations within the next 12 months, and give a rough estimate of the
probable extent of the impact, if possible.
The Company has ascertained that information and data pertaining to
microbreweries and brewpubs are available but is diverse and hard to
assemble. It is the belief of the Company that this situation will persist
for the immediate future . The Company knows of no other company in the
six-state Rocky Mountain area designated by the Company as its marketing
area which is currently engaged in a similar business to the Company. If
another company sees fit to engaged in a similar business and is better
equipped and better financed that the Company, the Company will be at a
serious disadvantage in its marketing efforts. On the other hand, the
Company may have found a marketing niche until some company structures its
operation to resemble the business plan of the Company to supply a
coordinated assemblage of information which will be useful to the general
retail public and attractive to the industry.
After the initial filing of the registration statement on Form 10SB, the
Company has progressed, albeit slowly, with its plan of business. Brewpubs
seem to be almost everywhere people congregate and more and more are being
established every month. This is good for the Company's business as it
difficult for any brewpub lover or microbrew drinker to keep up with the
changing scene. The Company has found since the inception of its business
plan that the necessity of publicity about the locations and products of
brewpubs and microbrews is a saleable item. The Company also found out
through sales efforts that many businesses, somewhat allied to the
entertainment and restaurant business is interested in publishing general
information about brewpubs and microbrews as an advertising medium for
themselves. It may open up a whole new sales area for the Company's
products. We're investigating further.
<PAGE>
In addition, the initial determinations of the Company has shown that the
Company could entertain the possibility of distributing, as a wholesaler,
books, T-shirts, and promotional items which are locally manufactured and
not yet being sold in the Rocky Mountain area. The Company is checking it
out and trying to determine if it could be a profit center. If it's not,
we'll ignore it. It has also been suggested that the Company become a
wholesale distributor for a line of homebrew kits. The directors have
discussed this and if it seems feasible and profitable, we'll do it.
49. If the Company sells a product or products and has had significant sales
during its last fiscal year, state the existing gross margin (net sales
less cost of such sales as presented in accordance with generally accepted
accounting principals) as a percentage of sales for the last fiscal year:
%. What is the anticipated gross margin for next year of operations?
Approximately %. If this is expected to change, explain. Also, if
reasonably current gross margin figures are available for the industry,
indicate these figures and the source or sources from which they are
obtained.
50. Foreign sales as a percent of total sales for last fiscal year: %.
Domestic government sales as a percent of total domestic sales for last
fiscal year: %. Explain the nature of these sales, including any
anticipated changes:
The Company has had no foreign sales or revenues therefrom and does not
contemplate any such sales or revenues in the future.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other shareholder matters.
Information required by Item 201 of Regulation S-B.
(a) Market Information. There is no market price on the Company's common
stock as the shares are not trading at the time of this registration
statement. The Company does not know if it will attempt to apply for
listing of its common stock on one or more of any exchange or markets
(b) Holders. At the date of February 28, 1999, there are 33 holders of the
common equity of the Company.
(c) Dividends. The Company has paid no dividends and does not contemplate
any dividends during the next two fiscal years.
Item 2. Legal Proceedings
If the registrant uses either Alternative 2 or Alternative 3 of this form,
furnish the information required by Item 103 of Regulation S-B.
Not Applicable. The registrant is using Alternative 1.
<PAGE>
Item 3. Changes in and Disagreements with Accountants
Furnish the information required by Item 304 of Regulation S-B.
There have been no changes of and no disagreement with accountants on
accounting and financial disclosure.
Item 4. Submission of Matters to a Vote of Security Holders
If any matter was submitted during the fourth quarter of the fiscal year
covered by this report to a vote of security holders, through the solicitation
of proxies or otherwise, furnish the following information:
No matter was submitted to the securities holders as described above.
Item 5. Compliance with Section 16(a) of the Exchange Act
Robert R. Turner, President and Director. No changes since registration.
Edward H. Hawkins, Secretary and Director. No changes since registration.
Item 6. Reports on form 8-K
State whether any reports on Form 8-K were filed during the last quarter of
the period covered by this report, listing the times reported, any financial
statement filed and the dates of such report.
No Current Reports on Form 8-K were filed during the last fiscal
quarter-year.
PART F/S
Furnish the information required by Item 310 of Regulation S-B.
The audited financial statements for the fiscal year ended February 28,
1999, follow:
<PAGE>
Mesa County Brewing Co.
FINANCIAL STATEMENTS
with
Independent Auditors' Report
For the Years Ended February 28, 1999 and 1998
and the period September 16, 1991 (Inception) through February 28, 1999
<PAGE>
Mesa County Brewing Co.
TABLE OF CONTENTS
Page
----
Independent Auditors' Report 1
Financial Statements
Balance Sheet 2
Statement of Operations 3
Statement of Cash Flows 4
Statement of Shareholder's Equity 5
Notes to the Financial Statements 6-8
<PAGE>
Independent Auditor's Report
- ----------------------------
We have audited the accompanying balance sheet of Mesa County Brewing Co. (a
Developmental Stage Company), at February 28, 1999 , and the related statement
of operations, shareholders' equity, and cash flows for the fiscal year ended
February 28, 1999 and 1998 and the period September 16, 1991 (inception) through
February 28, 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mesa County Brewing Co. at
February 28, 1999 and the results of its operations and its cash flows for the
fiscal years ended February 28, 1999 and 1998 and the period September 16, 1991
(inception) through February 28, 1999 , in conformity with generally accepted
accounting principles.
Kish, Leake & Associates, P.C.
Certified Public Accountants
Englewood, Colorado
March 30, 1999
1
<PAGE>
Mesa County Brewing Co.
(A Development Stage Company)
Balance Sheet
February
28, 1999
--------
ASSETS
Current Assets - Cash $ 645
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES $ 0
Current Liabilities - Accounts Payable 1,200
SHAREHOLDERS' EQUITY
Preferred Stock, No Par Value,
Non Voting, Authorized 5,000,000 shares;
Issued And Outstanding 40,000 Shares 4,000
Common Stock, No Par Value
Authorized 50,000,000 shares;
Issued and outstanding 2,240,000 Shares 1,120
Deficit Accumulated During
The Development Stage (5,675)
TOTAL SHAREHOLDERS' EQUITY (555)
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 645
The Accompanying Notes Are An Integral Part Of These Financial Statements.
2
<PAGE>
<TABLE>
<CAPTION>
Mesa County Brewing Co.
(A Development Stage Company)
Statement Of Operations
September
16, 1991
Fiscal Fiscal (Inception)
Year Ended Year Ended Through
February February February
28, 1999 28, 1998 28, 1999
-------- -------- --------
<S> <C> <C> <C>
Revenue $ 0 $ 0 $ 0
Bank Charges 34 0 34
Fees 355 205 560
Printing 605 0 605
Professional Fees 3,276 0 3,276
Rent 1,200 0 1,200
Total Expenses 5,470 205 5,675
Net (Loss) ($ 5,470) ($ 205) (5,675)
Basic (Loss) Per Common Share ($ 0.00) ($ 0.00)
Weighted Average Common Shares Outstanding 1,560,000 166,667
The Accompanying Notes Are An Integral Part Of These Financial Statements.
3
</TABLE>
<PAGE>
Mesa County Brewing Co.
(A Development Stage Company)
Statement Of Cash Flow
September
16, 1991
Fiscal Fiscal (Inception)
Year Ended Year Ended Through
February February February
28, 1999 28, 1998 28, 1999
-------- -------- --------
Net (Loss) ($5,470) ($ 205) ($5,675)
Plus Items Not Affecting Cash Flow: 0 0 0
Increase in Accounts Payable 1,200 0 1,200
Net Cash Flows From Operations (4,270) (205) (4,475)
Cash Flows From Investing Activities:
Net Cash Flows From Investing: 0 0 0
Cash Flows From Financing Activities:
Common Stock Issued For Cash 1,020 100 1,120
Preferred Stock Issued For Cash 0 4,000 4,000
Net Cash Flows From Financing: 1,020 4,100 5,120
Net Increase (Decrease) In Cash (3,250) 3,895 645
Cash At Beginning Of Period 3,895 0 0
Cash At End Of Period $ 645 $ 3,895 $ 645
Summary Of Non-Cash Investing And Financing
Activities: $ 0 $ 0 $ 0
The Accompanying Notes Are An Integral Part Of These Financial Statements.
4
<PAGE>
<TABLE>
<CAPTION>
Mesa County Brewing Co.
(A Development Stage Company)
Statement Of Shareholders' Equity
Net (Loss)
Accumulated
Number Of Number Of During The
Shares Shares Preferred Common Development
Preferred Common Stock Stock Stage Total
--------- ------ ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Balance At September 16, 1991 and
February 28, 1992, 1993, 1994, 1995
1996, and 1997 0 0 $ 0 $ 0 $ 0 $ 0
February 3, 1998 issued 200,000
Shares Of No Par Value Common
Stock for cash of $100
or $.0005 per share 200,000 100 100
February 5, 1998 issued 40,000
Shares Of No Par Value Preferred
Stock for cash of $4,000
or $.10 per share 40,000 4,000 4,000
Net (Loss) (205) (205)
Balance At February 28, 1998 40,000 200,000 4,000 100 (205) 3,895
May 1998 Issued 2,040,000 Shares
of No Par Value Common Stock for
Cash of $1,020 or $.0005 Per Share 2,040,000 1,020 1,020
Net (Loss) (5,470) (5,470)
Balance At February 28, 1999 40,000 2,240,000 $ 4,000 $ 1,120 ($ 5,675) ($ 555)
The Accompanying Notes Are An Integral Part Of These Financial Statements.
5
</TABLE>
<PAGE>
Mesa County Brewing Co.
(A Development Stage Company)
Notes to Financial Statements
At February 28, 1999
- --------------------
Note 1 - Organization and Summary of Significant Accounting Policies
organization:
- --------------------------------------------------------------------------------
On September 16, 1991, Mesa County Brewing, Co. ("the Company") was incorporated
under the laws of Colorado, to engage in the business of publishing and
marketing books about breweries in the Rocky Mountain Area. The Company may also
engage in any business which is permitted by the Colorado Business Corporation
Act, as designated by the board of directors of the Company.
Developmental Stage:
The Company is currently in the developmental stage and has no significant
operations to date.
Statement of Cash Flows:
For purposes of the statement of cash flows, the Company considers demand
deposits and highly liquid-debt instruments purchased with a maturity of three
months or less to be cash equivalents.
Cash paid for interest and taxes in the period ended February 28, 1999 and 1998
was $-0-.
Fiscal Year End:
The Company has chosen February 28th as its fiscal year end.
Revenue Recognition:
When operations commence the Company will recognize revenue when the published
works are sold.
Use of Estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts. Actual results could differ from those estimates.
6
<PAGE>
Mesa County Brewing Co.
(A Development Stage Company)
Notes to Financial Statements
At February 28, 1999
- --------------------
Note 2 - Capital Stock
- ----------------------
Common Stock:
The Company initially authorized 1,000,000 shares of no par value common stock.
On January 29, 1997 the Company amended its articles of incorporation to
increase the authorized shares to 50,000,000. On February 3, 1998 the Company
issued 200,000 shares of no par common stock for cash of $100 or $.0005 per
share.
In May 1998 the Company issued 2,040,000 shares of no par common stock for cash
of $1,020 or $.0005 per share as part of a plan to offer for sale up to 4,000
units (the "Units") at $2.50 per Unit, or $.0005 per share based on a best
efforts basis to Colorado residents and non-United States citizens only. Each
Unit is comprised of 5,000 shares of no par value common stock. The minimum
purchase was 5 units for a total offering of $10,000. These shares of common
stock contained in the Units were issued pursuant to an exemption from
registration under Section 3(b) and Regulation D, Rule 504, of the Securities
Act of 1933, as amended, and to an exemption from registration provided by
Section 11-51-308(l)(p) of the Colorado Securities Act.
Preferred Stock
On January 29, 1997 the Company amended its articles of incorporation to
increase the authorized shares to 5,000,000 shares of no par, non-voting
preferred stock where the Directors of the Company have the right to assign
preferences.
On February 5, 1998, the Company issued 40,000 shares of its no par value
preferred stock for $4,000 or $.10 per share. The Directors have assigned the
following preferences to the issued and outstanding shares of Preferred Stock:
(I) the Preferred Stock shall be non-voting, (ii) the holders of the stock as a
group have the right to receive, prorata, upon dissolution or winding up of the
Company, 10% of the assets of the Company prior to division and distribution of
assets to the holders of the Company's Common Stock.
The Company has declared no dividends through February 28, 1999.
7
<PAGE>
Mesa County Brewing Co.
(A Development Stage Company)
Notes to Financial Statements
At February 28, 1999
- --------------------
Note 3 - Income Taxes
- ---------------------
The Company follows Financial Accounting Standards Board Statement No. 109,
"Accounting for Income Taxes" (SFAS #109), which requires, among other things,
an asset and liability approach to calculating deferred income taxes. As of
February 28, 1999 the Company has a deferred tax asset of $1135 primarily for
its net operating loss carry forward which has been fully reserved through a
valuation allowance. The change in the valuation allowance for February 28, 1998
is $1094. The net operating loss carryover will expire in varying amount in the
years 2012 and 2013
Note 4 - Related Party Events
- -----------------------------
The Company presently maintains its principal offices at an address provided by
a related party at a monthly rental of $100 per month, plus any expense of
telephone, fax, and secretarial services, commencing March 1, 1998. The office
is located at 4155 E. Jewell Ave - Suite 909, Denver, CO 80222.
8
<PAGE>
PART III
Item 1. Index to Exhibits
Exhibits required in Part III of Form 1-A
Exhibit Number: Description
Exhibit No. 2. Plan of Acquisition Not Applicable
Exhibit No. 3. Charter and Bylaws reviously Filed
Exhibit No. 5. Voting trust agreement Not applicable
Exhibit No. 6. Material contracts Not applicable
Exhibit No. 7. Material foreign patents Not applicable
Exhibit No. 11. Statement re: computation
of per share earnings Not applicable
Exhibit No. 24. Power of attorney Not applicable
Exhibit No. 27. Financial Data Schedule Attached
- --------------------------------------------------------------------------------
Signatures
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
MESA COUNTY BREWING CO.
(Registrant)
Date: April 6, 1999
/s/ Edward H. Hawkins
----------------------------------
Edward H. Hawkins, Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> FEB-28-1999
<PERIOD-START> MAR-01-1998
<PERIOD-END> FEB-28-1999
<CASH> 645
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 645
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 645
<CURRENT-LIABILITIES> 1,200
<BONDS> 0
0
4,000
<COMMON> 1,120
<OTHER-SE> (5,675)
<TOTAL-LIABILITY-AND-EQUITY> 645
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 5,470
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (5,470)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,470)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,470)
<EPS-PRIMARY> (.00)
<EPS-DILUTED> 0
</TABLE>
