FORM 10-SB
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB/A
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under section 12(b) or (g) of the Securities Exchange Act of 1934
BEACH BREW BEVERAGE COMPANY, INC.
(Name of small business issuer in its charter)
NEVADA 91-1868790
(States of other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
1401 Walnut Creek Dr. Encinitas, California
92024
(Address of principal executive offices) (Zip Code)
Issuers telephone number (760 ) 753-3424
Securities registered under Section 12(b) of the Exchange Act:
Title of each class Name of each exchange on which registered
to be so registered each class is to be registered
N/A N/A
Securities registered under Section 12 (g) of the Exchange Act:
Common stock, par value $.001 per share
(Title of class)
(Title of class)
At December 31, 1998, the aggregate market value of the voting stock held by non
affiliates is undeterminable and is considered to be 0.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Not applicable
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
As of December 31, 1998, the registrants had 7,500,000 of common stock issued
and outstanding, as of December 31, 1999, and as of September 30, 2000 the
registrant had 7,650,000 shares of common stock issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and 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 other
information statement; and (3) Any prospectus filed pursuant to rule 424 (b) or
(c ) under the Securities Act of 1933: None
BEACH BREW BEVERAGE COMPANY, INC.
FORM 10 - SB
TABLE OF CONTENTS
PAGE
PART I
ITEM 1. Description of Business . . . . . . . . . . . . . . . 4
.
ITEM 2. Managements Discussion and Analysis or Plan of Operation .4
3. Description of Property . . . . . . . . . . . . . . . . . 11
ITEM 4. Security Ownership of Certain Beneficial Owners and
Management . . . . . . . . . 11
ITEM 5. Directors, Executive Officers, Promoters and Control
Persons . . . . . . . . . . . . . . 12
ITEM 6. Executive Compensation . . . . . . . . . . . . . . . . . 13
ITEM 7. Certain Relationships and Related Transactions . . . . . 13
ITEM 8. Description of Securities. . . . . . . . . . . . . . . . .13
PART II
ITEM 1. Market Price of and Dividends on Registrants Common Equity and
Other Shareholder Matters . . . . . . . . . . . . 14
ITEM 2. Legal Proceedings . . . . . . . . . . . . . . . . . . . . 15
ITEM 3. Changes in and Disagreements with Accountants . . . . . . .15
ITEM 4. Recent Sales of Unregistered Securities . . . . . . . . . 15
ITEM 5. Indemnification of Directors and Officers . . . . . . . . 16
PART F / S
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 17-39
PART III
ITEM 1. Index to Exhibits . . . . . . . . . . . . . . . . . . . . S-1
ITEM 2. Description of Exhibits . . . . . . . . . . . . . . . . . S-1
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
-
FORM 10 - SB
PART I
ITEM 1. Description of Business
The Company was organized on October 30, 1997 under the laws of the State
of Nevada as Beach Brew Beverage Company, Inc. for the purposes of acquiring the
assets of a California Partnership, (Beach Brew Beverage) the Partnership, to
manufacture, develop and market tea, cocktail mixes and fruit drinks. After two
years of intensive research and development a number of proprietary concentrated
liquid tea and fruit flavored products were developed by the Company, all of
which are the sole property of Beach Brew Beverage Company, Inc. Further
research indicated the constant development of new products and marketing would
prove to be expensive for the Company. Although the proprietary products of the
Company shall remain and may be revived as an operable business as a subsidiary
at a later date. The current direction of the Company changed dramatically.
The Company changed its name to Hussongs America, Inc. on August 15, 1999,
with the intention of obtaining the rights to distribute a commercially made
beer under the Companys name. In addition the Company was to have the right to
market a sports line of clothing bearing the Hussongs name and logo in the
western United States. The agreements necessary to go forward with Hussongs
America, Inc. did not come to fruition due to circumstances beyond the Companys
control.
The Company changed its name to Golf Centers Inc. on December 22, 1999 with
the intent of acquiring a California limited partnership. ( Granada Hills
Associates ), the partnership in January 2000 for the proposes of constructing
and operation a high quality sports practice center known as THE SPORTS CENTER
OF L. A.. The sports center was intended to be unique in that its entire
approach was to meet an absolutely unsatisfied need for a quality facility for
todays golfer to learn and practice the game of golf. In the first quarter of
2000 the City of Los Angeles informed the partnership that due to forward
looking financial constraints of the City of Los Angeles, the proposed property
lease to the partnership was doubtful. Subsequently, the partnership filed legal
proceedings in order to force the issuance of the lease by the City of Los
Angeles. During this period of legal disputes, the Company continued with
development of new tea and tea related products. In the third quarter of 2000
the Companys decision to move forward with Golf Centers Inc. was abandoned due
to time delays and legal difficulties of the partnership. On July 27, 2000 the
Company changed its name to the original name of Beach Brew Beverage Company
Inc., with the intention of moving forward with the brewing and marketing of tea
and related products.
Facilities and services
The Companys principal place of business and corporate offices are located
at the current business office of its President at 1402 Walnut Creek Rd.,
Encinitas, California 92024. The facilities consist of approximately 2500 square
feet. The Company believes that its current facilities are adequate for the
immediate future.
Management Discussion and Analysis or plan of operation
Beach Brew Beverage was formed as a California limited partnership in March
of 1996 for the purpose of creating a product to fill an identified niche in the
$10 billion consumer tea and fruit beverage markets. After two years of
intensive research and development a number of proprietary concentrated liquid
tea and fruit flavored products were developed by the Company, all of which are
the sole property of Beach Brew Beverage Company, Inc. There is no other company
who presently produces and sells a competitive line of liquid concentrate or
similar products. A proprietary variety of packaging was created which, when
combined with the liquid tea and fruit concentrates, has proven to be
exceptionally popular with consumers and retail food chains alike.
The Companys products have been successfully test marketed to many
different consumer focus groups, retail food chains, hotels and restaurants and
the airline industry. In July of 1996, the Company received its first
commercial orders and since that initial order, the product line has been
successfully sold in over 500 retail food chain outlets such as Albertsons,
Smiths, Hughes and Smart & Final. Smart & Final, one of the smallest retail
chains with only 160 outlets, alone would represent approximately $500,000 of
gross revenues to the Company per year. Albertsons, Smiths and Hughes have a
combined total of over 900 retail outlets. The Company has recently developed a
bulk tea item which will be sold in bulk and dispensed from a machine or tap at
point of sale for retail use only.
The Company uses large outside vendors to produce its products. The
decision to use outside vendors has allowed the Company to significantly reduce
manpower, space and capital equipment requirements associated with the
manufacturing process while enabling the Company to order product in enormous
quantities when necessary.
The Company has employed the services of two Los Angeles based companies to
produce its proprietary tea and other concentrated liquid products. The flexible
foil packaging is manufactured by a San Francisco based company which has
guaranteed production runs of up to 1 million packets with only a two week
advanced notice. The filling is performed in Ontario, CA., by a vendor who can
fill up to 70,000 packets per day. The boxing and shipping function is done by
Company personnel at the Encinitas California warehouse.
Executive Officers and Directors
The Executive officers and directors of the Company are as follows:
Name Age Position
Frank E. Igo, Jr 46 President, Chief Executive Officer and Director
Karen Igo 46 Treasurer, and Director
Gary DeGano 60 Secretary and Director
All directors hold office until the first annual meeting of stockholders or
until their successors have been duly elected and qualified. Directors will be
elected at the annual meetings to serve for one year terms. There are no
agreements with respect to the election of directors. The Company has not
compensated its directors for service on the Board of Directors or any committee
thereof. Any non-employee director of the Company is reimbursed for expenses
incurred for attendance at meetings of the Board of Directors and any committee
of the Board of Directors. The Executive Committee of the Board of Directors, to
the extent permitted under Nevada law, exercises all of the power and authority
of the Board of Directors in the management of the business and affairs of the
Company between meetings of the Board of Directors. Each executive officer
serves at the discretion of the Board of Directors.
The Directors will initially devote their time to the Companys affairs on
an as needed basis, the amount of which is undetermined at this time. Such
time could amount to as little as one percent of the time they devote to their
own business. With sales, they could possibly devote their full time to the
Companys business. Presently, there are no other persons whose activities are
material to the Companys operations other than the Companys corporate counsel.
The business experience of each of the persons listed above during the past
five years is as follows:
Frank E. Igo Jr., been chairman/CEO of Beach Brew since founding the
Company in 1995 to the present. He has been responsible for directing all
operations of Beach Brew subsequent to inception. As President of Diethrich
Group for 15 years, he developed over $300,000,000 of Hotel/Resort projects such
as the Hyatt Regency-Sacramento, the Radisson-Palm Springs, the Pleasanton
Hilton, the Radisson Plaza Irvine and the Dana Point Resort. He also brings over
15 years of experience representing companies such as Jason Foods, Hyatt, the
Radisson and Sheraton Hotels. Mr. Igo received his B.A. in Hotel and Restaurant
Management from the University of Massachusetts and his M.B.A. from
Northeaster/Harvard University.
Karen Igo received her Bachelor Degree from the University of Maryland in
1977 and her Master of Audiology in 1979. Since that time she has held positions
with City of Baltimore, Sharper Image, the Cardiff Unified School District and
is presently the President of Spencer Telecommunications of San Diego.
Gary DeGano co-founded a full service mortgage banking firm that provided
sources of real estate loan funding to builders, mortgage brokerages and the
general real estate sales community. The mortgage banking firm became public in
1989. Mr. DeGano is currently President of Triad Industries, Inc. a publicly
traded Company ( parent Company of R.B. Capital and Equities, Inc.) and is
experienced in negotiating merger and acquisition agreements.
Note: Frank and Karen Igo are husband and wife.
Compensation
If the Offering is successfully completed and the Company is able to
generate sufficient revenues through the operation of its business, it is
intended that salaries will be paid to existing officers. Marketing will be the
responsibility of Frank E. Igo, Jr., the Companys President.
Management intends to hire outside employees as needed and increase the
time they devote to the Company should such a need arise. In such cases,
compensation to management will be consistent with prevailing wages for the
services rendered. It is not anticipated that the Company will have to increase
payroll expenditures until such time as monthly sales exceed $50,000.
Conflicts of Interest
The Company will initially rent office space from its President. This
facility will serve as the Companys principal place of business. Rent will be
paid by the Company only if this Offering is successful to the extent that the
Company can commence commercial operations and marketing of its product. All
rents will be based on values relative to the existing market for similar
facilities.
The Companys officers and directors are subject to the doctrine of
corporate opportunities only insofar as it applies to business opportunities in
which the Company has indicated an interest, either through its proposed
business plan or by way of an express statement of interest contained in the
Companys minutes. If directors are presented with business opportunities that
may conflict with business interests identified by the Company, such
opportunities must be promptly disclosed to the Board of Directors and made
available to the Company. In the event the Board shall reject an opportunity so
presented and only in that event, any of the Companys officers and directors
may avail themselves of such and opportunity. Every effort will be made to
resolve any conflicts that may arise in favor of the Company. There can be no
assurance, however, that these efforts will be successful.
Marketing
The Companys initial thrust will continue to be the multi-billion retail
food chain segment of the market. A national network of retail food chain
brokers has been established and the Company/brokers are now poised to begin
soliciting additional retail food chains such as Food Lion, Kroger, Ralphs,
Lucky, to name only a few. The Company/brokers are also approaching the mass
merchants like Walmart, Kmart, Target, and smaller specialty chains such as Cost
Plus and Trader Joes and convenience outlet stores such as Seven Eleven and
Circle K.
Beach Brews established network of retail food chain and mass merchant
brokers, represent retail products currently being sold in over 23,000 separate
locations nationwide. In addition, the company has contacted retail food outlets
to purchase the companys products in bulk and dispense the products at point of
sale.
The uniqueness of packaging and diversity of the product line which
includes concentrated teas, fruit drinks and cocktail mixes will place the
products throughout the entire store and not just on one shelf, providing the
Beach Brew name with maximum storewide exposure. For example, the teas and fruit
concentrates will be located on shelves in their respective isles as well as at
the check out counter through the use of clip strip packages. The cocktail mixes
will occupy shelf space in the liquor department.
Together with its brokers, the Company plans to broaden exposure to both
the retail market and food and beverage market through participation in trade
shows. Beach Brew will be represented at the Food Marketing Institute in
Chicago, the Fancy Food Retail Show in San Francisco, as well as
hotel/restaurant shows in Los Angeles, Chicago and New York.
Competition
Presently, there are several companies marketing products similar to Beach
Brew Beverages Company, Inc. though their products are either powder or bottled
in the final form. Most of these companies are larger than the Company with
longer histories of operation and greater financial and personnel resources.
Also, most of these competitors have established some market share in the market
in which the Company is competing. The ability of the Company to penetrate these
markets will depend on many factors including, but not limited to, its ability
to obtain sufficient capital to enhance and broaden the marketing of its
products, to develop new and improved products, to obtain and retain necessary
management and advisory personnel, the establishment of a comprehensive
marketing plan.
Research and Development
The Company has not allocated funds for conducting research and development
activities to develop new products or technology. Currently, management does not
anticipate that funds will be allocated for primary research in the immediate
future. Development activities routinely conducted by the Company will consist
of improvements to existing products and developing new or alternative products.
The Company has 3 full time employees. Management intends to hire
additional employees only as needed and increase the time they devote to the
Company should such need arise. In such cases, compensation to management will
be consistent with prevailing wages for services rendered. It is not anticipated
that the Company will have to increase payroll expenditures until such time as
monthly sales exceed $50,000 a month. The Company does not anticipate in the
immediate future to offer any employee a bonus, profit sharing or deferred
compensation plan nor are there any employment contracts with any director or
employee. Management intends to hire additional qualified personnel as business
conditions warrant. In addition to its full-time employees, the Company may use
the services of certain outside consultants and advisors as needed on a contract
basis.
Office Facilities
The Companys principal place of business and corporate offices are located
at the current business office of its President at 1402 Walnut Creek Rd.,
Encinitas, California 92024. The facilities consist of approximately 2,500
square feet. The Company believes that its current facilities are adequate for
the immediate future.
Legal
The Company is not a party to any material pending legal proceedings and no
such action by, or to the best of its knowledge, against the Company has been
threatened.
Net Operating Loss
The Company has accumulated approximately $135,351 of net operating loss
carry forwards as of September 30, 2000, which may be offset against taxable
income and income taxes in future years. The use of these losses to reduce
income taxes will depend on the generation of sufficient taxable income prior to
the expiration of the net operating loss carry forwards. The carry forwards
expire in the year 2015. In the event of certain changes in control of the
Company, there will be an annual limitation on the amount of net operating loss
carry forwards which can be used. No tax benefit has been reported in the
financial statements for the year ended December 31, 1999 or the nine months
ended September 30, 2000.
Recent Accounting Pronouncements
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standard (SFAS) No. 128, Earnings Per Share and Statement of
Financial Accounting Standards No. 129 Disclosures of Information About an
Entitys Capital Structure. SFAS No. 128 provides a different method of
calculating earnings per share than is currently used in accordance with
Accounting Principles Board Opinion No. 15, Earnings Per Share. SFAS No. 128
provides for the calculation of Basic and Dilutive earnings per share. Basic
earnings per share includes no dilution and is computed by dividing income
available to common shareholders by the weighted average number of common shares
outstanding for the period. Diluted earnings per share reflects the potential
dilution of securities that could share in the earnings of an entity, similar to
fully diluted earnings per share. SFAS no. 129 establishes standards for
disclosing information about an entitys capital structure. SFAS no. 128 and SFAS
no. 129 are effective for financial statements issued for periods ending after
December 15, 1997. Their implementation is not expected to have a material
effect on the financial statements.
The Financial Accounting Standards Board has also issued SFAS No. 131, No.
130, Reporting Comprehensive Income and SFAS no. 131, Disclosures about
Segments of an Enterprise and Related Information. SFAS No. 130 establishes
standards for reporting and display of comprehensive income, its components and
accumulated balances. Comprehensive income is defined to include all changes in
equity except those resulting from investments by owners and distributors to
owners. Among other disclosures, SFAS no. 130 requires that all items that are
required to be recognized under current accounting standards as components of
comprehensive income be reported in a financial statement that displays with the
same prominence as other financial statements. SFAS no. 131 supersedes SFAS no.
14 Financial Reporting for Segments of a Business Enterprise. SFAS no. 131
establishes standards on the way that public companies report financial
information abut operating segments in annual financial statements and requires
reporting of selected information about operating segments in interim financial
statements issued to the public. It also establishes standards for disclosure
regarding products and services, geographic areas and major customer. SFAS no.
131 defines operating segments as components of a company about which separate
financial information is available that is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in assessing
performance.
SFAS 130 and 131 are effective for financial statements for periods
beginning after December 15, 1997 and requires comparative information for
earlier years to be restated. Because of the recent issuance of the standard,
management has been unable to fully evaluate the impact, if any the standard may
have on future financial statement disclosures. Results of operations and
financial position, however, will be unaffected by implementation of the
standard.
Inflation
In the opinion of management, inflation will not have a material effect on
the operations of the Company.
Risk Factors and Cautionary Statements
This Registration Statement contains certain forward-looking statements.
The Company wishes to advise readers that actual results may differ
substantially from such forward-looking statements. Forward-looking statements
involve risks and uncertainties that could cause actual results to differ
materially from those expressed in or implied by the statements, including, but
not limited to, the following: the ability of the Company to meet its cash and
working capital needs, the ability of the Company to successfully market its
product, and other risks detailed in the Companys periodic report filings with
the Securities and Exchange Commission.
Quarterly Trends
The Company expects revenues to grow moderately in the first and second
quarter increase significantly in the third and forth quarter of 2001, as sales
increase.
Liquidity and Capital Resources
The Company has inventory and $20,000 in liquid assets that will allow
shipment of product in the fourth quarter.
Year 2000 Compliance
The Company is reviewing its computer systems and operations, as well as
the components for its systems, to determine the extent to which the business
will be vulnerable to potential errors and failures as a result if the Year
2000 problem. The year 2000 problem results from the use of computer programs
which were written using only two digits ( rather than four digits ) to define
applicable years. On January 1, 2000, any clock or date recording mechanism,
including date sensitive software which uses only two digits to represent the
year, could recognize a date using 00 as the year 1900, rather than the
year 2000 This could result in system failures or miscalculations, causing
disruptions of operations, including, among other things, a temporarily
inability to process transactions, send invoices, provide services or engage in
similar activities. These failures, miscalculations and disruptions could have a
material adverse effect on our business, operations, and financial conditions.
The Companys software and hardware components in its systems are Y2K compliant,
and the Company is taking steps to make sure its developed systems are Y2K
compliant and the system components are Y2K compliant.
The Company has made inquiries to its outside suppliers to ascertain if
such suppliers are Y2K compliant. At this time, management is satisfied that
such suppliers have made or are making appropriate examinations and necessary
upgrades to insureY2K readiness. However, the Company does not depend
exclusively on one supplier, and, therefor, does not anticipate any significant
interruption in materials and supplies in the event any particular supplier
experiences Y2K problems. Although the Company does not anticipate any material
adverse effects, it cannot guarantee that no disruption in products or services
will occur if multiple suppliers experience Y2K problems.
Currently, the Company does not have contingency plans in place to deal
with unanticipated Y2K disruptions if they occur. Such unanticipated disruptions
could have an adverse effect on the Companys operation.
Results of Operations
A summary of our balance sheets for the years ended December 31, 1998 and
1999 and for the interim statements for September 30, 2000 are as follows:
Years Ended Nine Months
December 30, September 30,
1998 1999 2000
Cash/Cash Equivalent $ - $ 3,000 $ -
Total Current Assets - 3,000 -
Total Assets 41,586 31,703 43,380
Current Liabilities 26,975 7,472 12,903
Total Liabilities 26,975 7,472 12,903
Shareholders Equity 14,611 24,231 30,477
Total Shareholders Equity
& Liabilities $41,586 $31,703 $43,380
The following summarizes the result of the Companys operation for the
years ended December 31, 1998 and 1999 and the interim period September 30,
2000.
From Inception
Nine Months Years Ended October 30,
Ended December 30, 1997 through
September 30, 2000 1998 1999 September 30, 2000
Revenues $ - $ - $ - $ -
Expenses
Amortization &
Depreciation 7,547 19,140 11,062 29,181
General Administrative 14,498 4,968 37,385 118,159
Total Expenses 22,045 24,108 48,447 147,340
Net Loss (22,045) (24,108) (48,447) (147,340)
Other Income (Expense)
Gain on Disposition
of asset - - 10,785 10,785
Interest Expense - (741) (185) (987)
Sale of Securities 2,191 - - 2,191
Net Loss (19,854) (24,849) (37,847) (135,351)
Other Comprehensive Income
(Loss)
(Loss) Gain on valuation of
available for sale
securities 26,100 - (20,950) (8,900)
Net Comprehensive
Income (Loss) 6,246 (24,849) (54,052) 144,251
ITEM 3. Description of Property
The information required by this Item 3, Description of Property, is set
forth in Item 1, Description of Business, of this Form 10-SB/A.
ITEM 4. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information, to the best of the Companys
knowledge, as of March 31, 1999, with respect to each person known by the
Company to own beneficially more than 5% of the outstanding Common Stock, each
director and all directors and officers as a group.
Name and Address Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership of Class (1)
Frank E. and Karen J. Igo 2,500,000 33 %
1401 Walnut Creek Dr.
Encinitas, CA 92024
Gary G. DeGano ** 321,250 4.2 %
816 Nantasket Court
San Diego, CA 92109
**Gary G. DeGano is a general partner in G & K Enterprises which
beneficially owns 161,500 shares of the outstanding common stock which is
included in the above total.
ITEM 5. Directors, Executive Officers, Promoters and Control Persons
Executive Officers and Directors
The executive officers and directors of the Company are as follows:
Name Age Position
Frank E. Igo, Jr 46 President, Chief Executive Officer,
and Director
Karen Igo 45 Treasurer / Director
Gary DeGano 60 Corporate Secretary / Director
All directors hold office until the first annual meeting of stockholders or
until their successors have been duly elected and qualified. Directors will be
elected at the annual meetings to serve for one year terms. There are no
agreements with respect to the election of directors. The Company has not
compensated its directors for service on the Board of Directors or any committee
thereof. Any non-employee director of the Company is reimbursed for expenses
incurred for attendance at meetings of the Board of Directors and any committee
of the Board of Directors. The Executive Committee of the Board of Directors, to
the extent permitted under Nevada law, exercises all of the power and authority
of the Board of Directors in the management of the business and affairs of the
Company between meetings of the Board of Directors. Each executive officer
serves at the discretion of the Board of Directors.
The Directors will initially devote their time to the Companys affairs on
an as needed basis, the amount of which is undetermined at this time. Such
time could amount to as little as one percent of the time they devote to their
own business. With sales, they could possibly devote their full time to the
Companys business. Presently, there are no other persons whose activities are
material to the Companys operations other than the Companys corporate counsel.
The business experience of each of the persons listed above during the past
five years is as follows:
Frank E. Igo, Jr., has been chairman/CEO of Beach Brew since founding the
Company in 1995 to the present. He has been responsible for directing all
operations of Beach Brew subsequent to inception. As Vice President of Diethrich
Group for 15 years, he developed over $300,000,000 of Hotel/Resort projects such
as the Hyatt Regency-Sacramento, the Radisson-Palm Springs, The Pleasanton
Hilton, the Radisson Plaza Irvine and the Dana Point Resort. He also brings over
15 years of experience representing companies such as Jason Foods, Hyatt, The
Radisson and Sheraton Hotels. Mr. Igo received his B.A. in Hotel and Restaurant
Management from the University of Massachusetts and his M.B.A. from
Northeaster/Harvard University.
Karen Igo received her Bachelor Degree from the University of Maryland in
1977 and her Master of Audiology in 1979. Since that time she has held positions
with City of Baltimore, Sharper Image, the Cardiff Unified School District and
is presently the President of Spencer Telecommunications of San Diego.
Gary DeGano co-founded a full service mortgage banking firm that provided
sources of real estate loan funding to builders, mortgage brokerages and the
general real estate sales community. The mortgage banking firm became public in
1989. Mr. DeGano is currently President of Triad Industries, Inc. a publicly
traded Company, ( parent Company of R.B. Capital and Equities, Inc. ) and is
experienced in negotiating merger and acquisition agreements.
Note: Frank and Karen Igo are husband and wife.
ITEM 6. Executive Compensation
If the Offering is successfully completed and the Company is able to
generate sufficient revenues through the operation of its business, it is
intended that salaries will be paid to existing officers. Marketing will be the
responsibility of Frank E. Igo, Jr., the Companys President.
Management intends to hire outside employees as needed and increase the
time they devote to the Company should such a need arise. In such cases,
compensation to management will be consistent with prevailing wages for the
services rendered. It is not anticipated that the Company will have to increase
payroll expenditures until such time as monthly sales exceed $50,000.
ITEM 7. Certain Relationships and Related Transactions
The Companys officers and directors are subject to the doctrine of
corporate opportunities only insofar as it applies to business opportunities in
which the Company has indicated an interest, either through its proposed
business plan or by way of an express statement of interest contained in the
Companys minutes. If directors are presented with business opportunities that
may conflict with business interests identified by the Company, such
opportunities must be promptly disclosed to the Board of Directors and made
available to the Company. In the event the Board shall reject an opportunity so
presented and only in that event, any of the Companys officers and directors
may avail themselves of such an opportunity. Every effort will be made to
resolve any conflicts that may arise in favor of the Company. There can be no
assurance, however, that these efforts will be successful.
ITEM 8. Description of Securities
Common Stock
The Company is authorized to issue 50,000,000 shares of Common Stock, par
value $.001 per share, of which 7,500,000 shares were issued and outstanding as
of December 31, 1998 and 7,650.000 as of December 31, 1999 respectively. All
shares of Common Stock have equal rights and privileges with respect to voting,
liquidation and dividend rights. Each share of Common Stock entitles the holder
thereof to (i) one non-cumulative vote for each share held of record on all
matters submitted to a vote of the stockholders; (ii) to participate equally and
to receive any and all such dividends as may be declared by the Board of
Directors out of funds legally available therefor; and (iii) to participate pro
rata in any distribution of assets available for distribution upon liquidation
of the Company. Stockholders of the Company have no preemptive rights to acquire
additional shares of Common Stock or any other securities. The Common Stock is
not subject to redemption and carries no subscription or conversion rights. All
outstanding shares of Common Stock are fully paid and non-assessable.
PART II
ITEM 1. Market Price of and Dividends on the Registrants Common Equity and Other
Shareholder Matters
Prior to the filing of this registration statement, no shares of the
Companys Common Stock have been registered with the Securities and Exchange
Commission (the Commission) or any state securities agency of authority. The
Companys Common Stock is eligible to be traded in the over-the-counter market
upon the filing of this Form 10SB and the clearings and comments thereto by the
Commission.
The ability of an individual shareholder to trade their shares in a
particular state may be subject to various rules and regulations of that state.
A number of states require that an issuers securities be registered in their
state or appropriately exempted from registration before the securities are
permitted to trade in that state. Presently, the Company has no plans to
register its securities in any particular state. Further, most likely the
Companys shares will be subject to the provisions of Section 15(g) and Rule
15g-9 of the Securities Exchange Act of 1934, as amended (the Exchange Act),
commonly referred to as the penny stock rule. Section 15(g) sets forth certain
requirements for transactions in penny stocks and rule 15g-9(d)(1) incorporates
the definition of penny stock as that used in Rule 3a51-1 of the d that used in
Rule 3a51-1 of the Exchange Act.
The Commission generally defines penny stock to be any equity security that
has a market price less than $5.00 per share, subject to certain exception. Rule
3a51-1 provides that any equity security is considered to be a penny stock
unless that security is: registered and traded on a national securities exchange
meeting specified criteria set by the Commission; authorized for quotation on
the NASDAQ stock Market; issued by a registered investment company; excluded
from the definition on the basis of price (at least $5.00 per share) or the
issuers net tangible assets; or exempted from the definition by the Commission.
If the Companys shares are deemed to be a penny stock, trading in the shares
will be subject to additional sales practice requirements on broker-dealers who
sell penny stocks to persons other than established customers and accredited
investors, generally persons with assets in excess of $1,000,000 or annual
income exceeding $200,000, or $300,000 together with their spouse.
For transactions covered by these rules, broker-dealers must make a special
suitability determination for the purchase of such security and must have
received the purchasers written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the rules require the delivery, prior to the first transaction, of a
risk disclosure document relating to the penny stock market. A broker-dealer
also must disclose the commissions payable to both the broker-dealer and the
registered representative, and current quotations for the securities. Finally,
monthly statements must be sent disclosing recent price information for the
penny stocks held in the account and information on the limited market in penny
stocks. Consequently, these rules may restrict the ability of broker-dealers to
trade and/or maintain a market in the Companys Common Stock and may affect the
ability of shareholders to sell their shares.
As of December 31, 1999 and September 30, 2000 there were 49 and 50 holders
respectfully of record of the Companys Common Stock. Because the Company does
not presently trade, no trading history is presented herein.
As of December 31, 1997 and March 31, 1998, the Company had issued and
outstanding 7,500,000 shares respectfully. Of this total, 5,000,000 shares
were issued in private transactions in the third and fourth quarter of
1997, of these 2,793,750 shares are deemed restricted securities as defined
by the Act and certificates representing such shares bear an appropriate
restrictive legend. The remaining 2,206,250 shares issued in December 1997
do not bear a restrictive legend. An additional 2,500,000 shares were
issued, pursuant to Rule 504 in March of 1999. These 2,500,000 shares do
not bear a restrictive legend. An additional 150,000 shares were issued,
pursuant to Rule 504 in March of 1999, these shares are deemed restricted
securities as defined by the act and certificates representing such shares
bear an appropriate restrictive legend.
Of the Companys total shares outstanding, 4,706,250 shares may be
sold, transferred or otherwise traded in the public market, should one
develop, unless held by an affiliate or controlling shareholder of the
Company. Of these 4,706,250 shares, the Company has identified no shares as
being held by affiliates of the Company.
The 2,943,750 shares considered restricted securities are held
presently by affiliates and/or controlling shareholders of the Company.
These shares may be sold pursuant to Rule 144 in the future, subject to the
volume and other limitations set forth under Rule 144. In general, under
Rule 144 as currently in effect, a person (or persons whose shares are
aggregated) who has beneficially owned restricted shares of the Company for
at least one year, including any person who may be deemed to be an
affiliate of the Company (as the term affiliate is defined under the
Act), is entitled to sell, within any three-month period, an amount of
shares that does not exceed the greater of (i) the average weekly trading
volume in the Companys Common Stock, as reported through the automated
quotation system of a registered securities association, during the four
calendar weeks preceding such sale or (ii) 1% of the shares then
outstanding. A person who is not deemed to be an affiliate of the Company
and has not been an affiliate for the most recent three months, and who has
held restricted shares for a least two years would be entitled to sell such
shares without regard to the resale limitations of Rule 144.
Generally, the shares of restricted stock may not be sold or otherwise
transferred unless first registered under the Act or unless there is an
appropriate exemption from registration available.
Dividend Policy
The Company has not declared or paid cash dividends or made
distributions in the past, and the Company does not anticipate that it will
pay cash dividends or make distributions in the foreseeable future. The
Company currently intends to retain any future earnings to finance its
operations.
ITEM 2. Legal Proceedings
There are presently no material pending legal proceedings to which the
Company or any of its subsidiaries in a party or to which any of its
property is subject and, to the best of its knowledge, no such actions
against the Company are contemplated or threatened.
ITEM 3. Changes in and Disagreements with Accountants
There have been no changes in or disagreements with accountants.
ITEM 4. Recent Sales of Unregistered Securities
On March 15, 1999, the Company completed an offering of its common
stock pursuant to the provisions of Regulation D, Rule 504. The Company
sold 2,500,000 shares of its common stock to 30 people for $50,000. In
December 1999 the Company sold 150,000 shares of its authorized but
unissued common stock for $15,000 pursuant to 4(2), 4(6) of the Securities
Act. The later offering was for restricted stock. The 504 offering was
exempt from regulation.
On March 23, 1999, the Company completed an offering of its Common
Stock pursuant to the provisions of Regulation D, Rule 504 of the Act.
Under the offerings, the Company sold 2,500,000 shares to 30 people for
$50,000 in March 1999 150,000 shares were sold pursuant to 4(2) 4(6) for
$15,000 in December 1999. This offering was not registered under the Act,
or registered or qualified under the securities laws of any state. All
purchasers of the shares reside outside the United States. The offering of
the shares was made in reliance upon the limited offering exemption from
registration with the Securities and Exchange Commission as set forth in
Rule 504 of Regulation D.
Each purchaser was required to complete and sign a written
subscription Agreement representing that they had read the Disclosure
Statement and that the offering was subject to various risks. Pursuant to
Rule 504(b)(1) of Regulation D, the provisions of Rule 502(c) and (d) shall
not apply to offers and sales made under Rule 504. Generally, Rule 502(d)
provides that: exempt as provided in Rule 504(b)(1), securities acquired
in a transaction under Regulation D shall have the status of securities
acquired in a transaction under Section 4(2) of the Act and cannot be
resold without registration under the Act or an exemption therefrom . . .
Because the Companys intent and good faith belief was that the
offering qualified under Rule 504(b)(1) of Regulation D, purchasers of the
Companys Common Stock may be permitted to resell their shares without
registration under the Act pursuant to Rule 502(d). As such, certificates
representing these shares do not bear any restrictive legends.
ITEM 5. Indemnification of Directors and Officers
As permitted by the provisions of the Nevada Revised Statutes (the
NRS), the Company has the power to indemnify any person made a party to an
action, suit or proceeding by reason of the fact that they are or were a
director, officer, employee or agent of the Company, against expenses,
judgments, fines and amounts paid in settlement actually and reasonably
incurred by them in connection with any such action, suit or proceeding if
they acted in good faith and in a manner which they reasonably believed to
be in, or not opposed to, the best interest of the Company and, in any
criminal action or proceeding, they had no reasonable cause to believe
their conduct was unlawful. Termination of any action, suit or proceeding
by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, does not, of itself, create a presumption
that the person did not act in good faith and in a manner which they
reasonably believed to be in or not opposed to the best interests of the
Company, and, in any criminal action or proceeding, they had no reasonable
cause to believe their conduct was unlawful.
The Company must indemnify a director, officer, employee or agent of
the Company who is successful, on the merits or otherwise, in the defense
of any action, suit or proceeding, or in defense of any claim, issue, or
matter in the proceeding, to which they are a party because they are or
were a director, officer employee or agent of the Company against expenses
actually and reasonably incurred by them in connection with the defense.
The Company may provide to pay the expenses of officers and directors
incurred in defending a civil or criminal action, suit or proceeding as the
expenses are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf
of the director or officer to repay the amount if it is ultimately
determined by a court of competent jurisdiction that they are not entitled
to be indemnified by the Company.
The NRS also permits a corporation to purchase and maintain liability
insurance or make other financial arrangements on behalf of any person who
is or was a director, officer, employee or agent of the Company, or is or
was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise for any liability asserted against them and liability
and expenses incurred by them in their capacity as a director, officer,
employee or agent, or arising out of their status as such, whether or not
the Company has the authority to indemnify them against such liability and
expenses. Presently, the Company does not carry such insurance.
Transfer Agent
The Company has designated Interwest Transfer Company, 1981 East 4800
South, Suite 100, Salt Lake City, UT 84117, as its transfer agent.
PART F / S
The Companys financial statements for the fiscal year ended December
31, 1998, December 31, 1999 and September 30, 2000, have been examined to
the extent indicated in their reports by HJ Associates, independent
certified public accountants, and have been prepared in accordance with
generally accepted accounting principles and pursuant to Regulation S-B as
promulgated by the Securities and Exchange Commission and are included
herein in response to Item 15 of this Form 10-SB.
BEACH BREW BEVERAGE COMPANY, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
September 30, 2000 and December 31, 1999
BEACH BREW BEVERAGE COMPANY, INC.
(A Development Stage Company)
Balance Sheets
ASSETS
September 30, December 31,
2000 1999
(Unaudited)
CURRENT ASSETS
Cash $ - $ 3,026
Total Current Assets - 3,026
PROPERTY AND EQUIPMENT (Notes 1 and 3) 21,130 28,677
OTHER ASSETS
Marketable securities (Note 1) 22,250 -
Total Other Assets 22,250 -
TOTAL ASSETS $43,380 $31,703
BEACH BREW BEVERAGE COMPANY, INC.
(A Development Stage Company)
Balance Sheets (Continued)
LIABILITIES AND STOCKHOLDERS EQUITY
September 30, December 31,
2000 1999
(Unaudited)
CURRENT LIABILITIES
Cash overdraft $ 2,467 $ -
Accounts payable 6,736 7,472
Notes payable 3,700 -
Total Current Liabilities 12,903 7,472
Total Liabilities 12,903 7,472
COMMITMENTS AND CONTINGENCIES (Note 4)
STOCKHOLDERS EQUITY
Preferred stock: 5,000,000 shares authorized at $0.01
par value; no shares issued and outstanding - -
Common stock: 50,000,000 shares authorized at $0.001
par value; 7,650,000 shares issued and outstanding 7,650 7,650
Additional paid-in capital 167,078 167,078
Other comprehensive loss (8,900) (35,000)
Deficit accumulated during the development stage (135,351 (115,497)
Total Stockholders Equity 30,477 24,231
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 43,380 $ 31,703
BEACH BREW BEVERAGE COMPANY, INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)
For the For the
Three Months Ended Nine Months Ended
2000 1999 2000
REVENUES $ - $ - $ -
EXPENSES
Amortization and depreciation 2,516 4,785 7,547
General and administrative 7,816 22,827 14,498
Total Expenses 10,332 27,612 22,045
Net Income (Loss) from Operations (10,332) (27,612) (22,045)
OTHER INCOME (EXPENSES)
Gain on disposition of asset - - -
Interest expense - - -
Gain on sale of securities - - 2,191
Total Other Income (Expenses) - - 2,191
NET LOSS (10,332) (27,612) (19,854)
OTHER COMPREHENSIVE INCOME
(LOSS)
Gain (loss) on valuation of available
for sale securities - - 26,100
Total Other Comprehensive - - 26,100
Income (Loss)
Net Comprehensive Income (Loss)$ (10,332) $ (27,612) $ 6,246
BASIC LOSS PER SHARE $ (0.00) $ (0.00) $ (0.00)
WEIGHTED AVERAGE NUMBER
OF SHARES 7,650,000 7,509,616 7,650,000
From
Inception on
For the October 30
Nine months ended 1997 through
September 30 September 30
1999 2000
REVENUES $ - $ -
EXPENSES
Amortization and depreciation 9,570 29,181
General and administrative 23,347 118,159
Total Expenses 32,917 147,340
Net Income (Loss) from Operations (32,917) (147,340)
OTHER INCOME (EXPENSES)
Gain on disposition of asset - 10,785
Interest expense (185) (987)
Gain on sale of securities - 2,191
Total Other Income (Expenses) (185) 11,989
NET LOSS (33,102) (135,351)
OTHER COMPREHENSIVE INCOME
(LOSS)
Gain (loss) on valuation of available
for sale securities (20,950) (8,900)
Total Other Comprehensive (20,950) (8,900)
Income (Loss)
Net Comprehensive Income (Loss) $ (54,052) $ (144,251)
BASIC LOSS PER SHARE $ (0.00)
WEIGHTED AVERAGE NUMBER
OF SHARES 5,997,929
BEACH BREW BEVERAGE COMPANY, INC.
(A Development Stage Company)
Statements of Stockholders Equity
Additional
Common Stock Paid in
Shares Amount Capital
Balance, October 30, 1997 - $ - $ -
October 31, 1997, common
stock issued to founders at
approximately $0.02 per share
for assets and services 5,000,000 5,000 83,166
Contributed capital - - 315
Net loss for the year ended
December 31, 1997 - _- _-
Balance, December 31, 1997 5,000,000 5,000 83,481
Contributed capital - - 3,780
Net loss for the year ended
December 31, 1998 - - -
Balance, December 31, 1998 5,000,000 5,000 87,261
March 12, 1999, common
stock issued at $0.02 per
share for cash 2,500,000 2,500 47,500
April 30, 1999, common
stock issued at $0.20 per
share for cash 25,000 25 4,975
June 30, 1999, common
stock issued at $0.20 per
share for cash 125,000 125 24,875
Contributed capital - - 2,467
Loss on valuation of available
for sale securities - - -
Net loss for the year ended
December 31, 1999 - - -
Balance, December 31, 1999 7,650,000 $ 7,650 $ 167,078
Deficit
Accumulated
Other During the
Comprehensive development
incomes (loss) stage
Balance, October 30, 1997 $ - $ -
October 31, 1997, common
stock issued to founders at
approximately $0.02 per share
for assets and services - -
Contributed capital - -
Net loss for the year ended
December 31, 1997 - (52,801)
Balance, December 31, 1997 - (52,801)
Contributed capital - -
Net loss for the year ended
December 31, 1998 - (24,849)
Balance, December 31, 1998 - (77,650)
March 12, 1999, common
stock issued at $0.02 per
share for cash - -
April 30, 1999, common
stock issued at $0.20 per
share for cash - -
June 30, 1999, common
stock issued at $0.20 per
share for cash - -
Contributed capital - -
Loss on valuation of available
for sale securities (35,000) -
Net loss for the year ended
December 31, 1999 - (37,847)
Balance, December 31, 1999 $ (35,000) $ (115,497)
BEACH BREW BEVERAGE COMPANY, INC.
(A Development Stage Company)
Statements of Stockholders Equity (Continued)
Additional
Common stock Paid in
shares amount capital
Balance, December 31, 1999 7,650,000 $ 7,650 $ 167,078
Gain on valuation of
available for sale securities
(unaudited) - - -
Net loss for the nine months
ended September 30, 2000
(unaudited) - - -
Balance, September 30, 2000
(unaudited) 7,650,000 $ 7,650 167,078
BEACH BREW BEVERAGE COMPANY, INC.
(A Development Stage Company)
Statements of Stockholders Equity (Continued)
Deficit
Accumulated
Other During the
Comprehensive Development
Income (Loss) Stage
Balance, December 31, 1999 $ (35,000) $ (115,497)
Gain on caluation of
available for sale securities
(unaiduted) 26,100 -
Net loss for the nine months
ended September 30, 2000
(unaudited) - (19,854)
Balance, September 30, 2000
(unaidited) $ (8,900) $ (135,351)
BEACH BREW BEVERAGE COMPANY, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
CASH FLOWS FROM OPERATING
ACTIVITIES
Income (loss) from operations $ (10,332) $ (19,854 ) $ (19,854)
Adjustments to reconcile net loss to
net cash used by operating
activities:
Amortization and depreciation
expense 2,516 4,785 7,547
Gain on disposal of asset - - -
Changes in operating assets and
liabilities:
Increase (decrease) in accounts
payable and cash overdraft 2,467 - 1,731
Net Cash (Used) by Operating
Activities (5,349) (22,827) (10,576)
CASH FLOWS FROM INVESTING
ACTIVITIES
Disposal of fixed assets - - -
Purchase of fixed assets - - -
Purchase of marketable securities - - -
Disposal of marketable securities - - 3,850
Net Cash Provided (Used) by
Investing Activities - - 3,850
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from notes payable 3,700 - 3,700
Contributed capital - - -
Payments on capital leases - - -
Net Cash Provided by Financing
Activities $ 3,700 $ - 3,700
BEACH BREW BEVERAGE COMPANY, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
From
Inception on
For the October 30,
Nine months ended 1997 through
September 30 September 30
1999 2000
CASH FLOWS FROM OPERATING
ACTIVITIES
Income (loss) from operations (33,102) $ (135,351)
Adjustments to reconcile net loss to
et cash used by operating
activities:
Amortization and depreciation
expense 9,570 29,181
Gain on disposal of asset - (10,785)
Changes in operating assets and
liabilities:
Increase (decrease) in accounts
payable and cash overdraft (13,717) 9,203
Net Cash (Used) by Operating
Activities (37,249) (107,752)
CASH FLOWS FROM INVESTING
ACTIVITIES
Disposal of fixed assets - 10,164
Purchase of fixed assets - (45,457)
Purchase of marketable securities (35,000) (35,000)
Disposal of marketable securities - 3,850
Net Cash Provided (Used) by
Investing Activities (35,000) (66,443)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from notes payable - 3,700
Contributed capital 2,467 6,562
Common stock issued for cash 80,000 168,166
Payments on capital leases (760) (4,233)
Net Cash Provided by Financing
Activities $ 81,707 $ 174,195
BEACH BREW BEVERAGE COMPANY, INC.
(A Development Stage Company)
Statements of Cash Flows (Continued)
(Unaudited)
For the For the
Three monthe ended Nine months ended
September 30 September 30
2000 1999 2000
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS $ (1,649) $ (22,827) $ (3,026)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 1,649 32,285 3,026
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ - $ 9,458 -
Cash Paid For:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
From
Inception on
For the Ocotber 30
Nine months ended 1997 through
September 30 September 30
1999 2000
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS $ 9,458 $ -
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD - -
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 9,458 $ -
Cash Paid For:
Interest $ $ 185 $ 988
Income taxes $ - $ -
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2000 and December 31, 1999
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The financial statements presented are those of Beach Brew Beverage
Company, Inc. (formerly Hussongs America, Inc.) (a development stage company)
(the Company). The Company was incorporated on October 30, 1997 in the State of
Nevada for the purpose of acquiring the assets of a California partnership, and
to manufacture, develop and market tea, cocktail mixes and fruit drinks. The
Company is a start-up enterprise in tea products and has had no significant
business operations. On March 25, 1999, the Company changed its name to
Hussongs America, Inc. In July of 1999, the name was changed back to Beach Brew
Beverage Company, Inc.
b. Accounting Method
The Companys financial statements were prepared using the accrual method
of accounting. The Company has elected a December 31 year end.
c. Estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles 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 revenues and expenses during the
reporting period. Actual results could differ from those estimates.
d. Property and Equipment
Property and equipment are stated at cost. Depreciation is computed using
the straight-line method over estimated useful lives as follows:
Production equipment ...................................... 5 years
Furniture and equipment ................................... 5 years
Office improvements ....................................... 5 years
e. Basic Loss Per Share
The computation of basic loss per share of common stock is based on the
weighted average number of shares outstanding during the period of the
statements.
For the For the
Three months ended Nine months ended
September 30 September 30
2000 1999 2000 1999
Numerator - income (loss) $ (10,332) $ (27,612) $(19,854) $ (33,102)
Denominator - weighted
average number of
shares outstanding 7,650,000 7,509,616 7,650,000 5,997,929
Income (loss) per share $ (0.00) $ 0.00 $ (0.00) $ (0.00)
BEACH BREW BEVERAGE COMPANY, INC.
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2000 and December 31, 1999
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
f. Income Taxes
No provision for federal income taxes has been made at September 30, 2000
due to accumulated operating losses.
The Company has accumulated approximately $133,000 of net operating losses
as of September 30, 2000 which may be used to reduce taxable income and income
taxes in future years through 2019. The use of these losses to reduce future
income taxes will depend on the generation of sufficient taxable income prior to
the expiration of the net operating loss carryforwards.
In the event of certain changes in control of the Company, there will be an
annual limitation on the amount of net operating loss carryforwards which can be
used. The potential tax benefits of the net operating loss carryforwards have
been offset by a valuation allowance of the same amount.
g. Investments in Securities
Marketable securities of $22,250 represents the cost of securities at
purchase date and are classified and disclosed as available for sale securities
under the requirements of SFAS No. 115. Under such statement, the Companys
securities are required to be reflected at fair market value as follows:
Other
Fair Comprehensive
Cost Value Gain (Loss)
$ 31,150 $ 22,250 $ (8,900)
h. Unaudited Financial Statements
The accompanying unaudited financial statements include all of the
adjustments which, in the opinion of management, are necessary for a fair
presentation. Such adjustments are of a normal recurring nature.
NOTE 2 - GOING CONCERN
The Companys financial statements are prepared using general accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash or other material
assets, nor does it have an established source of revenues sufficient to cover
its operating costs and to allow it to continue as a going concern. The Company
does have an established business plan which details a significant increase in
sales of their tea products into the food service market.
BEACH BREW BEVERAGE COMPANY, INC.
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2000 and December 31, 1999
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
September 30, December 31,
2000 1999
(Unaudited)
Furniture and equipment $42,375 $42,375
Production equipment 5,450 5,450
Office improvements 2,486 2,486
Total 50,311 50,311
Less accumulated depreciation (29,181) (21,634)
Property and Equipment - Net $ 21,130 $28,677
Depreciation expense was $7,547 and $9,570 for the nine months ended
September 30, 2000 and 1999, respectively.
BEACH BREW BEVERAGE COMPANY, INC.
(Formerly Hussongs America, Inc.)
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 1999
C O N T E N T S
Independent Auditors Report......................................... 3
Balance Sheet........................................................ 4
Statements of Operations............................................. 6
Statements of Stockholders Equity.................................... 7
Statements of Cash Flows............................................. 8
Notes to the Financial Statements................................... 10
INDEPENDENT AUDITORS REPORT
Board of Directors
Beach Brew Beverage Company, Inc.
(Formerly Hussongs America, Inc.)
(A Development Stage Company)
Encinitas, California
We have audited the accompanying balance sheet of Beach Brew Beverage
Company, Inc. (formerly Hussongs America, Inc.) (a development stage company)
as of December 31, 1999 and the related statements of operations, stockholders
equity and cash flows for the years ended December 31, 1999 and 1998 and from
inception on October 30, 1997 through December 31, 1999. These financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits 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 significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide 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 Beach Brew Beverage Company,
Inc. (formerly Hussongs America, Inc.) (a development stage company) as of
December 31, 1999 and the results of its operations and its cash flows for the
years ended December 31, 1999 and 1998 and from inception on October 30, 1997
through December 31, 1999, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company is a development stage company with no
established source of revenues which raises substantial doubt about its ability
to continue as a going concern. Managements plans concerning these matters are
also described in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
HJ & Associates, LLC
Salt Lake City, Utah
May 30, 2000
The accompanying notes are an integral part of these financial statements.
BEACH BREW BEVERAGE COMPANY, INC.
(Formerly Hussongs America, Inc.)
(A Development Stage Company)
Balance Sheet
ASSETS
December 31,
1999
CURRENT ASSETS 3,026
Total Current Assets 3,026
PROPERTY AND EQUIPMENT (Notes 1 and 3) 28,677
OTHER ASSETS
Marketable securities (Note 1) -
Total Other Assets -
TOTAL ASSETS $31,703
BEACH BREW BEVERAGE COMPANY, INC.
(Formerly Hussongs America, Inc.)
(A Development Stage Company)
Balance Sheet (Continued)
LIABILITIES AND STOCKHOLDERS EQUITY
December 31,
1999
CURRENT LIABILITIES
Accounts payable $ 7,472
Total Current Liabilities 7,472
Total Liabilities 7,472
COMMITMENTS AND CONTINGENCIES (Note 4)
STOCKHOLDERS EQUITY
Preferred stock, 5,000,000 shares authorized at $0.01
par value; no shares issued and outstanding -
Common stock, 50,000,000 shares authorized at $0.001
par value; 7,650,000 shares issued and outstanding 7,650
Additional paid-in capital 167,078
Other comprehensive loss (35,000)
Deficit accumulated during the development stage (115,497)
Total Stockholders Equity 24,231
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 31,703
BEACH BREW BEVERAGE COMPANY, INC.
(Formerly Hussongs America, Inc.)
(A Development Stage Company)
Statements of Operations
From
Inception on
For the October 30,
Years Ended 1997 Through
December 31, December 31,
1999 1998 1999
REVENUES $ - $ - $ -
EXPENSES
Amortization and depreciation 11,062 19,140 21,634
General and administrative 37,385 4,968 103,661
Total Expenses 48,447 24,108 125,295
Net Loss From Operations (48,447) (24,108) (125,295)
OTHER INCOME (EXPENSES)
Gain on disposition of asset 10,785 - 10,785
Interest expense (185) (741) (987)
Total Other Income (Expenses) 10,600 (741) 9,798
NET LOSS (37,847) (24,849) (115,497)
OTHER COMPREHENSIVE LOSS
Loss on valuation of available
for sale securities (35,000) - (35,000)
Total Other Comprehensive Loss (35,000) - (35,000)
Net Comprehensive Loss $ (72,847) $ (24,849) $ (150,497)
BASIC LOSS PER SHARE $ (0.01) $ (0.01)
WEIGHTED AVERAGE NUMBER
OF SHARES 7,013,699 5,000,000
BEACH BREW BEVERAGE COMPANY, INC.
(Formerly Hussongs America, Inc.)
(A Development Stage Company)
Statements of Stockholders Equity
The accompanying notes are an integral part of these financial statements.
Additional
Common Stock Paid-in
Shares Amount Capital
Balance, October 30, 1997 - $ - $ -$
October 31, 1997, common
stock issued to founders at
approximately $0.02 per share
for assets and services 5,000,000 5,000 83,166
Contributed capital - - 315
Net loss for the year ended
December 31, 1997 - - -
Balance, December 31, 1997 5,000,000 5,000 83,481
Contributed capital - - 3,780
Net loss for the year ended
December 31, 1998 - - -
Balance, December 31, 1998 5,000,000 5,000 87,261
March 12, 1999, common
stock issued at $0.02 per
share for cash 2,500,000 2,500 47,500
April 30, 1999, common
stock issued at $0.20 per
share for cash 25,000 25 4,975
June 30, 1999, common
stock issued at $0.20 per
share for cash 125,000 125 24,875
Contributed capital - - 2,467
Loss of valuation of available
for sale securities - - -
Net loss for the year ended
December 31, 1999 - - -
Balance, December 31, 1999 7,650,000 $ 7,650 $ 167,078
Deficit
Accumulated
Other During the
Comprehensive Development
Loss Stage
Balance, October 30, 1997 $ - $ -
October 31, 1997, common
stock issued to founders at
approximately $0.02 per share
for assets and services - -
Contributed capital - -
Net loss for the year ended
December 31, 1997 - (52,801)
Balance, December 31, 1997 - (52,801)
Contributed capital - -
Net loss for the year ended
December 31, 1998 - (24,849)
Balance, December 31, 1998 - (77,650)
March 12, 1999, common
stock issued at $0.02 per
share for cash - -
April 30, 1999, common
stock issued at $0.20 per
share for cash - -
June 30, 1999, common
stock issued at $0.20 per
share for cash - -
Contributed capital - -
Loss of valuation of available
for sale securities (35,000) -
Net loss for the year ended
December 31, 1999 - (37,847)
Balance, December 31, 1999 $ (35,000) $ (115,497)
BEACH BREW BEVERAGE COMPANY, INC.
(Formerly Hussongs America, Inc.)
(A Development Stage Company)
Statements of Cash Flows
For the
Years Ended
December 31,
1999 1998
CASH FLOWS FROM OPERATING
ACTIVITIES
Loss from operations $ (37,847) $ (24,849)
Adjustments to reconcile net loss to
net cash used by operating activities:
Amortization and depreciation expense 11,062 19,140
Gain on disposal of asset (10,785) -
Changes in operating assets and liabilities:
(Increase) decrease in accounts
receivable - 879
Increase (decrease) in accounts payable (5,930) 2,382
Net Cash (Used) by Operating
Activities (43,500) (2,448)
CASH FLOWS FROM INVESTING
ACTIVITIES
Disposal of fixed assets - -
Purchase of fixed assets - -
Purchase of marketable securities (35,000) -
Net Cash (Used) by Investing
Activities (35,000) -
CASH FLOWS FROM FINANCING
ACTIVITIES
Contributed capital 2,467 3,780
Common stock issued for cash 80,000 -
Payments on capital leases (941) (3,039)
Net Cash Provided by Financing
Activities $ 81,526 $ 741
From
Inception on
October 30,
1997 Through
December 31,
1999
CASH FLOWS FROM OPERATING
ACTIVITIES
Loss from operations $ (115,497)
Adjustments to reconcile net loss to
net cash used by operating activities:
Amortization and depreciation expense 21,634
Gain on disposal of asset (10,785)
Changes in operating assets and liabilities:
(Increase) decrease in accounts
receivable -
Increase (decrease) in accounts payable 7,472
Net Cash (Used) by Operating
Activities (97,176)
CASH FLOWS FROM INVESTING
ACTIVITIES
Disposal of fixed assets 10,164
Purchase of fixed assets (45,457)
Purchase of marketable securities (35,000)
Net Cash (Used) by Investing
Activities (70,293)
CASH FLOWS FROM FINANCING
ACTIVITIES
Contributed capital 6,562
Common stock issued for cash 168,166
Payments on capital leases (4,233)
Net Cash Provided by Financing
Activities $ 170,495
BEACH BREW BEVERAGE COMPANY, INC.
(Formerly Hussongs America, Inc.)
(A Development Stage Company)
Statements of Cash Flows (Continued)
From
Inception on
For the October 30,
Years Ended 1997 Through
December 31, December 31,
1999 1998 1999
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS $3,026 $ (1,707) $ 3,026
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR - 1,707 -
CASH AND CASH EQUIVALENTS AT
END OF YEAR $ 3 $ - $ 3,026
Cash Paid for:
Interest $ 185 $ 741 $ 988
Income taxes $ - $ - $ -
BEACH BREW BEVERAGE COMPANY, INC.
(Formerly Hussongs America, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1999
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The financial statements presented are those of Beach Brew Beverage
Company, Inc. (formerly Hussongs America, Inc.) (a development stage company)
(the Company). The Company was incorporated on October 30, 1997 in the State of
Nevada for the purpose of acquiring the assets of a California partnership, and
to manufacture, develop and market tea, cocktail mixes and fruit drinks. The
Company is a start-up enterprise in tea products and has had no significant
business operations. On March 25, 1999, the Company changed its name to
Hussongs America, Inc. In July of 1999, the name was changed back to Beach Brew
Beverage Company, Inc.
b. Accounting Method
The Companys financial statements were prepared using the accrual method of
accounting. The Company has elected a December 31 year end.
c. Estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles 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 revenues and expenses during the
reporting period. Actual results could differ from those estimates.
d. Property and Equipment
Property and equipment are stated at cost. Depreciation is computed using
the straight-line method over estimated useful lives as follows:
Production equipment 5 years
Furniture and equipment 5 years
Office improvements 5 years
e. Income Taxes
No provision for federal income taxes has been made at December 31, 1999
due to accumulated operating losses.
The Company has accumulated approximately $115,000 of net operating losses
as of December 31, 1999 which may be used to reduce taxable income and income
taxes in future years through 2019. The use of these losses to reduce future
income taxes will depend on the generation of sufficient taxable income prior to
the expiration of the net operating loss carryforwards.
BEACH BREW BEVERAGE COMPANY, INC.
(Formerly Hussongs America, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1999
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
e. Income Taxes (Continued)
In the event of certain changes in control of the Company, there will be an
annual limitation on the amount of net operating loss carryforwards which can be
used. The potential tax benefits of the net operating loss carryforwards have
been offset by a valuation allowance of the same amount.
f. Investments in Securities
Marketable securities of $35,000 represents the cost of securities at
purchase date and are classified and disclosed as available for sale securities
under the requirements of SFAS No. 115. Under such statement, the Companys
securities are required to be reflected at fair market value as follows:
Other
Fair Comprehensive
Cost Value Loss
$ 35,000 $ - $ (35,000)
NOTE 2 - GOING CONCERN
The Companys financial statements are prepared using general accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash or other material
assets, nor does it have an established source of revenues sufficient to cover
its operating costs and to allow it to continue as a going concern. The Company
does have an established business plan which details a significant increase in
sales of their tea products into the food service market.
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
December 31,
1999
Furniture and equipment $ 42,375
Production equipment 5,450
Office improvements 2,486
Total 50,311
Less accumulated depreciation (21,634)
Property and Equipment - Net $ 28,677
BEACH BREW BEVERAGE COMPANY, INC.
(Formerly Hussongs America, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1999
NOTE 3 - PROPERTY AND EQUIPMENT(Continued)
Depreciation expense was $11,062 and $19,140 for the years ended December
31, 1999 and 1998, respectively.
NOTE 4 - COMMITMENTS AND CONTINGENCIES
The Company has entered into an agreement with Scott Ross, Ltd. whereby the
Company receives services (creative development and production of product line
designs for packaging and displays) in return for a percentage of gross sales.
The agreement calls for the Company to pay Scott Ross, Ltd. a royalty in the
amount of one-third (1/3) of one percent of gross sales for orders to all
customers generated by the Beach Brew Iced Tea line. In addition, the Company
agrees to pay Joseph Goldstein (President, Scott Ross, Ltd.) for services a
royalty in the amount of one percent of gross sales for orders to all customers
generated by the lemonade products. These royalties are both due and payable on
a monthly basis when related sales occur. This commitment was for a period of
two years beginning in July 1997. As of December 31, 1999 the commitment has
expired.
HUSSONGS AMERICA, INC.
(Formerly Beach Brew Beverage Company, Inc.)
(A Development Stage Company)
FINANCIAL STATEMENTS
March 31, 1999 and December 31, 1998
C O N T E N T S
Independent Auditors Report............................................... 3
Balance Sheets............................................................ 4
Statements of Operations.................................................. 6
Statements of Stockholders Equity ........................................ 7
Statements of Cash Flows ................................................. 8
Notes to the Financial Statements.......................................... 10
INDEPENDENT AUDITORS REPORT
Board of Directors
Hussongs America, Inc.
(Formerly Beach Brew Beverage Company, Inc.)
(A Development Stage Company)
Encinitas, California
We have audited the accompanying balance sheets of Hussongs America, Inc.
(formerly Beach Brew Beverage Company, Inc.) (a development stage company) as of
March 31, 1999 and December 31, 1998 and the related statements of operations,
stockholders equity and cash flows for the three months ended March 31, 1999,
and for the years ended December 31, 1998 and 1997 and from inception on October
30, 1997 through March 31, 1999. These financial statements are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide 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 Hussongs America, Inc.
(formerly Beach Brew Beverage Company, Inc.) (a development stage company) as of
March 31, 1999 and December 31, 1998 and the results of its operations and its
cash flows for the three months ended March 31, 1999, and for the years ended
December 31, 1998 and 1997 and from inception on October 30, 1997 through March
31, 1999, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company is a development stage company with no
established source of revenues which raises substantial doubt about its ability
to continue as a going concern. Managements plans concerning these matters are
also described in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Jones, Jensen & Company
Salt Lake City, Utah
August 27, 1999
HUSSONGS AMERICA, INC.
(Formerly Beach Brew Beverage Company, Inc.)
(A Development Stage Company)
Balance Sheets
ASSETS
March 31, December 31,
1999 1998
CURRENT ASSETS
Cash $ 7,674 $ -
Total Current Assets 7,674 -
PROPERTY AND EQUIPMENT (Notes 1 and 4) 36,801 41,586
OTHER ASSETS
Marketable securities (Note 1) 35,000 -
Total Other Assets 35,000 -
TOTAL ASSETS $79,475 $41,586
HUSSONGS AMERICA, INC.
(Formerly Beach Brew Beverage Company, Inc.)
(A Development Stage Company)
Balance Sheets (Continued)
LIABILITIES AND STOCKHOLDERS EQUITY
March 31, December 31,
1999 1998
CURRENT LIABILITIES
Accounts payable $ 13,402 $ 13,402
Lease payable, current portion (Note 3) 12,813 13,573
Total Current Liabilities 26,215 26,975
Total Liabilities 26,215 26,975
COMMITMENTS AND CONTINGENCIES (Note 5)
STOCKHOLDERS EQUITY
Preferred stock, 5,000,000 shares authorized at
$0.01 par value; no shares issued and outstanding - -
Common stock, 50,000,000 shares authorized at $0.001
par value; 7,500,000 and 5,000,000 shares issued and
outstanding, respectively 7,500 5,000
Additional paid-in capital 135,706 87,261
Deficit accumulated during the development stage (89,946) (77,650)
Total Stockholders Equity 53,260 14,611
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 79,475 $ 41,586
HUSSONGS AMERICA, INC.
(Formerly Beach Brew Beverage Company, Inc.
(A Development Stage Company)
Statements of Operations
REVENUES $ - $ - $ - $ -
EXPENSES
Amortization and
depreciation 4,785 19,140 1,595 25,520
General and administrative 7,326 4,968 51,145 63,439
Total Expenses 12,111 24,108 52,740 88,959
OTHER (EXPENSES)
Interest expense (185) (741) (61) (987)
Total Other (Expenses) (185) (741) (61) (987)
NET LOSS $ (12,296) $ (24,849) $ (52,801) $ (89,946)
BASIC LOSS PER SHARE $ (0.00) $ (0.01) $ (0.01)
WEIGHTED AVERAGE NUMBER
OF SHARES 5,377,165 5,000,000 5,000,000
HUSSONGS AMERICA, INC.
(Formerly Beach Brew Beverage Company, Inc.)
(A Development Stage Company)
Statements of Stockholders Equity
Deficit
Accumulated
Additional During the
Common Stock Paid-In Development
Shares Amount Capital Stage
Balance, October 30,
1997 - $ - $ - $ -
October 31, 1997, common
stock issued to founders at
approximately $0.02 per share
for assets
and services 5,000,000 5,000 83,166 -
Contributed capital - - 315 -
Net loss for the year ended
December 31, 1997 - - - (52,801)
Balance, December 31,
1997 5,000,000 5,000 83,481 (52,801)
Contributed capital - - 3,780 -
Net loss for the year ended
December 31, 1998 - - - (24,849)
Balance December 31,
1998 5,000,000 5,000 87,261 (77,650)
March 12, 1999, common
stock issued at $0.02 per
share for cash 2,500,000 2,500 47,500 -
Contributed capital - - 945 -
Net loss for the three months
ended March 31, 1999 - - - (12,296)
Balance, March 31,
1999 7,500,000 $ 7,500 $ 135,706 $ (89,946)
HUSSONGS AMERICA, INC.
(Formerly Beach Brew Beverage Company, Inc.)
(A Development Stage Company)
Statements of Cash Flows
From
For the Inception on
Three Months For the October 30,
Ended Years Ended 1997 Through
March 31, December 31, March 31,
1999 1998 1997 1999
CASH FLOWS FROM OPERATING
ACTIVITIES
Income (loss) from
operations $ (12,296) $ (24,849) $ (52,801) $ (89,946)
Adjustments to reconcile net income to
net cash used by operating activities:
Amortization and depreciation
expense 4,785 19,140 1,595 25,520
Changes in operating assets
and liabilities:
(Increase) decrease in accounts
receivable - 879 (879) -
Increase (decrease) in accounts
payable - 2,382 11,021 13,403
Net Cash (Used) by Operating
Activities (7,511) (2,448) (41,064) (51,023)
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of fixed assets - - (45,457) (45,457)
Purchase of marketable
securities (35,000) - - (35,000)
Net Cash (Used) by Investing
Activities (35,000) - (45,457) (80,457)
CASH FLOWS FROM FINANCING
ACTIVITIES
Contributed capital 945 3,780 315 5,040
Common stock issued for cash 50,000 - 88,166 138,166
Payments on capital leases (760) (3,039) (253) (4,052)
Net Cash Provided by Financing
Activities $ 50,185 $ 741 $ 88,228 $ 139,154
HUSSONGS AMERICA, INC.
(Formerly Beach Brew Beverage Company, Inc.)
(A Development Stage Company)
Statements of Cash Flows (Continued)
From
For the Inception on
Three Months For the October 30,
Ended Years Ended 1997 Through
March 31, December 31, March 31,
1999 1998 1997 1999
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS $ 7,674 $ (1,707) $ 1,707 $ 7,674
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR - 1,707 - -
CASH AND CASH EQUIVALENTS AT
END OF YEAR $ 7,674 $ - $ 1,707 $ 7,674
Cash Paid for:
Interest $ 185 $ 741 $ 62 $ 988
Income taxes $ - $ - $ - $ -
The accompanying notes are an integral part of these financial statements.
HUSSONGS AMERICA, INC.
(Formerly Beach Brew Beverage Company, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
March 31, 1999 and December 31, 1998
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The financial statements presented are those of Hussongs America, Inc.
(formerly Beach Brew Beverage Company, Inc.) (a development stage company) (the
Company). The Company was incorporated on October 30, 1997 in the State of
Nevada for the purpose of acquiring the assets of a California partnership, and
to manufacture, develop and market tea, cocktail mixes and fruit drinks. The
Company is a start-up enterprise in tea products and has had no significant
business operations. On March 25, 1999, the Company changed its name to
Hussongs America, Inc.
b. Accounting Method
The Companys financial statements were prepared using the accrual method of
accounting. The Company has elected a December 31 year end.
c. Estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles 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 revenues and expenses during the
reporting period. Actual results could differ from those estimates.
d. Property and Equipment
Property and equipment are stated as cost. Depreciation is computed using
the straight-line method over estimated useful lives as follows:
Production equipment 5 years
Furniture and equipment 5 years
Office improvements 5 years
e. Income Taxes
No provision for federal income taxes has been made at March 31, 1999 due
to accumulated operating losses.
The Company has accumulated approximately $90,000 of net operating losses
as of March 31, 1999 which may be used to reduce taxable income and income taxes
in future years through 2014. The use of these losses to reduce future income
taxes will depend on the generation of sufficient taxable income prior to the
expiration of the net operating loss carryforwards.
HUSSONGS AMERICA, INC.
(Formerly Beach Brew Beverage Company, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
March 31, 1999 and December 31, 1998
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
e. Income Taxes (Continued)
In the event of certain changes in control of the Company, there will be an
annual limitation on the amount of net operating loss carryforwards which can be
used. The potential tax benefits of the net operating loss carryforwards have
been offset by a valuation allowance of the same amount.
f. Investments in Securities
Marketable securities of $35,000 at March 31, 1999 are classified and
disclosed as held to maturity securities under the requirements of SFAS No. 115.
Under such statement, the Companys securities are required to be reflected at
fair market value.
NOTE 2- GOING CONCERN
The Companys financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash or other material
assets, nor does it have an established source of revenues sufficient to cover
its operating costs and to allow it to continue as a going concern. The Company
does have an established business plan which details a significant increase in
sales of their tea products into the food service market.
NOTE 3 - LEASES
The Company leases a truck with lease terms through May of 1999. The
obligations under the capital lease have been recorded in the accompanying
financial statements at the present value of future minimum lease payments.
Obligations under the capital lease consists of the following:
March 31, December 31,
1999 1998
Total $ 12,813 $ 13,573
Less: current portion (12,813) (13,573)
Long-term portion $ - $ -
HUSSONGS AMERICA, INC.
(Formerly Beach Brew Beverage Company, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
March 31, 1999 and December 31, 1998
NOTE 3 - LEASES (Continued)
The future minimum lease payments under the capital lease and the net
present value of the future minimum lease payments are as follows:
Period Ending
March 31, Amount
1999 $ 13,057
Total future minimum lease payments 13,057
Less, amount representing interest (244)
Present value of future minimum lease payments $12,813
NOTE 4 - PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
March 31, December 31,
1999 1998
Furniture and equipment $ 42,375 $ 42,375
Production equipment 17,460 17,460
Office improvements 2,486 2,486
Total 62,321 62,321
Less accumulated depreciation (25,520) (20,735)
Property and Equipment - Net $ 36,801 $ 41,586
NOTE 5 - COMMITMENTS AND CONTINGENCIES
The Company has entered into an agreement with Scott Ross, Ltd. whereby the
Company receives services (creative development and production of product line
designs for packaging and displays) in return for a percentage of gross sales.
The agreement calls for the Company to pay Scott Ross, Ltd. a royalty in the
amount of one-third (1/3) of one percent of gross sales for orders to all
customers generated by the Beach Brew Iced Tea line. In addition, the Company
agrees to pay Joseph Goldstein (President, Scott Ross, Ltd.) for services a
royalty in the amount of one percent of gross sales for orders to all customers
generated by the lemonade products. These royalties are both due and payable on
a monthly basis when related sales occur. This commitment was for a period of
two years beginning in July, 1997.
SIGNATURES
In accordance with Section 12 of the Securities and Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly organized.
BEACH BREW BEVERAGE COMPANY, INC.
(Registrant)
Date: November 1, 2000 By:/S/ Frank Igo
FRANK IGO
President
