Delaware
|
2086
|
95-4348325
|
(State
or jurisdiction of
incorporation
or organization)
|
(Primary
Standard Industrial
Classification
Code Number)
|
(I.R.S.
Employer
Identification
Number)
|
13000
South Spring Street
Los
Angeles, California 90061
(310) 217-9400
|
||
(Address
and telephone number of principal executive offices and principal
place of
business)
|
||
Christopher
J. Reed
Chief
Executive Officer
13000
South Spring Street
Los
Angeles, California 90061
(310) 217-9400
|
||
(Name,
address and telephone number of agent for service)
|
||
With
copies to:
Jeffrey
P. Berg, Esq.
Kenneth
M.H. Hoff, Esq.
Jenkens
& Gilchrist, LLP
12100
Wilshire Boulevard
Suite
1500
Los
Angeles, California 90025-7120
(310)
820-8800
|
Per
Share
|
Total
|
||||||
Public
offering price
|
$
|
4.00
|
$
|
8,000,000
|
|||
Underwriting
discounts and commissions
|
$
|
0.40
|
$
|
800,000
|
|||
Proceeds,
before expenses, to us
|
$
|
3.60
|
$
|
7,200,000
|
|||
|
|
US
EURO Securities,
Inc.
|
|
Page
|
|
1
|
|
4
|
|
13
|
|
15
|
|
17
|
|
17
|
|
18
|
|
21
|
|
32
|
|
46
|
|
50
|
|
52
|
|
53
|
|
56
|
|
58
|
|
59
|
|
64
|
|
64
|
|
64
|
|
F-1
|
|
Common
Stock
|
2,000,000
shares
|
(1)
|
||
Common
Stock to be outstanding after the offering
|
7,002,326
shares
|
(2)
|
||
(1)
|
We
have previously sold 333,156 shares of common stock in this offering,
resulting in gross proceeds of $1,332,624 to us, and the number
of shares
to be outstanding after this offering will include such
shares.
|
(2)
|
Assumes
the sale of all 2,000,000 shares offered pursuant to this
prospectus.
|
Balance
Sheet Data:
|
June
30,
2006
|
December
31,
2005
|
|||||
(Unaudited)
|
|||||||
Total
assets
|
$
|
5,124,380
|
$
|
4,912,195
|
|||
Current
liabilities
|
4,266,040
|
3,450,269
|
|||||
Long-term
liabilities, less current portion
|
1,236,926
|
1,312,931
|
|||||
Stockholders’
equity (deficiency)
|
(378,586
|
)
|
148,995
|
Statements of Operations Data: |
Six
Months Ended
June
30,
|
Years
Ended
December 31,
|
|||||||||||
2006
|
2005
|
2005
|
2004
|
||||||||||
(Unaudited)
|
(Unaudited)
|
||||||||||||
Sales
|
$
|
5,137,089
|
$
|
4,399,608
|
$
|
9,470,285
|
$
|
8,978,365
|
|||||
Gross
profit
|
858,348
|
844,047
|
1,724,786
|
1,875,328
|
|||||||||
Operating
expenses
|
1,616,829
|
977,715
|
2,241,237
|
1,946,667
|
|||||||||
Loss
from operations
|
(758,481
|
)
|
(133,668
|
)
|
(516,451
|
)
|
(71,339
|
)
|
|||||
Net
Loss attributable to common stockholders
|
(986,305
|
)
|
(324,672
|
)
|
(855,425
|
)
|
(479,371
|
)
|
|||||
Net
Loss per share, basic and diluted
|
(0.19
|
)
|
(0.07
|
)
|
(0.18
|
)
|
(0.10
|
)
|
|||||
Weighted
average shares used to compute net loss per share, basic and
diluted
|
5,239,913
|
4,769,640
|
4,885,151
|
4,726,091
|
·
|
fund
more rapid expansion,
|
·
|
fund
additional marketing expenditures,
|
·
|
enhance
our operating infrastructure,
|
·
|
respond
to competitive pressures, and
|
·
|
acquire
other businesses.
|
·
|
sales
of new products could adversely impact sales of existing
products,
|
·
|
we
may incur higher cost of goods sold and selling, general and
administrative expenses in the periods when we introduce new products
due
to increased costs associated with the introduction and marketing
of new
products, most of which are expensed as incurred,
and
|
·
|
when
we introduce new platforms and bottle sizes, we may experience increased
freight and logistics costs as our co-packers adjust their facilities
for
the new products.
|
·
|
our
largest co-packer, Lion Brewery, accounted for approximately 63.5%
of our
total case production in 2005,
|
·
|
if
any of those co-packers were to terminate our co-packing arrangement
or
have difficulties in producing beverages for us, our ability to produce
our beverages would be adversely affected until we were able to make
alternative arrangements, and
|
·
|
our
business reputation would be adversely affected if any of the co-packers
were to produce inferior quality
products.
|
·
|
price
and volume fluctuations in the stock markets
generally,
|
·
|
changes
in our earnings or variations in operating
results,
|
·
|
any
shortfall in revenue or increase in losses from levels expected by
securities analysts,
|
·
|
changes
in regulatory policies or law,
|
·
|
operating
performance of companies comparable to us,
and
|
·
|
general
economic trends and other external
factors.
|
·
|
a
description of the nature and level of risk in the market for penny
stocks
in both public offerings and secondary
trading,
|
·
|
a
description of the broker’s or dealer’s duties to the customer and of the
rights and remedies available to the customer with respect to violation
of
such duties or other requirements of securities
laws,
|
·
|
a
brief, clear, narrative description of a dealer market, including
“bid”
and “ask” prices for penny stocks and significance of the spread between
the “bid” and “ask” price,
|
·
|
a
toll-free telephone number for inquiries on disciplinary actions;
definitions of significant terms in the disclosure document or in
the
conduct of trading in penny stocks,
and
|
·
|
such
other information and is in such form (including language, type,
size and
format), as the SEC shall require by rule or
regulation.
|
·
|
the
bid and offer quotations for the penny
stock,
|
·
|
the
compensation of the broker-dealer and its salesperson in the
transaction,
|
·
|
the
number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the
market
for such stock,
|
·
|
the
liquidity of the market for such stock,
and
|
·
|
monthly
account statements showing the market value of each penny stock held
in
the customer’s account.
|
·
|
The
effectiveness of our rescission offer to preclude certain holders
of our
stock from seeking relief for alleged violations of securities laws
in
connection with securities issuances in connection with our initial
public
offering,
|
·
|
Our
ability to generate sufficient cash flow to support capital expansion
plans and general operating
activities,
|
·
|
Decreased
demand for our products resulting from changes in consumer
preferences,
|
·
|
Competitive
products and pricing pressures and our ability to gain or maintain
its
share of sales in the marketplace,
|
·
|
The
introduction of new products,
|
·
|
Our
being subject to a broad range of evolving federal, state and local
laws
and regulations including those regarding the labeling and safety
of food
products, establishing ingredient designations and standards of identity
for certain foods, environmental protections, as well as worker health
and
safety. Changes in these laws and regulations could have a material
effect
on the way in which we produce and market our products and could
result in
increased costs,
|
·
|
Changes
in the cost and availability of raw materials and the ability to
maintain
our supply arrangements and relationships and procure timely and/or
adequate production of all or any of our
products,
|
·
|
Our
ability to penetrate new markets and maintain or expand existing
markets,
|
·
|
Maintaining
existing relationships and expanding the distributor network of our
products,
|
·
|
The
marketing efforts of distributors of our products, most of whom also
distribute products that are competitive with our
products,
|
·
|
Decisions
by distributors, grocery chains, specialty chain stores, club stores
and
other customers to discontinue carrying all or any of our products
that
they are carrying at any time,
|
·
|
The
availability and cost of capital to finance our working capital needs
and
growth plans,
|
·
|
The
effectiveness of our advertising, marketing and promotional
programs,
|
·
|
Changes
in product category consumption,
|
·
|
Economic
and political changes,
|
·
|
Consumer
acceptance of new products, including taste test
comparisons,
|
·
|
Possible
recalls of our products, and
|
·
|
Our
ability to make suitable arrangements for the co-packing of any of
our
products.
|
Actual
Amount of
Shares
Sold to Date
(333,156
shares sold
or
16.66% of Total)
|
Estimated
Amount
if
1,000,000
Shares
are Sold
(50%
of Total)
|
Estimated
Amount
if
2,000,000 Shares
are
Sold
(100%
of Total)
|
||||||||
Gross
Offering Receipt
|
$
|
1,332,624
|
$
|
4,000,000
|
$
|
8,000,000
|
||||
Underwriters’ Compensation |
133,270
|
400,000
|
800,000
|
|||||||
Offering Expenses |
755,000
|
755,000
|
755,000
|
|||||||
Proposed
Uses
|
Amount
and Percentage
of
Net Proceeds
|
Amount
and Percentage
of
Net Proceeds
|
Amount
and Percentage
of
Net Proceeds
|
||||||
Estimated
Net Proceeds from Offering
|
444,354
(100%)
|
2,845,000
(100%)
|
6,445,000
(100%)
|
||||||
Hire
additional sales representatives (1)
|
117,000
(26%)
|
700,000
(25%)
|
1,900,000
(30%)
|
||||||
New
product launches (2)
|
20,000
(4%)
|
119,900
(4%)
|
244,900
(4%)
|
||||||
Retail
slotting (3)
|
90,000
(21%)
|
750,000
(26%)
|
1,500,000
(23%)
|
||||||
Brand
advertising (4)
|
122,000
(27%)
|
750,000
(26%)
|
1,500,000
(23%)
|
||||||
Cooler
and in-store displays (5)
|
30,000
(7%)
|
248,985
(9%)
|
568,985
(9%)
|
||||||
Salary
for new Chief Financial Officer (6)
|
--
|
100,000
(4%)
|
100,000
(2%)
|
||||||
Equipment
purchases for the Brewery (7)
|
35,000
(8%)
|
150,000
(5%)
|
150,000
(2%)
|
||||||
Working
capital (8)
|
30,354
(7%)
|
26,115
(1%)
|
481,115
(7%)
|
||||||
Total
net proceeds
|
$444,354
(100%)
|
$2,845,000
(100%)
|
$6,445,000
(100%)
|
·
|
291,000
shares of common stock issuable upon exercise of outstanding options
issued by us under our 2001 Stock Option Plan, at a weighted average
exercise price of $3.80,
|
·
|
209,000
additional shares of common stock reserved for future issuance under
our
2001 Stock Option Plan,
|
·
|
613,241
shares of common stock issuable upon exercise of outstanding warrants
at a
weighted average exercise price of
$2.80,
|
·
|
200,000
shares reserved for future issuance under the underwriters’ warrants
(including 33,316 shares underlying underwriters’ warrants which we have
agreed to issue to the underwriters relating to the sale of 333,156
shares
sold as of the date of this prospectus) at an exercise price of $6.60
per
share,
|
·
|
138,025
shares of common stock issuable upon conversion of principal and
accrued
interest on certain convertible debt at June 30, 2006,
and
|
·
|
235,760
shares of common stock issuable upon conversion of 58,940 outstanding
shares of Series A preferred stock.
|
At June
30, 2006
|
||||||||||
Actual
|
Pro
forma as adjusted
for
sale of
1,000,000
shares
|
Pro
forma as Adjusted
for
sale of
2,000,000
shares
|
||||||||
Current
liabilities
|
||||||||||
Current
portion of long-term debt
|
$
|
191,516
|
$
|
191,516
|
$
|
191,516
|
||||
Lines
of credit
|
1,463,461
|
1,463,461
|
1,463,461
|
|||||||
Total
current liabilities
|
1,654,977
|
1,654,977
|
1,654,977
|
|||||||
Long-term
liabilities
|
||||||||||
Long-term
debt, less current portion
|
984,568
|
984,568
|
984,568
|
|||||||
Notes
payable to related parties
|
252,358
|
252,358
|
252,358
|
|||||||
Total
long-term liabilities
|
1,236,926
|
1,236,926
|
1,236,926
|
|||||||
Stockholders’
equity:
|
||||||||||
Common
Stock, par value $.0001 per share; 11,500,000 shares authorized;
5,335,482
shares issued and outstanding; 6,002,326 shares issued and outstanding
as
adjusted for the sale of 1,000,000 shares; 7,002,326 shares issued
and
outstanding as adjusted for the sale of 2,000,000 shares
|
533
|
600
|
700
|
|||||||
Preferred
Stock, par value $10.00 per share; 500,000 shares authorized; 58,940
shares issued and outstanding
|
589,402
|
589,402
|
589,402
|
|||||||
Additional
paid-in capital
|
3,276,847
|
4,902,418
|
8,502,318
|
|||||||
Accumulated
deficit
|
(4,245,368
|
)
|
(4,245,368
|
)
|
(4,245,368
|
)
|
||||
Total
stockholder’s equity (deficit)
|
(378,586
|
)
|
1,247,052
|
4,847,052
|
||||||
Total
capitalization
|
$
|
2,513,317
|
$
|
4,138,955
|
$
|
7,738,955
|
If
1,000,000
shares
are sold
|
If
2,000,000
shares
are sold
|
||||||
Offering
Price per Share
|
$
|
4.00
|
$
|
4.00
|
|||
Net
tangible book value per common share at June 30, 2006
|
(0.23
|
)
|
(0.23
|
)
|
|||
Increase
per common share attributable to new investors
|
0.42
|
0.91
|
|||||
Net
tangible book value per share of common stock after the offering
|
0.20
|
0.68
|
|||||
Dilution
per share of common stock to new investors
|
$
|
3.80
|
$
|
3.32
|
|||
Percentage
of dilution per share of common stock to new investors
|
95
|
%
|
82
|
%
|
|||
If
50% of
Offering
sold
(1,000,000
shares)
|
Number
|
Percent
|
Amount
|
Percent
|
Average
price
per
share
|
|||||||||||
Existing
stockholders (1)
|
5,335,482
|
88.9
|
%
|
$
|
3,277,380
|
55.1
|
%
|
$
|
0.61
|
|||||||
New
investors
|
666,844
|
11.1
|
%
|
$
|
2,667,376
|
44.9
|
%
|
$
|
4.00
|
|||||||
Total
|
6,002,326
|
100
|
%
|
$
|
5,944,756
|
100
|
%
|
If
100% of
Offering
sold
(2,000,000
shares)
|
Number
|
Percent
|
Amount
|
Percent
|
Average
price
per
share
|
|||||||||||
Existing
stockholders (1)
|
5,335,482
|
76.2
|
%
|
$
|
3,277,380
|
33.0
|
%
|
$
|
0.61
|
|||||||
New
investors
|
1,666,844
|
23.8
|
%
|
$
|
6,667,376
|
67.0
|
%
|
$
|
4.00
|
|||||||
Total
|
7,002,326
|
100
|
%
|
$
|
9,944,756
|
100
|
%
|
|||||||||
(1)
|
Based
on the capital contribution from inception to the date of this
prospectus,
and includes the 333,156 shares of common stock previously issued
in
connection with this offering.
|
·
|
291,000
shares of common stock issuable upon exercise of outstanding options
issued by us under our 2001 Stock Option Plan, at a weighted average
exercise price of $3.80,
|
·
|
209,000
additional shares of common stock reserved for future issuance under
our
2001 Stock Option Plan,
|
·
|
613,241
shares of common stock issuable upon exercise of outstanding warrants
at a
weighted average exercise price of
$2.80,
|
·
|
200,000
shares reserved for future issuance under the underwriters’ warrants
(including 33,316 shares underlying underwriters’ warrants which we have
agreed to issue to the underwriters relating to the sale of 333,156
shares
sold as of the date of this prospectus) at an exercise price of $6.60
per
share,
|
·
|
138,025
shares of common stock issuable upon conversion of principal and
accrued
interest on certain convertible debt at June 30, 2006,
and
|
·
|
235,760
shares of common stock issuable upon conversion of 58,940 shares
of Series
A preferred stock.
|
Year
Issued
|
Option
Strike
Price
issued
|
Highest
Price Paid
for
Common Shares
|
|||||
1991
|
0.02
|
0.27
|
|||||
1992
|
1.00
|
1.00
|
|||||
2000
|
2.00
|
2.00
|
|||||
2001
|
3.00
|
3.00
|
|||||
2002
|
6.00
|
6.00
|
|||||
2005
|
4.00
|
4.00
|
Historical
Table of Stock Issuance for Reed’s, Inc. (fka Original Beverage
Corp.)
|
|||||||||||||
Type
of Issuance
|
Class*
|
No.
of Shares Issued
|
Price/Share
|
Year
of
Issue
|
|||||||||
Founder’s
stock
|
C
|
3,200,000
|
0.0001
|
1991
|
|||||||||
Private
investment
|
C
|
187,500
|
0.267
|
1991
|
|||||||||
Private
investment
|
C
|
50,000
|
0.75
|
1993
|
|||||||||
Private
investment
|
C
|
10,000
|
1.50
|
1996
|
|||||||||
Exempt
private placement
|
C
|
141,100
|
1.50
|
1999
|
|||||||||
SCOR
direct public offering
|
C
|
450,275
|
2.00
|
2000
|
|||||||||
Exempt
private placement (existing stockholder)
|
C
|
250,000
|
2.00
|
2000
|
|||||||||
Note
conversion options exercise (from 1991)
|
C
|
200,000
|
0.75
|
2000
|
|||||||||
Warrant
exercise (from 1991)
|
C
|
37,500
|
1.00
|
2000
|
|||||||||
Employee
bonus grants
|
C
|
1,500
|
2.00
|
2000
|
|||||||||
China
Cola acquisition
|
C
|
130,000
|
2.00
|
2000
|
|||||||||
Options
exercise (from 1991)
|
C
|
20,000
|
1.00
|
2001
|
|||||||||
Employee
bonus grants
|
C
|
14,500
|
2.00
|
2001
|
|||||||||
Vendor
payment
|
C
|
3,200
|
2.00
|
2001
|
|||||||||
Exempt
private placement (existing stockholder)
|
C
|
500
|
3.00
|
2001
|
|||||||||
Loan
conversion option exercise (from 1991)
|
C
|
8,889
|
1.125
|
2001
|
|||||||||
Loan
conversion option exercise (from 1992)
|
C
|
11,877
|
1.50
|
2001
|
|||||||||
Exempt
private placement (existing stockholder)
|
C
|
3,750
|
4.00
|
2001
|
|||||||||
Employee
bonus grants
|
C
|
1,500
|
3.333
|
2003
|
|||||||||
Exempt
private placement (existing stockholder)
|
C
|
3,000
|
3.50
|
2003
|
|||||||||
Exempt
private placement (existing stockholders)
|
‡Pr
|
‡33,440
|
‡10.00
|
2004
|
|||||||||
Corporate
note conversion exercised (from 2001)
|
‡Pr
|
‡25,500
|
‡10.00
|
2004
|
|||||||||
Exercise
of options, exercise price of $0.20
|
C
|
262,500
|
0.20
|
2005
|
|||||||||
Issuance
of shares on preferred stock dividend
|
C
|
7,362
|
4.00
|
2005-06
|
|||||||||
Sale
of common stock in this offering
|
C
|
333,156
|
4.00
|
2005-06
|
|||||||||
Issuance
of shares on preferred stock dividend
|
C
|
7,373
|
4.00
|
2006
|
‡ |
Series
A preferred stock at $10 par value convertible to 4 common
shares
|
* |
Type
of share issued C=Common, Pr=Preferred
|
·
|
Reed’s
Ginger Brews,
|
·
|
Virgil’s
Root Beer and Cream Sodas,
|
·
|
China
Colas,
|
·
|
Reed’s
Ginger Juice Brews,
|
·
|
Reed’s
Ginger Candies, and
|
·
|
Reed’s
Ginger Ice Creams
|
Direct
sales to large retailer accounts
|
%
of
total
sales
|
Local
direct distribution
|
%
of
total
sales
|
Natural,
gourmet and mainstream distributors
|
%
of
total
|
Total
sales
|
||||||||||||||||
2005
|
$
|
1,536,896
|
16
|
$
|
751,999
|
8
|
$
|
7,181,390
|
76
|
$
|
9,470,285
|
|||||||||||
2004
|
1,983,598
|
22
|
395,601
|
4
|
6,599,166
|
74
|
8,978,365
|
|||||||||||||||
2003
|
1,286,365
|
19
|
90,121
|
1
|
5,405,290
|
80
|
6,781,776
|
·
|
large
retail accounts, such as Costco, BJ Wholesale, and Cost Plus World
Markets, and
|
·
|
the
natural food section of mainstream national supermarket chains, such
as
Safeway, Kroger’s, Ralph’s and Bristol
Farms.
|
2001
|
2002
|
2003
|
2004
|
2005
|
||||||||||||
Net
sales
|
$
|
6,200,000
|
$
|
6,400,000
|
$
|
6,800,000
|
$
|
9,000,000
|
$
|
9,500,000
|
·
|
successes
in our Southern California direct distribution
strategy,
|
·
|
increases
in our core of national distribution to natural and gourmet food
stores
and mainstream supermarket chains,
and
|
·
|
increases
in our direct sales to large
retailers.
|
·
|
inefficiencies
commensurate with a start-up period for the Brewery that we purchased
in
2002 as our West Coast production facility,
and
|
·
|
higher
freight, glass and production expenses due to the increase in the
cost of
fuel and increases in the price of ingredients in our
products.
|
·
|
We
have an unsecured $50,000 line of credit with US Bank which expires
in
December 2009. Interest is payable monthly at the prime rate, as
published
in the Wall Street Journal, plus 12% per annum. Our outstanding balance
was $25,980 at June 30, 2006 and there was $24,020 available under
the
line of credit. The interest rate in effect at June 30, 2006 was
20.25%.
|
·
|
We
have a line of credit with Merrill Lynch. Robert T. Reed, Jr., our
Vice
President and National Sales Manager - Mainstream and a brother of
our
Chief Executive Officer, Christopher J. Reed has pledged certain
securities (which do not include any of our securities which are
owned by
Mr. Reed) in his personal securities account on deposit with Merrill
Lynch
as collateral for repayment of the line of credit. The amount of
the line
of credit is based on a percentage value of such securities. At June
30,
2006, the outstanding balance on the line of credit was $685,620,
and
there was $1,528 available under the line of credit The line of credit
bears interest at a rate of 3.785% per annum plus LIBOR (9.452% as
of June
30, 2006). In consideration for Mr. Reed’s pledging his stock account at
Merrill Lynch as collateral, we have agreed to pay Mr. Reed 5% per
annum of the amount we borrow from Merrill Lynch, as a loan fee.
During
the years ended December 31, 2005 and 2004, we paid Mr. Reed $15,250
and
$3,125, respectively, under this agreement. In addition, Christopher
J.
Reed has pledged all of his shares of common stock to Robert T. Reed,
Jr.
as collateral for the shares pledged by Robert T. Reed,
Jr.
|
·
|
We
have a line of credit with Business Alliance Capital Corporation.
This
line of credit allows us to borrow a maximum amount of $1,400,000,
based
on a borrowing base of accounts receivables and inventory. The borrowing
base on the accounts receivable is 80% of all eligible receivables,
which
are primarily accounts receivables under 90 days. The inventory borrowing
base is 50% of eligible inventory. As of June 30, 2006, the outstanding
balance on the line of credit was $751,861. The interest rate on
this line
of credit is prime plus 4.0%, and the interest rate at June 30, 2006
was
12.25%. The line of credit expires on June 30, 2007 and is guaranteed
by
Christopher J. Reed and his wife, Judy Reed, who are directors and
our
principal stockholders. This revolving line of credit is secured
by all of
our assets, including accounts receivable, inventory, trademarks
and other
intellectual property, building and equipment. As of June 30, 2006,
we had
approximately $386,000 of availability on this line of
credit.
|
·
|
fund
more rapid expansion,
|
·
|
fund
additional marketing expenditures,
|
·
|
enhance
our operating infrastructure,
|
·
|
respond
to competitive pressures, and
|
·
|
acquire
other businesses.
|
·
|
Reed’s
Ginger Brews,
|
·
|
Virgil’s
Root Beer and Cream Sodas,
|
·
|
China
Colas,
|
·
|
Reed’s
Ginger Juice Brews,
|
·
|
Reed’s
Ginger Candies, and
|
·
|
Reed’s
Ginger Ice Creams
|
·
|
increased
national direct sales and
distribution,
|
·
|
increased
store placement with mainstream stores and
retailers,
|
·
|
strong
national distributorships,
|
·
|
stimulate
strong consumer demand for our existing brands and
products,
|
·
|
develop
additional unique alternative beverage brands and other products,
and
|
·
|
specialty
packaging like our 5-liter party kegs, our ceramic swing-lid bottle
and
our 750 ml. champagne bottle.
|
·
|
sales
to mainstream, natural and specialty food stores in the United States
and,
to a lesser degree, Canada, through our regional distributors and
sales
representatives,
|
·
|
direct
sales effort to large national retailers,
and
|
·
|
direct
distribution by our trucks and drivers to retailers in Southern
California.
|
·
|
supporting
in-store sampling programs of our
products,
|
·
|
generating
free press through public
relations,
|
·
|
advertising
in national magazines targeting our
customers,
|
·
|
maintaining
a company website (www.reedsgingerbrew.com),
and
|
·
|
participating
in large public events as sponsors.
|
·
|
Reed’s
Ginger Brews and Virgil’s Root Beer held three of the top ten items based
on dollar and unit sales among all sugar/fructose sweetened sodas
in the
natural foods industry in the United States, with Reed’s Extra Ginger Brew
holding the number one position,
and
|
·
|
Reed’s
Original Ginger Brew and Virgil’s were two of the top ten brands based on
dollar and unit sales among all sugar/fructose sweetened sodas in
the
natural foods industry in the United States, with Reed’s Original Brew
holding the number one position.
|
·
|
Reed’s
Original Ginger Brew was
our first creation, and is a Jamaican recipe for homemade ginger
ale using
17 grams of fresh ginger root, lemon, lime, honey, fructose, pineapple,
herbs and spices. Reed’s Original Ginger Brew is 20% fruit
juice.
|
·
|
Reed’s
Extra Ginger Brew is
the same approximate recipe, with 26 grams of fresh ginger root for
a
stronger bite. Reed’s Extra Ginger Brew is 20% fruit
juice.
|
·
|
Reed’s
Premium Ginger Brew is
the no-fructose version of Reed’s Original Ginger Brew, and is sweetened
only with honey and pineapple juice. Reed’s Premium Ginger Brew is 20%
fruit juice.
|
·
|
Reed’s
Raspberry Ginger Brew is
brewed from 17 grams of fresh ginger root, raspberry juice and lime.
Reed’s Raspberry Ginger Brew is
20% raspberry juice and is sweetened with fruit juice and
fructose.
|
·
|
Reed’s
Spiced Apple Brew uses
8 grams of fresh ginger root, the finest tart German apple juice
and such
apple pie spices as cinnamon, cloves and allspice. Reed’s Spiced Apple
Brew is 50% apple juice and sweetened with fruit juice and
fructose.
|
·
|
Reed’s
Cherry Ginger Brew is
the newest addition to our Ginger Brew family, and is naturally brewed
from: filtered water, fructose, fresh ginger root, cherry juice from
concentrate and spices. Reed’s Cherry Ginger Brew is 22% cherry
juice.
|
·
|
Reed’s
Lemon Guava Ginger Juice Brew adds guava juice from concentrate and
lemon
juice from concentrate.
|
·
|
Reed’s
Strawberry Kiwi Ginger Juice Brew adds organic strawberry juice from
concentrate and organic kiwi juice from
concentrate.
|
·
|
Pineapple
Orange Ginger Juice Brew adds organic pineapple juice from concentrate,
organic orange juice from concentrate, and organic limejuice from
concentrate.
|
·
|
Reed’s
Cranberry Raspberry Ginger Juice Brew adds cranberry juice from
concentrate, and organic raspberry juice from
concentrate.
|
· |
Reed’s
Original Ginger Ice Cream made
from milk, cream, raw cane sugar, Reed’s Crystallized Ginger Candy (finest
ginger root, raw cane sugar), ginger puree, and guar gum (a natural
vegetable gum),
|
·
|
Chocolate
Ginger Ice Cream made
from milk, cream, raw cane sugar, finest Belgian cocoa (used to make
Belgian chocolate), Reed’s Crystallized Ginger Candy (fresh baby ginger
root, raw cane sugar), chocolate shavings (sugar, unsweetened chocolate,
Belgian cocoa, soy lecithin and real vanilla), ginger puree, and
guar gum
(a natural vegetable gum) creating the ultimate chocolate ginger
ice
cream, and
|
·
|
Reed’s
Green Tea Ginger Ice Cream made
from milk, cream, the finest green tea, raw cane sugar, ginger puree,
Reed’s Crystallized Ginger Candy (fresh baby ginger root, raw cane sugar),
and guar gum (a natural vegetable gum) creating the ultimate green
tea
ginger ice cream.
|
·
|
a
facility that we own in Los Angeles, California, known as The Brewery,
at
which we produce certain soda products for the western half of the
United
States, and
|
·
|
a
packing, or co-pack, facility in Pennsylvania, known as the Lion
Brewery,
with which they contract to supply us with product we do not produce
at
The Brewery. The term of our agreement with Lion Brewery expires
on May
31, 2007 and renews automatically for successive two-year terms unless
terminated by either party. The Lion Brewery assembles our products
and
charges us a fee, generally by the case, for the products they
produce.
|
Name
|
Position
|
Age
|
||
Christopher
J. Reed
|
President,
Chief Executive Officer, Chief Financial Officer and Chairman of
the
Board
|
47
|
||
Eric
Scheffer
|
Vice
President and National Sales Manager - Natural Foods
|
38
|
||
Robert
T. Reed, Jr.
|
Vice
President and National Sales Manager - Mainstream
|
50
|
||
Robert
Lyon
|
Vice
President Sales - Special Projects
|
56
|
||
Judy
Holloway Reed
|
Secretary
and Director
|
46
|
||
Mark
Harris
|
Director
|
49
|
||
Dr.
D.S.J. Muffoletto, N.D.
|
Director
|
51
|
||
Michael
Fischman
|
Director
|
50
|
Annual
Compensation
|
Long-term
Compensation
|
All
Other Compensation
|
|||||||||||||||||
Name
and Principal
Position
|
Year
|
Salary
|
Bonus
|
Other
Annual
Compensation
|
Securities
Underlying
Options
|
||||||||||||||
Christopher
J. Reed.
Chief
Executive Officer and President
|
2005
2004
2003
|
$
|
150,000
150,000
150,000
|
0
0
0
|
0
0
0
|
0
0
0
|
0
0
0
|
||||||||||||
Name of Beneficial Owner |
Number
of Shares
Beneficially
Owned
|
Percentage
of Shares
Beneficially
Owned (1)
|
||||||||
Before
this Offering
|
After
this Offering
|
|||||||||
Directors
and Named Executive Officers
|
||||||||||
Christopher
J. Reed (2)
|
3,200,000
|
59.98
|
%
|
45.70
|
%
|
|||||
Judy
Holloway Reed (2)
|
3,200,000
|
59.98
|
%
|
45.70
|
%
|
|||||
Mark
Harris (3)
|
4,250
|
*
|
*
|
|||||||
Dr.
Daniel S.J. Muffoletto, N.D.
|
0
|
0
|
0
|
|||||||
Michael
Fischman
|
0
|
0
|
0
|
|||||||
Robert
T. Reed, Jr. (4)
|
391,250
|
7.18
|
%
|
5.50
|
%
|
|||||
Directors
and executive officers as a group (8 persons) (5)
|
3,731,000
|
66.81
|
%
|
51.45
|
%
|
|||||
5%
or greater stockholders
|
||||||||||
Joseph
Grace (6)
|
500,000
|
9.37
|
%
|
7.14
|
%
|
|||||
Robert
T. Reed, Sr. (7)
|
391,338
|
7.16
|
%
|
5.49
|
%
|
|||||
* |
Less
than 1%.
|
(1)
|
Beneficial
ownership is determined in accordance with the rules of the SEC.
Shares of
common stock subject to options or warrants currently exercisable
or
exercisable within 60 days of the date of this prospectus, are deemed
outstanding for computing the percentage ownership of the stockholder
holding the options or warrants, but are not deemed outstanding for
computing the percentage ownership of any other stockholder. Unless
otherwise indicated in the footnotes to this table, we believe
stockholders named in the table have sole voting and sole investment
power
with respect to the shares set forth opposite such stockholder's
name.
Unless otherwise indicated, the officers, directors and stockholders
can
be reached at our principal offices. Percentage of ownership is based
on
5,335,482 shares of common stock outstanding as of the date of this
prospectus, and gives effect to the sale of 333,156 shares pursuant
to
this offering as of the date of this prospectus. Percentage of share
ownership after the offering assumes the sale of all 2,000,000 shares
in
this offering.
|
(2)
|
Christopher
J. Reed and Judy Holloway Reed are husband and wife. The same number
of
shares of common stock is shown for each of them, as they may each
be
deemed to be the beneficial owner of all of such shares. These shares
have
been pledged as collateral to Robert T. Reed, Jr. to secure a pledge
of
Mr. Reed of his shares as collateral for a line of credit extended
to
us.
|
(3)
|
Consists
of: (i) 250 shares of common stock, and (ii) 4,000 shares of common
stock,
which can be converted at any time from 1,000 shares of Series A
preferred
stock. The address for Mr. Harris is 160 Barranca Road, Newbury Park,
California 91320.
|
(4)
|
Consists
of (i) 281,250 shares of common stock, (ii) options exercisable into
50,000 shares of common stock, and (iii) 60,000 shares of common
stock,
which can be converted at any time from 15,000 shares of Series A
preferred stock. Does not give effect to the agreement of Mr. Reed
to
purchase shares of our common stock in connection with the rescission
offer.
|
(5)
|
Includes
three executive officers (including Robert T. Reed, Jr., our Executive
Vice-President and National Sales Manager - Mainstream (see footnote
4
above), Robert Lyon, our Vice President Sales - Special Projects
(options
to purchase up to 60,000 shares) and Eric Scheffer, our Vice President
and
National Sales Manager - Natural Foods (500 shares and options to
purchase
up to 75,000 shares) who beneficially own in the aggregate of 526,750
shares of common stock.
|
(6)
|
The
address for Mr. Grace is 1900 West Nickerson Street, Suite 116, PMB
158,
Seattle, Washington 98119.
|
(7)
|
Consists
of (i) 262,500 shares of common stock, and (ii) 128,838 shares of
common
stock, which can be converted from principal and accrued interest
on
certain convertible promissory notes at June
30, 2006.
|
·
|
amend
our certificate of incorporation or bylaws in any manner which adversely
affects the rights of the Series A preferred stock, or
|
·
|
authorize
or issue any equity security having a preference over the Series
A
preferred stock with respect to equity security other than any senior
preferred stock.
|
·
|
allow
the Board of Directors to issue, without further action by the
stockholders, up to 500,000 shares of undesignated preferred
stock.
|
·
|
prior
to the date of the transaction, the board of directors of the corporation
approved either the business combination or the transaction which
resulted
in the stockholder becoming an interested
stockholder.
|
·
|
upon
completion of the transaction that resulted in the stockholder becoming
an
interested stockholder, the stockholder owned at least 85% of the
voting
stock of the corporation outstanding at the time the transaction
commenced, excluding for purposes of determining the number of shares
outstanding (1) shares owned by persons who are directors and also
officers and (2) shares owned by employee stock plans in which employee
participants do not have the right to determine confidentially whether
shares held subject to the plan will be tendered in a tender or exchange
offer.
|
·
|
on
or subsequent to the date of the transaction, the business combination
is
approved by the board and authorized at an annual or special meeting
of
stockholders, and not by written consent, by the affirmative vote
of at
least 66 2/3%
of the outstanding voting stock which is not owned by the interested
stockholder.
|
·
|
1%
of the number of shares of common stock then outstanding, which will
equal
approximately 53,355 as of the date of this prospectus, or 70,023
shares
immediately after this offering, assuming the sale of the maximum
number
of shares offered hereby, or
|
·
|
The
average weekly trading volume of the common stock during the four
calendar
weeks preceding the filing of a notice on Form 144 with respect to
such
sale.
|
·
|
we
agree to use our best efforts to have the shares sold in this offering
listed on a national stock exchange as soon as practicable following
the
offering,
|
·
|
the
underwriting agreement provides for reciprocal indemnification between
us
and the underwriters against certain liabilities in connection with
the
registration statement, including liabilities under the Securities
Act,
and
|
·
|
for
a period of five years following this offering, US EURO will have
the
right to designate an observer to our board of directors and each
of its
committees.
|
Listing
Requirement
|
NASDAQ
Capital
Market
|
OTCBB
|
||
Market
value of publicly held shares
|
$5,000,000
|
N/A
|
||
Number
of publicly held shares
|
1,000,000
|
N/A
|
||
Number
of public stockholders
|
300
|
N/A
|
||
Bid
price of listed securities
|
$4.00
|
No
minimum
|
||
Stockholders’
equity
|
$5,000,000
|
No
minimum
|
||
Corporate
governance requirements
|
Yes
|
No
|
||
Market
makers
|
3
|
1
|
·
|
transfers
by will, the laws of descent and distribution, operation of law or
by
court order,
|
·
|
hypothecations
of a deceased security holder to pay expenses of the deceased security
holder’s estate (provided that the hypothecated security would remain
subject to the lock-in agreement),
and
|
·
|
transfers
by gift to family members (provided that the gifted security would
remain
subject to the lock-in agreement).
|
·
|
the
holders of the promotional shares initially would not share in any
such
distribution until the persons who purchased shares of common stock
in
this offering have received an amount equal to the purchase price
for
their shares ($4.00) multiplied by the number of shares of common
stock
that they purchased in this offering and which they still held at
the time
of such distribution (adjusted for stock splits, stock dividends,
recapitalizations and the like), and thereafter,
and
|
·
|
all
holders of our equity securities participate on an equal, per share
basis
multiplied by the number of shares of equity securities that they
hold at
the time of such distribution (subject to such
adjustments).
|
Security
Holder
|
Quantity
|
Type
of Security
|
||
Christopher
J. Reed and Judy Holloway Reed
|
3,200,000
|
shares
|
||
Robert
T. Reed, Jr. (1)
|
391,250
|
shares
and option shares
|
||
Robert
T. Reed, Sr. (2)
|
391,338
|
shares
and note shares
|
||
Peter
Sharma III
|
137,539
|
warrant
shares
|
||
Joseph
Grace
|
250,000
|
shares
|
||
Eric
Scheffer
|
75,500
|
shares
and options
|
||
Mark
Harris
|
4,250
|
shares
|
||
Total
|
4,449,877
|
Index
to Financial Statements
|
F-1
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
Balance
Sheets
|
F-3
|
Statements
of Operations
|
F-4
|
Statements
of Changes In Stockholders’ Equity
(Deficiency)
|
F-5
|
Statements
of Cash Flows
|
F-6
|
Notes
to Financial Statements
|
F-7
|
June
30,
2006
|
December
31,
2005
|
||||||
ASSETS |
(Unaudited)
|
||||||
CURRENT ASSETS | |||||||
Cash
|
$
|
54,768
|
$
|
27,744
|
|||
Inventory
|
1,275,819
|
1,208,019
|
|||||
Trade
accounts receivable, net of allowance for doubtful accounts and
returns
and discounts of $101,000 at June 30, 2006 and $70,000 at December
31,
2005
|
982,484
|
534,906
|
|||||
Other
receivables
|
6,267
|
10,563
|
|||||
Prepaid
expenses
|
106,311
|
74,279
|
|||||
Total
Current Assets
|
2,425,649
|
1,855,511
|
|||||
Property
and equipment, net of accumulated depreciation of $566,449 at June
30,
2006 and $508,136 at December 31, 2005
|
1,864,011
|
1,885,354
|
|||||
OTHER ASSETS | |||||||
Brand
names
|
800,201
|
800,201
|
|||||
Other
intangibles, net of accumulated amortization of $4,095 at June
30, 2006
and $3,723 at December 31, 2005
|
14,519
|
14,891
|
|||||
Deferred
stock offering costs
|
20,000
|
356,238
|
|||||
Total
Other Assets
|
834,720
|
1,171,330
|
|||||
TOTAL
ASSETS
|
$
|
5.124,380
|
$
|
4,912,195
|
|||
LIABILITIES
AND STOCKHOLDERS’ EQUITY (DEFICIENCY)
|
|||||||
CURRENT
LIABILITIES
|
|||||||
Accounts
payable
|
$
|
2,381,103
|
$
|
1,644,491
|
|||
Lines
of credit
|
1,463,461
|
1,445,953
|
|||||
Current
portion of long term debt
|
191,516
|
169,381
|
|||||
Accrued
interest
|
154,191
|
136,240
|
|||||
Accrued
expenses
|
75,769
|
54,204
|
|||||
Total
Current Liabilities
|
4,266,040
|
3,450,269
|
|||||
Notes
payable, related party
|
252,358
|
252,358
|
|||||
Long
term debt, less current portion
|
984,568
|
1,060,573
|
|||||
Total
Liabilities
|
5,502,966
|
4,763,200
|
|||||
COMMITMENTS
AND CONTINGENCIES
|
|||||||
STOCKHOLDERS’
EQUITY (DEFICIENCY)
|
|||||||
Preferred
stock, $10.00 par value, 500,000 shares authorized, 58,940 shares
outstanding
|
589,402
|
589,402
|
|||||
Common
stock, $.0001 par value, 11,500,000 shares authorized, 5,335,482
and 5,042,197 shares issued and outstanding at June 30, 2006 and
December 31, 2005, respectively
|
533
|
503
|
|||||
Common
stock to be issued, none at June 30, 2006 and 7,362 shares at December
31,
2005
|
---
|
29,470
|
|||||
Additional
paid in capital
|
3,276,847
|
2,788,683
|
|||||
Accumulated
deficit
|
(4,245,368
|
)
|
(3,259,063
|
)
|
|||
Total
stockholders’ equity (deficiency)
|
(378,586
|
)
|
148,995
|
||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)
|
$
|
5,124,380
|
$
|
4,912,195
|
|||
Six
Months
Ended
June 30,
|
Years
Ended
December 31,
|
||||||||||||
2006
|
2005
|
2005
|
2004
|
||||||||||
(Unaudited)
|
(Unaudited)
|
||||||||||||
SALES
|
$
|
5,137,089
|
$
|
4,399,608
|
$
|
9,470,285
|
$
|
8,978,365
|
|||||
COST
OF SALES
|
4,278,741
|
3,555,561
|
7,745,499
|
7,103,037
|
|||||||||
GROSS
PROFIT
|
858,348
|
844,047
|
1,724,786
|
1,875,328
|
|||||||||
OPERATING
EXPENSES
|
|||||||||||||
Selling
|
600,619
|
521,116
|
1,124,705
|
791,975
|
|||||||||
General &
Administrative
|
649,656
|
456,599
|
955,764
|
1,074,536
|
|||||||||
Provision
for amounts due from director
|
—
|
—
|
124,210
|
—
|
|||||||||
Expenses
associated with rescission offer on prior sales of common
stock
|
351,757
|
—
|
|||||||||||
Legal
Fees
|
14,797
|
—
|
36,558
|
80,156
|
|||||||||
Total
Operating Expenses
|
1,616,829
|
977,715
|
2,241,237
|
1,946,667
|
|||||||||
LOSS FROM
OPERATIONS
|
(758,481
|
)
|
(133,668
|
)
|
(516,451
|
)
|
(71,339
|
)
|
|||||
OTHER
EXPENSES
|
|||||||||||||
Interest
Expense
|
(198,354
|
)
|
(161,534
|
)
|
(309,504
|
)
|
(255,032
|
)
|
|||||
Loss
on extinguishment of debt
|
—
|
—
|
--
|
(153,000
|
)
|
||||||||
NET
LOSS
|
(956,835
|
)
|
(295,202
|
)
|
(825,955
|
)
|
(479,371
|
)
|
|||||
Preferred
stock dividend
|
(29,470
|
)
|
(29,470
|
)
|
(29,470
|
)
|
—
|
||||||
Net
Loss Attributable to Common Stockholders
|
$
|
(986,305
|
)
|
$
|
(324,672
|
)
|
$
|
(855,425
|
)
|
$
|
(479,371
|
)
|
|
Loss
Per Share Available to Common Stockholders —
Basic
and Fully Diluted
|
$
|
(.19
|
)
|
$
|
(0.07
|
)
|
$
|
(0.18
|
)
|
$
|
(.10
|
)
|
|
WEIGHTED
AVERAGE SHARES OUTSTANDING,
Basic
and Fully Diluted
|
5,239,913
|
4,769,640
|
4,885,151
|
4,726,091
|
|||||||||
Common
|
Additional
|
||||||||||||||||||||||||
Stock
|
Paid
|
||||||||||||||||||||||||
Common
Stock
|
to
be
|
In
|
Preferred
Stock
|
Accumulated
|
|||||||||||||||||||||
Shares
|
Amount
|
Issued
|
Capital
|
Shares
|
Amount
|
Deficit
|
Total
|
||||||||||||||||||
Balance,
January 1, 2004
|
4,726,091
|
$
|
472
|
—
|
$
|
2,429,824
|
—
|
$
|
—
|
$
|
(1,723,627
|
)
|
$
|
706,669
|
|||||||||||
Issuance
of preferred stock
|
—
|
—
|
—
|
—
|
33,440
|
334,400
|
—
|
334,400
|
|||||||||||||||||
Conversion
of debt to preferred stock
|
—
|
—
|
—
|
—
|
25,500
|
255,002
|
—
|
255,002
|
|||||||||||||||||
Recognition
of beneficial conversion feature on issuance of preferred stock
|
—
|
—
|
—
|
353,640
|
—
|
—
|
(200,640
|
)
|
153,000
|
||||||||||||||||
Net
loss for year ended 2004
|
—
|
—
|
—
|
—
|
—
|
—
|
(479,371
|
)
|
(479,371
|
)
|
|||||||||||||||
Balance,
December 31, 2004
|
4,726,091
|
472
|
—
|
2,783,464
|
58,940
|
589,402
|
(2,403,638
|
)
|
969,700
|
||||||||||||||||
Exercise
of warrants
|
262,500
|
26
|
5,224
|
—
|
—
|
—
|
5,250
|
||||||||||||||||||
Preferred
Stock Dividend
|
—
|
—
|
29,470
|
—
|
—
|
—
|
(29,470
|
)
|
—
|
||||||||||||||||
Common
stock issued for cash
|
53,606
|
5
|
—
|
196,570
|
—
|
—
|
—
|
196,575
|
|||||||||||||||||
Deferred
stock offering costs charged to additional paid in capital
|
—
|
—
|
—
|
(196,575
|
)
|
—
|
—
|
—
|
(196,575
|
)
|
|||||||||||||||
Net
loss for year ended December 31, 2005
|
—
|
—
|
—
|
—
|
—
|
—
|
(825,955
|
)
|
(825,955
|
)
|
|||||||||||||||
Balance
December 31, 2005
|
5,042,197
|
503
|
29,470
|
2,788,683
|
58,940
|
589,402
|
(3,259,063
|
)
|
148,995
|
||||||||||||||||
Preferred
Stock Dividend
|
7,373
|
1
|
—
|
29,469
|
—
|
—
|
(29,470
|
)
|
—
|
||||||||||||||||
Common
stock issued in connection with the June 30, 2005 preferred stock
dividend
|
7,362
|
1
|
(29,470
|
)
|
29,469
|
—
|
—
|
—
|
—
|
||||||||||||||||
Common
stock issued for cash, net of offering costs
|
278,550
|
28
|
—
|
429,226
|
—
|
—
|
—
|
429,254
|
|||||||||||||||||
Net
loss for the six months ended June 30, 2006
|
—
|
—
|
—
|
—
|
—
|
—
|
(956,835
|
)
|
(956,835
|
)
|
|||||||||||||||
Balance
June 30, 2006 (Unaudited)
|
5,335,482
|
$
|
533
|
|
—
|
$
|
3,276,847
|
58,940
|
|
589,402
|
$
|
(4,245,368
|
)
|
|
(378,586
|
)
|
|||||||||
For
The Six Months
Ended
June 30,
|
For
The Year
Ended
December 31,
|
||||||||||||
2006
|
2005
|
2005
|
2004
|
||||||||||
(Unaudited)
|
(Unaudited)
|
||||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|||||||||||
Net
Loss
|
$
|
(956,835
|
)
|
$
|
(295,202
|
)
|
$
|
(825,955
|
)
|
$
|
(479,371
|
)
|
|
Adjustments
to reconcile net loss to net cash used in operating activities:
|
|||||||||||||
Depreciation
and amortization
|
58,684
|
46,610
|
118,517
|
97,329
|
|||||||||
Provision
for amounts due from director
|
—
|
—
|
124,210
|
—
|
|||||||||
Loss
on extinguishment of debt
|
—
|
—
|
—
|
153,000
|
|||||||||
(Increase)
decrease in operating assets and increase (decrease) in operating
liabilities:
|
|||||||||||||
Accounts
receivable
|
(447,578
|
)
|
(67,305
|
)
|
262,708
|
(231,557
|
)
|
||||||
Inventory
|
(67,800
|
)
|
103,424
|
93,006
|
(3,665
|
)
|
|||||||
Prepaid
expenses
|
(32,032
|
)
|
(33,264
|
)
|
(68,627
|
)
|
11,730
|
||||||
Other
receivables
|
4,296
|
(5,631
|
)
|
(7,400
|
)
|
7,589
|
|||||||
Accounts
payable
|
736,612
|
252,032
|
232,367
|
233,447
|
|||||||||
Accrued
expenses
|
21,565
|
(6,684
|
)
|
2,655
|
(9,755
|
)
|
|||||||
Accrued
interest
|
17,951
|
3,932
|
25,909
|
45,233
|
|||||||||
Net
cash used in operating activities
|
(665,137
|
)
|
(2,088
|
)
|
(42,610
|
)
|
(176,020
|
)
|
|||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||||||||
Purchase
of property and equipment
|
(36,969
|
)
|
(31,754
|
)
|
(181,654
|
)
|
(204,147
|
)
|
|||||
Due
from director
|
—
|
(25,013
|
)
|
(33,013
|
)
|
(44,040
|
)
|
||||||
Net
cash used in investing activities
|
(36,969
|
)
|
(56,767
|
)
|
(214,667
|
)
|
(248,187
|
)
|
|||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||||||||
Repayment
of previous line of credit
|
—
|
(759,387
|
)
|
||||||||||
Borrowings
on new line of credit
|
—
|
1,109,543
|
|||||||||||
Borrowings
on debt
|
—
|
190,000
|
|||||||||||
Payments
for offering costs
|
(237,287
|
)
|
(134,481
|
)
|
(332,857
|
)
|
(219,955
|
)
|
|||||
Principal
payments on debt
|
(53,870
|
)
|
(216,016
|
)
|
(263,815
|
)
|
(208,852
|
)
|
|||||
Proceeds
from issuance of common stock
|
1,002,779
|
—
|
196,575
|
||||||||||
Proceeds
received from issuance of preferred stock
|
—
|
—
|
—
|
334,400
|
|||||||||
Proceeds
from borrowings
|
—
|
—
|
295,900
|
208,464
|
|||||||||
Net
borrowings (payments) on lines of credit
|
17,508
|
78,112
|
367,731
|
339,708
|
|||||||||
Proceeds
on debt to related parties
|
—
|
(21,000
|
)
|
(21,000
|
)
|
—
|
|||||||
Net
cash provided by financing activities
|
729,130
|
246,771
|
242,533
|
453,765
|
|||||||||
NET
INCREASE (DECREASE) IN CASH
|
27,024
|
187,916
|
(14,744
|
)
|
29,558
|
||||||||
CASH —
Beginning of year
|
27,744
|
42,488
|
42,488
|
12,930
|
|||||||||
CASH —
End of year
|
$
|
54,768
|
$
|
230,404
|
$
|
27,744
|
$
|
42,488
|
|||||
Supplemental
Disclosures of Cash Flow Information
|
|||||||||||||
Cash
paid during the period for:
|
|||||||||||||
Interest
|
$
|
180,403
|
$
|
157,602
|
$
|
283,595
|
$
|
227,669
|
|||||
Taxes
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
|||||
Non
cash Investing and Financing Activities
|
|||||||||||||
Notes
payable converted to preferred stock
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
224,000
|
|||||
Accrued
interest converted to preferred stock
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
31,002
|
|||||
Beneficial
conversion feature
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
353,640
|
|||||
Common
stock issued in settlement of accrued interest on related party
debt upon
exercise of warrants
|
|
—
|
|
5,250
|
|
5,250
|
|
—
|
|||||
Common
stock to be issued in settlement of preferred stock dividend
|
$
|
29,470
|
$
|
29,740
|
$
|
29,740
|
$
|
—
|
|||||
Common
stock issued in settlement of preferred stock dividend
|
$
|
29,470
|
$
|
—
|
$
|
—
|
$
|
—
|
|||||
Conversion
of a line of credit to term loan
|
$
|
—
|
$
|
—
|
$
|
50,000
|
$
|
—
|
|||||
Deferred
stock offering costs charged to paid in capital
|
$
|
356,238
|
$
|
—
|
$
|
—
|
$
|
—
|
|||||
(1) |
Operations
and Summary of Significant Accounting
Policies
|
A) |
Nature
of
Operations
|
B) |
Going
Concern
|
C) |
Use
of Estimates
|
D) |
Accounts
Receivable
|
E) |
Property
and Equipment and Related
Depreciation
|
Property and Equipment Type |
Years
of Depreciation
|
|||
Building
|
39
years
|
|||
Machinery
and equipment
|
7-12
years
|
|||
Computer
|
3-5
years
|
|||
Automobile
|
5
years
|
|||
Office
equipment
|
7
years
|
F) |
Intangible
Assets
|
G) |
Concentrations
|
H) |
Fair
Value of Financial
Instruments
|
I) |
Cost
of sales
|
J) |
Income
Taxes
|
K) |
Deferred
Stock Offering Costs
|
L) |
Stock
Options
|
Net
loss as reported
|
$
|
(825,955
|
)
|
$
|
(825,955
|
)
|
|
Stock
based compensation
|
(530,955
|
)
|
(530,955
|
)
|
|||
Pro
forma loss
|
$
|
(1,356,910
|
$
|
(1,356,910
|
)
|
||
|
|||||||
Primary
and fully diluted loss per share, as reported
|
$
|
(0.18
|
)
|
(0.18
|
)
|
||
Proforma
fully and diluted loss per share
|
$
|
(0.28
|
)
|
(0.28
|
)
|
M) |
Revenue
Recognition
|
N) |
Net
Loss Per Share
|
|
June
30, 2006
(Unaudited)
|
December
31, 2005
|
|||||
Warrants
|
613,241
|
613,241
|
|||||
Convertible
notes
|
138,025
|
133,954
|
|||||
Preferred
Stock
|
235,760
|
235,760
|
|||||
Options
|
291,000
|
291,000
|
|||||
Total
|
1,278,026
|
1,273,955
|
O) |
Advertising
Costs
|
P) |
Reporting
Segment of the
Company
|
Q) |
Comprehensive
Income
|
R) |
Recent
Accounting
Pronouncements
|
June
30,
2006
|
December
31,
2005
|
||||||
(unaudited)
|
|||||||
Raw
Materials
|
$
|
649,873
|
$
|
678,343
|
|||
Finished
Goods
|
625,946
|
529,676
|
|||||
|
$
|
1,275,819
|
$
|
1,208,019
|
June
30,
2006
|
December
31,
2005
|
||||||
(unaudited)
|
|||||||
Land
|
$
|
409,546
|
$
|
409,546
|
|||
Building
|
918,442
|
915,932
|
|||||
Vehicles
|
223,867
|
223,867
|
|||||
Machinery
and equipment
|
755,562
|
734,886
|
|||||
Office
equipment
|
123,043
|
109,259
|
|||||
|
2,430,460
|
2,393,490
|
|||||
Accumulated
depreciation
|
(566,449
|
)
|
(508,136
|
)
|
|||
$
|
1,864,011
|
$
|
1,885,354
|
|
|
|
|
|
|||||||||
Asset
|
Gross
Amount
|
Accumulated
Amortization
|
Current
Year
Amortization
|
Useful
Life
|
|||||||||
Building
Loan Fees
|
$
|
18,614
|
$
|
3,723
|
$
|
745
|
300
months
|
|
|
|
|
|
|||||||||
Asset
|
Gross
Amount
|
Accumulated
Amortization
|
Current
Period
Amortization
|
Useful
Life
|
|||||||||
Building
Loan Fees
|
$
|
18,614
|
$
|
4,095
|
$
|
373
|
300
months
|
Year
|
Amount
|
|||
2006
|
$
|
745
|
||
2007
|
745
|
|||
2008
|
745
|
|||
2009
|
745
|
|||
2010
|
745
|
|
June
30 2006
(Unaudited)
|
December 31, 2005
|
|||||
Note
payable to SBA in the original amount of $748,000 with interest
at the
Wall Street Journal prime rate plus 1% per annum, adjusted monthly
with no
cap or floor. The combined monthly principal and interest payments
are $5,851, subject to annual adjustments. The interest rate in
effect at
December 31, 2005 was 8%. The note is secured by land and building
and guaranteed by the majority stockholder. The note matures November
2025.
|
$
|
668,955
|
$
|
674,582
|
|||
Notes
payable, unsecured, with interest at 10% per annum. Principal and
accrued interest are payable in full at the end of the note term.
Theses
notes were issued with warrants, exercisable at issuance. The warrants
have an exercise price of $3 and a term of 5 years. Principal and any
unpaid interest were due in June 2006 and have been extended until
October
2006 (Unaudited)
|
50,000
|
50,000
|
|||||
Building
improvement loan with a maximum draw of $168,000. The interest
rate is at
the Wall Street Journal prime rate plus 1%, adjusted monthly with
no cap
or floor. The combined monthly principal and interest payments
are $1,186;
subject to annual adjustments. The rate in effect at December 31,
2005 was 8% per annum. The note is secured by land and building
and
guaranteed by the majority stockholder and matures
November 2025.
|
140,763
|
142,119
|
Notes
payable, due on demand, unsecured, with interest at 10% per annum.
The
note is convertible to common stock at 60% of the initial public
offering
price or 100% of a private offering price.
|
9,000
|
9,000
|
|||||
Note
payable to a bank, unsecured, interest rate is prime plus 3.25%.
The
interest rate in effect December 31, 2005 was 10.5%. The note matures
in
December 2009.
|
44,827
|
50,000
|
|||||
Notes
payable to GMAC, secured by automobiles, payable in monthly installments
of $758 including interest at 0.0%, with maturity in 2008.
|
13,656
|
18,204
|
|||||
Notes
payable to Chrysler Financial Corp., secured by automobiles, payable
in
monthly installments of $658, including interest at 1.9% per annum,
with
maturity in 2008.
|
17,387
|
21,151
|
|||||
Installment
loan secured by certain plant equipment. Payable in monthly installments
of $7,500 plus interest. This loan bears interest at prime plus
4.00% per
annum. The interest rate in effect at June 30, 2006 was 12.25%.
This loan
matures in June 2010. (Unaudited)
|
231,496
|
---
|
|||||
Equipment
line of credit up to a maximum of $150,000, secured by certain
plant
equipment. Payable in ratable monthly installments of principal and
applicable interest. This loan bears interest at prime plus 2.75% per
annum. The interest rate in effect at December 31, 2005 was 10.00%.
This
loan matures in May 2009.
|
---
|
93,900
|
|||||
Installment
loan secured by certain plant equipment. Payable in monthly installments
of $3,167 plus interest. This loan bears interest at prime plus
2.75% per
annum. The interest rate in effect at December 31, 2005 was 10.00%.
This
loan matures in June 2010.
|
---
|
170,998
|
|||||
Total
|
1,176,084
|
1,229,954
|
|||||
|
|||||||
Less
current portion
|
191,516
|
169,381
|
|||||
|
$
|
984,568
|
$
|
1,060,573
|
|
|
|||
2006
|
$
|
169,381
|
||
2007
|
111,321
|
|||
2008
|
102,654
|
|||
2009
|
87,348
|
|||
2010
|
38,090
|
|||
Thereafter
|
721,160
|
|||
Total
|
$
|
1,229,954
|
(9) |
Stock
Options and Warrants
|
A) |
Stock
Options
|
|
Options
|
|||
|
|
|||
Balance
January 1, 2004
|
72,500
|
|||
Options
granted in 2004
|
—
|
|||
Options
exercised in 2004
|
—
|
|||
|
||||
Balance
December 31, 2004
|
72,500
|
|||
Options
granted in 2005
|
218,500
|
|||
Options
exercised in 2005
|
---
|
|||
Balance
December 31, 2005
|
291,000
|
Exercise
Price
Range
|
Weighted
Average
Remaining
Number
|
Weighted
Average
Remaining
Contractual
Life
|
|||||
$2.00
|
37,500
|
44
months
|
|||||
$3.00
|
17,500
|
42
months
|
|||||
$4.00
|
218,500
|
60
months
|
|||||
$6.00
|
17,500
|
42
months
|
|||||
Total
options
|
291,000
|
56
months
|
B) |
Warrants
|
|
|
|
|||||
Exercise
Price
Range
|
Weighted
Average
Remaining
Number
|
Weighted
Average
Remaining
Contractual
Life
|
|||||
$2.00
|
119,876
|
42
months
|
|||||
$3.00
|
493,365
|
42
months
|
|||||
|
613,241
|
Deferred income tax asset: |
June
30,
2006
|
December
31,
2006
|
|||||
(unaudied)
|
|||||||
Net
operating loss carry forward
|
$
|
1,
386,000
|
$
|
1,061,000
|
|||
Valuation
allowance
|
(1,386,000
|
)
|
(1,061,000
|
)
|
|||
Net
deferred income tax asset
|
—
|
$
|
—
|
|
Year
Ended
|
||||||
|
December
31,
|
||||||
|
2005
|
2004
|
|||||
Tax
expense at the U.S. statutory income tax
|
(34.00
|
)%
|
(34.00
|
)%
|
|||
Increase
in the valuation allowance
|
34.00
|
%
|
34.00
|
%
|
|||
Effective
tax rate
|
—
|
—
|
Year
Ending December 31,
|
|
|||
2006
|
$
|
58,433
|
||
2007
|
20,968
|
|||
2008
|
10,905
|
|||
2009
|
4,173
|
|||
Total
|
Page
|
|
1
|
|
4
|
|
13
|
|
15
|
|
17
|
|
17
|
|
18
|
|
21
|
|
32
|
|
46
|
|
50
|
|
52
|
|
53
|
|
56
|
|
58
|
|
59
|
|
64
|
|
64
|
|
64
|
|
F-1
|
|
Description
|
Actual
Amount of Shares Sold to
Date
(333,156
shares sold)
|
Amount
if 1,000,000
Shares
are Sold
|
Amount
if 2,000,000
Shares
are Sold
|
||||||||||
SEC
registration fee
|
$
|
1,115
|
1,115
|
1,115
|
|||||||||
Postage
and printing expenses
|
23,000
|
23,000
|
23,000
|
*
|
|||||||||
Legal
fees
|
149,000
|
149,000
|
149,000
|
*
|
|||||||||
Accounting
fees
|
239,000
|
239,000
|
239,000
|
*
|
|||||||||
Blue
sky fees and expenses
|
24,885
|
24,885
|
24,885
|
*
|
|||||||||
Underwriter
expenses
|
29,000
|
29,000
|
29,000
|
*
|
|||||||||
Promotional
expenses
|
179,000
|
179,000
|
179,000
|
||||||||||
Advertising
expenses
|
110,000
|
110,000
|
110,000
|
*
|
|||||||||
TOTAL
|
$
|
755,000
|
755,000
|
755,000
|
1.1
|
Underwriting
Agreement - US EURO Securities, Inc.
|
|
|
1.2
|
Subscription
Agreement *
|
|
|
1.3
|
Underwriters’
Warrant
|
||
1.4
|
Selected
Dealers’ Agreement #
|
||
3.1
|
Certificate
of Incorporation *
|
|
|
3.2
|
Amendment
to Certificate of Incorporation *
|
|
|
3.3
|
Certificate
of Designations *
|
|
|
3.4
|
Certificate
of Correction to Certificate of Designations *
|
|
|
3.5
|
Bylaws,
as amended
|
|
|
4.1
|
Form
of common stock certificate *
|
|
|
4.2
|
Form
of Series A preferred stock certificate *
|
|
|
4.3
|
2001
Employee Stock Option Plan *
|
|
|
4.4
|
Convertible
promissory notes issued to investors *
|
|
|
4.5
|
Amendment
to Promissory Note *
|
|
|
5.1
|
Legal
opinion of Jenkens & Gilchrist, LLP *
|
|
|
10.1
|
Purchase
Agreement for Virgil’s Root Beer *
|
|
|
10.2
|
Brewing
Agreement dated as of May 15, 2001 between the Company and The Lion
Brewery, Inc. *
|
|
10.3
|
Loan
Agreement with U.S. Bank National Association for purchase of the
Brewery
*
|
|
|
10.4
|
Loan
Agreement with U.S. Bank National Association for improvements at
the
Brewery *
|
|
|
10.5
|
Loan
Agreement with Bay Business Credit *
|
|
|
10.6
|
Credit
Agreement with Merrill Lynch *
|
|
|
10.7
|
Form
of Promotional Share Lock-In Agreement *
|
|
|
10.7(a)
|
Promotional
Share Lock-In Agreement For Christopher J. Reed *
|
||
10.7(b)
|
Promotional
Share Lock-In Agreement For Robert T. Reed, Jr. *
|
||
10.7(c)
|
Promotional
Share Lock-In Agreement For Robert T. Reed, Sr. *
|
||
10.7(d)
|
Promotional
Share Lock-In Agreement For Peter Sharma, III *
|
||
10.7(e)
|
Promotional
Share Lock-In Agreement For Joseph Grace *
|
||
10.7(f)
|
Promotional
Share Lock-In Agreement for Judy Holloway Reed *
|
||
10.7(g)
|
Promotional
Share Lock-In Agreement for Eric Scheffer *
|
||
10.7(h)
|
Promotional
Share Lock-In Agreement for Mark Harris 1
|
||
10.8
|
Loan
Agreement dated September 28, 2004 with Bay Business Credit
*
|
|
|
10.9
|
Sirius/Pureprophet,
Ltd. Vendor’s Credit Line Agreement with Original Beverage Corp.
*
|
|
|
10.10
|
Terms
Of Amortization for Peter Sharma III for Sirius/Pureprophet, Ltd.
-
Vendor’s
Credit Line Agreement with Original Beverage Corp. *
|
||
10.11
|
Co-Sign
Agreement *
|
|
|
10.12
|
Loan
Agreement with Robert T. Reed, Sr. *
|
|
|
10.13
|
Loan
Agreement with William Holiman *
|
|
|
10.14
|
Loan
Agreement with Bay Business Credit *
|
|
|
10.15
|
Loan
Agreement with Robert T. Reed, Sr. *
|
|
|
10.16
|
Loan
Agreement with Robert T. Reed, Sr. *
|
|
|
10.17
|
Amendment
to Loan Agreement with Bay Business Credit *
|
|
|
10.18
|
Suspension
of Loan Payment Agreement with Robert T. Reed, Sr. *
|
|
|
10.19
|
Agreement
to Assume Repurchase Obligations 1
|
||
10.20
|
Loan
and Security Agreement with Business Alliance Capital Corporation
dated
June 3, 2005,
and
Amendment No. 1 thereto dated June 29, 2006 1
|
||
14.1
|
Code
of Ethics 1
|
||
23.1
|
Consent
of Weinberg & Co., P.A.
|
|
|
23.2
|
Consent
of Jenkens & Gilchrist, LLP (contained in Exhibit 5.1)
*
|
|
|
24
|
Power
of Attorney (included in the signature page to the Registration Statement)
*
|
|
|
* |
Previously
filed as part of this Registration
Statement.
|
# |
To
be filed by amendment.
|
1. |
Filed
as part of the Registrant’s Registration Statement on Form SB-2 (File No.
333-135186).
|
(i) |
Include
any prospectus required by Section 10(a)(3) of the Securities Act
of
1933;
|
(ii) |
Reflect
in the prospectus any facts or events which, individually or together,
represent a fundamental change in the information in the registration
statement; and notwithstanding
the forgoing, any increase or decrease in volume of securities offered
(if
the total dollar value of securities offered (if the total dollar
value of
securities offered would not exceed that which was registered) and
any
deviation from the low or high end of the estimated maximum offering
range
may be reflected in the form of prospects filed with the Commission
pursuant to Rule 424(b) (§230.424(b) of this chapter) if, in the
aggregate, the changes in the volume and price represent no more
than a
20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
|
(iii) |
Include
any additional or changed material information on the plan of
distribution.
|
(i) |
Any
preliminary prospectus or prospectus of the undersigned small business
issuer relating to the offering required to be filed pursuant to
Rule
424;
|
(ii) |
Any
free writing prospectus relating to the offering prepared by or on
behalf
of the undersigned small business issuer or used or referred to by
the
undersigned small business issuer;
|
(iii) |
The
portion of any other free writing prospectus relating to the offering
containing material information about the undersigned small business
issuer or its securities provided by or on behalf of the undersigned
small
business issuer; and
|
(iv) |
Any
other communication that is an offer in the offering made by the
undersigned small business issuer to the
purchaser.
|
(i) |
Each
prospectus filed by the undersigned small business issuer pursuant
to Rule
424(b)(3) shall be deemed to be part of the registration statement as
of the date the filed prospectus was deemed part of and included in
the registration statement;
|
(ii) |
Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5),
or
(b)(7) as part of a registration statement in reliance on Rule 430B
relating to an offering made pursuant to Rule 415(a)(1)(i), (vii),
or
(x) for the purpose of providing the information required by section
10(a) of the Securities Act shall be deemed to be part of and
included in the registration statement as of the earlier of the date
such
form of prospectus is first used after effectiveness or the date
of
the
|
Signature
|
Title
|
Date
|
||
/s/
Christopher J. Reed
|
Chief
Executive Officer, Chief Financial Officer and Chairman of the Board
of
|
September
1, 2006
|
||
Christopher J. Reed | Directors (Principal Executive Officer and Principal Accounting Officer) | |||
/s/
Judy Holloway Reed
|
Director
|
September
1, 2006
|
||
Judy Holloway Reed | ||||
/s/
Mark Harris
|
Director
|
September
1, 2006
|
||
Mark Harris | ||||
/s/
Daniel S.J. Muffoletto
|
Director
|
September
1, 2006
|
||
Daniel S.J. Muffoletto | ||||
/s/
Michael Fischman
|
Director
|
September
1, 2006
|
||
Michael Fischman |
1.1
|
Underwriting
Agreement - US EURO Securities, Inc.
|
|
|
1.2
|
Subscription
Agreement *
|
|
|
1.3
|
Underwriters’
Warrant
|
||
1.4
|
Selected
Dealers’ Agreement #
|
||
3.1
|
Certificate
of Incorporation *
|
|
|
3.2
|
Amendment
to Certificate of Incorporation *
|
|
|
3.3
|
Certificate
of Designations *
|
|
|
3.4
|
Certificate
of Correction to Certificate of Designations *
|
|
|
3.5
|
Bylaws,
as amended
|
|
|
4.1
|
Form
of common stock certificate *
|
|
|
4.2
|
Form
of Series A preferred stock certificate *
|
|
|
4.3
|
2001
Employee Stock Option Plan *
|
|
|
4.4
|
Convertible
promissory notes issued to investors *
|
|
|
4.5
|
Amendment
to Promissory Note *
|
|
|
5.1
|
Legal
opinion of Jenkens & Gilchrist, LLP *
|
|
|
10.1
|
Purchase
Agreement for Virgil’s Root Beer *
|
|
|
10.2
|
Brewing
Agreement dated as of May 15, 2001 between the Company and The Lion
Brewery, Inc. *
|
|
|
10.3
|
Loan
Agreement with U.S. Bank National Association for purchase of the
Brewery
*
|
|
|
10.4
|
Loan
Agreement with U.S. Bank National Association for improvements at
the
Brewery *
|
|
|
10.5
|
Loan
Agreement with Bay Business Credit *
|
|
|
10.6
|
Credit
Agreement with Merrill Lynch *
|
|
|
10.7
|
Form
of Promotional Share Lock-In Agreement *
|
|
|
10.7(a)
|
Promotional
Share Lock-In Agreement For Christopher J. Reed *
|
||
10.7(b)
|
Promotional
Share Lock-In Agreement For Robert T. Reed, Jr. *
|
||
10.7(c)
|
Promotional
Share Lock-In Agreement For Robert T. Reed, Sr. *
|
||
10.7(d)
|
Promotional
Share Lock-In Agreement For Peter Sharma, III *
|
||
10.7(e)
|
Promotional
Share Lock-In Agreement For Joseph Grace *
|
||
10.7(f)
|
Promotional
Share Lock-In Agreement for Judy Holloway Reed *
|
||
10.7(g)
|
Promotional
Share Lock-In Agreement for Eric Scheffer *
|
||
10.7(h)
|
Promotional
Share Lock-In Agreement for Mark Harris 1
|
||
10.8
|
Loan
Agreement dated September 28, 2004 with Bay Business Credit
*
|
|
|
10.9
|
Sirius/Pureprophet,
Ltd. Vendor’s Credit Line Agreement with Original Beverage Corp.
*
|
|
|
10.10
|
Terms
Of Amortization for Peter Sharma III for Sirius/Pureprophet, Ltd.
-
Vendor’s Credit Line Agreement with Original Beverage Corp.
*
|
||
10.11
|
Co-Sign
Agreement *
|
|
|
10.12
|
Loan
Agreement with Robert T. Reed, Sr. *
|
|
|
10.13
|
Loan
Agreement with William Holiman *
|
|
|
10.14
|
Loan
Agreement with Bay Business Credit *
|
|
|
10.15
|
Loan
Agreement with Robert T. Reed, Sr. *
|
|
|
10.16
|
Loan
Agreement with Robert T. Reed, Sr. *
|
|
|
10.17
|
Amendment
to Loan Agreement with Bay Business Credit *
|
|
|
10.18
|
Suspension
of Loan Payment Agreement with Robert T. Reed, Sr. *
|
|
|
10.19
|
Agreement
to Assume Repurchase Obligations 1
|
||
10.20
|
Loan
and Security Agreement with Business Alliance Capital Corporation
dated
June 3, 2005, and Amendment No. 1 thereto dated June 29, 2006 1
|
||
14.1
|
Code
of Ethics 1
|
||
23.1
|
Consent
of Weinberg & Co., P.A.
|
|
|
23.2
|
Consent
of Jenkens & Gilchrist, LLP (contained in Exhibit 5.1)
*
|
|
|
24
|
Power
of Attorney (included in the signature page to the Registration Statement)
*
|
|
|
* |
Previously
filed as part of this Registration
Statement.
|
# |
To
be filed by amendment.
|
1. |
Filed
as part of the Registrant’s Registration Statement on Form SB-2 (File No.
333-135186).
|