FORWARD LOOKING STATEMENTS
This report contains forward-looking statements that involve risk and uncertainties. We use words such as "anticipate," "believe," "plan," "expect," "future," "intend," and similar expressions to identify such forward-looking statements. Investors should be aware that all forward-looking statements contained within this filing are good faith estimates of management as of the date of this filing and actual results may differ materially from historical results or our predictions of future results.
General Financial Matters
Our auditor's report on our financial statements for the year ended
Overview
At the time the Company was organized, its principal business objective was to
engage in the oil and gas business. The Company became a public reporting
company by filing a Form S-1 Registration Statement with the
We have limited operating history, no revenue, and negative working capital.
On
We intend to look for other beverage brand acquisition transactions in the future.
Plan of Operations
Prior to the Asset Acquisition transaction, we were a shell company with no substantive operations. The purpose of the Company was to seek and investigate potential assets, properties or businesses to acquire while complying with the periodic reporting requirements of the Exchange Act for so long as we are subject to those requirements.
We have developed a business plan to obtain rights to develop a portfolio of
beverage (alcoholic and non-alcoholic) product brands and to distribute and
market beverage products nationally and internationally. Our first brand is the
"Tequila Alebrijes" brand of tequila. We obtained the trademark for this brand
and the rights to market and distribute Tequila Alebrijes products. We also
acquired approximately 12,000 bottles of tequila valued at
We do not intend to produce beverage products but rather we intend to acquire brand and marketing rights for beverage products and thereafter commercialize our products either directly by selling to retailers and point of sale locations or through brand management agreements and/or distribution agreements with other companies involved in the beverage distribution business.
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Acquisition of Assets
On
The Company's Business Plan - General
Our new business plan is to engage in the business of acquiring rights to market non-alcoholic and alcoholic beverage brands. As described above, our first acquisition was the Tequila Alebrijes brand of tequila. Currently, that is our only product brand.
Demand for premium distilled spirits brands is driving growth and transforming the distilled spirits industry, driven by several key trends including an increasingly global market for alcoholic beverages, better and more well-defined channels of distribution, an international and domestic rise of cocktail culture, the growing popularity for distilled spirits, a greater desire among consumers wanting to know more about the history and production methods behind what they drink, an increase in the willingness of consumers to enjoy experimenting and trying new brands, categories and styles of alcoholic beverages, the identifiable industry trend showing increasing demand for a broader variety and new brands at the point of sale, and a higher level of appreciation of quality over quantity, with premium and above offerings gaining market share.
Amidst the background where industry leading producers are shifting more emphasis on premium brand offerings, an emerging wave of small craft distillers is capturing an increasing market share. As the craft boom continues, we anticipate that larger brands will increase their emphasis on craft qualities and will look to emerging brands gaining consumer support as acquisition candidates.
We intend, subject to adequate financing, to build a portfolio of beverage brands of non-alcoholic and alcoholic beverages. We anticipate that we may be able to use our securities to acquire interests in additional beverage brands and as incentive for brand managers and other product distributors.
We entered into a non-exclusive brand management agreement with
As of the date of this report, the brand management agreement has not resulted
in the sale of any of our product. The brand management agreement expired in
Ultimate Business Goal
One of our ultimate business goals is to develop critical mass and a diverse portfolio of distilled spirits and non-alcoholic brands to make us an attractive acquisition target or an attractive partner for other companies in the beverage industry.
To achieve this goal, we plan on developing diverse channels of distribution by building relationships with strong regional and local distributors. To support our distributors, we plan to work with brand managers to create marketing, support consumer awareness, and to develop demand at the retail level in liquor stores and bars.
Our planned operating strategy
Our business strategy relates to our Tequila Alebrijes product and potentially other distilled spirits brands and non-alcoholic brands. We have developed a strategy to commence and build operations in the premium spirits industry. Our strategy is as follows:
(1)Building Our
(2)Qualify for Our Own Licenses and Permits. Initially we are relying on "Brand Management Agreements" with companies that already have distribution channels and have import and export licenses and permits. In addition, we will be
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contracting with US domestic distributors that have permits and licenses in a
large number of key states for spirits sales. In addition, our Brand Management
companies will have the logistical capability to store, ship and comply with all
state and federal regulations and accounting requirements. The Brand Manager
will also be responsible for collecting and reporting on all taxes, customs
compliance and shipping regulations. Our non-exclusive Brand Manager for our
Tequila Alebrijes brand is CCB. The CCB Brand Management Agreement, which
expired in
(3)Build Distribution. If, in the future, we obtain required permits, we intend
to focus on building additional distribution for Tequila Alebrijes and other
brands in the
(4)Marketing. We plan to bring the enjoyment of the Tequila Alebrijes experience to the customer. Key to scaling our business activities is our commitment to, and investment in innovative and effective sales and marketing campaigns, and supporting demand generated from those campaigns with sufficient inventory. Consumers want an experience and our marketing strategy is built around that.
Our first proprietary brand, Tequila Alebrijes, is a premium tequila. Our Tequila Alebrijes product is expected to be shipped to the Brand Manager as needed for distribution.
The brand management agreement with CCB expired in
We anticipate that in order to achieve our marketing strategy for our Tequila Alebrijes brand and acquire and market other brands, we will be required to obtain significant capital from equity and debt sources. There can be no assurance that we will be able to obtain adequate additional capital as we need it or even if it is available, that it will be on terms and conditions that are acceptable and commercially reasonable. We anticipate that we will issue shares of our capital stock to raise additional capital, to attract third party distribution networks, attempt to acquire interests in other brands and for employee compensation.
Results of Operations
We have yet to generate any revenue from the acquisition of the tequila related assets and there can be no assurance we will be able to generate meaningful revenues in the near future. We anticipate that we must raise additional capital to develop a meaningful marketing program for our products and there can be no assurance that we will be able to raise adequate capital to market our products and develop active business operations.
Three months ended
For the three months ended
For the three months ended
Such expenses consist primarily of legal and accounting fees, as well as annual
fees required to maintain the Company's corporate status. For the three months
ended
As a result of the foregoing, the Company incurred a loss of
Liquidity
As of
For the three months ended
There were no investing activities during the three months ended
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For the three months ended
As a result of the foregoing, there was an increase in cash of
From the date of inception (
Our ability to continue as a going concern in the next 12 months depends on our
ability to obtain sources of capital to fund our continuing operations and to
fund our operations in the beverage industry. As of
In
As described in Part II Item 3, the lender under the Secured Promissory Note has notified us of a claimed default under the Note. The Note is secured by all of the assets of the Company. We currently do not have cash available to repay the Note and there is no assurance that we will ever have liquid assets necessary to repay the Note.
Employees
As of the date of this report, we have no employees. Subject to adequate financing and business needs we will retain employees, third party consultants, agents and other service providers on an as needed basis.
Off-Balance Sheet Arrangements
The Company did not have any off-balance sheet arrangements that had or are reasonably likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term "off-balance sheet arrangement" generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with the Company is a party, under which the Company has (i) any obligation arising under a guarantee contract, derivative instrument or variable interest; or (ii) a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.
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