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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 4/29/22 Brewdog USA Inc. 1-K 12/31/21 2:4.1M Armed Forces Brewin… Inc |
Document/Exhibit Description Pages Size
1: 1-K Annual Report or Special Financial Report -- HTML 4K
primary_doc.xml
2: PART II Annual Report - Part II HTML 66K
| Microsoft Word - BrewDog Form 1-K December 31 2016 - 13.06.17 - CAM.docx |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1-K ANNUAL REPORT
ANNUAL REPORT PURSUANT TO REGULATION A
For the Annual Period Ended December 31, 2021
BREWDOG USA INC.
(Exact name of registrant as specified in its charter)
Commission File Number: 024-10532
Date of Qualification of Offering: August 1, 2016
Date of Commencement of Offering: August 4, 2016
Delaware
(State or other jurisdiction of incorporation or organization)
47-4320975
(I.R.S. Employer Identification No.)
65 E State St, Suite 1800
(Address of principal executive offices)
614-400-3051
Issuer’s telephone number, including area code
Common Stock
(Title of each class of securities issued pursuant to Regulation A)
Item 1.Business
BrewDog USA Inc. ("BrewDog" or the "Company" "Us" or "We") and its subsidiaries were formed for the general purpose of brewing and retailing craft beer in the United States. BrewDog has constructed a brewing facility in Columbus, Ohio that has been operational since April 2017. A taproom and a craft beer themed hotel were opened at the brewing facility in Columbus in February 2017 and August 2018, respectfully. BrewDog has also opened seven bars-- two in Columbus, Ohio in 2018; Indianapolis, Indiana in 2019; Cincinnati, Ohio in 2019; Pittsburgh, Pennsylvania in 2020; New Albany, Ohio in 2021; and Cleveland, Ohio in 2021.
BrewDog’s mission:
·Our mission is to make other people as passionate about great craft beer as we are.
BrewDog’s charter:
·For Better Beer.
·For A Better Planet.
·Powered By People.
·For Us All.
Management’s discussion and analysis of financial condition and results of operations
as of December 31, 2020 is available for review here and incorporated by reference.
https://www.sec.gov/Archives/edgar/data/1646269/000164626921000001/brewdog2020form1k.htm
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
A.Operating Results Overview
BrewDog USA Inc. (“BrewDog” or the “Company” “Us” or “We”) was formed on April 22, 2015, as a Delaware Corporation, for the general purpose of brewing and distributing craft beer in the United States. BrewDog is majority owned by BrewDog Plc, a United Kingdom company. BrewDog has built a brewery in Columbus, Ohio to manufacture its craft beer for national distribution across the U.S., as well as wholesale and retail sales and also to operate local retail bar/restaurant establishments, which may have small brewing facilities on site that will operate under the name “BrewDog” and will sell BrewDog beer, along with food items.
Results of Operations
The year ended December 31, 2021
Overall the business has continued to be loss making in the year. There have been a number of factors impacting performance including pre-opening costs from two new bar/restaurants; COVID-19; board supply disruptions; and rising costs due to inflation. Despite challenging conditions, the business has reporting revenue growth of 16% versus 2020.
The results for the year include the forgiveness of PPP Loans, further detail within Note 2 of the Audited Financial Statements, which has positively impacted the results for the year. As the company looks towards 2022 and onwards there is an increased focus on delivering continued revenue growth together with both cost and operational improvements across all aspects of the business.
Revenue. Total revenue for the year ended December 31, 2021 was $31,528,908 an increase of 16% compared to $27,223,498 for the year ended December 31, 2020 primarily in wholesale craft beer sales and drink and food sales from our bars.
Cost of Sales. Cost of sales for the year ended December 31, 2021 were $22,426,599. Cost of sales for the period comprised of Brewery raw material costs, packaging costs, manufacturing labor and overhead as well as Bar drink and food purchases and labor for preparing and serving.
Administrative Expenses. Operating expenses for the year ended December 31, 2021 were $13,727,721. Operating expenses for the period were comprised of advertising, marketing, payroll, real estate taxes, insurance, and other administrative expenses.
B.Liquidity and Capital Resources
We had net cash of $1,339,911 at December 31, 2021.
During the year ended December 31, 2021, operating activities provided $319,492 primarily due to prepaid expenses and other current assets and accruals and other liabilities.
Cash used by investing activities relating to capital expenditures during the year ended December 31, 2021 was $(5,689,789). Cash provided by financing activities during the twelve months ending December 31, 2021 was $5,829,143 related to proceeds from borrowings. Since inception, our capital needs have primarily been met by BrewDog Plc.
C.Plan of Operations
Our plan of operation for the 12 months ended December 31, 2021 is as follows:
In 2021, we have expanded into 6 new states including Texas and Florida. In total, the Company now distributes to 31 states, Washington D.C. and Canada. We plan to continue state expansion throughout 2022. BrewDog is always experimenting and development new varieties of beer and other beverages. In 2021, we brewed over 150 different styles of beer, cider, hard seltzer and non-alcoholic beer. To fully utilize our state-of-the-art Brewery, beginning in February 2018, we entered a contract brewing arrangement with a regional craft brewer whereby we produce and package their beer brands. We plan to continue to contract brew throughout 2022. We continue to expand our retail business. From 2017 to 2021, the Company has opened a network of 9 bars and a hotel across Ohio, Indiana, and Pennsylvania. We plan to open new bars in 2022. In 2021, we saw revenue from e-commerce increase to 8% from less than 6% in 2020. We believe the growth in digital orders is directly attributable to changes in customer behavior caused by COVID-19. Part of our growth strategy involves increasing sales through our e-commerce channel. We have hired and plan to hire staff to run our business and to help us follow through on our business plans.
D.Trend Information
Demand for craft beer in North America continues to grow. According to the Brewers Association’s 2021 Annual Craft Brewing Industry Production Report, “Overall U.S. beer volume sales were up 1% in 2021, while craft brewer volume sales grew 8%.” BrewDog has focused on continuing to grow its distribution footprint a focus its sales and marketing strategies to capitalize on these trends.
The Company began seeing the impact of the COVID-19 in mid-March 2020 as various policies were implemented by federal, state and local governments in response to the COVID-19 pandemic, such as stay-at-home orders and business closures. During 2021, many state and local governments began easing COVID-19 restrictions. As a result, we saw sales in our bars increase and more demand for our products in the on-premise channel. While many public reports indicate that the COVID-19 pandemic may be slowly winding down, the Company remains committed to providing safe conditions to customers and employees. COVID-19 mitigation strategies have led to broad supply chain disruptions across the U.S. and globally. Since the onset of COVID-19, there has been minimal disruption to our supply chain network. We are working closely with our suppliers, customers and other business partners to minimize the potential impact on our business.
E.Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
F.Critical Accounting Policies
We have identified the policies outlined below as critical to our business operations and an understanding of our results of operations. The list is not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by accounting principles generally accepted in the United States, with no need for management's judgment in their application. The impact and any associated risks related to these policies on our business operations is discussed throughout Management's Discussion and Analysis of Financial Condition and Results of Operations where such policies affect our reported and expected financial results. Note that our preparation of the consolidated financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. There can be no assurance that actual results will not differ from those estimates. The list of significant accounting policies are outlined in Note 2 to the Consolidated Financial Statements.
G.Additional Company Matters
The Company has not filed for bankruptcy protection nor has it ever been involved in receivership or similar proceedings. The Company is not presently involved in any legal proceedings material to the business or financial condition of the Company. The Company does not anticipate any
material reclassification, merger, consolidation, or purchase or sale of a significant amount of assets not in the ordinary course of business, in the next 12 months.
As of December 31, 2021, BrewDog USA Inc.’s officers and directors information is available for review here. Please see pages 47-48.
https://www.sec.gov/Archives/edgar/data/1646269/000164626920000012/partiiandiii.htm
As of December 31, 2021, BrewDog USA Inc. had 341 full-time employees, one of which is an executive officer of the Company.
The directors, executive officers and significant employees of the Company as of December 31, 2021 are as follows:
Name | Position | Age | Term of Office | Approx. hours per week |
Executive Officers: | ||||
James Watt | President | 39 | 4-22-15 to present | 10 |
Alan Martin Dickie | Vice President | 39 | 4-22-15 to present | 10 |
Chief Financial Officer | 51 | 4-22-15 to present | 10 | |
Chief Executive Officer | 39 | 2-1-20 to present | 40 | |
Directors | ||||
James Watt | Chairman of Board of Directors | 39 | 4-22-15 to present | N/A |
Alan Martin Dickie | Director | 39 | 4-22-15 to present | N/A |
Director | 51 | 4-22-15 to present | N/A | |
Director | 39 | 2-1-20 to present | N/A | |
The directors of BrewDog USA Inc. are, at present, not compensated by the Company for their roles as directors. For the four present directors, only expenses are reimbursed for their participation on the board of directors. The Company may choose to compensate the present directors in the future, as well as compensate future directors, in the Company’s discretion.
Executive Compensation
For 2021, compensation for executive officers consist of the following:
Name | Capacities in which compensation was received | Cash compensation ($) | Other compensation ($) | Total compensation ($) |
James Watt | President | $ 0 | $ 0 | $ 0 |
| ||||
Alan Martin Dickie | Vice President | $ 0 | $ 0 | $ 0 |
| ||||
Chief Financial Officer | $ 0 | $ 0 | $ 0 | |
| ||||
Chief Executive Officer | $ 265,227 | $ 0 | $ 265,227 | |
Employment Agreements
We entered into an employment agreement Jason Block who was appointed Chief Executive Officer in February 2020. A stock incentive program for our directors, executive officers, employees and key consultants may be established in the future.
Board of Directors
Our board of directors currently consists of four directors. None of our directors are “independent” as defined in Rule 4200 of FINRA’s listing standards. We may appoint additional independent directors to our board of directors in the future, particularly to serve on committees should they be established.
Committees of the Board of Directors
We may establish an audit committee, compensation committee, a nominating and governance committee and other committees to our Board of Directors in the future, but have not done so to date. Until such committees are established, matters that would otherwise be addressed by such committees will be acted upon by the Board of Directors.
Director Compensation
We currently do not pay our directors any compensation for their services as board members, with the exception of reimbursing for board related expenses. In the future, we may compensate directors, particularly those who are not also employees and who act as independent board members, on either a per meeting or fixed compensation basis.
Limitation of Liability and Indemnification of Officers and Directors
Our Bylaws limit the liability of directors and officers of the Company to the maximum extent permitted by Delaware law. The Bylaws state that the Company shall indemnify and hold harmless each person who was or is a party or is threatened to be made a party to, or is otherwise involved
in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director or an officer of the Company or such director or officer is or was serving at the request of the Company as a director, officer, partner, member, manager, trustee, employee or agent of another company or of a partnership, limited liability company, joint venture, trust or other enterprise.
The Company believes that indemnification under our Bylaws covers at least negligence and gross negligence on the part of indemnified parties. The Company also may secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in connection with their services to us, regardless of whether our Bylaws permit such indemnification.
The Company may also enter into separate indemnification agreements with its directors and officers, in addition to the indemnification provided for in our Bylaws. These agreements, among other things, may provide that we will indemnify our directors and officers for certain expenses (including attorneys’ fees), judgments, fines and settlement amounts incurred by a director or executive officer in any action or proceeding arising out of such person’s services as one of our directors or officers, or rendering services at our request, to any of its subsidiaries or any other company or enterprise. We believe that these provisions and agreements are necessary to attract and retain qualified persons as directors and officers.
There is no pending litigation or proceeding involving any of our directors or officers as to which indemnification is required or permitted, and we are not aware of any threatened litigation or proceeding that may result in a claim for indemnification.
For additional information on indemnification and limitations on liability of our directors and officers, please review the Company’s Bylaws, which are attached to the Offering Circular and available for review here and incorporated by reference:
https://www.sec.gov/Archives/edgar/data/1646269/000164626916000019/brewdogbylaws.htm
Item 4.Security Ownership of Management and Certain Securityholders
Information regarding security ownership of management and certain shareholders as of December 31, 2020 is available for review here and incorporated by reference.
https://www.sec.gov/Archives/edgar/data/1646269/000164626921000001/brewdog2020form1k.htm
The following table sets forth information regarding beneficial ownership of our Common Stock as of December 31, 2021. There is no beneficial ownership of our Common Stock by any of our directors or executive officers or by all of our directors and executive officers as a group.
Beneficial ownership and percentage ownership are determined in accordance with the rules of the Securities and Exchange Commission and includes voting or investment power with respect to Shares of stock. This information does not necessarily indicate beneficial ownership for any other purpose.
Unless otherwise indicated and subject to applicable community property laws, to our knowledge,
each Shareholder named in the following table possesses sole voting and investment power over their Shares of Common Stock.
BrewDog USA, Inc. | ||||
Common Stock | ||||
Shares Beneficially OwnedShares Beneficially Owned Prior To OfferingAfter Offering Name and Position of Beneficial OwnerNumberPercentNumberPercent | ||||
BrewDog Plc1 | 6,315,789 | 100.00% | 6,314,789 | 96.57% |
New Shares issued in Offering | N/A | N/A | 223,002 | 3.41% |
Shares transferred | N/A | N/A | 1,000 | 0.02% |
|
|
|
|
|
Total Shares in Class | 6,315,789 | 100.00% | 6,538,791 | 100.00% |
Total Overall Shares | 6,315,789 | 100.00% | 6,538,791 | 100.00% |
1James Watt and Martin Dickie own voting stock of BrewDog Plc and are authorized by BrewDog Plc to vote on behalf of its shares of BrewDog USA, Inc.
Item 5.Interest of Management and Others in Certain Transactions
Information regarding interest of management and others in certain transactions as of December 31, 2020 is available for review here and incorporated by reference.
https://www.sec.gov/Archives/edgar/data/1646269/000164626921000001/brewdog2020form1k.htm
BrewDog Plc, the Company’s parent, has built a highly successful operation in the United Kingdom, with the same lines of business as BrewDog USA wishes to establish in the United States. As part of BrewDog Plc’s business, it previously established relationships with local beer and spirits distributors of BrewDog craft beers in the United States. BrewDog USA will therefore be able to draw upon such distribution relationships and BrewDog Plc’s expertise in launching the U.S. business.
In addition, BrewDog Plc plans to enter into a license with BrewDog USA permitting the Company to use the intellectual property of BrewDog Plc (including any trademarks) and any new marks created by BrewDog Plc. It is anticipated that any new intellectual property will be owned by BrewDog Plc, who will pay for the cost of clearing, registering and protecting any new intellectual property and will be licensed to BrewDog USA.
During the last fiscal year, the Company was a participant in transactions with BrewDog Plc, its parent company, in which the amounts involved exceed the lesser of $120,000 and one percent of the average of the Company’s total assets at year-end for the last completed fiscal year. In these transactions, BrewDog Plc charged management fees of $110,332, charged interest of $67,755 and made net advances of $5,345,190 to the Company.
James Watt and Martin Dickie own stock of, and are executive officers and directors of BrewDog Plc. As a result, they both have an indirect interest in the above-referenced transactions, as well as any other transactions involving the Company and BrewDog. James Watt and Martin Dickie will also have an indirect interest in any future transactions between BrewDog Plc and the Company due to their status as shareholders, executive officers and directors. There have been no transactions between BrewDog Plc and the Company in which either James Watt or Martin Dickie received any extra or special benefit not shared on a pro-rata basis by all of the holders of securities of the class of stock owned by them as shareholders of BrewDog Plc.
Item 6.Other Information None.
Item 7.Financial Statements
INDEX TO FINANCIAL STATEMENTS OF BREWDOG USA INC. | |
Consolidated Balance Sheets as of December 31, 2021 and 2020 | 2 |
Consolidated Statements of Comprehensive Loss - December 31, 2021 and 2020 | 3 |
Consolidated Statements of Stockholders’ Deficit - December 31, 2021 and 2020 | 4 |
Consolidated Statements of Cash Flows - December 31, 2021 and 2020 | 5 |
Notes to Consolidated Financial Statements | 6-21 |
Item 8.Exhibits
Charters, including amendments, Bylaws, and material contracts previously filed with Form 1-A and available for review at:
Charters:
https://www.sec.gov/Archives/edgar/data/1646269/000164626916000019/brewdogcharter.htm
https://www.sec.gov/Archives/edgar/data/1646269/000164626916000019/brewdogbylaws.htm
https://www.sec.gov/Archives/edgar/data/1646269/000164626916000019/brewdogmaterialcontracts.htm
SIGNATURES
Pursuant to the requirements of Regulation A, the issuer has duly caused this annual report on Form 1-K to be signed on its behalf by the undersigned, thereunto duly authorized, in Columbus, Ohio on April 29, 2022.
BREWDOG USA, INC.
By: /s/ Neil Simpson Chief Financial Officer
Pursuant to the requirements of Regulation A, this report has been signed below by the following persons on behalf of the issuer in the capacities and on the dates indicated.
SignatureTitle
By: /s/ Jason BlockChief Executive Officer & Director BrewDog USA Inc.
By: /s/ Neil SimpsonChief Financial Officer & Director BrewDog USA Inc.
| This ‘1-K’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| Filed on: | 4/29/22 | |||
| For Period end: | 12/31/21 | |||
| 12/31/20 | 1-K | |||
| 8/4/16 | ||||
| 8/1/16 | QUALIF | |||
| 4/22/15 | ||||
| List all Filings | ||||
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 4/28/23 Brewdog USA Inc. 1-K 12/31/22 2:4.2M 9/26/22 Brewdog USA Inc. 1-SA 6/30/22 1:226K Armed Forces Brewin… Inc |
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 4/13/21 Brewdog USA Inc. 1-K 12/31/20 2:5.9M 8/31/20 Brewdog USA Inc. 1-A POS¶ 8/31/20 11:13M 7/25/16 Brewdog USA Inc. 1-A/A 7/22/16 11:19M |