The maker of Flying Monkey Dogfight Pale Ale, Breakaway IPA, American Blonde and Caboose Oatmeal Stout will be looking for financing, the company says in a filing with the U.S. Securities and Exchange Commission.
American Brewing Co. says it needs to raise additional capital in order to fund operations and execute the business plan. Financial concerns, including a $2.3 million deficit, raise substantial doubts about the company’s ability to continue as a going concern, or without the threat of liquidation. Without additional cash, the company could be forced to scale down business or pursue other strategic alternatives, it says in an SEC filing.
The Edmonds, Washington-based brewer, formed in 2010, makes the four beers mentioned above, plus seasonal varieties and kombucha tea. American Brewing has racked up several awards at the Great American Beer Festival in Denver, and says it is focused on growth.
Right now, American Brewing distributes beer in Washington, North Carolina, Canada and Japan. The business is working to grow distribution to include Idaho, Oregon, Michigan, Nevada, New Jersey and Montana, according to an SEC filing. The company's’s growth plan includes product expansion, including more seasonal beers, and adding 6- and 12-packs to the mix.
The company was highlighted in a PBS mini-documentary series on the micro-brew movement, “Breakthroughs with Martin Sheen.”
In April, American Brewing added kombucha with the acquisition of B&R Liquid Adventure LLC, the maker of Bucha Live Kombucha, a gluten-free, organic, sparkling kombucha tea. American Brewing paid $260,000 in cash, plus nearly 1.5 million shares of common stock (valued at $500,000).
The company, which faces competition from enormous, international beer corporations, has been operating with loans from small business lender Pinnacle Capital Partners, and management.
Revenues grew during the business’ second quarter, to $944,916 from $638,525 in the first quarter. In the second quarter of 2014, the company had $843,320 in revenue.
Beer companies have proven popular M&A targets in recent years, as popularity of smaller brands skyrocketed. In May, beer giant SABMiller plc agreed to buy Meantime Brewing Co. to add European craft beer. Before that, Anheuser-Busch InBev (NYSE: BUD) made a deal for independent beer business Blue Point Brewing Co. For more on interest in craft beer, read our interview with Tom Pirko, managing director of beverage advisory firm Bevmark LLC.
For the previous edition of Turnaround Tuesday, see General Steel to Restructure as Price Declines Hurt Bottom Line. For a list of other struggling companies, see Mergers & Acquisitions Distressed Company Watch List.