Liquidity and Management Plans	9 Months Ended
Sep. 30, 2012
Liquidity And Management Plans
Liquidity and Management Plans	2. Liquidity and Management Plans On June 23, 2011, MBC and Releta entered into a Credit and Security Agreement (the “Agreement”) with Cole Taylor Bank, an Illinois banking corporation (“Cole Taylor”). The Agreement provides a credit facility with a maturity date of June 23, 2016 of up to $10,000,000 consisting of a $4,119,000 revolving facility, a $1,934,000 machinery and equipment term loan, a $2,947,000 real estate term loan and a $1,000,000 capital expenditure line of credit. Convertible promissory notes issued to United Breweries of America, Inc. (“UBA”), one of the Company’s principal shareholders, are subordinated to the Cole Taylor facility. At September 30, 2012, the Company had cash and cash equivalents of $139,000, an accumulated deficit of $13,846,700 and a working capital deficit of $2,567,900 due to losses incurred since 2005 in connection with KBEL’s operations in the UK. (For additional information, see Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.”) On March 2, 2012, United Breweries (Holdings) Limited (“UBHL”), MBC’s indirect majority shareholder, issued a letter of financial support on behalf of KBEL (the “Letter of Support”), to KBEL’s accountants, to confirm that UBHL had agreed to provide funding on an as needed basis to KBEL to ensure that KBEL is able to meet its financial obligations as and when they become due. There is no maximum dollar limit on the amount of funds which UBHL will provide to KBEL specified in the Letter of Support. The type of financial support provided by UBHL and the terms of such financial support are not specified in the Letter of Support. UBHL’s financial support to KBEL is contingent upon compliance with any applicable exchange control requirements and other applicable laws and regulations relating to the transfer of funds from India to the UK. The Letter of Support dated March 2, 2012 was issued for a 12 month minimum period. Management intends to seek UBHL’s consent to keep the current Letter of Support in force beyond the minimum period, if necessary, or request that UBHL issue a new letter of support for periods after such minimum period. UBHL controls the Company’s two largest shareholders, UBA and Inversiones Mirabel S.A., and as such, UBHL is the Company’s indirect majority shareholder. UBHL represented in the Letter of Support that it has the requisite financial resources to meet its commitment to KBEL under the Letter of Support. The Chairman of the Company’s Board of Directors, Dr. Vijay Mallya, is also the chairman of the board of directors of UBHL. Management has taken several actions to enable the Company to meet its working capital needs through September 30, 2013, including reducing discretionary expenditures, exploring expansion of business in new territories and pursuing additional brewing contracts in an effort to utilize a portion of excess production capacity. The Company may also seek additional capital infusions to support its operations. If it becomes necessary to seek UBHL’s financial assistance under the current Letter of Support and UBHL is either unable or unwilling to fulfill its commitment to KBEL under the current Letter of Support or to extend the time period of such commitment if necessary, it may result in a material adverse effect on KBEL’s, UBIUK’s and the Company’s financial position and on their ability to continue operations. In addition, if the Company is in default under its secured credit facilities, its lenders may seek to satisfy any outstanding obligations through recourse against the applicable pledged collateral which may include the Company’s real property and fixed and current assets. The loss of any material pledged asset would likely have a material adverse effect on the Company’s financial position and results of operations. UBIUK and KBEL hold the exclusive brewing and distribution rights for Kingfisher Premium Lager in the UK, Ireland, continental Europe, and Canada through a licensing agreement with United Breweries Limited, an Indian corporation (“UB”). Under its terms, this licensing agreement is currently scheduled to expire in October 2013. We are in discussions with UB to renew this agreement. If we are unable to renew this licensing agreement on commercially reasonable terms, our results of operations, cash flows and financial position may be materially adversely affected. In July 2001, we entered into the Kingfisher Trademark and Trade Name License Agreement with Kingfisher America, Inc., pursuant to which we obtained a royalty-free, exclusive license to use the Kingfisher trademark and trade name in connection with the brewing and distribution of beer in the US. Under its terms, this agreement is currently scheduled to expire in October 2013. If we are unable to renew this license agreement on commercially reasonable terms, our results of operations, cash flows and financial position may be materially adversely affected. Since 1998, UBIUK and KBEL have licensed to Shepherd Neame the exclusive right to brew, keg, bottle, can, label, and package all beers and related products sold under the Kingfisher trademark in the UK, Ireland, and continental Europe. This agreement will expire in October 2013. We are in discussion with Shepherd Neame and other potential parties to negotiate a new agreement. If we are unable to renew this agreement on commercially reasonable terms or enter into a new agreement for brewing for distribution in the Foreign Territory, our results of operations, cash flows and financial position may be materially adversely affected.

Liquidity and Management Plans

9 Months Ended

Sep. 30, 2012

2. Liquidity and Management Plans

On June 23, 2011, MBC and Releta entered into a Credit and Security Agreement (the “Agreement”) with Cole Taylor Bank, an Illinois banking corporation (“Cole Taylor”). The Agreement provides a credit facility with a maturity date of June 23, 2016 of up to $10,000,000 consisting of a $4,119,000 revolving facility, a $1,934,000 machinery and equipment term loan, a $2,947,000 real estate term loan and a $1,000,000 capital expenditure line of credit. Convertible promissory notes issued to United Breweries of America, Inc. (“UBA”), one of the Company’s principal shareholders, are subordinated to the Cole Taylor facility.

At September 30, 2012, the Company had cash and cash equivalents of $139,000, an accumulated deficit of $13,846,700 and a working capital deficit of $2,567,900 due to losses incurred since 2005 in connection with KBEL’s operations in the UK. (For additional information, see Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.”)

On March 2, 2012, United Breweries (Holdings) Limited (“UBHL”), MBC’s indirect majority shareholder, issued a letter of financial support on behalf of KBEL (the “Letter of Support”), to KBEL’s accountants, to confirm that UBHL had agreed to provide funding on an as needed basis to KBEL to ensure that KBEL is able to meet its financial obligations as and when they become due. There is no maximum dollar limit on the amount of funds which UBHL will provide to KBEL specified in the Letter of Support. The type of financial support provided by UBHL and the terms of such financial support are not specified in the Letter of Support. UBHL’s financial support to KBEL is contingent upon compliance with any applicable exchange control requirements and other applicable laws and regulations relating to the transfer of funds from India to the UK. The Letter of Support dated March 2, 2012 was issued for a 12 month minimum period. Management intends to seek UBHL’s consent to keep the current Letter of Support in force beyond the minimum period, if necessary, or request that UBHL issue a new letter of support for periods after such minimum period. UBHL controls the Company’s two largest shareholders, UBA and Inversiones Mirabel S.A., and as such, UBHL is the Company’s indirect majority shareholder. UBHL represented in the Letter of Support that it has the requisite financial resources to meet its commitment to KBEL under the Letter of Support. The Chairman of the Company’s Board of Directors, Dr. Vijay Mallya, is also the chairman of the board of directors of UBHL.

Management has taken several actions to enable the Company to meet its working capital needs through September 30, 2013, including reducing discretionary expenditures, exploring expansion of business in new territories and pursuing additional brewing contracts in an effort to utilize a portion of excess production capacity. The Company may also seek additional capital infusions to support its operations.

If it becomes necessary to seek UBHL’s financial assistance under the current Letter of Support and UBHL is either unable or unwilling to fulfill its commitment to KBEL under the current Letter of Support or to extend the time period of such commitment if necessary, it may result in a material adverse effect on KBEL’s, UBIUK’s and the Company’s financial position and on their ability to continue operations. In addition, if the Company is in default under its secured credit facilities, its lenders may seek to satisfy any outstanding obligations through recourse against the applicable pledged collateral which may include the Company’s real property and fixed and current assets. The loss of any material pledged asset would likely have a material adverse effect on the Company’s financial position and results of operations.

UBIUK and KBEL hold the exclusive brewing and distribution rights for Kingfisher Premium Lager in the UK, Ireland, continental Europe, and Canada through a licensing agreement with United Breweries Limited, an Indian corporation (“UB”). Under its terms, this licensing agreement is currently scheduled to expire in October 2013. We are in discussions with UB to renew this agreement. If we are unable to renew this licensing agreement on commercially reasonable terms, our results of operations, cash flows and financial position may be materially adversely affected.

In July 2001, we entered into the Kingfisher Trademark and Trade Name License Agreement with Kingfisher America, Inc., pursuant to which we obtained a royalty-free, exclusive license to use the Kingfisher trademark and trade name in connection with the brewing and distribution of beer in the US. Under its terms, this agreement is currently scheduled to expire in October 2013. If we are unable to renew this license agreement on commercially reasonable terms, our results of operations, cash flows and financial position may be materially adversely affected.

Since 1998, UBIUK and KBEL have licensed to Shepherd Neame the exclusive right to brew, keg, bottle, can, label, and package all beers and related products sold under the Kingfisher trademark in the UK, Ireland, and continental Europe. This agreement will expire in October 2013. We are in discussion with Shepherd Neame and other potential parties to negotiate a new agreement. If we are unable to renew this agreement on commercially reasonable terms or enter into a new agreement for brewing for distribution in the Foreign Territory, our results of operations, cash flows and financial position may be materially adversely affected.