Concentrations and Credit Risk

12 Months Ended

Dec. 31, 2012

Risks and Uncertainties [Abstract]

Concentrations and Credit Risk

11.     Concentrations and Credit Risk

Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents, and accounts receivable. Substantially all of the Company’s cash and cash equivalents are deposited with commercial banks that have minimal credit risk, in the US and the UK. Accounts receivable are generally unsecured and customers are subject to an initial credit review and ongoing monitoring. Wholesale distributors account for substantially all accounts receivable; therefore, this risk concentration is limited due to the number of distributors and the laws regulating the financial affairs of distributors of alcoholic beverages. The Company has approximately $75,300 in cash deposits and $2,889,900 of accounts receivable due from customers located in the UK as of December 31, 2012.

The Company could experience labor disputes, work stoppages or other disruptions in production that could adversely affect it. As of December 31, 2012, union represented approximately 18% of the Company’s US-based workforce. On that date, the Company had approximately fourteen employees at its California (“CA”) facility who were working under a collective bargaining agreement. The agreement covering the CA facility expires on July 31, 2013.

Gross sales to the top five customers totaled $9,245,700 and $10,576,900 for the years ended December 31, 2012 and 2011, which represents 23% and 26% of sales for the years ended December 31, 2012 and 2011, respectively. Gross sales to Shepherd Neame for the years ended December 31, 2012 and 2011 was $3,527,000 and $5,063,000, which represented 9% and 12% of sales for those years respectively. No other customer individually represented greater than 5% of revenue.