Panache Beverage Inc. (fka WDKA)

[IPO$]

Sales dropped by more than half. What did mgt. do with all that money? ITs restricted cash dropped by $1,000,000 in Q1. I did not see any financing or investing activities so the money must have been blown in operations. Salaries? Terrible FS. Worst I have seen in a while for a company that as given that much $.

[IPO$]

PANACHE BEVERAGE, INC.


CONSOLIDATED STATEMENTS OF OPERATIONS - (Unaudited)






For the three months ended


March 31,


2014

2013



REVENUES-NET
$ 634,917 $ 1,417,138


COST OF GOODS SOLD
515,866 860,427


GROSS PROFIT
119,051 556,711


OPERATING EXPENSES


Advertising & promotion
289,115 267,044

Consulting
229,109 132,950

Professional fees
323,957 288,018

General & administrative
677,315 762,961

TOTAL OPERATING EXPENSES
1,519,496 1,450,973


LOSS FROM OPERATIONS
(1,400,445 ) (894,262 )


OTHER EXPENSE


Interest expense
(252,739 ) (104,582 )

Interest income
11,060 11,061

Gain on legal settlements
25,000 -

Gain on extinguishment of debt
- 58,296

TOTAL OTHER EXPENSE
(216,679 ) (35,225 )


LOSS FROM OPERATIONS AND BEFORE NON-CONTROLLING INTERESTS
(1,617,124 ) (929,487 )


LESS: LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS
181,585 120,972


LOSS BEFORE PROVISION FOR INCOME TAXES
(1,435,539 ) (808,515 )


PROVISION FOR INCOME TAXES
- -


NET LOSS ATTRIBUTABLE TO PANACHE BEVERAGE, INC.
$ (1,435,539 ) $ (808,515 )


BASIC AND DILUTED RESULTS PER SHARE OF COMMON STOCK:



LOSS PER SHARE ATTRIBUTABLE TO PANACHE BEVERAGE, INC.: BASIC AND DILUTED
$ (0.05 ) $ (0.03 )


WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC & DILUTED
27,055,891 26,310,526

[IPO$]

PANACHE BEVERAGE, INC.


CONSOLIDATED BALANCE SHEETS - (Unaudited)






March 31,

December 31,


2014

2013



ASSETS


Current Assets


Cash and cash equivalents
$ 221,075 $ 49,850

Restricted cash
387,208 1,942,158

Accounts receivable – net
231,419 173,803

Inventory
875,621 1,121,923

Prepaid expenses and other current assets
828,222 441,830

Total Current Assets
2,543,545 3,729,564


Property and Equipment - net
3,507,250 3,450,551


TOTAL ASSETS
$ 6,050,795 $ 7,180,115


LIABILITIES AND EQUITY (DEFICIT)



Current Liabilities


Accounts payable
$ 1,197,987 $ 1,219,419

Due to factor
351,271 312,500

Notes payable
28,000 33,187

Loans payable – related parties
498,231 498,231

Accrued interest
283,779 153,305

Other current liabilities
794,215 619,612

Total Current Liabilities
3,153,483 2,836,254


Long term debt
11,210,667 11,210,667


Total Liabilities
14,364,150 14,046,921


Equity (Deficit)



Common stock, par value $0.001; 200,000,000 shares authorized as of March 31, 2014 and December 31, 2013; 27,055,891 shares issued and outstanding as of March 31, 2014 and December 31, 2013
27,056 27,056

Additional paid in capital
4,239,006 4,191,572

Additional paid in capital - warrants
606,514 483,373

Accumulated (deficit)
(11,801,542 ) (10,366,003 )

Total stockholders' deficit
(6,928,966 ) (5,664,002 )

Non-controlling interests
(1,384,389 ) (1,202,804 )

Total Equity (Deficit)
(8,313,355 ) (6,866,806 )


TOTAL LIABILITIES AND EQUITY (DEFICIT)
$ 6,050,795 $ 7,180,115

[IPO$]

They will immediately exercise their right pursuant to the agreement and take control of the common shares. I hope former management returns shares to treasury. Otherwise a reverse split and issuance to Consilium will be necessary. If shares are not turned in, former management will be sued for fraud.

[Brads]

The forebearance agreement expired Friday - What do we think Consillium are about to do?

[IPO$]

10-Q is due today and still NO filing...

[IPO$]

the top guy...he was the man

[thesmalls]

Who did you speak with?

I dont expect much light to be shed in the 10Q to be filed but they definitely need to provide some transparency and direction or they will be down to pennies. I was a big supporter of the company/brand and was accumulating in the high $0.20s before the announcement. However - too much uncertainty now.

One option is for Consilium to retire the shares from the previous mgmt and reissue them on a secondary preventing dilution and increasing/recovering capital

[IPO$]

Inquiries of predecessor mgt.

[thesmalls]

They are keeping that a well hidden secret if accurate.

How are you getting to $3/share?

[IPO$]

If the expected exit strategy is still on and the company's case load is near its projections, then we have a $3 stock price. As long as a reverse split is not done, we are still sitting pretty IMO. Any thoughts?

[rblackmon]

my understanding is that the board were forced to resign which was a good thing but their distributor and key sales relationships nationally were managed through the VP of Sales. Hopefully they will keep him close. Dales was obviously in way above his head and clearly over compensated for what he was doing.

[CluelessStockJunkie]

From what I understand it will be an improvement. Key players will be kept and salaries and incentives realigned with performance.

[thesmalls]

where do you think they go from here? how instrumental was Dale in the relationship side of the business in getting distributors and placement with the brand? that is my biggest concern outside of the shares. however, it looks like those become less of an issue since a majority of them have been pledged per the 8K

did they lose any other sales personnel? did they leave with the board? might not be as big of an issue if they were underperforming anyway.

[CluelessStockJunkie]

Yup the board removal was a good thing like I said !!!

[IPO$]

Of the 27 million total shares, 19.9 million shares will be given up as security and collateral for loan guaranteed by former insiders.

[IPO$]

I see that there were 19,000,000 shares in reserve for collateral on the $6,100,000 loan the shares are owned by inside control people. Those will be taken away from them.

[thesmalls]

Per 8K released today - looks like we do not need to worry about the previous mgmt shares coming onto the market in the short term. Looks like the majority of them are now in the hands/controlled by Consilium. Still seems to be a lot we arent getting here.

[IPO$]

True. If they keep their shares, company will reverse split all shareholders out. If they keep them, they free up after 90 days and create a serious threat of dumping.

[thesmalls]

i dont have a good guess let alone a reasonable prediction. too many unknowns right now about the shares held by the departing insiders.

[IPO$]

I want to see share price go to $3 in short term. What do you reasonably and realistically predict ?

[thesmalls]

how do you know they are investigating? that information would be strictly confidential and certainly not public.

as far as them not being concerned with share price - that may or may not be the case. if he continued to pay himself that much without the associated performance in stock price - then yes i would agree.

as far as the $11MM - most of that is laid out in the quarterly and annual filings.

[IPO$]

I think the share price is going to head way up soon since getting shelf space in a very competitive liquor shelf space is difficult and these brands did it in relatively short order, so I respect management for that.

Many new distributors are carrying the product so this is also a plus.

Prior mgt. cared less about share price.

[IPO$]

Top line sales growth was dismal and lackluster to say the least. It is not what I expected with $11MM in investment. Terrible use of funds and piss poor management. New management is investigating where the money went and will either sue or turn them over to DOJ if fraud is proved.

[thesmalls]

other than Dale's pay being incongruent with stock performance (specifically in late 2013 and 2014) - what do you want from them?

they bought a distillery with cash on good financial terms to vertically integrate their supply chain.

they launched several products in the last 12 months (and one more just recently)

they have continued to increase top line revenue (though certainly not exponentially where they need to be on certain fronts)

they have increased sales force and distribution in strategic areas.

their marketing seems to have been a success to a certain degree in those targeted areas.

there appeared to be one or maybe two large positions being liquidated towards the end of 2013 and into 2014 that caused the steady decline. now you face the risk of the insiders leaving who control half of the outstanding shares liquidating. who will absorb those shares? Consilium? will they be long term vested or just recovering original capital?

so far -the market has not responded to the changes. 1Q14 results will more than likely be late with the changes. hopefully we will be provided more details at that time on the strategy front, guidance on top and bottom line, and capital infusion to advance distribution/sales.

[CluelessStockJunkie]

Agreed

[IPO$]

About time they do something. Glad the old regime is out.

[thesmalls]

8K released today discussed the new product distillery is currently producing and the second line that is being installed. Went over the recent CFO new hire as well. They are transitioning admin and sales down to the distillery

[CluelessStockJunkie]

I wish it was EVERYTHING lol

[IPO$]

man...u c everything lol

[CluelessStockJunkie]

Again, seen that ;)

[IPO$]

I agree. water entered mmj mkt fyi

[CluelessStockJunkie]

Should be bottomed out and done.

[IPO$]

tight spread today

[IPO$]

u r on the ball

[CluelessStockJunkie]

Already seen it ;)

[IPO$]

fyi---exercise is being revived....ck it out

[CluelessStockJunkie]

Agreed. And I am fairly certain with would be the game plan with the recent "takeover"

[IPO$]

I wonder if the intent or exit strategy is still a sale to a larger company? If so, case load will dictate selling price.

[thesmalls]

how are you breaking down the "$11MM investment"...?

getting shelf space in very competitive liquor shelf space is not easy and these brands did it in relatively short order.

what do you expect the revenues to be a couple years after launch? how many distributors are carrying the product let alone pushing it?

[IPO$]

Top line sales growth under older management is miserable and disgusting considering $11MM of investment.

[thesmalls]

Ok. That makes more sense.

[VVVVVV]

Oh I meant I am holding until a few pennies, THEN may consider buying. I understand now.

I got out months ago at $.35 and was waiting.

[VVVVVV]

This is despicable what just occurred, I am sure most would agree!

Well my opinion seemed to be true. PPS down tremendously. I am a small investor who was waiting to free up some money to invest into this company. Had own at $.25 and sold @ $.35. Thought they had a nice little business here. Nice product and potential.

BUT when a number of calls to the IR office weren't returned, hey one has to wonder. For those that did sell and cut your losses, well, your welcome. Listen I have been there done that in a few others, so I know what everyone is going through. I really do.

I don't have to disclose anything but I will. I presently don't own any shares and after what was pulled on the current and potential shareholders, I don't plan on purchasing any in the near future.

As for the distillery which I stated was closed with the gate shut at 11:30 in the morning a few months ago, after four months of ownership, it kind of brings up a red flag. I asked the lady if they were hiring and she said no. Period. Do your own DD. but as of now, everything I have stated is true to the best of my knowledge.

And, I don't really appreciate your comments. I gave an education and experienced opinion on the direction of the PPS. Their recent PR even stated additional capital is needed. So, if your new to penny stocks, this either means dilution or private placement, either which is not encouraging. Especially after the main characters resigned. More dilution usually mean lower PPS. IMHO

[thesmalls]

the below is a contradiction:

"Wow, I was going to invest a nice chuck of money into this company, in the near future. But what just happened and no response back form IR I'm holding until a few pennies.

Good luck and cut your losses ASAP and then maybe reconsider after the dust settles. Sad very sad. You jus never know with penny stocks."

are you holding until a few pennies or cutting your losses and THEN reevaluating...?

[thesmalls]

first of all - i dont know who would divulge that information to a random caller. second - it takes very few people to run a modern distillery as it is mostly electronic. it isnt like the relics that had many manual operations. third, even if they only had 4, that could simply be full time employees. the rest could be part time or contract. doesnt pay to have a high head count on one's own paper.

as far as operation - the PR yesterday stated rather succinctly it was in operation and running. in light of the announcement/8K and due to the reason to release that PR - it would be considered misleading and open themselves up to civil suits and SEC inquiry if they were drastically skirting disclosure and materially misrepresenting the status of operations/company.

while on the surface this is certainly not positive news - there is a serious lack of information we are not privy to that will determine whether or not it is positive going forward.

regardless - yelling "sell! sell!" is disingenuous at best and possibly illegal depending on what your intent/non public actions exist of. there are many factors that go into selling a security - especially a thinly traded, closely held stock such as this.

as a matter of disclosure - i am neither buying nor selling at this juncture. i was buying heavily prior to this release. the fundamental story has not changed with respect to the brands or the position of the company. if there was a need for leadership change from a numbers perspective - i am willing to wait and see what the plan is. the brands are selling and selling well in certain areas.

[VVVVVV]

Contradict what?

Well, since the PPS is around $ .10, pennies would be a much better buy in, than $.35.

But, this will be diluted down and maybe even at pennies, it maybe too risky.

Who's running the ship? That's my questions.

[thesmalls]

ran what into the ground? you need to do some independent research or you shouldnt be investing in micro stocks.

the company has launched three brands in the last 12 months. has increased top line revenues steadily the last three years and the bottom line while not "improving" has been moving with the increased SG&A around added employees, repatriating products to the US, establishing distribution, and vertically integrating the brands. the company can now control their supply as well as increase revenue by cobranding.

as far as the distillery - this is about a brand and selling. this isnt a history lesson or a walk through time visiting the Maker's Mark facility in Kentucky. it is a modern facility with no "panache" when it comes to history. however, do we need that when making a discount vodka to compete in a crowded space.

i have an issue with Dale's compensation relative to stock performance over the last 12-18 months. while he is/was the primary stockholder - his compensation should have been backloaded and relative to the stock performance. in light of the consistent downward trend since beginning of 2013 - it should have been adjusted immediately for 2014.

the inflated SG&A around compensation could be a major factor in the lenders pulling the plug on current mgmt. it also could be they do not feel revenues were increasing fast enough for a young brand.

corruption? do you have any proof or even objective assumptions that there was corruption in the mgmt that just resigned?

even though the stock is off close to 50-70% since the announcement - the volume is still very low and the size of the offers on the ASK have not changed much. that suggests whoever was systematically selling prior have continued and are not accelerating the liquidation. insiders are required to file a Form 4 and those have not been filed. it would do the former insiders no good to dump shares now as there simply wouldnt be supply to absorb them. unless they were looking to force the hand of the lenders to play ball.

the PR yesterday was welcome but there certainly needs to be more details about how they move forward before there will be any serious buying picking up.

as far as VVVVV - he contradicts himself in the same post. he encourages you/others to "sell ASAP" while he holds on for pennies. maybe i misunderstood.

[IPO$]

I'm angry at how mgt ran it into the ground.

[VVVVVV]

IPO$, the building is an old old plant with a few cars if that parked outside. Their PR made it out to be something it wasn't. Last time I drove by, there was one car and the other the gate was locked and no one was around. This was several months ago.

It just pisses me off when some defend a company that has four of the top level management resign! There is nothing good about that. But, hey we learn are lessons in this , don't we.