Item 3.02 Unregistered Sale of
Equity Securities
On December 31, 2017, UPD Holding Corp.
(the “Registrant”) closed an Agreement of Exchange and Plan of Reorganization (the “Agreement”) with Record
Street Brewing Co., a Nevada corporation (“RSB”), which was dated December 31, 2017. Pursuant to the Agreement, the
Registrant will issue 80,000,000 restricted common stock shares to the four shareholders of RSB in exchange for all outstanding
capital stock of RSB, after which the Registrant will have 161,366,636 common shares outstanding. Mark Conte, President of the
Registrant, is a minority shareholder of RSB.
Business, Operations and Organization
Esio Water & Beverage Development
Corp. was incorporated in Nevada in June 1988 as Richard Barrie Fragrances, Inc. Over the years, the Company changed its name several
times, most recently from Tempco, Inc. to Esio Water & Beverage Development Corp. Esio Water & Beverage Development Corp.
and its wholly-owned subsidiaries Net Edge Devices, LLC, an Arizona Limited Liability Company, and iMetabolic Corp, (“IMET”)
a Nevada Corporation are hereinafter collectively referred to as the “Company.”
On March 16, 2015, the Company
issued to the IMET 16 shareholders of record an aggregate of 60,000,000 shares, or 76.2% of the Company’s common stock. Prior
to the close of the reverse merger, IMET had 10,000,000 common shares outstanding immediately prior to the merger and net liabilities
of $20,500. Prior to closing, the predecessor company had 18,566,636 shares outstanding and net assets of $89,615, of which $85,378
was cash and $4,237 was non-cash. As a result of the closing of this transaction, IMET is now a wholly owned subsidiary of the
Company and its business and operations represent those of the Company
For accounting purposes, this
transaction is being accounted for as a reverse merger and has been treated as a recapitalization of the Company with IMET considered
the accounting acquirer, and the financial statements of the accounting acquirer become the financial statements of the registrant.
This transaction is hereinafter referred to as the “Reverse Merger.” The Company did not recognize goodwill or any
intangible assets in connection with the transaction. The 60,000,000 common shares issued to the shareholders of IMET in conjunction
with the share exchange transaction have been presented as outstanding for all periods.
On December 30, 2015, the Company
filed Articles of Merger (the “Merger”) with the Nevada Secretary of State. The Merger was between the Company and
our wholly-owned subsidiary, UPD Holding Corp. (the “Subsidiary”). Pursuant to Nevada corporate law, we amended our
Articles of Incorporation by the Merger to change our name to UPD Holding Corp. We believe our new name more properly indicates
our current lines of business because the Company has not been in the water and beverage industry since 2012. “UPD”
stands for United Product Development.
On January 8, 2018, the Company
filed an 8-K with the Securities and Exchange Commission on announcing the closing of its Agreement of Exchange and Plan of Reorganization
dated December 31, 2017 between UPD Holding Corp. and Record Street Brewing (“RSB”).
In the quarter ending March
31, 2018, the Company entered into a production relationship with BrewHub and launched the new Stylus lager in all formats as well
as blonde and pale ales in cans along with the Company’s existing 1/6 and 1/2-barrel kegs and 12 oz bottles.
Note Regarding Forward-Looking
Statements
This Current Report on Form 8-K includes
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”),
and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than
statements of historical fact, contained in this prospectus constitute forward-looking statements. In some cases you can identify
forward-looking statements by terms such as “may,” “intend,” “might,” “will,” “should,”
“could,” “would,” “expect,” “believe,” “estimate,” “anticipate,”
“predict,” “project,” “potential,” or the negative of these terms and similar expressions intended
to identify forward-looking statements.
Forward-looking statements are based on
assumptions and estimates and are subject to risks and uncertainties. We have identified in this Current Report on Form 8-K some
of the factors that may cause actual results to differ materially from those expressed or assumed in any of our forward-looking
statements. There may be other factors not so identified. You should not place undue reliance on our forward-looking statements.
As you read this Current Report on Form 8-K, you should understand that these statements are not guarantees of performance or results.
Further, any forward-looking statement
speaks only as of the date on which it is made and, except as required by law, we undertake no obligation to update any forward-looking
statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or
unanticipated events or circumstances. New factors emerge from time to time that may cause the business not to develop as expected
and it is not possible to predict all of them. Factors that may cause actual results to differ materially from those expressed
or implied by these forward-looking statements include, but are not limited to, those described in Item 2.01 of this Current Report
on Form 8-K under the heading “Risk Factors”, as well as the following:
These forward-looking statements include,
among other things, statements relating to:
The company’s anticipated
cash needs and its estimates regarding its capital expenditures, as well as its capital requirements and need for additional financing;
The company’s ability to
identify and retain personnel for its continued business;
The company’s ability to
maintain current strategic relationships and develop relationships with new strategic partners;
The Company’s competitive
position and its expectations regarding competition from other brewing companies and
Anticipated trends and challenges
in its core business and the markets in which it operates.
INDUSTRY AND MARKET DATA
There are four distinct craft beer industry
market segments: brewpubs, microbreweries, regional craft breweries and contract brewing companies. Record Street currently meets
the definition of a microbrewery (i.e., brewery that produces less than 15,000 barrels of beer per year with 75 percent or more
of its been sold off-site). The company currently sells its products to the public by the traditional three-tier system (brewer
to wholesaler to retailer/consumer). It also intends to sell its products directly to the consumer through carry-outs and on-site
tap-room, restaurant, and brewpub sales.
The company anticipates its location in
Reno, Nevada to be its first brewpub (i.e., a restaurant-brewery that sells 25 percent of more of its beer on site). However, it
currently is designated as a contract brewing company because it hires other breweries to produce its beer. BrewHub currently handles
this production aspect. Record Street handles its own marketing, sales and distribution of its beer.
Record Street’s goal is to become
an independent, regional, craft brewing company with a majority of its volume in “traditional” or “innovative”
beers with an annual beer production of between 15,000 and 6,000,000 barrels.
The overall beer market is transitioning
from traditional brands to craft brands that command a price premium. While craft beers account for only 12.3% of the total beer
market by barrel volume, they are 21.1% of the total beer market by dollar volume. And, the craft beer market increased at the
rate of 12.8% in 2015, and 8.0% in the first half of 2016.
U.S. exports of craft beer increased at
the rate of 16.3% in 2015, with a significant portion originating in California.
Growth Strategy
Retail chain sales will be among its strategy
through the following points:
Key account frequency
Core brand placements
Brand share of mind
Draught and package incentives
Subsidiaries
Record Street Brewing (RSB) is a subsidiary
of United Product Development Corp.
Legislation and Government Incentives
Not applicable.
Manufacturing
RSB is currently contract brewing
through an agreement with BrewHub. RSB currently manufactures and markets three flagship ales: Blonde Ale, Pale Ale, and Indian
Pale Ale. RSB distributes existing 1/6 and 1/2-barrel kegs, 12 oz bottles and 12 oz cans through distribution relationships with
Young’s Market Company, LLC in California and Southern Glazer’s Wine and Spirits in Nevada. In addition, RSB has commenced
planning and pre-construction work upon its flagship brewpub to be located in Reno, Nevada.
Research and Development
Not applicable.
Intellectual Property Protection
Not applicable.
Facilities and Employees
Not applicable.
Environmental Matters
Not applicable.
Reports to Security Holders
Not applicable.
Description of the Industry
There are four distinct craft beer industry
market segments: brewpubs, microbreweries, regional craft breweries and contract brewing companies. Record Street currently meets
the definition of a microbrewery (i.e., brewery that produces less than 15,000 barrels of beer per year with 75 percent or more
of its been sold off-site). The company currently sells its products to the public by the traditional three-tier system (brewer
to wholesaler to retailer/consumer). It also intends to sell its products directly to the consumer through carry-outs and on-site
tap-room, restaurant, and brewpub sales.
RISK FACTORS
Risks Related to the Common Stock
Capital requirements
To the extent that the cash flow from operations
are insufficient to fund the Company’s operations, we will be required to raise additional capital through equity or debt
financing. Any additional equity financing may be dilutive to shareholders, and debt financing, if available, may involve significant
restrictive covenants. The Company’s failure or inability to raise capital when needed could have a material adverse effect
on the Company’s business, financial condition and results of operations. There can be no assurance that such financing will
be available on terms satisfactory to the Company, if at all.
The Company may conduct further offerings
in the future, in which case your shareholdings will be diluted
The Company may rely on equity sales of
common stock to fund operations. The Company may conduct further equity and/or convertible debt offerings in the future to finance
operations or other projects that it decides to undertake. If common stock is issued in return for additional funds, or upon conversion
or exercise of outstanding convertible debentures or warrants, the price per share could be lower than that paid by existing common
stockholders. The Company anticipates continuing to rely on equity sales of common stock and issuances of convertible debt and/or
warrants convertible or exercisable into shares of common stock in order to fund its business operations. If the Company issues
additional shares of common stock, your percentage interest in the Company will be lower. This condition, often referred to as
“dilution”, could result in a reduction in the per share value of your shares of common stock.
The trading price of our common stock may
fluctuate significantly
Volatility in the trading price of our
common stock may prevent you from being able to sell your shares of our common stock at prices equal to or greater than your purchase
price. The trading price of our common stock could fluctuate significantly for various reasons, including:
our operating and financial performance
and prospects;
our quarterly or annual earnings
or those of other companies in our industry;
the public’s reaction to
our press releases, other public announcements and filings with the Securities and Exchange Commission;
changes in earnings estimates
or recommendations by research analysts who track our common stock or the stock of other companies in our industry;
The Company does not anticipate paying dividends in the future
We have never declared or paid any cash
dividends on our common stock. Our current policy is to retain earnings to reinvest in our business. Therefore, we do not anticipate
paying cash dividends in the foreseeable future. The Company’s dividend policy will be reviewed from time to time by the
Board of Directors in the context of its earnings, financial condition and other relevant factors. Until the Company pays dividends,
which it may never do, its shareholders will not be able to receive a return on shares of common stock unless they sell them. In
addition, there is no guarantee that our common stock will appreciate in value or even maintain the price at which stockholders
have purchased their shares.
Financial Information
The disclosure included in Item 9.01 of this Current Report
on Form 8-K is incorporated herein by reference.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations
The following discussion and analysis provides
information concerning Record Street Brewing’s. operating results and financial condition. This discussion and analysis should
be read in conjunction with the Company’s consolidated financial statements and accompanying notes included elsewhere in
this Current Report on Form 8-K, including the financial statements of the acquired business for the year ended June 30, 2018 as
well as pro forma financial statements showing the effect of the Acquisition which are filed as Exhibits to the Company’s
10Q files June 4, 2018. The Company’s consolidated financial statements have been prepared in accordance with U.S. generally
accepted accounting principles (“GAAP”).
Some sections of this discussion and analysis
contain forward-looking statements that, because of their nature, necessarily involve a number of known and unknown risks and uncertainties,
including statements regarding our capital needs, business strategy and expectations. Any statements contained herein that are
not statements of historical facts may be deemed to be forward-looking statements. In some cases, forward-looking statements can
be identified by terminology such as “may,” “will,” “should,” “expect,” “plan,”
“intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential”
or “continue,” the negative of such terms or other comparable terminology. The Company’s actual and future results
could therefore differ materially from those indicated or underlying these forward-looking statements. In evaluating these statements,
you should consider various factors, including the risks discussed below, and, from time to time, in other reports filed with the
SEC. See “Risk Factors” and “Forward- Looking Statements”.
Although the Company deems the expectations
reflected in these forward-looking statements to be reasonable, the Company cannot provide any guarantee as to the materialization
of the expectations reflected in these forward- looking statements.
OVERVIEW
Record Street Brewing Company is engaged
in the business of alcoholic beverages product development, marketing, distribution and sales with a current focus in the beer
industry. The company’s flagship products are its blonde ale, pale ale and India pale ale in bottles and kegs, which are
distributed throughout Nevada and California. The newest product offering is a blonde pilsner in both cans and kegs and the company
has a line of spirits and a line of both red and white blends in development as well. Ultimately the company intends to launch
a chair of Record Street Tap Rooms which will be music lounges that serve each of the company’s products on a displayed tap
system with value pricing, high margins and high volumes, together with affordable craft pizzas, salads and brunch fare. Flagship
locations are intended for Reno, Nevada and Hollywood, California.
Off Balance Sheet Arrangements
Not applicable.
Security Ownership of Beneficial Owners and Management
Directors and Executive Officers
Identification of Directors and Executive Officers
The following table sets forth the name,
age and positions of our new executive officer and director as of the Effective Date. Executive officers are elected annually
by our Board of Directors. Each executive officer holds his office until he resigns, is removed by the Board, or his successor
is elected and qualified. Directors are elected annually by our stockholders at the annual meeting. Each director holds
his office until his successor is elected and qualified or his earlier resignation or removal.
Name
|
|
Age
|
|
Position
|
|
Director Since
|
|
|
|
|
|
|
|
Mark W. Conte
|
|
|
57
|
|
|
President, Chief Executive Officer, Director
|
|
March 16, 2015
|
Kevin J. Pikero
|
|
|
62
|
|
|
Chief Financial Officer, Director
|
|
March 16, 2015
|
Andrew D. Smith
|
|
|
59
|
|
|
Director
|
|
March 16, 2015
|
Mark W. Conte.
Mr. Conte is
a business professional and entrepreneur in Reno, Nevada with over 25 years of experience in marketing and operations in the health,
nutraceutical, technology, agricultural sciences, and banking industries. Mr. Conte is a co- founder and currently serves as President
of iMetabolic Corp. Formerly, Mr. Conte was a co-founder and co-Managing Member of International Metabolic Institute LLC, which
developed the “iMetabolic” brand and initial line of dietary and nutraceutical products. Prior thereto, Mr. Conte was:
a Partner in 1Globe Wireless, Inc.; the B2B Sales Manager for AT&T Wireless; Managing Director and Manager of Operations for
Perten Instruments; Vice President of Marketing for AIQ Systems, Inc.; and as a Corporate Banking Specialist and Foreign Exchange
Representative for Valley Bank of Nevada. Mr. Conte is a graduate of the University of Nevada at Reno with a B.S. in Finance.
Kevin J. Pikero
. Mr. Pikero
is a practicing Certified Public Accountant (CPA) in Reno, Nevada with over 35 years of experience in the financial and accounting
business. Mr. Pikero currently operates Kevin J. Pikero & Associates, Inc. (CPAs) in Reno, Nevada providing accounting, tax,
and financial services for a select domestic and international clientele of corporations, partnerships, sole proprietors, and individuals.
Mr. Pikero’s professional history includes employment with: Haims & Company – (CPAs); E.F. Hutton Credit
Corp.; Barclays Business Credit Inc.; Truckee River Bank; Bank of America Community Development Bank; and United American Funding,
Inc. Mr. Pikero is a graduate of Bentley University with a B.S. in Accounting and of the University of Bridgeport, Bridgeport,
CT with a M.B.A. in Finance.
Andrew D. Smith.
Mr. Smith
is a Certified Public Accountant in Chicago, Illinois with over 25 years of experience in the financial and accounting business.
He is a co-founder and the current President of Houlihan Capital, an investment banking firm with specializations in mergers and
acquisitions and valuations. Previously to his time at Houlihan Capital, Mr. Smith was: a Senior Vice President for EVEREN Securities,
Inc. (formerly Kemper Securities, Inc., 1993 to 1996), where he was the founder and co-head of the firm’s Mergers & Acquisitions
Group; a Managing Director at Geneva Capital Markets; and an auditor for Ernst & Whinney, where he specialized in serving financial
institutions. Mr. Smith is a graduate, with honors, of Ohio Wesleyan University with a BA in Economics, is registered with FINRA
as a General Securities Representative (Series 7), General Securities Principal (Series 24), and a Financial and Operations Principal
(Series 27), is a member of the American Institute of Certified Public Accountants and the Illinois CPA Society, and is credentialed
through the American Institute of Certified Public Accountants as “Accredited in Business Valuation.”
Executive Compensation
The following table sets forth the compensation
awarded to, earned by or paid to each named executive officer during each of the fiscal years ended June 30, 2018 and 2017.
Summary Compensation Table
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
Salary
|
|
Compensation
|
|
Total
|
Name and Principal Position
|
|
Year
|
|
($)
|
|
($)
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark W. Conte (1)
|
|
2018
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
President, Chief (Principal) Executive Officer, Director
|
|
2017
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin J. Pikero (1)
|
|
2018
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Chief (Principal) Financial Officer and Director
|
|
2017
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrew D. Smith (1)
|
|
2018
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Director
|
|
2017
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
_________________
|
|
(1)
|
Messrs. Conte, Pikero and Smith were appointed to their positions on March 16, 2015.
|
Director Compensation
We do not currently have a formal plan
for compensating our directors.
Compensation Committee Interlocks and Insider
Participation
Not applicable.
Executive Employment Agreements
There are no employment agreements between
the Company and its officers and directors.
Long-Term Incentive Plans
The Company currently has no long-term incentive plans.
Stock Option Plans
A summary of the activity of options under
the plan and non-statutory options granted outside the plan follows:
|
|
|
|
Weighted
|
|
|
Number of
|
|
Average
|
|
|
Options
|
|
Exercise
Price
|
|
|
|
|
|
Outstanding at June 30, 2016
|
|
|
2,102,767
|
|
|
$
|
0.013
|
|
Granted
|
|
|
—
|
|
|
|
—
|
|
Exercised
|
|
|
—
|
|
|
|
—
|
|
Expired
|
|
|
(870,000
|
)
|
|
|
0.24
|
|
Forfeited
|
|
|
—
|
|
|
|
—
|
|
Outstanding at June 30, 2017
|
|
|
1,232,767
|
|
|
$
|
0.01
|
|
Granted
|
|
|
—
|
|
|
|
—
|
|
Exercised
|
|
|
—
|
|
|
|
—
|
|
Expired
|
|
|
(32,767
|
)
|
|
|
0.13
|
|
Forfeited
|
|
|
—
|
|
|
|
—
|
|
Outstanding at June 30, 2018
|
|
|
1,200,000
|
|
|
$
|
0.05
|
|
Additional information about outstanding
options to purchase the Company’s common stock as of June 30, 2018 is as follows:
|
|
Options Outstanding
|
|
Options Exercisable
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
Average
|
|
Weighted
|
|
|
|
|
|
Average
|
|
Weighted
|
|
|
|
|
Number
|
|
Remaining
|
|
Average
|
|
Aggregate
|
|
|
|
Remaining
|
|
Average
|
|
Aggregate
|
Exercise
|
|
of
|
|
Contractual
|
|
Exercise
|
|
Intrinsic
|
|
Number of
|
|
Contractual
|
|
Exercise
|
|
Intrinsic
|
Price
|
|
Shares
|
|
Life (Years)
|
|
Price
|
|
Value
|
|
Shares
|
|
Life (Years)
|
|
Price
|
|
Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$0.05
|
|
|
1,200,000
|
|
|
|
1.60
|
|
|
$
|
0.05
|
|
|
$
|
—
|
|
|
|
1,200,000
|
|
|
|
0.60
|
|
|
$
|
0.05
|
|
|
$
|
—
|
|
|
|
|
1,200,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,200,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The 1,200,000
options were granted to directors on February 3, 2014 and are exercisable at $0.05 for 5 years.
Additional information about outstanding
options to purchase the Company’s common stock as of June 30, 2017 is as follows:
|
|
Options Outstanding
|
|
Options Exercisable
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
Average
|
|
Weighted
|
|
|
|
|
|
Average
|
|
Weighted
|
|
|
|
|
Number
|
|
Remaining
|
|
Average
|
|
Aggregate
|
|
|
|
Remaining
|
|
Average
|
|
Aggregate
|
Exercise
|
|
of
|
|
Contractual
|
|
Exercise
|
|
Intrinsic
|
|
Number of
|
|
Contractual
|
|
Exercise
|
|
Intrinsic
|
Price
|
|
Shares
|
|
Life (Years)
|
|
Price
|
|
Value
|
|
Shares
|
|
Life (Years)
|
|
Price
|
|
Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$0.13
|
|
|
32,767
|
|
|
|
0.17
|
|
|
$
|
0.13
|
|
|
$
|
—
|
|
|
|
32,767
|
|
|
|
.017
|
|
|
$
|
0.13
|
|
|
$
|
—
|
|
$0.05
|
|
|
1,200,000
|
|
|
|
1.60
|
|
|
$
|
0.05
|
|
|
$
|
—
|
|
|
|
1,200,000
|
|
|
|
1.60
|
|
|
$
|
0.05
|
|
|
$
|
—
|
|
|
|
|
1,232,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,232,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The options were
granted to directors on February 3, 2014 and are exercisable at $0.05 for 5 years.
Warrants Granted by Predecessor Company
Prior to Reverse Merger
Prior to the Reverse Merger, the predecessor
company issued 8,155,478 Warrants primarily in connections with financing arrangements and consulting services. Activity relative
to these warrants for the year ended June 30, 2018 is as follows:
|
|
|
|
|
|
|
Number
|
|
Weighted
|
|
|
of
|
|
Average
|
|
|
Shares
|
|
Exercise Price
|
|
|
|
|
|
Warrants outstanding - June 30, 2016
|
|
|
8,155,478
|
|
|
$
|
0.75
|
|
Granted
|
|
|
—
|
|
|
|
—
|
|
Expired
|
|
|
(3,655,000
|
)
|
|
|
0.75
|
|
|
|
|
|
|
|
|
|
|
Warrants outstanding – June 30, 2017
|
|
|
4,500,748
|
|
|
$
|
0.75
|
|
Granted
|
|
|
—
|
|
|
|
—
|
|
Expired
|
|
|
(4,500,748
|
)
|
|
|
0.75
|
|
|
|
|
|
|
|
|
|
|
Warrants outstanding – June 30, 2018
|
|
|
0
|
|
|
$
|
0.00
|
|
All the warrants outstanding as of June
30, 2018 have expired.
Additional information about outstanding
warrants to purchase the Company’s outstanding warrants as of June 30, 2017 is as follows:
|
|
Warrants Outstanding
|
|
Warrants Exercisable
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
Average
|
|
Weighted
|
|
|
|
|
|
Average
|
|
Weighted
|
|
|
|
|
Number
|
|
Remaining
|
|
Average
|
|
Aggregate
|
|
|
|
Remaining
|
|
Average
|
|
Aggregate
|
Exercise
|
|
of
|
|
Contractual
|
|
Exercise
|
|
Intrinsic
|
|
Number of
|
|
Contractual
|
|
Exercise
|
|
Intrinsic
|
Price
|
|
Warrants
|
|
Life (Years)
|
|
Price
|
|
Value
|
|
Warrants
|
|
Life (Years)
|
|
Price
|
|
Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$0.75
|
|
|
4,500,748
|
|
|
|
0.01
|
|
|
$
|
0.75
|
|
|
$
|
—
|
|
|
|
4,500,748
|
|
|
|
0.01
|
|
|
$
|
0.75
|
|
|
$
|
—
|
|
|
|
|
4,500,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.500,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional information about outstanding
warrants to purchase the Company’s outstanding warrants as of June 30, 2016 is as follows:
|
|
Warrants Outstanding
|
|
Warrants Exercisable
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
Average
|
|
Weighted
|
|
|
|
|
|
Average
|
|
Weighted
|
|
|
|
|
Number
|
|
Remaining
|
|
Average
|
|
Aggregate
|
|
|
|
Remaining
|
|
Average
|
|
Aggregate
|
Exercise
|
|
of
|
|
Contractual
|
|
Exercise
|
|
Intrinsic
|
|
Number of
|
|
Contractual
|
|
Exercise
|
|
Intrinsic
|
Price
|
|
Warrants
|
|
Life (Years)
|
|
Price
|
|
Value
|
|
Warrants
|
|
Life (Years)
|
|
Price
|
|
Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$0.75
|
|
|
8,155,478
|
|
|
|
0.03
|
|
|
$
|
0.75
|
|
|
$
|
—
|
|
|
|
8,155,478
|
|
|
|
0.03
|
|
|
$
|
0.75
|
|
|
$
|
—
|
|
|
|
|
8,155,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,155,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certain Relationships and Related Transactions and Director
Independence
Other than as disclosed in the above, none
of the following parties has had, since the beginning of the Registrant’s last fiscal year, any material interest, direct
or indirect, in any transaction with the Registrant or in any presently proposed transaction that has or will materially affect
the Registrant:
Any directors or executive officers;
Any person who beneficially owns, directly
or indirectly, shares carrying more than 5% of the voting rights attached to the outstanding shares of common stock;
Any promoters; and
Any member of the immediate family (including
spouse, parents, children, siblings and in-laws) of any of the foregoing persons.
Director Independence
The Registrant does not currently
have any independent directors and does not anticipate appointing additional directors in the foreseeable future. If the Registrant
engages further directors and officers, however, the Registrant plans to develop a definition of independence.
Legal Proceedings
During 2016, the company entered into a construction contract
for leasehold improvements. This contract was not completed and litigation commenced between the Company and the counterparty to
the contract in 2016. This litigation was subsequently settled in November 2017 for a payment of $82,500 and a two-year noninterest
bearing note in the total amount of $90,000 which requires monthly payments of $3,750. The Company has accrued this liability
as of June 30, 2016 when the construction ceased.
MARKET INFORMATION AND PRICE
Market for Common Stock
Our common stock is quoted on the OTC QB
maintained by the OTC Markets under the symbol “UPDC.” The high and low bid prices of our common stock as reported
for the periods presented, by fiscal quarter (i.e., the first quarter beginning July 1 and ended September 30), were as follows.
The quotations reflect inter-dealer prices, without retail markup, mark-down, or commission and may not represent actual
transactions.
|
|
Price Range
|
Fiscal Year Ended June 30, 2018:
|
|
High
|
|
Low
|
|
|
|
|
|
Quarter Ended:
|
|
|
|
|
|
|
|
|
September 30, 2017
|
|
$
|
0.0425
|
|
|
$
|
0.0052
|
|
December 31, 2017
|
|
$
|
0.069
|
|
|
$
|
0.0116
|
|
March 31, 2018
|
|
$
|
0.09
|
|
|
$
|
0.02
|
|
June 30, 2018
|
|
$
|
0.069
|
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
Price Range
|
Fiscal Year Ended June 30, 2017:
|
|
High
|
|
Low
|
|
|
|
|
|
Quarter Ended:
|
|
|
|
|
|
|
|
|
September 30, 2016
|
|
$
|
0.04
|
|
|
$
|
0.0025
|
|
December 31, 2016
|
|
$
|
0.025
|
|
|
$
|
0.0111
|
|
March 31, 2017
|
|
$
|
0.0369
|
|
|
$
|
0.007
|
|
June 30, 2017
|
|
$
|
0.01
|
|
|
$
|
0.0042
|
|
Holders
As of June 30, 2018, there were approximately
178 holders of record of our common stock. This does not include beneficial owners holding stock in street name.
Dividends
Any future determination as to the declaration
and payment of dividends on shares of our Common Stock will be made at the discretion of our Board of Directors out of funds legally
available for such purpose. We are under no contractual obligations or restrictions to declare or pay dividends on our shares
of Common Stock. In addition, we currently have no plans to pay such dividends. Our Board of Directors currently intends
to retain all earnings for use in the business for the foreseeable future.
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Board of Directors and Stockholders
Record Street Brewing Co.
We have audited the accompanying balance sheets
of Record Street Brewing Co. (the “Company”) as of December 31, 2016 and 2015, and the related statements of operations,
stockholders’ equity (deficit), and cash flows for the years then ended. These financial statements are the responsibility
of the entity’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United States) and in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan and perform an audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we
express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred
to above present fairly, in all material respects, the financial position of Record Street Brewing Co.
as
of
December 31, 2016 and 2015
, and the results of its operations
and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of
America.
The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern. As discussed in Note [1] to the financial statements,
the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about
its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note [1]. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ MaloneBailey, LLP
www.malonebailey.com
Houston, Texas
November 16, 2018