1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Beverage Inc. (the Company) was incorporated in the State of Florida on December 28, 2004 under the name as Biometrix
International Inc. On May 30, 2007, the Company changed its name to BMX Development Corp. On September 6, 2011, the Company filed
an Articles of Amendment to the Articles of Incorporation with the Florida Secretary of State to change its name to Panache Beverage
Inc. and believed the new name would more accurately reflect its business after a stock exchange transaction with Panache LLC,
a New York Limited Liability Company.
August 19, 2011, the Company completed a stock exchange transaction with Panache LLC (Panache). Panache
was organized as a limited liability company in the State of New York on February 9, 2010. Panache is an alcoholic beverage company
specializing in development, global sales and marketing of spirits brands, and currently owns 65.5% ownership of Wodka LLC (Wodka),
a New York Limited Liability Company organized on August 14, 2009. Upon its organization, Panache assumed ownership of Wodka from
a related party. Wodka imports vodka under the brand name Wodka for wholesale distribution to retailers located throughout the
United States and internationally.
stock exchange transaction involved two simultaneous transactions:
majority shareholder of the Company delivered 2,560,000 shares of the Companys common stock to the Panache Members in exchange
for total payments of $125,000 in cash and;
Company issued to the Panache Members an amount equal to 17,440,000 new investment shares of common stock of the Company pursuant
to Rule 144 under the Securities Act of 1933, as amended, in exchange for one hundred percent (100%) of the issued and outstanding
membership interest units of Panache from the Panache Members.
NYC, LLC (Alibi) was organized as a limited liability company in the State of New York on May 17, 2007 and remained
dormant until it conducted its first business operations during the first quarter of 2012. Effective January 1, 2012, the members
of Alibi transferred their interests to Panache Beverage, Inc. and Alibi became a 100% owned subsidiary of Panache Beverage, Inc.
Alibi markets and distributes Alibi American Whiskey.
consolidated financial statements include the accounts of Panache Beverage, Inc., Panache LLC, Wodka LLC and Alibi NYC, LLC (collectively,
the Company). All material intercompany transactions have been eliminated.
accompanying unaudited consolidated financial statements have been prepared in accordance with both generally accepted accounting
principles for interim financial information, and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial
statements. The accompanying unaudited consolidated financial statements reflect all adjustments (consisting of normal recurring
accruals) that are, in the opinion of management, considered necessary for a fair presentation of the results for the interim
periods presented. Interim results are not necessarily indicative of results to be expected for a full year.
of presentation- (Continued)
unaudited consolidated financial statements and related disclosures have been prepared with the presumption that users of the
interim financial information have read or have access to the Companys annual audited consolidated financial statements
for the preceding fiscal year. The financial statements of the Company are presented in US dollars.
Company uses the accrual basis of accounting and generally accepted accounting principles in the United States of America (US
GAAP). The Company has adopted a December 31 fiscal year end. Certain reclassifications were made to the 2011 financial
statements presentation in order to conform to the 2012 presentation. Such reclassifications had no effect on reported income.
recognize revenue when title and risk of loss pass to the customer, typically when the product is shipped. Some sales contracts
contain customer acceptance provisions that grant a right of return. Under these provisions, customers can return products that
are not merchantable and fit and suitable for their intended use, are not of the same premium quality as products currently in
existence, or are defectively packaged, bottled or labeled. Customers may also return any product that does not comply with all
applicable laws and regulations. We record revenue net of the estimated cost of sales returns and allowances. Gross revenue was
reduced due to sales returns and allowances by $29,900 and $16,110 during the three months ended March 31, 2012 and 2011, respectively.
discounts were $25,701 and $3,271 for the three months ended March 31, 2012 and 2011.
time to time the Company provides incentives to its customers in the form of free product. The costs associated with producing
this product is included as an expense in costs of goods sold. No revenue is recognized with respect to such product giveaways.
The Company did not give away any product during the three months ended March 31, 2012 and 2011, respectively.
costs are expensed as incurred and aggregated $286,775 and $496,915 for the three months ended March 31, 2012 and 2011, respectively.
receives advertising services in the form of out of home media space from a related party who holds a non-controlling interest
in Wodka. The Company recorded advertising expense and capital contributions from non-controlling interests of $182,572 and $438,884
in relation to this arrangement for the three months ended March 31, 2012 and 2011, respectively.
Significant Accounting Policies
significant accounting policies are set forth in Note 1 of the audited financial statements included in the Companys 2011
Annual Report on Form 10-K and remain unchanged as of March 31, 2012.
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those
issued accounting standards
Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption
of any such pronouncements may be expected to cause a material impact on its consolidated financial condition or the consolidated
results of its operations.