| Commitments and Contingencies Disclosure [Text Block] |
NOTE 15 — COMMITMENTS AND CONTINGENCIES
|
A. |
The Company has entered into a supply agreement with Irish Distillers Limited (“Irish Distillers”), which provides for the production of Irish whiskeys for the Company through 2022, subject to annual extensions thereafter, provided that the Company and Irish Distillers agree on the amount of liters of pure alcohol to be provided in the following year. Under this agreement, the Company is obligated to notify Irish Distillers annually of the amount of liters of pure alcohol it requires for the current contract year and contracts to purchase that amount. For the contract year ending June 30, 2012, the Company has contracted to purchase approximately €545,262 or $727,260 (translated at the March 31, 2012 exchange rate) in bulk Irish whiskey. The Company is not obligated to pay Irish Distillers for any product not yet received. During the term of this supply agreement, Irish Distillers has the right to limit additional purchases above the commitment amount. |
|
B. |
The Company has a distribution agreement with Gaelic Heritage Corporation, Ltd., an international supplier, to be the sole-producer of Celtic Honey, one of the Company’s products, for an indefinite period. |
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C. |
The Company leases office space in New York, NY, Dublin, Ireland and Houston, TX. The New York, NY lease began on May 1, 2010 and expires on April 30, 2013 and provides for monthly payments of $16,779. The Dublin lease commenced on March 1, 2009 and extends through November 30, 2013 and provides for monthly payments of €1,250 or $1,619 (translated at the March 31, 2012 exchange rate). The Houston, TX lease commenced on February 24, 2000 and extends through January 31, 2013 and provides for monthly payments of $1,693. The Company has also entered into non-cancelable operating leases for certain office equipment. |
Future minimum lease payments for leases with initial or remaining terms in excess of one year are as follows:
| Years ending March 31, |
|
Amount |
|
| 2013 |
|
$ |
221,509 |
|
| 2014 |
|
|
30,177 |
|
| |
|
|
|
|
| Total |
|
$ |
251,626 |
|
In addition to the above annual rental payments, the Company is obligated to pay its pro-rata share of utility and maintenance expenses on the leased premises. Rent expense under operating leases amounted to approximately $323,201 and $330,152 for the years ended March 31, 2012 and 2011, respectively, and is included in general and administrative expense.
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D. |
Under the amended terms of the agreement under which the Company purchased McLain & Kyne, the Company was obligated to pay an earn-out to the sellers based on the financial performance of the acquired business. The aggregate amount of such earn-out payments, which was not to exceed $4,000,000, was determined by calculations as defined in the agreement, as amended, through March 31, 2011. The Company is also required to pay an earn-out based on the case sales of the Jefferson’s Presidential Select for a specified amount of cases. For the years ended March 31, 2012 and 2011, the sellers earned $117,048 and $131,966, respectively, under this agreement. |
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E. |
As described in Note 9G, in August 2011, the Company and CB-USA entered into the Keltic Facility. |
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