Changes in state legislation on distribution policies could negatively affect our business practices. States where we have a strong sales presence could pass laws that fundamentally changes the competitive landscape for the beer distribution sector. Any modification in the competitive climate in those states could have negative consequences on our future sales
and operational performance as well as on the financial stability of wholesalers on which we depend. We might run low on kegs required for distribution of draft beer. We distribute our draft beer from kegs under our ownership. In times when we see higher sales, we might have to rely on kegs leased from A-B to meet the extra demand. Should draft beer shipments rise,
we could find ourselves short of kegs to meet sales orders. Should our keg needs not be satisfied by either lease or purchase, we could have to postpone some draft shipings. Such delays could hurt relationships with distributors and A-B as well as sales. Sales could suffer if the founders of Widmer Brothers Brewing Company become less involved in advancing that
Brand famil The founders of Widmer
Brothers Brewing Company, Kurt R. Widmer (“Kurt”) and Robert P. Widmer (“Rob"), are essential to our present Widmer Brothers brand family messaging and we rely on the good public view of their images, as founders. Our Widmer Brothers brand appeals to certain drinkers because of Kurt's founding and chairman of the board function as well as Rob's
founding and vice president of corporate quality assurance and industry relations. Should Kurt or Rob be unable or unable to carry on in their active roles, their absence could compromise the potency of our messaging and, hence, our future development possibilities For important raw materials, packaging materials, and manufacturing inputs, we rely on specific vendors.
We rely on some third parties for important raw materials, packaging materials, and utilities even if we try to keep backup and alternative suppliers for all major raw materials and production inputs. Any disturbance in the capacity or willingness of these third parties to provide these essential components could impede our capacity to keep manufacturing our
Products so affecting our financial situation
operational results, and cash flows. Violation of state and federal environmental laws could compromise our business operations. Among other things, environmental rules and local permits and agreements on air emissions, water discharges, and handling and disposal of hazardous wastes affect our brewing activities. Although we have no reason to expect the
operation of our breweries vA small number of shareholders hold a high ownership percentage of our common stock and uncertainty over their continuous ownership plans could cause the market price of our common stock to decrease.As said above, A-B owns a sizable portion of us. Kurt Widmer and Rob Widmer also jointly beneficially possess roughly 2.2
million shares, or 11.6%, of our common stock. These two organizations taken together control 43.3% of our equity. Subject to volume, method of sale, and other conditions under the Securities Act of 1933, all of these shares are open for public market sale. Such public market sales or the belief that such sales would take place could lower the market price of our
Common stock We do not intend to pay
and are limited in our ability to declare or pay dividends; so, any return on their investment in us depends on stock appreciation. We do not project paying cash dividends. Moreover, unless we satisfy specific financial criteria, under our loan arrangement with BofA we are not allowed to declare or pay a dividend. Therefore, only appreciation of the price of our common stock
will yield a benefit back to owners. Investors looking for cash dividends should not make common stock investments.Our intangible assets, including goodwill, could lose their fair value. Our overall intangible assets including goodwill have shown a notable rise following the acquisition of Kona Brewing Company. On a net basis, our $29.4 million array of intangible
assets as of December 31, 2014 accounted for around 16.5% of our overall assets. Our analyses of these assets may find that a decline in the fair value of these assets resulted in a notable drop in sales growth, which had a negative impact on our estimated cash flows linked with these assets, should any circumstances arise—such as economic recession or other
Conclusion
factors causing a reduction in consumer demand or for any other reason. Should this happen, we would have to acknowledge a possibly major decrease in the value of these assets due to impairment. Any such impWe own and operate four highly-automated, small-batch production breweries: the Oregon Brewery, th Washington Brewery, the New Hampshire Brewery, and the Hawaiian Brewery, as well as two small, innovation brewing systems in Portland, Oregon
and Portsmouth, New Hampshire. We lease the sites upon which the Hawaiian Brewery and Pubs, the New Hampshire Breweries and Pub, the Portland Innovation Brewery, and Oregon Pub are located, in addition to our office space and warehouse locations n Portland, Oregon for our corporate, administrative and sales functions. In 2014, we entered nto a leas for space in Southern California for our national sales office. These operating leases expire at
various times between 2016 and 2047. Certain of these leases are with related parties. See Notes to Consolidated Financial Statements included in Part II, Item 8 of this report for further discussion regarding these arrangements.airment loss would be charged against current operations during the change period.iolates any such control or mandate, should such a breach take place or should environmental rules get stricter going forward, we could suffer.
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