Letter from the President

Dear Shareholders, Customers, Distributors, and all interested parties:

2005 was a wild rollercoaster ride for all of us at Bard’s Tale Beer Company.  We started off the year strongly, expanding distribution to eleven states by mid-spring.  We achieved what no other company in the world was able to accomplish; brewing a true beer using only whole grains that was also gluten free.  We did it all naturally, without the use of grain syrups, extracts, or industrial enzymes, just whole grain sorghum, water, hops, and yeast.   The goal we set was to produce a superior tasting beer everyone could drink, and based on our sales, positive press, and customer feedback we were successful.  A real beer made from whole grains, not another imitation.

Sometimes a good thing is too good…

Due to the phenomenal demand, the contract brewer we utilized had to double its capacity by buying additional equipment and fomenters.  By the summer, we had reached our allotted capacity at the contract brewer, and had to start rationing beer to our distributors.  By the end of the summer, the contract brewer developed production problems that lead to quality problems in our beer (non gluten related).

The issues with the beer related to excessive foaming, and were directly related to sanitation at the contract brewery.  We spent a great deal of time, resources, and money to correct the issue, but in the end, we determined that the contract brewery could not meet our standards of quality, and we ceased production.

Bard’s Tale will never sell an inferior beer, and never a beer with quality issues.  Because the possibility existed that our beer produced at that brewery could have problems, we pulled it from the market.  As celiacs we understood that pulling this beer from the market had an effect on people who could only drink our beer, but we felt there was no other choice.

Sometimes a good thing can get better…

From the first days of production we have always been planning further expansion.  Finding a high quality partner to brew our beer has been a difficult quest.  A potential contract brewery must first and foremost be able to handle our requirements to ensure the beer remains absolutely gluten free.  Additionally they need to have quality procedures in place that meet or exceed our requirements.  Lastly, they need to be able to make a lot more high quality beer so we can get the beer out to everyone, in every state.

It has taken us a long time to find a facility to meet these requirements, but we have been working several months now with a large brewery in California. This is a large, state-of-the art brewery and we are extremely excited to be working with them.  On Monday March 13th we brewed our first test batch with the new equipment and we are on schedule to brew our first batch the last week in March with availability beginning the first week of May (check our website for availability).

You will also be excited to know that by moving to this new facility we have increased our production capacity by 1200% per batch.  This will give us the capacity to meet our initial demand for the entire US.   For us, this was a double edged sword, and the main reason it has taken so long to get back into production.  The financial requirements for producing the beer at this increased capacity is far larger than we thought, and it has taken us longer than we would have liked in to raise the additional funds, but we are there.  The beer will be back in May, it will be better than before, and with our increased capacity, we will be able to get it to everyone who wants it.

We really appreciate everyone’s patience and ongoing support.  As a celiac myself, I am committed to providing the best products, using only natural ingredients and brewing methods.  If you have any questions or would like additional information please check out our website at www.bardsbeer.com.

We look forward to a successful 2006.

Cheers,

Kevin Seplowitz
President