Washington
|
|
27-2432263
|
(State
or other jurisdiction
incorporation
or organization)
|
|
(
IRS
Employer Identification Number
)
|
|
|
|
1700 E. 68
th
Avenue
|
|
|
Denver, CO
|
|
80229
|
(Address
of principal executive offices)
|
|
(zip
code)
|
Title
of Each Class
|
|
Name of
each exchange on which registered
|
Common stock, par value of $0.001
|
|
The
NASDAQ Capital Market
|
Large accelerated filer
|
☐
|
Accelerated filer
|
☐
|
Non-accelerated
filer
|
☐
(Do not check if a smaller reporting
company)
|
Smaller reporting company
|
☒
|
|
|
Emerging
growth company
|
☒
|
|
Page
|
PART I
|
|
|
|
ITEM
1. BUSINESS
|
3
|
|
|
ITEM
1A. RISK FACTORS
|
14
|
|
|
ITEM
1B. UNRESOLVED STAFF COMMENTS
|
20
|
|
|
ITEM
2. PROPERTIES
|
20
|
|
|
ITEM
3. LEGAL PROCEEDINGS
|
21
|
|
|
ITEM
4. MINE SAFETY DISCLOSURES
|
21
|
|
|
PART II
|
|
|
|
ITEM
5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
21
|
|
|
ITEM
6. SELECTED FINANCIAL DATA
|
22
|
|
|
ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
|
22
|
|
|
ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
30
|
|
|
ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
31
|
|
|
ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
|
32
|
|
|
ITEM
9A. CONTROLS AND PROCEDURES
|
32
|
|
|
ITEM
9B. OTHER INFORMATION
|
34
|
|
|
PART III
|
|
|
|
ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE
|
34
|
|
|
ITEM
11. EXECUTIVE COMPENSATION
|
37
|
|
|
ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
|
38
|
|
|
ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
|
39
|
|
|
ITEM
14. PRINCIPAL ACCOUNTING FEES AND SERVICES
|
40
|
|
|
PART IV
|
|
|
|
ITEM
15. EXHIBITS
|
40
|
|
|
SIGNATURES
|
41
|
1)
|
New Age has a unique business platform with its own Direct Store
Delivery ("DSD") distribution. This platform enables the Company to
have the infrastructure and resources to operate a profitable
beverage business. Most if not all beverage companies under $100
million in scale struggle because of the overhead and costs to
operate in the sector. New Age, with its cash generative DSD
operation, can spread its overhead across a much larger base,
providing the resources to allocate to brand building and expansion
in a way few if any other small cap beverage companies
can.
Our DSD distribution group in Colorado includes almost 40 unique
routes, with a >20 person sales team, and a >20 person
merchandising team, covering more than 6,000 outlets for more than
60 brands and more than 600 SKU’s. The DSD arm of our
business is a test bed for new products before national rollout,
provides an early indicator system for any new emerging competitive
brands or beverage segments, and gives the group near captive
control of the shelf space across the 6,000 outlets the group
services.
The scale that the DSD system represents, coupled with the
efficient cash conversion of the type of operation, provides the
resources and infrastructure base to facilitate expansion and
diversification to higher margin beverages sold globally in
traditional and new higher margin channels. The combination
provides the potential for superior free cash flow and net income
generation in a way that would be very difficult for other smaller
beverage companies to achieve.
|
2)
|
New Age has a full brand portfolio competing in only the growth
segments of the industry, and as such is the only one-stop-shop
supplier of healthy beverages for retailers and distributors. These
entities are reticent to work with smaller, individual brand
companies without the resources and infrastructure to support
them.
New Age’s portfolio of healthy brands enables the Company to
pursue the strategic high ground of “world’s leading
healthy functional beverage company,” filling the void
created by the legacy leaders in the industry. Not only does the
Company enjoy the growth rate benefits of the segments in which it
competes, but by focusing exclusively on healthy alternatives, it
limits its distractions and required investments to maintain
businesses in declining segments like juice or carbonated soft
drinks for example that many of its competitors are forced to
continue.
|
3)
|
New Age has a strong distribution in major key accounts across the
US that has near doubled in the past six-months. We have insights
that this “distribution presence” supports development
of “brand preference,” and provides a stable and
sustainable revenue platform. New Age has also recently structured
preferred partnerships with major distributors to penetrate new and
alternative channels, and believes it has first mover advantage
with them to take advantage of significant growth in these
segments.
The Company has spent the past 10 years developing a national
hybrid distribution network with other major DSD operators, natural
channel distributors, and direct to store wholesale distribution.
The Company’s national network represents a significant
competitive advantage and barrier to entry vs. many other smaller
beverage companies.
|
4)
|
The Company has financial flexibility with a strong balance sheet,
de minimis debt, and access to the capital markets unlike many
other private or small public beverage entities.
New Age has historically enjoyed a low cost of capital relative to
its peer group by virtue of its line of credit at libor plus 2
established with US Bank in 2016. That line, coupled with its
ability to access the capital markets up to $100 million via its
S-3 facility established in October 2017 to facilitate major
acquisitions or provide capital for significant organic growth
opportunities, provides the firm with an unprecedented ability and
significant optionality to intelligently support its
growth.
|
5)
|
New Age has the organizational capabilities and systems unlike
other small beverage companies., defined as having the people,
processes, systems, information, and culture/environment to drive
superior, sustainable, profitable growth,
New Age’s senior leadership team has collectively more than
100 years of beverage industry experience and experience working in
both major multinationals and smaller beverage companies. The
Company’s board of directors brings global strategic
leadership experience gleaned from running highly successful major
multinational companies in the beverage, retail, and other
industries. From a process standpoint, New Age has dedicated daily,
weekly, monthly and annual routines, by and through which it runs
the operation.
The Company recently employed Microsoft dynamics and Encompass ERP
systems, and has an internal target setting system whereby every
associate in the firm has specific metrics cascaded from the
Company’s annual business plan. New Age has also developed
its own proprietary dashboards to augment its access to syndicated
data and industry information, and employed a culture of ownership
and environment of accountability and that is metric driven and
performance oriented.
|
Calendar
Quarter
|
High
|
Low
|
2016
|
|
|
First
Quarter
|
$
0.36
|
$
0.19
|
Second
Quarter
|
$
1.64
|
$
1.42
|
Third
Quarter
|
$
1.70
|
$
1.60
|
Fourth
Quarter
|
$
4.18
|
$
3.95
|
2017
|
|
|
First
Quarter
|
$
5.55
|
$
3.51
|
Second
Quarter
|
$
6.72
|
$
3.71
|
Third
Quarter
|
$
5.09
|
$
3.41
|
Fourth
Quarter
|
$
3.35
|
$
1.99
|
|
Year
Ended
December
31,
2017
|
Year
Ended
December
31,
2016
|
Net
revenue
|
$
52,188,295
|
$
25,301,806
|
Cost of goods
sold
|
39,788,384
|
19,505,580
|
Gross
profit
|
12,399,911
|
5,796,226
|
Operating
expenses
|
18,448,964
|
9,422,983
|
Other (income)
expenses
|
(2,513,127
)
|
6,322
|
Net
loss
|
(3,535,926
)
|
(3,633,079
)
|
|
Year Ended
December 31,
|
Year Ended
December 31,
|
|
2017
|
2016
|
Production
costs and labor
|
$
37,114,005
|
$
18,408,750
|
Shipping
cost
|
2,674,379
|
1,096,830-
|
Cost
of goods sold
|
$
39,788,384
|
$
19,505,580
|
|
Year
Ended
December
31,
2017
|
Year
Ended
December
31,
2016
|
Advertising,
promotion and selling
|
$
3,840,332
|
$
1,584,104
|
General and
administrative
|
13,940,583
|
6,367,606
|
Legal and
professional
|
668,049
|
1,471,273
|
Total operating
expenses
|
$
18,448,964
|
$
9,422,983
|
|
December
31
|
December
31,
|
|
2017
|
2016
|
Current
assets
|
$
16,224,143
|
$
10,005,922
|
Less: current
liabilities
|
11,113,259
|
11,442,748
|
Working capital
(deficiency)
|
$
5,110,884
|
$
(1,436,826
)
|
|
Year
ended
December
31,
2017
|
Year
Ended
December
31,
2016
|
Net cash (used in)
provided by operating activities
|
$
(8,410,777
)
|
$
975,176
|
Net cash provided
by (used in) investing activities
|
6,227,421
|
(8,547,198
)
|
Net cash provided
by financing activities
|
1,939,513
|
8,057,254
|
Net change in
cash
|
$
(243,843
)
|
$
485,232
|
|
December
31,
2017
|
December
31,
2016
|
ASSETS
|
|
|
CURRENT
ASSETS:
|
|
|
Cash
|
$
285,245
|
$
529,088
|
Accounts
receivable, net of allowance for doubtful accounts
|
7,462,065
|
4,729,356
|
Inventories
|
7,041,775
|
4,420,632
|
Prepaid expenses
and other current assets
|
1,435,058
|
326,846
|
Total current
assets
|
16,224,143
|
10,005,922
|
|
|
|
Prepaid expenses,
long-term
|
504,355
|
-
|
Property and
equipment, net of accumulated depreciation
|
1,894,820
|
7,286,201
|
Security
deposit
|
197,515
|
-
|
Right-of-use
asset
|
4,064,883
|
-
|
Goodwill
|
21,230,212
|
4,895,241
|
Intangible assets,
net of accumulated amortization
|
23,556,251
|
4,538,674
|
Total
assets
|
$
67,672,179
|
$
26,726,038
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|
|
CURRENT
LIABILITIES:
|
|
|
Accounts
payable
|
$
4,370,491
|
$
4,415,043
|
Accrued
expenses
|
2,276,638
|
2,465,526
|
Contingent
consideration
|
800,000
|
-
|
Lease liability,
current
|
239,079
|
-
|
Current portion of
notes payable
|
3,427,051
|
4,562,179
|
|
Year
ended
|
Year
ended
|
|
December
31,
2017
|
December
31,
2016
|
REVENUES,
net
|
$
52,188,295
|
$
25,301,806
|
Cost of Goods
Sold
|
39,788,384
|
19,505,580
|
|
|
|
GROSS
PROFIT
|
12,399,911
|
5,796,226
|
|
|
|
OPERATING
EXPENSES:
|
|
|
Advertising,
promotion and selling
|
3,840,332
|
1,584,104
|
General and
administrative
|
13,940,583
|
6,367,606
|
Legal and
professional
|
668,049
|
1,471,273
|
Total operating
expenses
|
18,448,964
|
9,422,983
|
|
|
|
LOSS FROM
OPERATIONS
|
(6,049,053
)
|
(3,626,757
)
|
|
|
|
OTHER INCOME
(EXPENSE):
|
|
|
Interest
expense
|
(228,039
)
|
(299,080
)
|
Other
expense
|
(698,899
)
|
-
|
Other
income
|
3,440,065
|
292,758
|
Total other income
(expense), net
|
2,513,127
|
(6,322
)
|
|
|
|
|
|
|
NET
LOSS
|
$
(3,535,926
)
|
$
(3,633,079
)
|
|
|
|
NET LOSS PER
SHARE – BASIC AND DILUTED
|
$
(0.12
)
|
$
(0.19
)
|
|
Common
Stock
|
Series A
Preferred Stock
|
Series B
Preferred Stock
|
Additional
Paid-in
|
Accumulated
|
|
|||
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Total
|
Balance at December 31,
2015
|
15,435,651
|
$
15,436
|
250,000
|
$
250
|
254,807
|
$
255
|
3,811,049
|
(3,331,878
)
|
$
495,112
|
|
|
|
|
|
|
|
|
|
|
Issuance of common
stock in connection with Xing
acquisition
|
4,353,915
|
4,354
|
-
|
-
|
-
|
-
|
6,990,646
|
-
|
6,995,000
|
Issuance of common stock in connection with
services provided
|
1,296,757
|
1,296
|
-
|
-
|
30,000
|
30
|
726,454
|
-
|
727,780
|
Restricted stock
awards issued to employees
|
771,783
|
772
|
-
|
-
|
-
|
-
|
253,916
|
-
|
254,688
|
Exercise of
warrants
|
42,000
|
42
|
-
|
-
|
-
|
-
|
20,958
|
-
|
21,000
|
Issuance of
warrants
|
-
|
-
|
-
|
-
|
-
|
-
|
18,153
|
-
|
18,153
|
Net loss
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(3,633,079
)
|
(3,633,079
)
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31,
2016
|
21,900,106
|
21,900
|
250,000
|
250
|
284,807
|
285
|
11,821,176
|
(6,964,957
)
|
4,878,654
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock in
connection with public offering
|
4,928,571
|
4,929
|
-
|
-
|
-
|
-
|
15,394,034
|
-
|
15,398,963
|
Issuance of common stock in
connection with the acquisition of Maverick Brands,
LLC
|
2,200,000
|
2,200
|
-
|
-
|
-
|
-
|
9,083,800
|
-
|
9,086,000
|
Issuance of common stock in
connection with the acquisition of Marley Beverages,
LLC
|
3,000,000
|
3,000
|
-
|
-
|
-
|
-
|
18,597,000
|
-
|
18,600,000
|
Issuance of common stock in
connection with the acquisition of Premier Micronutrient
Corporation
|
1,200,000
|
1,200
|
-
|
-
|
-
|
-
|
5,494,800
|
-
|
5,496,000
|
Issuance of common stock in
connection with services provided
|
395,184
|
395
|
-
|
-
|
-
|
-
|
1,985,659
|
-
|
1,986,054
|
Restricted stock awards issued to
employees
|
250,000
|
250
|
-
|
-
|
-
|
-
|
514,750
|
|
515,000
|
Share-based compensation employee
stock option plan
|
-
|
-
|
-
|
-
|
-
|
-
|
162,374
|
-
|
162,374
|
Recession of Series A Preferred
Shares
|
-
|
-
|
(250,000
)
|
(250
)
|
-
|
-
|
250
|
-
|
-
|
Conversion of of Series B
Preferred Stock
|
924,584
|
924
|
-
|
-
|
(115,573
)
|
(116
)
|
(808
)
|
-
|
-
|
Exercise of
warrants
|
372,974
|
373
|
-
|
-
|
-
|
-
|
150,563
|
-
|
150,936
|
Net loss
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(3,535,926
)
|
(3,535,926
)
|
Balance at December 31,
2017
|
35,171,419
|
$
35,171
|
-
|
$
-
|
169,234
|
$
169
|
$
63,203,598
|
$
(10,500,883
)
|
$
52,738,055
|
|
December 31,
2017
|
|||
|
Level I
|
Level II
|
Level III
|
Total
|
|
(in thousands)
|
|||
Contingent
Provision:
|
|
|
|
|
Earn-out
attributable to Marley acquisition
|
$
-
|
$
-
|
$
800
|
$
800
|
|
|
|
|
|
Total contingent
provision
|
$
-
|
$
-
|
$
800
|
$
800
|
|
December 31,
2016
|
|||
|
Level
I
|
Level
II
|
Level
III
|
Total
|
|
(in thousands)
|
|||
Contingent
Provision:
|
|
|
|
|
Earn-out
attributable to Marley acquisition
|
$
-
|
$
-
|
$
-
|
$
-
|
|
|
|
|
|
Total contingent
provision
|
$
-
|
$
-
|
$
-
|
$
-
|
Cash
|
$
8,500,000
|
Seller’s
note
|
4,500,000
|
Stock
|
6,995,000
|
Purchase
price
|
$
19,995,000
|
Accounts
receivable
|
$
5,627,669
|
Inventories
|
4,847,417
|
Prepaid expenses
and other current assets
|
492,972
|
Property and
equipment, net
|
7,418,789
|
Other intangible
assets acquired (customer lists)
|
4,628,800
|
Assumption of
accounts payable, accrued expenses, other current liabilities and
mortgage note payable
|
(7,526,874
)
|
|
15,488,773
|
Goodwill
|
4,506,227
|
|
$
19,995,000
|
Cash
|
$
2,000,000
|
Stock
|
9,086,000
|
Purchase
price
|
$
11,086,000
|
Accounts
receivable
|
$
245,426
|
Inventories
|
1,523,413
|
Prepaid expenses
and other current assets
|
211,213
|
Property and
equipment, net
|
68,282
|
Other intangible
assets acquired (trade names, recipes and customer
lists)
|
6,660,441
|
Accounts payable
and accrued expenses
|
(1,201,254
)
|
Assumption of note
payable
|
(1,570,952
)
|
|
5,936,569
|
Goodwill
|
5,149,431
|
|
$
11,086,000
|
Stock
|
$
5,496,000
|
Purchase
price
|
$
5,496,000
|
Prepaid expenses
and other current assets
|
2,256
|
Property and
equipment, net
|
55,023
|
Patents
1,767,588
|
4,100,000
|
Accounts
payable
|
(27,772
)
|
Assumption of notes
payable
|
(401,095
)
|
|
3,728,412
|
Goodwill
|
1,767,588
|
|
$
5,496,000
|
Stock
|
$
18,600,000
|
Contingent
consideration
|
800,000
|
Purchase
price
|
$
19,400,000
|
Accounts
receivable
|
$
186,658
|
Inventories
|
798,098
|
Prepaid expenses
and other current assets
|
198,882
|
Property and
equipment, net
|
22,191
|
Other intangible assets acquired (trade names,
recipes and customer lists)
|
9,281,365
|
Accounts payable
and accrued expenses
|
(505,146
)
|
|
9,982,048
|
Goodwill
|
9,417,952
|
|
$
19,400,000
|
|
For the year
ended
December
31,
2017
|
For the year
ended
December
31,
2016
|
|
(unaudited)
|
(unaudited)
|
Revenues
|
$
56,144,428
|
$
70,699,047
|
Net loss from
continuing operations
|
(7,497,397
)
|
(17,562,676
)
|
Net loss per share
– Basic and diluted
|
$
(0.22
)
|
$
(0.51
)
|
Weighted average
number of common shares outstanding – Basic and
Dilutive
|
34,330,520
|
34,330,520
|
|
December
31,
2017
|
December
31,
2016
|
Finished
goods
|
$
6,302,265
|
$
3,962,050
|
Raw
materials
|
739,510
|
458,582
|
|
$
7,041,775
|
$
4,420,632
|
|
December
31,
2017
|
December
31,
2016
|
Customer
relationships
|
$
6,444,126
|
$
4,878,800
|
Patents
|
4,100,000
|
-
|
Recipes
|
3,530,000
|
-
|
License
agreements
|
5,990,252
|
-
|
Trade
name
|
4,860,441
|
-
|
Less: accumulated
amortization
|
(1,368,568
)
|
(340,126
)
|
|
$
23,556,251
|
$
4,538,674
|
Year Ended December 31,
|
|
Amount
|
|
|
2018
|
|
$
|
1,387,985
|
|
2019
|
|
|
1,387,985
|
|
2020
|
|
|
1,387,985
|
|
2021
|
|
|
1,387,985
|
|
2022
|
|
|
1,387,985
|
|
Thereafter
|
|
|
16,616,326
|
|
Total
|
|
$
|
23,556,251
|
|
|
December
31,
2017
|
December
31,
2016
|
Land and
building
|
$
518,293
|
$
6,070,000
|
Trucks and
coolers
|
1,226,053
|
963,474
|
Other property and
equipment
|
913,053
|
509,064
|
Less: accumulated
depreciation
|
(762,579
)
|
(256,337
)
|
|
$
1,894,820
|
$
7,286,201
|
|
December
31,
2017
|
December
31,
2016
|
Revolving note
payable due bank
|
$
2,000,000
|
$
5,650,000
|
Series
B notes assumed from the Maverick Acquisition
|
1,472,051
|
-
|
Note payable due to
bank – secured by building
|
-
|
4,754,636
|
Seller’s note
payable
|
-
|
4,500,000
|
Note payable, net
of unamortized discounts of $0 and $98,575 as of December 31, 2017
and 2016, respectively
|
-
|
32,218
|
|
3,427,051
|
14,936,854
|
Less: current
portion
|
(3,427,051
)
|
(4,562,179
)
|
Long-term portion,
net of unamortized discounts
|
$
-
|
$
10,374,675
|
|
December
31,
2017
|
December
31,
2016
|
Related party debt,
net of unamortized discounts of $0 and $36,331 as of December 31,
2017 and 2016, respectively
|
$
-
|
$
29,961
|
Less: current
portion
|
-
|
-
|
Long-term portion,
net of unamortized discount
|
$
-
|
$
29,961
|
2018
|
$
968,073
|
2019
|
820,800
|
2020
|
830,640
|
2021
|
840,000
|
2022
|
845,000
|
Thereafter
|
$
4,304,513
|
Employee Stock Option Compensation
Award Activity
|
Shares
|
Weighted-
Average Grant
Date Fair
Value
|
Non-vested
options at January 1, 2016
|
-
|
$
-
|
Granted
|
438,848
|
$
1.11
|
Vested
|
-
|
$
-
|
Forfeited
|
-
|
$
-
|
Non-vested
options at December 31, 2016
|
438,848
|
$
1.11
|
|
|
|
Non-vested
options at January 1, 2017
|
438,848
|
$
1.11
|
Granted
|
-
|
$
-
|
Vested
|
(146,283
)
|
$
1.11
|
Forfeited
|
-
|
$
-
|
Non-vested
options at December 31, 2017
|
292,565
|
$
1.11
|
Exercise
price
|
$
1.79
|
Dividend
yield
|
0.0
%
|
Risk-free interest
rate
|
0.86
%
|
Expected
volatility
|
100
%
|
Expected term
(years)
|
3.0
|
Estimated
forfeiture % rate
|
0.0
%
|
|
|
Weighted
Average
|
|
Number
|
Exercise
Price
|
Warrants
outstanding December 31, 2015
|
1,127,000
|
$
0.94
|
Granted
|
372,974
|
$
0.40
|
Exercised
|
(42,000
)
|
$
0.50
|
Forfeited
|
(1,085,000
)
|
$
0.96
|
Warrants
outstanding December 31, 2016
|
372,974
|
$
0.40
|
Warrants
exercisable as of December 31, 2016
|
372,974
|
$
0.40
|
Warrants
outstanding December 31, 2016
|
375,000
|
$
0.40
|
Granted
|
-
|
$
-
|
Exercised
|
(372,974
)
|
$
0.40
|
Forfeited
|
-
|
$
-
|
Warrants
outstanding December 31, 2017
|
-
|
0.40
|
Warrants
exercisable as of December 31, 2017
|
-
|
0.40
|
|
Service
Shares
|
|
Restricted Stock-Based Compensation
Award Activity
|
Shares
|
Weighted-
Average Grant
Date Fair
Value
|
Non-vested
restricted stock awards at January 1, 2016
|
-
|
$
-
|
Granted
|
771,783
|
$
0.33
|
Vested
|
-
|
$
-
|
Forfeited
|
-
|
$
-
|
Non-vested
restricted stock awards at December 31, 2016
|
771,783
|
$
0.33
|
|
|
|
|
|
|
Non-vested
restricted stock awards January 1, 2017
|
771,783
|
$
0.33
|
Granted
|
250,000
|
$
2.11
|
Vested
|
(257,261
)
|
$
0.33
|
Forfeited
|
-
|
$
-
|
Non-vested
restricted stock awards at December 31, 2017
|
764,522
|
$
0.71
|
|
December
31,
2017
|
December
31,
2016
|
Net
operating loss carry forwards
|
$
2,689,000
|
$
2,139,000
|
Intangible
asset amortization
|
128,000
|
34,000
|
Other
|
53,000
|
-
|
Valuation
allowance
|
(2,870,000
)
|
(2,173,000
)
|
Total
|
$
-
|
$
-
|
|
December
31,
2017
|
December
31,
2016
|
Expected
federal income tax benefit at 34%
|
$
(1,202,000
)
|
$
(1,235,000
)
|
Expected
state income tax benefit, net of
|
|
|
federal
benefit
|
(108,000
)
|
(111,000
)
|
Non-deductible
expenses
|
1,000
|
1,000
|
Change
in prior year deferred taxes and other
|
2,055,000
|
(39,000
)
|
Change
in federal and state statutory tax rates
|
(1,443,000
)
|
(43,000
)
|
Change
in valuation allowance
|
697,000
|
1,427,000
|
Total
tax expense
|
$
-
|
$
-
|
|
Year
ended
|
Year
ended
|
|
December
31,
2017
|
December
31,
2016
|
Weighted average
shares outstanding – Basic
|
30,616,506
|
18,889,608
|
Series B preferred
stock
|
-
|
-
|
Warrant to acquire
common stock
|
-
|
-
|
Weighted average
shares outstanding – Diluted
|
30,616,506
|
18,889,608
|
|
2017
|
2016
|
Fair
value of assets acquired
|
$
39,688,219
|
$
27,521,874
|
Less
liabilities assumed
|
(4,506,219
)
|
(7,526,874
)
|
Net
assets acquired
|
35,182,000
|
19,995,000
|
Less
shares issued
|
(33,182,000
)
|
(6,995,000
)
|
Less
note payable
|
(-)
|
(4,500,000
)
|
Business
acquisitions, net of cash acquired
|
$
2,000,000
|
$
8,500,000
|
|
Years Ended
December 31,
|
|
(In thousands)
|
2017
|
2016
|
DSD
|
$
37,545
|
$
18,211
|
Brands
|
14,643
|
7,091
|
Total
revenues
|
$
52,188
|
$
25,302
|
|
December 31,
(in thousands)
|
|
(In thousands)
|
2017
|
2016
|
DSD
|
$
16,450
|
$
17,274
|
Brands
|
50,486
|
9,452
|
Total
Assets
|
$
66,936
|
$
26,726
|
|
Years Ended
December 31,
(in thousands)
|
|
(In thousands)
|
2017
|
2016
|
Revenues
|
$
37,545
|
$
18,211
|
Cost
of sales
|
(28,096
)
|
(14,926
)
|
Gross
profit
|
$
9,449
|
$
3,285
|
|
Years Ended
December 31,
(in thousands)
|
|
(In thousands)
|
2017
|
2016
|
Revenues
|
$
14,643
|
$
7,091
|
Cost
of sales
|
(11,692
)
|
(4,580
)
|
Gross
profit
|
$
2,951
|
$
2,511
|
Name
|
|
Age
|
|
Position(s)
|
Neil
Fallon
|
|
51
|
|
Executive
Chairman
|
Brent
David Willis
|
|
58
|
|
Chief
Executive Officer, Director
|
Chuck
Ence
|
|
58
|
|
Chief
Financial Officer
|
Reggie
Kapteyn(1)(2)
|
|
47
|
|
Director
|
David
Vautrin(1)(2)
|
|
47
|
|
Director
|
Ed
Brennan(2)
|
|
61
|
|
Director
|
Tim
Haas(3)
|
|
71
|
|
Director
|
Greg
Fea(1)(3)
|
|
58
|
|
Director
|
Name
and
Principal
Position
|
|
Year
|
Salary
($)
|
Totals
($)
|
Brent
Willis, Chief Executive Officer
|
|
2017
|
$
200,000
|
$
200,000
|
|
|
2016
|
$
67,500
|
$
67,500
|
Neil
Fallon, former Chief Executive Officer
|
|
2017
|
$
100,000
|
$
100,000
|
|
|
2016
|
$
100,000
|
$
100,000
|
|
|
Number of
Shares of
Common
Stock
Beneficially
|
|
|
Percentage of
Shares of Common Stock Beneficially
|
|
Number of
Shares of Preferred Stock
Beneficially
|
|
Percentage
Of Shares
of
Preferred
Stock
Beneficially
|
|
Percentage
of
Combined
Voting
Power of
Common and
Preferred
Stock Before
|
|
Percentage of
Voting Power of Common Stock After
|
||
Beneficial
Owner
|
|
Owned
|
|
|
Owned
|
|
Owned
|
|
Owned
|
|
Offering(2)(3)
|
|
Offering
|
||
Five Percent Stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
B&R
Liquid Adventure Trust(1)
|
|
1,434,912
|
|
|
6.5
|
%
|
—
|
|
—
|
|
|
—
|
|
|
|
Nuwa
Group, LLC(2)
|
|
2,852,311
|
|
|
13
|
%
|
169,234
|
|
81.1
|
%(2)
|
|
—
|
|
|
|
Scott
Lebon(3)
|
|
1,579,761
|
|
|
7.2
|
%
|
—
|
|
—
|
|
|
—
|
|
|
|
Tom
Lebon(4)
|
|
1,579,761
|
|
|
7.2
|
%
|
—
|
|
—
|
|
|
—
|
|
|
|
Julie
Anderson(5)
|
|
1,731,236
|
|
|
7.9%
|
|
—
|
|
10
|
%(5)
|
|
10.
|
%(5)
|
|
|
Executive Officers and Directors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Neil
Fallon(6)
|
|
5,689,639
|
|
|
26.0
|
%
|
—
|
|
90
|
%(6)
|
|
90
|
%(6)
|
|
|
Brent
Willis(7)
|
|
1,850,546
|
|
|
8.4
|
%
|
—
|
|
—
|
|
|
—
|
|
|
|
Chuck
Ence
|
|
422,702
|
|
|
1.9
|
%
|
—
|
|
—
|
|
|
—
|
|
|
|
Reggie
Kapteyn
|
|
30,232
|
|
|
—
|
-
|
—
|
|
—
|
|
|
—
|
|
|
|
David
Vautrin
|
|
30,232 |
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
|
Ed
Brennan
|
|
30,232 |
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
|
Tim
Haas
|
|
30,232 |
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
|
Greg
Fea
|
|
30,232 |
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
|
All
Officers and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Directors
as a Group (8 persons)
|
|
8,114,047
|
|
|
36.3
|
%
|
169,234
|
|
|
(2)(5)(6)
|
|
90
|
%
|
|
|
|
2016
|
ACCELL
|
|
Audit
fees
|
$
37,349
|
Audit related
fees
|
122,595
|
MALONE
BAILEY
|
-
|
All other
fees
|
5,100
|
Total
fees
|
$
165,044
|
Exhibit
Number
|
|
Description
|
|
Amended Articles of Incorporation 2016 New Age Beverages
Corporation (incorporated by reference to Exhibit 3.01 of our Form
8-K (File No. 000-55179) filed with the Securities and Exchange
Commission on August 5, 2016)
|
|
|
Amended Bylaws 2013 (incorporated by reference to Exhibit 3.2.2 of
our Form S-1 (File No. 333-193725) filed with the Securities and
Exchange Commission on February 3, 2014)
|
|
|
Certificate of Designation of Series A preferred stock
(incorporated by reference to Exhibit 4.1 of our Form S-1 (File No.
333-193725) filed with the Securities and Exchange Commission on
February 3, 2014)
|
|
3.4
|
|
Amended
Certificate of Designation of Series B preferred stock
(incorporated by reference to Exhibit 4.2 of our Form S-1 (File No.
000-55179) filed with the Securities and Exchange Commission on
October 5, 2016)
|
|
New Age
Beverages Corporation 2016-2017 Long Term Incentive Plan
(incorporated by reference to Exhibit 10.1 of our Form 8-K (File
No. 000-55179) filed with the Securities and Exchange Commission on
August 5, 2016)
|
|
10.2
|
|
Employment
Agreement with Brent Willis (incorporated by reference to Exhibit
10.3 of our Form S-1 (File No. 000-55179) filed with the Securities
and Exchange Commission on October 5, 2016)
|
|
Funding
Agreement with Nuwa Group, LLC (incorporated by reference to
Exhibit 10.2.1 of our Amendment No. 1 to Form S-1 (File No.
333-193725) filed with the Securities and Exchange Commission on
March 7, 2014)
|
|
|
Amendment to Funding Agreement with Nuwa Group, LLC (incorporated
by reference to Exhibit 10.2.2 of our Amendment No. 1 to Form S-1
(File No. 333-193725) filed with the Securities and Exchange
Commission on March 7, 2014)
|
|
|
Asset Purchase Agreement with B&R Liquid Adventure, LLC
(incorporated by reference to Exhibit 10.1 of our Form 8-K (File
No. 000-55179) filed with the Securities and Exchange Commission on
April 2, 2015)
|
|
|
Asset Purchase Agreement for Xing Acquisition (incorporated by
reference to Exhibit 10.1 of our Form 8-K (File No. 000-55179)
filed with the Securities and Exchange Commission on May 23,
2016)
|
|
10.6
|
|
Asset Purchase Agreement with AMBREW, LLC (incorporated by
reference to Exhibit 10.1 of our Form 8-K (File No. 000-55179)
filed with the Securities and Exchange Commission on October 5,
2015)
|
|
Promissory Note (incorporated by reference to Exhibit 10.4 of our
Amendment No. 1 to Form 8-K (File No. 000-55179) filed with the
Securities and Exchange Commission on June 30, 2016)
|
|
10.8
|
|
Credit
Agreement dated June 30, 2016 (incorporated by reference to Exhibit
10.7 of our Form S-1 (File No. 000-55179) filed with the Securities
and Exchange Commission on November 28, 2016)
|
10.9
|
|
Promissory Note with Nuwa Group, LLC (incorporated by reference to
Exhibit 10.8 of our Form S-1 (File No. 000-55179) filed with the
Securities and Exchange Commission on November 28,
2016)
|
|
Credit Agreement NABC Properties June 30, 2016 (incorporated by
reference to Exhibit 10.9 of our Form S-1 (File No. 333-215267)
filed with the Securities and Exchange Commission on December 22,
2016)
|
|
|
Purchase and Sale Agreement between NABC Properties, LLC and Vision
23
rd
,
LLC dated January 10, 2017(incorporated by reference to Exhibit
10.1 of our Form 8-K filed with the Securities and Exchange
Commission on January 30, 2017)
|
|
|
Asset
Purchase Agreement between New Age Beverages Corporation and Marley
Beverage Company, LLC dated as of March 23, 2017 (
incorporated by reference to Exhibit 10.1 of our
Form 8-K filed with the Securities and Exchange Commission on March
29, 2017)
|
|
|
Asset
Purchase Agreement between New Age Beverages Corporation and
Maverick Brands, LLC Company, LLC dated as of March 31, 2017
(
incorporated by reference to Exhibit
10.1 of our Form 8-K filed with the Securities and Exchange
Commission on March 31, 2017)
|
|
|
Security
Agreement between New Age Beverages Corporation and
in favor of Sunkist Growers, Inc., as
Collateral Agent
dated as of March 31, 2017 (
incorporated by reference to Exhibit 10.2 of our
Form 8-K filed with the Securities and Exchange Commission on March
31, 2017)
|
|
|
Asset
Purchase Agreement between New Age Beverages Corporation and
Premier Micronutrient Corporation dated as of May 18, 2017
(
incorporated by reference to Exhibit
10.1 of our Form 8-K filed with the Securities and Exchange
Commission on May 24, 2017)
|
|
|
Amendment
to Asset Purchase Agreement between New Age Beverages Corporation
and Marley Beverage Company, LLC dated as of June 9, 2017
(
incorporated by reference to Exhibit
10.2 of our Form 8-K filed with the Securities and Exchange
Commission on June 13, 2017)
|
|
|
At
Market Issuance Sales Agreement between New Age Beverages
Corporation and B.Riley FBR, Inc. dated as of March 23, 2018
(
incorporated by reference to Exhibit
10.1 of our Form 8-K filed with the Securities and Exchange
Commission on March 23, 2018)
|
|
14.1
*
|
|
Code of
Ethics and Conduct
|
21.1
*
|
|
List of
Subsidiaries
|
31.1
*
|
|
Certification
of Chief Executive Officer pursuant to Section 302
|
31.2
*
|
|
Certification
of Chief Financial Officer pursuant to Section 302
|
32.1
*
|
|
Certification
of Chief Executive Officer pursuant to Section 906
|
32.2*
|
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Certification
of Chief Financial Officer pursuant to Section 906
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101**
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Interactive
Data Files
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NEW AGE BEVERAGES CORPORATION
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Date:
April 17, 2018
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By:
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/s/ Brent Willis
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Brent
Willis
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Chief
Executive Officer and Director
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(Principal
Executive Officer)
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Date:
April 17, 2018
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By:
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/s/ Chuck Ence
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Chuck
Ence
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Chief
Financial Officer (Principal Financial and Accounting
Officer)
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Name
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Title
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Date
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/s/
Brent Willis
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Chief
Executive Officer and Director
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April
17, 2018
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Brent
Willis
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(Principal
Executive Officer)
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/s/
Chuck Ence
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Chief
Financial Officer
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April
17, 2018
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Chuck
Ence
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(Principal
Financial and Accounting Officer)
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/s/
Neil Fallon
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Executive
Chairman
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April
17, 2018
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Neil
Fallon
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/s/
Reggie Kapteyn
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Director
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April
17, 2018
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Reggie
Kapteyn
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/s/
David Vautrin
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Director
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April
17, 2018
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David
Vautrin
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/s/ Ed
Brennan
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Director
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April
17, 2018
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Ed
Brennan
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/s/ Tim
Haas
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Director
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April
17, 2018
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Tim
Haas
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/s/
Greg Fea
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Director
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April
17, 2018
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Greg
Fea
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NEW AGE BEVERAGES CORPORATION
1700 EAST 68TH AVENUE
DENVER, COLORADO 80229
WWW.NEWAGEBEV.COM
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NEW AGE BEVERAGES CORPORATION
1700 EAST 68TH AVENUE
DENVER, COLORADO 80229
WWW.NEWAGEBEV.COM
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NEW AGE BEVERAGES CORPORATION
1700 EAST 68TH AVENUE
DENVER, COLORADO 80229
WWW.NEWAGEBEV.COM
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NEW AGE BEVERAGES CORPORATION
1700 EAST 68TH AVENUE
DENVER, COLORADO 80229
WWW.NEWAGEBEV.COM
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NEW AGE BEVERAGES CORPORATION
1700 EAST 68TH AVENUE
DENVER, COLORADO 80229
WWW.NEWAGEBEV.COM
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NEW AGE BEVERAGES CORPORATION
1700 EAST 68TH AVENUE
DENVER, COLORADO 80229
WWW.NEWAGEBEV.COM
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NEW AGE BEVERAGES CORPORATION
1700 EAST 68TH AVENUE
DENVER, COLORADO 80229
WWW.NEWAGEBEV.COM
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NEW AGE BEVERAGES CORPORATION
1700 EAST 68TH AVENUE
DENVER, COLORADO 80229
WWW.NEWAGEBEV.COM
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NEW AGE BEVERAGES CORPORATION
1700 EAST 68TH AVENUE
DENVER, COLORADO 80229
WWW.NEWAGEBEV.COM
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NEW AGE BEVERAGES CORPORATION
1700 EAST 68TH AVENUE
DENVER, COLORADO 80229
WWW.NEWAGEBEV.COM
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NEW AGE BEVERAGES CORPORATION
1700 EAST 68TH AVENUE
DENVER, COLORADO 80229
WWW.NEWAGEBEV.COM
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1.
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I have
reviewed this Annual Report on Form 10-K of
New Age Beverages Corp.
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2.
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Based
on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the
period covered by this report;
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3.
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Based
on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in
this report;
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4.
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The
registrant’s other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
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(a)
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Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this report is being prepared;
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(b)
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Designed
such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles;
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(c)
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Evaluated
the effectiveness of the registrant’s disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the
end of the period covered by this report based on such
evaluation;
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(d)
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Disclosed
in this report any change in the registrant’s internal
control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the
registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over
financial reporting; and
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5.
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The
registrant’s other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the
audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
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(a)
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All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s
ability to record, process, summarize and report financial
information; and
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(b)
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Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s
internal control over financial reporting.
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Date:
April ___, 2018
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/s/
Brent Willis
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Brent
Willis
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Chief
Executive Officer and Director
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(Principal
Executive Officer)
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1.
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I have
reviewed this Annual Report on Form 10-K of
New Age Beverages Corp.
;
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2.
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Based
on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the
period covered by this report;
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3.
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Based
on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in
this report;
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4.
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The
registrant’s other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
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(a)
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Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this report is being prepared;
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(b)
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Designed
such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles;
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(c)
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Evaluated
the effectiveness of the registrant’s disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the
end of the period covered by this report based on such
evaluation;
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(d)
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Disclosed
in this report any change in the registrant’s internal
control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the
registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over
financial reporting; and
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5.
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The
registrant’s other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the
audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
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(a)
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All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s
ability to record, process, summarize and report financial
information; and
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(b)
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Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s
internal control over financial reporting.
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Date:
April ___, 2018
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/s/
Chuck Ence
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Chuck
Ence
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Chief
Financial Officer (Principal Financial and Accounting
Officer)
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1.
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The
Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
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2.
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The
information contained in the Report fairly presents, in all
material respects, the financial condition and results of
operations of the Company, as of, and for the periods presented in
the Report.
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Date:
April ___, 2018
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/s/
Brent Willis
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Brent
Willis
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Chief
Executive Officer and Director
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(Principal
Executive Officer)
|
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|
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/s/
Chuck Ence
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Chuck
Ence
|
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Chief
Financial Officer (Principal Financial and Accounting
Officer)
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