On May 20, 2016, Bucha, Inc., formerly known as American Brewing Company, Inc., a Washington corporation ("we" or the "Company"), entered into an Asset Purchase Agreement (the "Agreement") whereby the Company acquired substantially all of the operating assets of New Age Beverages, LLC, New Age Properties, LLC, Aspen Pure, LLC and Xing Beverage, LLC (collectively, "Xing"), which are companies engaged in the manufacture and sale of various teas and beverages (the "Acquisition"). On May 20, 2016, the parties executed the Asset Purchase Agreement for the Acquisition. On June 30, 2016 (the "Closing Date"), the parties executed the final exhibits and the Company transferred the purchase price and other consideration described in the Agreement, thereby closing the transaction.
Upon the closing of the Acquisition, the Company received substantially all of the operating assets of Xing, consisting of inventory, fixed assets and intellectual property in exchange for an aggregate purchase price of approximately $19,995,000, consisting of $6,995,000 worth of the Company's common stock, $8,500,000 in cash, and a secured promissory note in an amount of $4,500,000. The shares of common stock shall be issued at a price per share of $1.6066, which is based on the Volume Weighted Average Price ("VWAP") of the Company's common stock for the thirty days prior to the Closing Date, and will consist of 4,353,915 shares. The promissory note shall accrue interest of 1% per annum, beginning after six months from the Closing Date, and shall be secured by a second lien on the Company's assets. The shares of Common Stock to be issued pursuant to the Acquisition will be restricted under Rule 144, and will also be subject to an additional leak out provision, which states that upon the date that is six months after Closing Date, the holders of the shares may only sell up to fifteen percent of the shares held by such shareholder each calendar quarter for an additional twelve month period, meaning that the leak out provision will expire 18 months from the Closing of the Acquisition. The Acquisition was subject to customary closing conditions. A copy of Asset Purchase Agreement dated May 20, 2016 was filed with the Form 8-K on May 23, 2016. The Closing exhibits, including the Assignment and Assumption Agreement, Bill of Sale and Promissory Note are included as part of this Form 8-K and are filed as Exhibits 10.2, 10.3, and 10.4 respectively.
As part of the Acquisition, the Company created two wholly owned subsidiaries, NABC, Inc. and NABC Properties, LLC, both of which are Colorado entities. NABC, Inc. shall act as the operating entity for the acquired Xing and Bucha assets, including the brands Aspen Pure®, XingTea®, XingEnergy®, Bucha®, and the DSD distribution operations. NABC Properties, LLC, shall act as the property owner for the acquired Xing property.
The Company intends to file the financial statements of Xing in an amendment to this Current Report on Form 8-K no later than 71 days from the Closing Date. The foregoing description of the Acquisition and related transactions does not purport to be complete and is qualified in its entirety by reference to the complete text of the Asset Purchase Agreement and incorporated exhibits, which are incorporated herein by reference.
The shares of our Common Stock to be issued in connection with the Acquisition will not be registered under the Securities Act, and were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"). Certificates representing these shares will contain a legend stating the restrictions applicable to such shares.