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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 8-K

 

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): September 30, 2020

 

NewAge, Inc.
  (Exact name of registrant as specified in its charter)  

 

Washington   001-38014   27-2432263
(State or other jurisdiction   (Commission   (I.R.S. Employer
of incorporation)   File Number)   Identification Number)

 

2420 17th Street, Suite 220, Denver, CO 80202
(Address of principal executive offices) (Zip Code)

 

(303) 566-3030
(Registrant’s telephone number, including area code)

 

 

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
     
  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
     
  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
     
  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, par value $0.001 per share   NBEV   Nasdaq Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging Growth Company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

     

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

On September 30, 2020, NewAge, Inc.(the “Company”) entered into an Amended and Restated Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Ariel Merger Sub, LLC (“Merger Sub”), Ariel Merger Sub 2, LLC (“Merger Sub 2”) Ariix, LLC (“Ariix”), certain members of Ariix (the “Sellers”) and Frederick Cooper, as Sellers Agent (the “Sellers Agent”), pursuant to which the Company agreed to acquire Ariix, which owns five brands in the e-commerce and direct selling channels, including Arrix, Zennoa, Limu, MaVie, and Shannen, subject to the conditions and terms set forth therein (the “Acquisition”). Pursuant to the Merger Agreement, on the closing date (the “Closing Date”), Ariix will merge with Merger Sub, with Ariix as the surviving entity and be a wholly-owned subsidiary of the Company. Subsequently, Merger Sub will merge with and into Merger Sub 2and remain a wholly-owned subsidiary of the Company.

 

The consideration for the Acquisition will be paid in a combination of cash and Company stock. On the Closing Date, the Company will pay the Sellers $20.0 million in cash and will issue 19 million shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”). Thirty days after shareholder approval of the issuance of the post-closing Common Stock, the Company will issue 7 million shares of Common Stock to Frederick Cooper and up to 1.67 million shares of Common Stock in as severance payments. On the six-month anniversary of the Closing Date, the Company will, at its option, pay $10 million in cash or issue shares of Common Stock with a 5-Day VWAP value of $10 million. On the first anniversary of the Closing Date, subject to shareholder approval, the company will issue 25.5 million shares of Common Stock. On the 14-month anniversary of the Closing Date, subject to shareholder approval, the Company will issue 2.9 million shares of Common Stock If the Company fails to receive shareholder approval for the issuance of the shares at three shareholders meetings held for the purpose of obtaining such approval, the Company will pay, within 90 days of the third shareholders meeting, $141,015,000 to the members of Ariix,$12,250,000 to Frederick Cooper, and up to $10,000,000 as severance payments. The number of shares of Common Stock issuable is subject to adjustment based on the working capital of Ariix at the Closing Date.

 

The Merger Agreement contains customary representations, warranties, covenants and indemnities by the parties to such agreement and is subject to customary closing conditions, including, among other things, (i) the receipt of regulatory approvals, including applicable antitrust approvals, (ii) the accuracy of the respective parties’ representations and warranties, subject to customary qualifications, and (iii) material compliance by the parties with their respective covenants and obligations. In addition, the Merger Agreement contains certain termination rights, including by the Company or the Sellers Agent in the event the closing has not occurred by November 30, 2020 (the “Outside Date”).

 

The summary of the Merger Agreement in this Current Report on Form 8-K is qualified by reference to the full text of the Merger Agreement, which is included as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference.

 

The Merger Agreement has been attached as an exhibit to this report to provide investors and security holders with information regarding its terms. It is not intended to provide any other information about the Company, Ariix or their respective subsidiaries and affiliates. The representations, warranties and covenants contained in the Merger Agreement were made only for purposes of such agreements and as of specific dates, are solely for the benefit of the parties to the Merger Agreement, may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the parties that differ from those applicable to investors. Investors should not rely on the representations, warranties or covenants or any description thereof as characterizations of the actual state of facts or condition of the Company, Ariix or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in public disclosures by the Company, Ariix or their subsidiaries or affiliates.

 

     

 

 

Forward-Looking Statements

 

This communication may contain certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as “expect,” “anticipate,” “believe,” “intend,” “estimate,” “plan,” “target,” “goal,” or similar expressions, or future or conditional verbs such as “will,” “may,” “might,” “should,” “would,” “could,” or similar variations. These statements are based on the beliefs and assumptions of the management of the Company based on information currently available to management. Such forward-looking statements include, but are not limited to, certain plans, expectations, goals, projections, and statements about the benefits of the transaction. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ materially from those contained or implied in the forward-looking statements including: risks related to the Acquisition and the integration of the businesses and assets acquired; the financial performance of the acquired businesses; the possibility that the transaction does not close when expected or at all because required regulatory or other approvals are not received or other conditions to closing are not satisfied on a timely basis or at all; potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the Acquisition; the possibility that the anticipated operating results and other benefits of the Acquisition are not realized when expected or at all; risks associated with increased leverage from the transaction; and other risks described in the section entitled “Risk Factors” under Item 1A in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as amended, and in subsequent periodic and current SEC filings the Company may make. The Company disclaims any obligation to revise or update any forward-looking statement that may be made from time to time by it or on its behalf.

 

Item 7.01 Regulation FD Disclosure.

 

On October 1, 2020, the Company issued press release announcing that the parties had entered into the Merger Agreement. A copy of the press release is furnished as Exhibit 99.1 of this report.

 

The information under Item 7.01 and in Exhibit 99.1 of this report is being furnished and shall not be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information under Item 7.01 and in Exhibit 99.1 of this report shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.   Description
     
2.1*   Amended and Restated Agreement and Plan of Merger, dated as of September 30, 2020, by and among NewAge, Inc, Ariel Merger Sub, LLC, Ariel Merger Sub 2, LLC Ariix, LLC, certain members of Ariix, LLC, and Frederick Cooper, as Sellers Agent.
     
99.1   Press Release dated October 1, 2020

 

* Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish supplementally a copy of any of the omitted schedules and exhibits to the U.S. Securities and Exchange Commission upon its request.

 

     

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  NEWAGE, INC.
     
Date: October 1, 2020 By: /s/ Gregory A. Gould
   

Gregory A. Gould

Chief Financial Officer

 

     

 

 

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