The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the District of Colorado on behalf of those who acquired NewAge Inc. (“NewAge” or the “Company”) (OTC: NBEVQ) securities between January 18, 2018 through October 18, 2022 (the “Class Period”). Investors have until February 6, 2023 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
NewAge is a purpose-driven company that offers products catering to health and wellness, nutritional performance, and weight management.
On January 10, 2022, NewAge filed an 8-K announcing that the Board and Defendant Brent Willis, CEO and Director of NewAge, agreed that he would “resign as [CEO], Director, and employee of the Company, effective immediately. On this news, the price of NewAge shares declined by $0.08, or approximately 8.41%, from $1.01 per share to close at $0.93 on January 11, 2022 and then declined by $0.05, or approximately 4.88%, from $0.93 per share to close at $0.88 on November 12, 2022.
On May 17, 2022, the Company announced that it had received a late notice from Nasdaq regarding the filing of its Form 10-Q. On this news, the price of NewAge shares declined by $0.06, or approximately 14.50%, from $0.42 per share to close at $0.36 on May 18, 2022.
On June 8, 2022, after trading had concluded for the day, the Company announced that it was undertaking a review of “strategic alternatives,” including “available financing alternatives, a potential financial restructuring, merger, sale or other strategic transaction.” On this news, the price of NewAge shares declined by $0.04, or approximately 10.84%, from $0.42 per share to close at $0.37 on June 9, 2022.
On August 30, 2022, NewAge announced that it was filing for Chapter 11 bankruptcy relief. Further, On August 31, 2022, The Wall Street Journal released an article called “New Age Says Cost of Internal Probe Contributed to Bankruptcy,” which highlighted the fact that in its Chapter 11 disclosure, NewAge admitted that it had conducted an expensive internal investigation into Ariix for suspected violations of the FCPA. On this news, the price of NewAge shares declined by $0.13, or approximately 36.67%, from $0.36 per share to close at $0.23 on August 31, 2022 and then declined by $0.11, or approximately 46.87%, from $0.23 per share to close at $0.12 on September 1, 2022.
On September 2, 2022, NewAge filed an 8-K announcing that it had received writing notice from The Nasdaq Stock Market LLC (“Nasdaq”) that, as a result of its filing for protection under Chapter 11 of the U.S. Bankruptcy Code, Nasdaq determined that NewAge’s securities would be delisted from the Nasdaq stock exchange, beginning on September 8, 2022. On this news, the price of NewAge shares declined by $0.02, or approximately 13.33%, from $0.15 per share to close at $0.13 on September 6, 2022.
On October 18, 2022, the SEC announced that it was taking legal action against Defendant Willis. On October 19, 2022, the SEC announced that it had instituted cease-and-desist proceedings against NewAge; in anticipation of these proceedings, NewAge submitted a settlement offer, which the SEC has accepted. On this news, the price of NewAge shares declined by $0.02, or approximately 94.00%, from $0.02 per share to close at $0.00 on October 19, 2022.
The lawsuit alleges that, throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose that: (1) the Company and Defendants had no relationship with the military or FamilyMart; (2) the Company and Defendants overstated the business agreements that they did have; (3) the Company and Defendants never produced or sold a proprietary CBD beverage; (4) the Company lacked adequate internal controls; and (5) as a result the Company had a heightened risk of regularly scrutiny and ultimately subject to an SEC investigation and action.