Going to see many more sales like these over the next few weeks. Here's why:
Several years ago, I invested in an LLC called B&R Liquid Adventure ("B&R"). It was bringing to market a new kombucha tea, Bucha. Long story short, B&R F'ed up and in April 2015, it sold Bucha to the highest bidder, American Brewing Company ("ABC"). Consideration included $400k in cash and 1.5M shares of restricted ABC stock (valued at $500k).
For those following NBEV, you know that the General came to ABC with his grand plan to build the largest functional beverage company in the world. ABC sold off its craft beer operations leaving it with Bucha. Then about a year ago came the General's first merger, with New Age Beverages, and thereafter ABC became NBEV.
Now back to the story of B&R. The sale of Bucha to ABC did not provide enough cash to satisfy B&R's outstanding obligations. In total, B&R had raised $4.4M in private equity from approx 30 investors. On 12/31/15, B&R's assets and remaining obligations were placed in a Liquidating Trust, allowing the B&R investors to write off their individual investments and for the Trustees to negotiate settlements with B&R's creditors.
Then six weeks ago, mana drops from heaven. I get a letter stating that the Liquidating Trust still holds 1.3 million shares of NBEV. The original stock has risen from 33 cents/share to almost $4.00. Suddenly, the written off investment has value and to top it off, the stock sale restrictions are due to expire on May 15, 2017. In another long story short, agreements are reached and those 1.3 million shares are transferred to the 30 or so original B&R investors, free to be traded on the open market.
The result for most B&R investors is found money, from zero to getting most of our original investments back (5,000 to 15,000 shares are received). But there are several really big investors with 100,000+ shares received. As those investors look to move on from NBEV, I believe there are many more 10,000 share sales to be seen over the coming weeks.
Lastly, all original B&R investors were invited to join a conference call with the General prior to distribution of the shares from the Trust. The General was careful not to release any insider info (ie, the PMC Holdings acquisition was well underway but no mention was made of it). But I was suitably impressed with General Bucha, his vision for NBEV and my own research that I've decided to put most of my mana into a drawer, not to be opened again until year end 2019. My over/under is 4x from today's closing price of $5.73. Any takers?
