Best I can determine, both announced share changes are bullish, if anything (but I'm not a lawyer).
The Company's first line of the offering, as is usual with this company, unclear:
"Company may offer and sell from time to time up to an aggregate of $50 million shares of the Company’s common stock (the “Placement Shares”), through the Agent."
This can be interpreted either way. $s or shares. Really, tho, it's just a typo, as later in the document the $50M figure is cited, actually in aggregate up to $50M, not shares. And this is an at the market issuance, to be implemented from time to time. So, if you value the company using a p/e or p/s multiple after subtracting cash, there will be no dilution. There will be a flexible way to raise cash as needed, especially useful if major opportunities avail.
Again not a lawyer, and despite past dilutive issuances and misleading statements, imo the company is giving itself an option to raise cash quickly and as needed. Again, at market prices, which, presumably, they would attempt to execute opportunistically, and if used with proper execution, shareholder friendly.
Why would they need more capital after the recent debt and equity raises? Well, they are taking orders for the new CBD portfolio October 8th. They seem to want partners possibly to share an educational marketing program. We don't really know the status or timimg of the CBD portfolio and any immediate potential revenue spike. But we may have a hint; that being, a $10M to $12M fourth quarter incremental improvement to revenue attributed to something "proprietary." This was in an earlier presentation, itemizing the bridge to $90M - $110M in 2018 revenue.
If NBEV gets substantial orders for the CBD products, they're going to need cash to meet demand and to market properly.
In this scenario, one of many, some not so bullish, they may PR a revenue figure of orders taken at the convention. hopefully with more information like timing, plans, partners, gross margin, anticipated ramp, etc. This would very possibly create an ideal time to issue some new shares, say one or two million @ the then (~ Oct.10) market price. If this does indeed happen, the shares could be valued with entirely more rationality than they are now.
As for the conversion of common stock to preferred, it will have no effect on the fully diluted share count. Initially, I thought the reason was to create a new class of super voting shares. This does not appear to be the case. So, perhaps someone else knows the reason.
