A few thoughts on the current situation:
1) Definitely experiencing mixed feelings over the 80k shares I purchased yesterday at $0.0039, but that did not stop me from adding 85k more at $0.0036 today. I am aware that, based on consensus sentiment here, I am throwing good money after bad.
2) On a whim, I called BrewBilt and left a message yesterday. Said I was an investor visiting Virginia soon and wanted to support their reported new brewery client there (both true). To my surprise, Jef Lewis called me back and we had a brief, pleasant chat. Although I did not obtain the name/location of the Virginia operation (new brewery with facility still being built), nor could he answer my questions about the buyback, I ended the conversation feeling a sense of reaffirmation in the DD that has made me a believer in this company as a winner over the next 6-12 months.
3) The Sacramento State PR was somewhat all over the place. That said, my interpretation was that the references to the San Diego State program (which seems unaffiliated, besides the Cal State connection, with the Sac State program) were made to demonstrate the future trajectory of the Sac State program. Not the PR I would have penned but not my company. I found press on the first iteration of the Sac State program that they ran in 2018. I have an email in to the biology professor who apparently co-ran the program in '18 asking for corroboration of the BBRW system purchase approval, and will update this board if he responds. At a minimum, it seems like the Sac State program is legit, if fledgling. The best write-up I found was titled "Class untaps beer knowledge for students" - State Hornet, 3/13/18. There is also a clip of Good Day Sacramento where the same professor is interviewed, although it provided more unintentional comedy versus actionable information. Sorry for lack of links, still learning how to post here.
4) Dilution. WTF, right? I think everyone holding BBRW shares wishes that there were fewer of them outstanding, but I also don't comprehend the magnitude of surprise that new shares seem to be hitting. Per the 3/31/20 10-Q, Note 9, Convertible Notes Payable, BBRW had notes payable that could be converted into 1,510 mil shares as of that date. I am not privy to the conversion terms, but made some simplifying assumptions to do BoE math. Only four of the notes listed as of 3/31/20, Actus #10, EMA #5, and Power Up #9 and 10, WERE NOT already past their due date. Assuming that the 1.5 bil shares were proportionally associated with the outstanding balances of each note, the four I listed above come to 320 mil shares, meaning that another 1,190 shares were convertible at will as of 3/31. Of the four other notes, Actus #10 became due today, and the other three are due in October, January '21, and February '21, respectively. My point is that, regardless of any announcements such as the 6/30 buyback PR, there were always going to be a couple/few hundred million more shares converted by note holders before everything stabilizes. We know that 265 mil of those shares hit between 6/10 (per 10-Q) and 7/1 (last update on OTC BB). Assuming that every other convertible note (before today's maturity) gets converted, we are looking at 509 mil (current) plus remaining 925 mil = 1,434 mil O/S. BBRW certainly could have issued more notes since 3/31, but presumably, if so, their due dates would be in 2021+.
5) For reasons that I admit seem understandable, very few seem to think that BBRW has commenced its buyback, or even will in the future. Others here are light years ahead of me in interpreting the tape and Level 2 data. However, I have seen enough big, blocky buying (about 4 mil shares Monday around 3PM, for instance), to believe the possibility that the buyback has commenced. With the announcement that it was authorized, BBRW has no further disclosure obligation before buying back shares, just need to stay within the % of daily volume thresholds, etc. Assuming that BBRW funds half the buyback amount publicized ($750k) and that they have not/will not optimize the PPS execution (so say an $0.005/sh avg), they're taking 150 mil shares off the table. More actual funding and lower PPS (such as those available today), would obviously amplify the impact. Absent major operational setbacks (no guarantee), I anticipate the O/S settling somewhere under a billion, and while that is prima facie ridiculous, I can get comfortable with that based on my optimism of future enterprise value.
6) My opinion of overall potential value of BBRW does, in fact, give them "credit" for growth within their traditional brewery business, as well as CBD extraction. I don't think we know enough about the cannabeer potential, but it smells like a real opportunity to me, although the innuendo-laden PR was not a great look (hindsight 20/20, I know). Allowing for the fact that BBRW could go b/k and we all walk away empty-handed (very real possibility, many businesses are failing right now), I think any reasonable success story for BBRW would put their enterprise value in the neighborhood of $20+ mil (again, very real possibility to "die trying"). Given that the convertible notes being discussed constitute the major debt load for BBRW, there should be relatively fewer liability on such a future-state balance sheet. All told, I feel comfortable that BBRW (if successful in its business plan) can wrap up 2020 somewhere in the 1.5 to 3 cents per share range, with plenty of scenarios (in my mind) for more upside, intermediate and long term. Two months ago, the internet was aflame with predictions of how valuable BBRW could become as a company. While the path has probably gotten narrower and the denominator in our math has grown, I personally do not believe that the fundamental opportunity has deteriorated materially.
Apologies for the novel, as I wanted to address a few different BBRW topics all in one place. As always, appreciate other viewpoints and continue to enjoy learning from other on this board. Thanks for reading.
AI
