They've had an Equity Purchase Agreement in place since early last year that allows an investor to buy millions of dollars worth of shares at 90% of some market price. I forget the exact terms but it's in an 8-k from last year. So it could be that fund, who is also a convertible lender, is buying shares and then reselling them right away. The company could have raised at least $50,000 this week alone. It's still better than a convertible note.
It's nothing surprising to me, but my gamble was that they would sign the hospitality agreement worth $100+ million, split between BRBL and BBRW, which would allow them to curtail their dilution ways and put BRBL on a huge run. That's looking less likely, as in the past 2 weeks it seems like they're just tapping the dilution spigot again.
Still, even though the dilution worsens, that agreement could fix it all. However, even I'm growing skeptical - it may have just been a 3 month story-telling adventure. So I sold a couple of million shares this week and added it into an acquisition/reverse merger kind of play instead, on Wednesday, now up 30% this week already.
Reverse mergers are my favorite plays but just like the IPO market, it's been dead for the past 18+ months until just this past January so now I have a more preferred investment option available for the rest of the year it appears.
These kind of business startup plays - BRBL and BBRW - are very risky, so I never put too much into them. The potential hospitality contract gave me hope, that maybe this one time, a dilution machine company would finally make a huge turnaround, becoming a legit long-term play. I'll still hold the rest of my shares until the end, just in case they surprise us yet.
A microbrewery franchise still makes complete sense to me as the profit margins of microbreweries are so high that it would be a good investment by a hospitality company, creating far more long-term value for both parties because of a partnership between them.
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