If I was a big hospitality company, I'd be hesitant to close any deal until BRBL cleaned up their books. Otherwise, BRBL might end up spending all their money on salaries and convertible debt interest rates when it could be going towards building their Phase II brewery instead.
That's why I'm hopeful they've been letting the notes convert because as of last month when they supposedly had about $745,000 of convertible notes on the books, that could be around $8,000 in monthly interest expenses at 12% (compounded monthly is my guess). Deduct $425,000 from that $745,000 as the April 1st note should be converted as the maturity date was April 1st.
But since they have that Equity Purchase Agreement in place, which is an easy way for them get cash if they need it, I can't tell if that's causing the extra dilution to occur. Not enough information. I'm guessing they may have raised $150,000 from this agreement last month, about 1.5 billion shares.
So I just wait with half my intended investment in place, because I sure don't want to miss the news of a hospitality contract, as their latest news suggests that the deal is getting near to closing.
Even though I think their monthly revenues could be approaching $100,000 per month now, they've suggested that sales to bars, stores, etc. don't carry great profit margins so they might be burning through most of that revenue with little cash to spare for growing the company. At least they should have enough cash to get the tap room open for great profit margins so I expect it will be several more months before they have spare cash on hand to grow organically.
If they are tapping the Equity Purchase Agreement, causing some of the recent dilution, at least there is no interest rate expense associated with it! That's certainly far better than a toxic note, so that's better than it has been in the past.
If they just report great revenues in Q4, that could give the stock a bump in price, and then they could sell more shares at a higher price. At some point they'll have to readjust the share structure if they want to uplist, but I'm fine with that, in part because I'll take advantage of a short-term sell-off which I would expect to recover easily if they announce the hospitality contract or the ground-breaking of the Phase II brewery.
I'm in it for the long haul because I'm confident they'll figure out a way to become a behemoth brewery someday. It was bad for 8 years with many huge reverse splits and convertible debt on the BBRW side, but BRBL could quickly become a profitable company with all of their 154 clients and the upcoming tap room, so it's a lot brighter than where BBRW started their journey.
Just my opinion; not investment advice.
Bullish
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