NEW YORK, NY / ACCESSWIRE / January 23, 2023 / Pomerantz LLP announces that a class action lawsuit has been filed against certain officers and directors of NewAge, Inc. ('NewAge' or the 'Company') (OTCMKTS:NBEVQ). The class action, filed in the United States District Court for the District of Colorado, and docketed under 23-cv-00127, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired the securities of NewAge for the time period January 18, 2018 through and including October 18, 2022 (the 'Class Period'), seeking to recover damages caused by Defendants' violations of federal securities laws and pursue remedies under the Securities Exchange Act of 1934 (the 'Exchange Act').
If you are a shareholder who purchased or otherwise acquired NewAge securities during the Class Period, you have until February 6, 2023 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at firstname.lastname@example.org or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Relevant non-party NewAge purports to produce and sell various beverages and other health products. NewAge wholly owns subsidiaries that sell products under a variety of brand names. NewAge purports to be an 'organic and healthy products company intending to become the world's leading social selling and distribution company.'
On August 30, 2022, NewAge filed for Chapter 11 bankruptcy in Delaware. The bankruptcy plan submitted by NewAge has not been confirmed and all litigation against NewAge is subject to an automatic stay.
During the Class Period, NewAge's Chief Executive Officer ('CEO') and various Chief Financial Officers ('CFOs') misrepresented to investors the Company's business relationships, product development, business prospects, adequacy of internal controls, and concealed an internal investigation and subsequent disclosure to the Department of Justice and the U.S. Securities and Exchange Commission ('SEC').
On January 10, 2022, NewAge filed a Form 8-K announcing that its Board and Defendant Brent Willis ('Willis') agreed that Willis would 'resign as [CEO], Director, and employee of the Company, effective immediately. The Company and Mr. Willis will determine the terms of his departure at a future date . . . . Ed Brennan will provide additional guidance and direction to the senior management team . . . .' In response, the stock went down 6% on each of the following trading days, from an opening price of $0.98 to a closing price of $0.9251 on January 11, 2022, and from an opening price of $0.935 to a closing price of $0.88 on January 12, 2022.
On May 17, 2022, the Company announced after trading hours that it had concluded that it had received a late notice from Nasdaq regarding the filing of its Form 10-Q. The next day, the stock went down by 8%, from an opening price of $0.391 per share to $0.3591 per share.
On June 8, 2022, after trading had concluded for the day, the Company announced that it was undertaking a review of 'strategic alternatives,' including 'available financing alternatives, a potential financial restructuring, merger, sale or other strategic transaction.' The next day, NewAge's share price went down 12%, from $0.42 per share to $0.3703. Following that, the Company's share price closed down 11% (the price per share dropped from $0.3605 to $0.3201 on the day), 5% (the price per share dropped from $0.3112 per share to $0.2902 on the day), and 3% (the price per share dropped from $0.298 per share to $0.29 on the day), respectively.
On August 30, 2022, NewAge announced that it was filing for Chapter 11 bankruptcy relief. Further, on August 31, 2022, The Wall Street Journal released an article called 'New Age Says Cost of Internal Probe Contributed to Bankruptcy,' which highlighted the fact that in its Chapter 11 disclosure, NewAge admitted that it had conducted an expensive internal investigation into Ariix, which NewAge had acquired in December 2020, for suspected violations of the Foreign Corrupt Practices Act. The next day, the stock closed down 39%, from an opening price of $0.2016 per share to $0.1222 per share. It further plummeted on September 2, 2022, closing down 27%, from an opening of $0.20 per share to $0.1482.
On September 2, 2022, after trading hours in the domestic markets had finished for the day, NewAge filed a Form 8-K announcing that it had received writing notice from The Nasdaq Stock Market LLC ('Nasdaq') that, as a result of its filing for protection under Chapter 11 of the U.S. Bankruptcy Code, Nasdaq determined that NewAge's securities would be delisted from the Nasdaq stock exchange, beginning on September 8, 2022. In response to this news, NewAge stock closed down 9% on September 6, 2022, from an opening price of $0.1368 to a closing price of $0.125.
On October 18, 2022, the SEC announced that it was taking legal action against Defendant Willis. Specifically, he was alleged to have engaged in a 'multi-year fraud by disseminating numerous false and misleading press releases and making false public statements concerning NewAge's business dealings, and aided and abetted NewAge's disclosure of material information in violation of Regulation FD,' and was accordingly charged under Section 10(b) and corresponding Rule 10b-5 of the Exchange Act, Section 17(a) of the Securities Act, and with aiding and abetting NewAge's violations of Section 13(a) of the Exchange Act and Regulation FD.
On October 19, 2022, the SEC announced that it had instituted cease-and-desist proceedings against NewAge pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act, enjoining NewAge from further violations of the Securities and Exchange Acts, and rules and regulations promulgated under them. In anticipation of these proceedings, NewAge submitted a settlement offer, which the SEC has accepted. The next day, NewAge stock plummeted from an opening price of $0.175 per share to $0.0013 per share, or 93%.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com
SOURCE: Pomerantz LLP
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