8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) June 13, 2017

NEW AGE BEVERAGES CORPORATION

(Formerly, American Brewing Company, Inc., and Búcha, Inc.)

(Exact name of registrant as specified in its charter)

Washington	333-215267	27-2432263
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1700 East 68th Avenue, Denver, CO	80229
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (303) 289-8655

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.below):

[  ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging Growth Company [X]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [X]

Explanatory Note

This Form 8-K/A (“Form 8-K/A”) amends the Current Report on Form 8-K filed by New Age Beverages Corporation. (the “Company”) with the Securities and Exchange Commission (“SEC”) on June 13, 2017 (the “Original Form 8-K”). The Original Form 8-K reported under Item 1.01 that the Company entered into an Asset Purchase Agreement, dated March 23, 2017 (the “APA”), as amended pursuant to an Amendment to the Purchase Agreement dated June 9, 2017 (the “Amendment” and collectively with the APA, the “Purchase Agreement”), pursuant to which the Company acquired substantially all of the operating assets of Marley Beverage Company, LLC (“Marley”).

At the Closing of the Purchase Agreement on June 13, 2017, the Company acquired substantially all of the operating assets of Marley, consisting of inventory, accounts receivable, fixed assets and intellectual property in exchange for a purchase price of 3,000,000 shares of the Company’s common stock. The Purchase Agreement provides for an earn out payment of $1,250,000 in cash if the gross revenues of the Marley business during any trailing twelve calendar month period after the Closing Date are equal to or greater than $15,000,000. The earnout, if applicable, will be paid as $625,000 on or before the 15^th day after the end of the first trailing twelve calendar month period in which the earnout condition is satisfied, $312,500 not later than the first anniversary of the initial earnout payment, and $312,500 not later than the second anniversary of the initial earnout payment. Pursuant to the terms of the Purchase Agreement, the holders of the shares of Common Stock issued in the acquisition were granted piggyback registration rights, as well as demand registration rights, with the demand registration rights beginning twelve months from the Closing Date. The consummation of the acquisition was subject to customary closing conditions.

The description of the Purchase Agreement found in this Form 8-K/A is not intended to be complete and is qualified in its entirety by reference to the agreements included or incorporated by reference in the Original Form 8-K.

This Form 8-K/A amends Item 9.01 of the Original Form 8-K to include financial statements of the business acquired and pro forma financial information in accordance with Items 9.01(a) and (b) within seventy-one calendar days after the date on which the initial report on Form 8-K was required to be filed. Except as set forth in Item 9.01 below, no other changes are being made to the Original Form 8-K.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements of Businesses Acquired

The following financial statements are filed with this Form 8-K and are incorporated herein by reference:

Exhibit 99.1	●	Audited balance sheets of Marley Beverage Company, LLC as of December 31, 2016 and 2015; respectively, and the related statements of operations, members’ deficit and cash flows for the years then ended;
Exhibit 99.2	●	Unaudited balance sheet of Marley Beverage Company, LLC as of June 13, 2017 and the related statements of operations, members’ deficit and cash flows for the period from January 1, 2017 to June 13, 2017.

(b) Pro Forma Financial Information

The following unaudited pro forma condensed consolidated financial statements are filed with this Form 8-K as exhibit 99.3 and are incorporated herein by reference:

● Unaudited pro forma combined balance sheet of the Company and Marley as of December 31, 2016 as if the Acquisition occurred January 1, 2016;

● Unaudited pro forma combined statements of operations of the Company and Marley for the year ended December 31, 2016 and for the six months ended June 30, 2017 as if the Acquisition occurred January 1, 2015; and

(c)	Exhibits
	Exhibit 23.1	Consent of Accell Audit & Compliance, P.A. to the incorporation of their report on the financial statements of Marley Beverage Company, LLC.

The unaudited pro forma combined financial information is presented for informational purposes only. The pro forma data is not necessarily indicative of what the Company’s financial position or results of operations actually would have been had the Company completed the Acquisition as of the dates indicated. In addition, the unaudited pro forma combined financial information does not purport to project the future financial position or operating results of the combined company.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	NEW AGE BEVERAGES CORPORATION
	(Registrant)
Date: August 28, 2017	By:	/s/ Brent Willis
		Brent Willis
		Chief Executive Officer

By:	/s/ Chuck Ence
	Chuck Ence
	Chief Financial Officer

EX-99.1

Financial Statements

Years Ended December 31, 2016 and 2015

Marley Beverage Company, LLC

Financial Statements

Years Ended December 31, 2016 and 2015

Marley Beverage Company, LLC

Contents

Independent Auditor’s Report	3
Financial Statements
Balance Sheets as of December 31, 2016 and 2015	5
Statements of Operations for the Years Ended December 31, 2016 and 2015	6
Statements of Changes in Members’ Deficit for the Years Ended December 31, 2016 and 2015	7
Statements of Cash Flows for the Years Ended December 31, 2016 and 2015	8
Notes to Financial Statements	9-14

2 

Independent Auditor’s Report

To the Members

Marley Beverage Company, LLC

We have audited the accompanying financial statements of Marley Beverage Company, LLC (the “Company”) which comprise the balance sheets as of December 31, 2016 and 2015, and the related statements of operations, changes in members’ deficit, and cash flows for the years then ended, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Marley Beverage Company, LLC as of December 31, 2016 and 2015, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Tampa, Florida

August 28, 2017

3 

Financial Statements

4 

Marley Beverage Company, LLC

Balance Sheets

December 31,	2016			2015
Assets
Current Assets
Cash	$	10,124		$	12,181
Receivables
Trade, net of allowances of $193,321 and $169,044		202,753			218,985
Affiliates		19,587,340			18,308,873
Other		1,721			69,128
Inventories, net		1,834,759			1,227,291
Prepaid expenses and other		226,801			174,357
Total Current Assets		21,863,498			20,010,815
Property and Equipment
Computer equipment and software		68,140			117,027
Vehicles		73,000			73,000
Office Furniture and fixtures		25,647			58,761
Accumulated depreciation		(128,958	)		(155,120	)
Net Property and Equipment		37,829			93,668
Total Assets	$	21,901,327		$	20,104,483
Liabilities and Members’ Deficit
Current Liabilities
Payables
Trade	$	283,440		$	305,150
Affiliates		46,552,602			38,246,870
Accrued expenses and other		234,040			913,664
Total Current Liabilities		47,070,082			39,465,684
Loan Payable to Affiliate		21,343,611			17,306,111
Total Liabilities		68,413,693			56,771,795
Members’ Deficit
Contribution capital		1,000,000			1,000,000
Accumulated deficit		(47,512,366	)		(37,667,312	)
Total Members’ Deficit		(46,512,366	)		(36,667,312	)
Total Liabilities and Members’ Deficit	$	21,901,327		$	20,104,483

See independent auditor’s report and accompanying notes to financial statements.

5 

Marley Beverage Company, LLC

Statements of Operations

Year ended December 31,	2016			2015
Net Sales	$	7,457,253		$	10,004,227
Cost of Sales		5,146,349			6,730,520
Gross Profit		2,310,904			3,273,707
Operating Expenses		8,077,064			8,821,896
Operating Loss		(5,766,160	)		(5,548,189	)
Interest Expense, Affiliate		3,987,057			3,203,167
Other Expense		91,837			309,294
Total Other Expense		4,078,894			3,512,461
Net Loss	$	(9,845,054	)	$	(9,060,650	)

See independent auditor’s report and accompanying notes to financial statements.

6 

Marley Beverage Company, LLC

Statements of Changes in Members’ Deficit

	Contributed Capital		Accumulated Deficit			Total
Balance, January 1, 2015	$	1,000,000	$	(28,606,662	)	$	(27,606,662	)
Net loss		-		(9,060,650	)		(9,060,650	)
Balance, December 31, 2015	$	1,000,000	$	(37,667,312	)	$	(36,667,312	)
Net loss		-		(9,845,054	)		(9,845,054	)
Balance, December 31, 2016	$	1,000,000	$	(47,512,366	)	$	(46,512,366	)

See independent auditor’s report and accompanying notes to financial statements.

7 

Marley Beverage Company, LLC

Statements of Cash Flows

Year ended December 31,	2016			2015
Operating Activities
Net loss	$	(9,845,054	)	$	(9,060,650	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		54,961			70,180
Provision for (recovery of) bad debt		5,839			(104,359	)
Loss on disposal of fixed assets		18,933			14,784
Changes in net operating assets and liabilities
Accounts receivable, trade		10,393			367,202
Receivable, affiliate		(1,278,467	)		(2,429,395	)
Other receivable		67,407			-
Inventories		(607,468	)		137,364
Prepaid expenses and other		(52,444	)		26,399
Accounts payable, trade		(21,710	)		(262,159	)
Payable, affiliate		8,305,732			8,464,447
Accrued expenses and other		(679,624	)		456,935
Net cash used in operating activities		(4,021,502	)		(2,319,252	)
Investing Activities
Purchase of property and equipment		(18,055	)		(36,133	)
Net cash used in investing activities		(18,055	)		(36,133	)
Financing Activities
Net borrowings from affiliates		4,037,500			2,287,000
Net Decrease in Cash		(2,057	)		(68,385	)
Cash, beginning of year		12,181			80,566
Cash, end of year	$	10,124		$	12,181
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
CASH PAID DURING THE YEAR FOR:
Interest	$	-		$	-
Income taxes	$	-		$	-

See independent auditor’s report and accompanying notes to financial statements.

8 

Marley Beverage Company, LLC

Notes to Financial Statements

1.   Significant Accounting Policies

Nature of Business

Marley Beverage Company, LLC (“the Company”) develops, markets and distributes ready-to-drink relaxation and coffee beverages in the United States, Canada, Europe, Latin America and certain other foreign countries. The majority investment in the Company is held by its parent, Viva Beverages LLC (“Viva”).

Use of Estimates

In preparing the financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), management is required to make estimates and assumptions that affect the reported amounts of (1) assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and (2) revenues and expenses during the reporting period. Significant areas subject to such estimates and assumptions include valuation allowances for receivables, inventories, the assessment of impairment for property and equipment and potential accruals relating to litigation and other liabilities. Actual results could differ from these estimates.

Concentrations of Credit Risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of accounts receivable. The Company attempts to minimize credit risk by reviewing all customers’ credit history before extending credit and by monitoring customers’ credit exposure on a continuing basis. The Company had one customer individually accounting for 18% and 14% of sales in 2016 and 2015, respectively. The Company had three and four customers accounting for 83% and 71%; respectively, of accounts receivables at December 31, 2016 and 2015.

Cash and Cash Equivalents

Marketable securities with original maturities of less than three months are considered to be cash equivalents. There were no cash equivalents and there was no cash in foreign bank accounts at December 31, 2016 and 2015.

9 

Marley Beverage Company, LLC

Notes to Financial Statements

Receivables

Receivables reflect balances from trade sales net of allowances for bad debt and other customer deductions. The Company records an allowance for doubtful accounts based on specifically identified customer balances that are believed to be uncollectible and an additional allowance based on certain percentages of the aged receivables, which are determined based on historical experience and a current assessment of the general financial conditions affecting the customer base. If the actual collections experience changes, revisions to the allowance may be required. Trade receivables and related allowances are written off to Operating Expenses when it is determined collection on an account is not probable. Provision for customer deductions are the best estimate of probable customer deductions related to customary trade incentives and other allowances. Customer deductions are reflected in the calculation of net sales. The allowances for bad debt and customer deductions were $5,839 and $187,482 respectively, at December 31, 2016 and $0 and $169,444, respectively, at December 31, 2015.

Inventories

Inventories are valued at the lower of cost or market. Cost is determined by the first-in, first-out (“FIFO”) method.

Property, Equipment and Depreciation

Property and equipment are stated at cost. Depreciation is computed over the estimated useful lives of the assets using the straight-line method. Estimated useful lives range from 3 to 7 years. Depreciation expense was $54,961 and $70,180 for the years ended December 31, 2016 and December 31, 2015, respectively. Repair and maintenance costs are charged to Operating Expense as incurred.

Impairment of Long-Lived Assets

The Company evaluates the recoverability of property and equipment by comparing the carrying amount of the asset or group of assets against the estimated undiscounted future cash flows expected to result from the use of the asset or group of assets and their eventual disposition. If the undiscounted cash flows are less than the carrying value of the asset or group of assets being evaluated, an impairment loss is recorded. An impairment loss is measured as the difference between the fair value and carrying value of the asset or group of assets being evaluated. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less cost to sell. The estimated fair value is based on the best information available under the circumstances, including prices for similar assets or the results of valuation techniques, including the present value of expected future cash flows using a discount rate commensurate with the risks involved. There was no impairment in 2016 or 2015.

10 

Marley Beverage Company, LLC

Notes to Financial Statements

Income Taxes

The Company is a limited liability company. In lieu of Federal income taxes, the members of a limited liability company are taxed on their proportional share of the Company’s taxable income. Therefore, no federal tax provision has been provided in these financial statements.

Revenue Recognition

The Company recognizes revenue on sales of its products as earned, generally when shipped and/or when title transfers to the customer. Revenue is recorded net of provisions for discounts and allowances.

Shipping and Handling

The Company classifies shipping and handling costs as Operating Expenses. The Company does not normally charge customers for shipping and handling. Shipping and handling costs paid by customers are not material and are reflected in Operating Expenses.

Advertising and Promotion Costs

The Company expenses the costs of advertising and promotion as incurred. Advertising and promotional expenses for the years ended December 31, 2016 and 2015 were $408,866 and $239,085, respectively, and reflected in Operating Expenses.

Fair Value of Financial Instruments

There is a three-level hierarchy for fair value measurements that distinguishes between market participant assumptions developed based on market data obtained from sources independent of the reporting entity (“observable inputs”) and the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (“unobservable inputs”). The hierarchy level assigned to financial instruments recorded at fair value is based on the Company’s assessment of the transparency and reliability of the inputs used in the valuation of such instruments at the measurement date. Level 1 inputs are based on quoted market prices. Level 2 are based on observable inputs, while Level 3 are based on unobservable inputs and management judgment. There were not any Level 2 or 3 measurements at December 31, 2016 and 2015

Due to their short maturity, the carrying amounts of cash, accounts receivable, accounts payable and accrued liabilities approximated their fair values at December 31, 2016 and 2015.

11 

Marley Beverage Company, LLC

Notes to Financial Statements

2.   Inventories

Inventories consisted of the following:

December 31,	2016			2015
Finished goods	$	1,627,204		$	1,234,792
Raw materials		270,772			165,977
Other		21,518			103,586
Reserves		(84,735	)		(274,064	)
Total	$	1,834,759		$	1,227,291

3.   Related Party Activities

Under the terms of the Company’s operating agreement, the Company is charged interest by Viva on net affiliate borrowings and capital funding in excess of $1,000,000. The borrowings accrue interest at a rate of 12% per annum compounded annually with accrued and unpaid interest compounded as of June 30, 2012. Interest after June 30, 2012 is not compounded. There are no repayment terms associated with these borrowings. Net outstanding borrowings resulting from funding in excess of $1,000,000 were $35,962,044 and $28,883,776 at December 31, 2016 and 2015, respectively. The net outstanding borrowing amount as of December 31, 2016 included $14,618,433 in net affiliate payables and $21,343,611 in loans payable to Viva. The net outstanding borrowing amount as of December 31, 2015 included $11,577,664 in net affiliate payables and $17,306,112 in loans payable to Viva.

4.       Operating Leases

The Company leases office space, through an affiliate, and certain other equipment, vehicles and storage units. Rent expense was $196,706 and $246,130 for the years ended December 31, 2016 and 2015, respectively, and reflected in Operating Expenses. Future lease obligations are approximately $34,047 for 2017 and $2,901 for 2018 through 2020.

5. Employee Benefit Plans

The Company, through an affiliate allocation, maintains a 401(k) plan covering substantially all of its employees that meet minimum age and service requirements. The Company matches employee contributions at a rate of 100% up to the first 2% of compensation. Allocated contributions to the plan were $38,403 and $42,412 for the years ended December 31, 2016 and 2015, respectively, and reflected in Operating Expenses.

12 

Marley Beverage Company, LLC

Notes to Financial Statements

6.   Employee Incentive Plans

In December 2013, the Company’s Board of Directors approved a resolution to adopt a unit appreciation rights plan (the “Plan”) and a grant of 1,244 units under the Plan to certain employees of the Company with a grant date of January 1, 2014. The granted units vest over three years on the anniversary grant date. Management has estimated the value of these units and determined it to be de minimis.

7.   Commitments and Contingencies

From time-to-time the Company may be involved in various claims and legal actions. Management does not expect a material adverse effect as the result of these claims.

8.   Guarantee

The Company is a co-borrower on the Fifth Third Bank Revolving Note (the “Fifth Third Note”) issued in April 2014 to Viva. Available credit under the Fifth Third Note is $3,000,000 with a principal maturity date of April 22, 2018 and interest on outstanding principal due monthly. The outstanding principal on the loan was $3,000,000 at December 31, 2016 and 2015 and Viva was current on all related interest payments. The Company may be obligated to make payments of principal and interest upon failure of Viva to make such payments when due. The maximum potential future liability of the Company related to the guarantee as of December 31, 2016 is estimated to be $2,517,900. The Company’s assets are also pledged as collateral.

9.   Guaranteed Minimum Payment Obligations

The Company has guaranteed minimum royalty and marketing obligations under a merchandise license agreement with Hope Road Merchandising, LLC. The license provides the Company with the exclusive right to use Bob Marley’s name and image in connection with its licensed products. Royalty and marketing expenses under the contract were $220,816 and $476,153 for the years ended December 31, 2016 and December 31, 2015, respectively. Future minimum obligations through the remainder of the first renewal term ending December 31, 2019, total $1,612,500. These amounts are due in stepped yearly increments ranging from $400,000 to $2,000,000. As of December 31, 2016 and 2015, $392 and $421,415 in accrued royalties, respectively, were reflected in Accrued Expenses and Other in Current Liabilities.

13 

Marley Beverage Company, LLC

Notes to Financial Statements

10.   Subsequent Events

The Company has evaluated the impact of events occurring after December 31, 2016 up to August 28, 2017, the date the financial statements were available for issuance. The Company is not aware of any significant events that would have a material impact on these financial statements, except for the below.

On March 23, 2017, the Company entered into an asset purchase agreement (the “APA”) whereby the Company agreed to sell substantially all of its operating assets to New Age Beverages Corporation. The consideration for the Acquisition was amended pursuant to an Amendment to the APA dated June 9, 2017. The Acquisition closed on June 13, 2017.

At closing, the Company sold substantially all of its operating assets, consisting of inventory, accounts receivable, fixed assets and intellectual property in exchange for a purchase price of 3,000,000 shares of the common stock of New Age Beverages Corporation, as well as an earn out payment of $1,250,000 in cash if the gross revenues during any trailing twelve calendar month period after the closing are equal to or greater than $15,000,000. The sell was subject to customary closing conditions. The shares of common stock for New Age Beverages Corporation were fair valued at $6.20 per share on June 13, 2017.

14 

EX-99.2

Financial Statements

For the Period January 1, 2017 to June 13, 2017

Marley Beverage Company, LLC

Financial Statements

For the Period January 1, 2017 to June 13, 2017

Marley Beverage Company, LLC

Contents

Independent Accountant’s Review Report	3
Financial Statements	4
Balance Sheet as of June 13, 2017	5
Statement of Operations for the period January 1, 2017 to June 13, 2017	6
Statement of Changes in Members’ Deficit for the period January 1, 2017 to June 13, 2017	7
Statement of Cash Flows for the period January 1, 2017 to June 13, 2017	8
Notes to Financial Statements	9

 2

INDEPENDENT ACCOUNTANT’S REVIEW REPORT

To the Members of

Marley Beverage Company, LLC

We have reviewed the accompanying financial statements of Marley Beverage Company, LLC, which comprise the balance sheet as of June 13, 2017, and the related statements of operations, members’ deficit and cash flows for the period January 1, 2017 to June 13, 2017 and the related notes to the financial statements. A review includes primarily applying analytical procedures to management’s financial data and making inquiries of company management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement whether due to fraud or error.

Accountant’s Responsibility

Our responsibility is to conduct the review engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. Those standards require us to perform procedures to obtain limited assurance as a basis for reporting whether we are aware of any material modifications that should be made to the financial statements for them to be in accordance with accounting principles generally accepted in the United States of America. We believe that the results of our procedures provide a reasonable basis for our conclusion.

Accountant’s Conclusion

Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in accordance with accounting principles generally accepted in the United States of America.

Tampa, Florida

August 28, 2017

 

 3

Financial Statements

 4

Marley Beverage Company, LLC

Balance Sheet

June 13,	2017
Assets
Current Assets
Cash	$	26,216
Receivables
Trade, net of allowances of $145,592		562,953
Affiliates		20,240,659
Other		4,428
Inventories, net		798,098
Prepaid expenses and other		208,674
Total Current Assets		21,841,028
Property and Equipment
Computer equipment and software		56,616
Vehicles		73,000
Office Furniture and fixtures		25,647
Accumulated depreciation		(133,072	)
Net Property and Equipment		22,191
Total Assets	$	21,863,219
Liabilities and Members’ Deficit
Current Liabilities
Payables
Trade	$	78,371
Affiliates		49,147,676
Accrued expenses and other		158,975
Total Current Liabilities		49,385,022
Loan Payable to Affiliate		21,663,881
Total Liabilities		71,048,903
Members’ Deficit
Capital contributions		1,000,000
Accumulated deficit		(50,185,684	)
Total Members’ Deficit		(49,185,684	)
Total Liabilities and Members’ Deficit	$	21,863,219

See accountant’s review report and accompanying notes to financial statements.

 5

Marley Beverage Company, LLC

Statement of Operations

	2017
Net Sales	$	1,847,473
Cost of Sales		1,509,471
Gross Profit		338,002
Operating Expenses		1,062,187
Operating Loss		(724,185	)
Interest Expense, Affiliate		1,948,586
Other Expense		547
Total Other Expense		1,949,133
Net Loss	$	(2,673,318	)

See accountant’s review report and accompanying notes to financial statements.

 6

Marley Beverage Company, LLC

Statement of Changes in Members’ Deficit

	Contributed Capital		Accumulated Deficit			Total
Balance, January 1, 2017	$	1,000,000	$	(47,512,366	)	$	(46,512,366	)
Net loss		-		(2,673,318	)		(2,673,318	)
Balance, June 13, 2017	$	1,000,000	$	(50,185,684	)	$	(49,185,684	)

 See accountant’s review report and accompanying notes to financial statements.

 7

Marley Beverage Company, LLC

 Statement of Cash Flows

	2017
Operating Activities
Net loss	$	(2,673,318	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		15,091
Loss on disposal of fixed assets		547
Changes in net operating assets and liabilities
Accounts receivable, trade		(360,200	)
Receivable, affiliate		(653,319	)
Other receivable		(2,707	)
Inventories		1,036,661
Prepaid expenses and other		18,127
Accounts payable, trade		(205,069	)
Payable, affiliate		2,595,074
Accrued expenses and other		(75,065	)
Net cash used in operating activities		(304,178	)
Financing Activities
Net borrowings from affiliates		320,270
Net Increase  in Cash		16,092
Cash, beginning of year		10,124
Cash, end of year	$	26,216

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

CASH PAID DURING THE YEAR FOR:
Interest	$	-	$	-
Income taxes	$	-	$	-

See accountant’s review report and accompanying notes to financial statements.

 8

Marley Beverage Company, LLC

Notes to Financial Statements

1.       Significant Accounting Policies

Nature of Business

Marley Beverage Company, LLC (“the Company”) develops, markets and distributes ready-to-drink relaxation and coffee beverages in the United States, Canada, Europe, Latin America and certain other foreign countries. The majority investment in the Company is held by its parent, Viva Beverages LLC (“Viva”).

Use of Estimates

In preparing the financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), management is required to make estimates and assumptions that affect the reported amounts of (1) assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and (2) revenues and expenses during the reporting period. Significant areas subject to such estimates and assumptions include valuation allowances for receivables, inventories, the assessment of impairment for property and equipment and potential accruals relating to litigation and other liabilities. Actual results could differ from these estimates.

Concentrations of Credit Risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of accounts receivable. The Company attempts to minimize credit risk by reviewing all customers’ credit history before extending credit and by monitoring customers’ credit exposure on a continuing basis. The Company had two customer accounting for 30% of sales from the period January 1, 2017 through June 13, 2017. The Company had three customers accounting for 57% of the total accounts receivable at June 13, 2017.

Cash and Cash Equivalents

Marketable securities with original maturities of less than three months are considered to be cash equivalents. There were no cash equivalents and there was no cash in foreign bank accounts at June 13, 2017.

9

Marley Beverage Company, LLC

Notes to Financial Statements

Receivables

Receivables reflect balances from trade sales net of allowances for bad debt and other customer deductions. The Company records an allowance for doubtful accounts based on specifically identified customer balances that are believed to be uncollectible and an additional allowance based on certain percentages of the aged receivables, which are determined based on historical experience and a current assessment of the general financial conditions affecting the customer base. If the actual collections experience changes, revisions to the allowance may be required. Trade receivables and related allowances are written off to Operating Expenses when it is determined collection on an account is not probable. Provision for customer deductions are the best estimate of probable customer deductions related to customary trade incentives and other allowances. Customer deductions are reflected in the calculation of net sales. The allowances for bad debt and customer deductions were $5,839 and $139,753 respectively, at June 13, 2017.

Inventories

Inventories are valued at the lower of cost or market. Cost is determined by the first-in, first-out (“FIFO”) method.

Property, Equipment and Depreciation

Property and equipment are stated at cost. Depreciation is computed over the estimated useful lives of the assets using the straight-line method. Estimated useful lives range from 3 to 7 years. Depreciation expense was $15,091 from the period January 1, 2017 through June 13, 2017. Repair and maintenance costs are charged to Operating Expense as incurred.

Impairment of Long-Lived Assets

The Company evaluates the recoverability of property and equipment by comparing the carrying amount of the asset or group of assets against the estimated undiscounted future cash flows expected to result from the use of the asset or group of assets and their eventual disposition. If the undiscounted cash flows are less than the carrying value of the asset or group of assets being evaluated, an impairment loss is recorded. An impairment loss is measured as the difference between the fair value and carrying value of the asset or group of assets being evaluated. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less cost to sell. The estimated fair value is based on the best information available under the circumstances, including prices for similar assets or the results of valuation techniques, including the present value of expected future cash flows using a discount rate commensurate with the risks involved. There were no impairment charges from the period January 1, 2017 through June 13, 2017.

 10

Marley Beverage Company, LLC

Notes to Financial Statements

Income Taxes

The Company is a limited liability company. In lieu of Federal income taxes, the members of a limited liability company are taxed on their proportional share of the Company’s taxable income. Therefore, no federal tax provision has been provided in these financial statements.

Revenue Recognition

The Company recognizes revenue on sales of its products as earned, generally when shipped and/or when title transfers to the customer. Revenue is recorded net of provisions for discounts and allowances.

Shipping and Handling

The Company classifies shipping and handling costs as Operating Expenses. The Company does not normally charge customers for shipping and handling. Shipping and handling costs paid by customers are not material and are reflected in Operating Expenses.

Advertising and Promotion Costs

The Company expenses the costs of advertising and promotion as incurred. Advertising and promotional expenses from the period January 1, 2017 through June 13, 2017 was minimal, and reflected in Operating Expenses.

Fair Value of Financial Instruments

There is a three-level hierarchy for fair value measurements that distinguishes between market participant assumptions developed based on market data obtained from sources independent of the reporting entity (“observable inputs”) and the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (“unobservable inputs”). The hierarchy level assigned to financial instruments recorded at fair value is based on the Company’s assessment of the transparency and reliability of the inputs used in the valuation of such instruments at the measurement date. Level 1 inputs are based on quoted market prices. Level 2 are based on observable inputs, while Level 3 are based on unobservable inputs and management judgment. There were not any Level 2 or 3 measurements at June 13, 2017.

Due to their short maturity, the carrying amounts of cash, accounts receivable, accounts payable and accrued liabilities approximated their fair values at June 13, 2017.

 11

Marley Beverage Company, LLC

Notes to Financial Statements

2.       Inventories

Inventories consisted of the following:

June 13,	2017
Finished goods	$	684,505
Raw materials		300,587
Other		21,641
Reserves		(208,635	)
Total	$	798,098

3.       Related Party Activities

Under the terms of the Company’s operating agreement, the Company is charged interest by Viva on net affiliate borrowings and capital funding in excess of $1,000,000. The borrowings accrue interest at a rate of 12% per annum compounded annually with accrued and unpaid interest compounded as of June 30, 2012. Interest after June 30, 2012 is not compounded. There are no repayment terms associated with these borrowings. The net outstanding borrowing amount as of June 13, 2017 included $11,577,664 in net affiliate payables and $21,663,881 in loans payable to Viva. Net outstanding borrowings resulting from funding in excess of $1,000,000 were $28,883,776 at June 13, 2017.

4.       Operating Leases

The Company leases office space, through an affiliate, and certain other equipment, vehicles and storage units. Rent expense was $25,726 from the period January 1, 2017 through June 13, 2017, and reflected in Operating Expenses. Future lease obligations are approximately $34,047 for 2017 and $2,901 for 2018 through 2020.

5. Employee Benefit Plans

The Company, through an affiliate allocation, maintains a 401(k) plan covering substantially all of its employees that meet minimum age and service requirements. The Company matches employee contributions at a rate of 100% up to the first 2% of compensation. Allocated contributions to the plan were $0 from the period January 1, 2017 through June 13, 2017, and reflected in Operating Expenses.

 12

Marley Beverage Company, LLC

Notes to Financial Statements

6.       Employee Incentive Plans

In December 2013, the Company’s Board of Directors approved a resolution to adopt a unit appreciation rights plan (the “Plan”) and a grant of 1,244 units under the Plan to certain employees of the Company with a grant date of January 1, 2014. The granted units vest over three on the anniversary the grant date. Management has estimated the value of these units and determined it to be de minimis.

7.       Commitments and Contingencies

From time-to-time the Company may be involved in various claims and legal actions. Management does not expect a material adverse effect as the result of these claims.

8.       Guarantee

The Company is a co-borrower on the Fifth Third Bank Revolving Note (the “Fifth Third Note”) issued in April 2014 to Viva. Available credit under the Fifth Third Note is $3,000,000 with a principal maturity date of April 22, 2018 and interest on outstanding principal due monthly. The outstanding principal on the loan was $3,000,000 at June 13, 2017 and Viva was current on all related interest payments. The Company may be obligated to make payments of principal and interest upon failure of Viva to make such payments when due. The maximum potential future liability of the Company related to the guarantee as of June 13, 2017 was estimated to be $2,476,200. The Company’s assets are also pledged as collateral.

9. Guaranteed Minimum Payment Obligations

The Company has guaranteed minimum royalty and marketing obligations under a merchandise license agreement with Hope Road Merchandising, LLC. The license provides the Company with the exclusive right to use Bob Marley’s name and image in connection with its licensed products. Royalty and marketing expenses under the contract were $476,153 for the period from January 1, 2017 to June 13, 2017. Future minimum obligations through the remainder of the first renewal term ending December 31, 2019, total $1,397,769. These amounts are due in stepped yearly increments ranging from $400,000 to $2,000,000. As of June 13, 2017, $431 in accrued royalties were reflected in Accrued Expenses and Other in Current Liabilities.

 13

Marley Beverage Company, LLC

Notes to Financial Statements

10. Subsequent Events

The Company has evaluated the impact of events occurring after June 13, 2017 up to August 28, 2017, the date the financial statements were available for issuance. The Company is not aware of any significant events that would have a material impact on these financial statements, except for the below.

On March 23, 2017, the Company entered into an asset purchase agreement (the “APA”) whereby the Company agreed to sell substantially all of its operating assets to New Age Beverages Corporation. The consideration for the Acquisition was amended pursuant to an Amendment to the APA dated June 9, 2017. The Acquisition closed on June 13, 2017.

At closing, the Company sold substantially all of its operating assets, consisting of inventory, accounts receivable, fixed assets and intellectual property in exchange for a purchase price of 3,000,000 shares of the common stock of New Age Beverages Corporation, as well as an earn out payment of $1,250,000 in cash if the gross revenues during any trailing twelve calendar month period after the closing are equal to or greater than $15,000,000. The sell was subject to customary closing conditions. The shares of common stock for New Age Beverages Corporation were fair valued at $6.20 per share on June 13, 2017.

 14

EX-99.3

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

For the years ended December 31, 2016 and 2015 and the six months ended June 30, 2017

Further to the Form 8-K dated June 13, 2017, on March 23, 2017, New Age Beverages Corporation (“we” or the “Company”), entered into an Asset Purchase Agreement (the “Agreement”) whereby the Company acquired substantially all of the operating assets of Marley Beverage Company, LLC (“Marley”), which is a company engaged in the development, manufacturing, selling and marketing of nonalcoholic relaxation teas and sparkling waters, and ready to drink coffee drinks (the “Acquisition”). On June 13, 2017 (the “Closing Date”), the parties executed the Asset Purchase Agreement for the Acquisition.

The accompanying unaudited pro forma combined financial statements present the pro forma combined financial position and results of operations of the combined company based upon the Company’s and Marley’s historical financial statements, after giving effect to the Company’s acquisition of Marley and the adjustments described in the following footnotes, and are intended to reflect the impact of this acquisition on Marley on a pro forma basis.

The unaudited pro forma combined balance sheet as of December 31, 2016 reflect the acquisition of Marley that occurred on June 13, 2017 as if it had been consummated as of January 1, 2016 and includes historical information as reported by the separate companies as well as adjustments that give effect to events that are directly attributable to the Acquisition and that are factually supportable.

The unaudited pro forma combined statements of operations for the year ended December 31, 2016 and for the six months ended June 30, 2017 give effect to the Acquisition as if it had been consummated on January 1, 2016 and include historical information as reported by the separate companies as well as adjustments that give effect to events that are directly attributable to the Acquisition, are expected to have a continuing impact and are factually supportable.

The accompanying unaudited pro forma combined financial statements are presented for illustrative purposes only. They do not purport to represent what the Company’s combined results of operations and financial position would have been had the Acquisition actually occurred as of the dates indicated, and they do not purport to project the Company’s future consolidated results of operations or financial position. The unaudited pro forma combined statements of operations and income do not reflect any adjustments for the effect of non-recurring items that the Company may realize as a result of the Acquisition. The unaudited pro forma combined financial statements include certain reclassifications to conform the historical financial information of Marley to the presentation of the Company.

Pro forma adjustments are necessary to reflect the estimated purchase price and to reflect the amounts related to tangible and intangible assets and liabilities acquired at an amount equal to the preliminary estimate of their fair values. The pro forma adjustments reflecting the completion of the Acquisition are based upon the acquisition method of accounting in accordance with Accounting Standards Codification 805, “Business Combinations” (“ASC 805”), and the assumptions set forth in the notes to the unaudited pro forma combined financial statements. Management has made a preliminary allocation of the purchase price to the tangible and intangible assets acquired and liabilities assumed based on various preliminary estimates. The allocation of the purchase price is preliminary pending finalization of various estimates and valuation analyses.

The pro forma adjustments are based on the preliminary information available at the time of the preparation of this document.

NEW AGE BEVERAGES CORPORATION

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

AS OF DECEMBER 31, 2016

	New Age Beverages Corporation				Marley Beverage Company, LLC				Pro Forma Adjustments				Pro Forma Balance Sheet
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	529,088			$	10,124		(A)	$	(10,124)			$	529,088
Accounts receivable, net		4,729,356				202,753				-				4,932,109
Receivables from affiliates		-				19,587,340		(B)		(19,587,340		)		-
Other receivables		-				1,721				-				1,721
Inventories, net		4,420,632				1,834,759				-				6,255,391
Prepaid expenses and other current assets		326,846				226,801				-				553,647
Total current assets		10,005,922				21,863,498				(19,597,464		)		12,271,956
Property and equipment, net		7,286,201				37,829				-				7,324,030
Customer relationships, net		4,538,674				-				-				4,538,674
Goodwill		4,895,241				-		(C)		18,505,222-				23,400,463
Total assets	$	26,726,038			$	21,901,327			$	(1,092,242		)	$	47,535,123
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	6,880,569		$		517,480		(D)	$	1,250,000			$	8,648,049
Payables to affiliates		-				46,552,602		(B)		(46,552,602		)		-
Current portion of notes payable and capital leases, net of unamortized discounts		4,562,179				-				-				4,562,179
Line of credit		-				-				-				-
Total current liabilities		11,442,748				47,070,082				(45,302,602		)		13,210,228
Note payable and capital leases, less current portion, net of unamortized discounts		10,374,675				-				-				10,374,675
Loan payable to affiliate		-				21,343,611		(B)		(21,343,611		)		-
Related party debt, net of unamortized discounts		29,961				-				-				29,961
Total liabilities		21,847,384				68,413,693				(66,646,213		)		23,614,864
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Common stock, $0.001 par value, 50,000,000 shares authorized; 21,900,106 shares issued and outstanding		21,900				-		(E)		3,000				24,900
Series A Preferred stock, $0.001 par value: 250,000 shares  authorized, 250,000 shares issued and outstanding		250				-				-				250
Series B Preferred stock, $0.001 par value: 300,000 shares  authorized, 284,807 shares issued and outstanding		285				-				-				285
Class A, B,C,D, E, F and F1 units; 29,935,243 units authorized; 28,741,388 units issued and outstanding (liquidation preference of $34,332,307)		-				-				-
Ordinary units: 38,334,090 units authorized; 910,557 units issued and outstanding		-				-				-
Additional paid-in capital		11,821,176				1,000,000		(E)			18,038,605			30,859,871
Accumulated deficit		(6,964,957	)			(47,512,366	)	(E)			47,512,366			(6,964,957	)
Total stockholders’ equity		4,878,654				(46,512,366	)			65,553,971				23,920,259
Total liabilities and stockholders’ equity	$	26,726,038			$	21,901,327			$	(1,092,242		)	$	47,535,123

NEW AGE BEVERAGES CORPORATION

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2016

	New Age Beverages Corporation			Marley Beverage Company, LLC				Pro Forma Adjustments		Pro Forma Statement of Operations
Net Revenue	$	25,301,806		$	7,457,253			$	-	$	32,759,059
Cost of Goods Sold		19,505,580			5,146,349				-		24,651,929
GROSS PROFIT		5,796,226			2,310,904				-		8,107,130
OPERATING EXPENSES:
Advertising, promotion and selling		1,584,104			-				-		1,584,104
General and administrative		6,367,606			8,077,064				-		14,444,670
Legal and professional		1,471,273			-				-		1,471,273
Total operating expenses		9,422,983			8,077,064				-		17,500,047
(LOSS) INCOME FROM OPERATIONS		(3,626,757	)		(5,766,160	)			-		(9,392,917	)
OTHER INCOME (EXPENSE):
Interest expense		(299,080	)		(3,987,057	)	(F)		3,987,057		(299,080	)
Other income		292,758			(91,837	)			-		200,921
Total other income (expense)		(6,322	)		(4,078,894	)			3,987,057		(98,159	)
NET (LOSS) INCOME	$	(3,633,079	)	$	(9,845,054	)		$	3,987,057	$	(9,491,076	)
Weighted Average Number of Common Shares Outstanding - Basic and Diluted		18,889,608			NA				3,000,000		21,889,608
NET INCOME (LOSS) PER SHARE - BASIC and DILUTED	$	(0.19	)		NA				NA	$	(0.43	)

NEW AGE BEVERAGES CORPORATION

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2017

	New Age Beverages Corporation			Marley Beverage Company, LLC				Pro Forma Adjustments		Pro Forma Statement of Operations
Net Revenue	$	25,892,596		$	1,847,473			$	-	$	27,740,069
Cost of Goods Sold		20,066,422			1,509,471				-		21,575,893
GROSS PROFIT		5,826,174			338,002				-		6,164,176
OPERATING EXPENSES:
Advertising, promotion and selling		1,591,911			-				-		1,591,911
General and administrative		4,788,852			1,062,187				-		5,851,039
Legal and professional		205,435			-				-		205,435
Total operating expenses		6,586,198			1,062,187				-		7,648,385
(LOSS) INCOME FROM OPERATIONS		(760,024	)		(724,185	)			-		(1,484,209	)
OTHER INCOME (EXPENSE):
Interest expense		(126,071	)		(1,948,586	)	(F)		1,948,586		(126,071	)
Other income (expense), net		2,675,423			(547	)			-		2,674,876	)
Total other income (expense)		2,549,352			(1,949,133	)			1,948,586		2,548,805
NET INCOME (LOSS)	$	1,789,328		$	(2,673,318	)		$	1,948,586	$	1,064,596
Weighted Average Number of Common
Shares Outstanding – Basic		30,540,843			NA				-		30,540,843
Weighted Average Number of Common
Shares Outstanding – Diluted		30,640,843			NA				NA		30,640,843
NET INCOME (LOSS) PER SHARE -
BASIC and DILUTED	$	0.07			NA				NA	$	0.03

New Age Beverages Corporation

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

December 31, 2016 and June 30, 2017

1. Basis of Presentation

The unaudited pro forma combined financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and certain footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been omitted pursuant to such rules and regulations; accordingly, these pro forma financial statements should be read in connection with New Age Beverages Corporation and Marley Beverage Company, LLC (“Marley”) historical audited and unaudited financial statements referred to above.

The unaudited pro forma combined statements of operations for the years ended December 31, 2016 and six months ended June 30, 2017 gives effect to the Acquisition as if it had been consummated on January 1, 2016 and include historical information as reported by the separate companies as well as adjustments that give effect to events that are directly attributable to the Acquisition, are expected to have a continuing impact and are factually supportable.

2. Acquisition of Marley

On March 23, 2017, New Age Beverages Corporation, a Washington corporation (“we” or the “Company”), entered into an Asset Purchase Agreement (the “Agreement”) whereby the Company agreed to acquire substantially all of the operating assets of Marley Beverage Company, LLC (“Marley”), which is a company engaged in the development, manufacturing, selling and marketing of nonalcoholic relaxation teas and sparkling waters, and ready to drink coffee drinks (the “Acquisition”). On March 23, 2017, the parties executed the Asset Purchase Agreement for the Acquisition, with the Closing having taken place on June 13, 2017 (the “Closing Date”). The consideration for the Acquisition was amended pursuant to an Amendment to the Asset Purchase Agreement dated June 9, 2017, which is attached as Exhibit 10.2 to this Form 8-K.

Upon the Closing Date, the Company received substantially all of the operating assets of Marley, consisting of inventory, accounts receivable, fixed assets and intellectual property in exchange for a purchase price of 3,000,000 shares of the Company’s common stock, as well as an earn out payment of $1,250,000 in cash if the gross revenues of the Marley business during any trailing twelve calendar month period after the Closing Date are equal to or greater than $15,000,000. The earnout, if applicable, will be paid as $625,000 on or before the 15^th day after the end of the first trailing twelve calendar month period in which the earnout condition is satisfied, $312,500 not later than the first anniversary of the initial earnout payment, and $312,500 not later than the second anniversary of the initial earnout payment. The shares of Common Stock issued pursuant to the Acquisition have not been registered, but the holders have piggyback registration rights, as well as demand registration rights, with the demand registration rights beginning twelve months from the Closing Date. The Acquisition was subject to customary closing conditions. A copy of the Asset Purchase Agreement dated March 23, 2017 was filed as Exhibit 10.1 to the Form 8-K filed on March 29, 2017.

The foregoing description of the Acquisition and related transactions does not purport to be complete and is qualified in its entirety by reference to the complete text of the Asset Purchase Agreement and the amendment thereto and incorporated exhibits, which are filed as Exhibits 10.1 and 10.2 hereto, and which are incorporated herein by reference.

The shares of our Common Stock issued in connection with the Acquisition will not be registered under the Securities Act unless the registration rights agreement provisions are exercised, and have been issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). Certificates representing these shares will contain a legend stating the restrictions applicable to such shares.

The purchase price was allocated to the net assets acquired based on their estimated fair values as follows:

Stock		18,600,000
Purchase price	$	18,600,000

Accounts receivable	$	562,953
Inventories		798,098
Prepaid expenses and other current assets		198,882
Property and equipment, net		22,191
Accounts payable and accrued expenses		(237,346	)
Contingent consideration		(1,250,000	)
		94,778
Goodwill		18,505,222
	$	18,600,000

The above allocation is preliminary and is subject to change. The acquisition was consummated on June 13, 2017, and as such, the Company has begun to assess the fair value of the various net assets acquired, but has not yet completed this assessment. The Company is also in the process of identifying other intangible assets, such as customer relationships and recipes that may need to be recognized apart from goodwill. Once identified, these other intangible assets, if any, will be recorded at their fair values. The Company is working to finalize the allocations as quickly as possible, and anticipates that the allocation will not be final for approximately six months. Any adjustments necessary may be material to the consolidated balance sheet and the amount of goodwill recognized. Any resulting adjustments would have no impact to the June 30, 2017 reported operating results or cash flows.

In connection with the acquisition of Marley, the Company incurred minimal transactional costs, which has been recognized as expense as of the closing date.

3. Pro Forma Adjustments  

The following is a summary of pro forma adjustments reflected in the unaudited pro forma condensed combined financial statements based on preliminary estimates, which may change as additional information is obtained.

Pro Forma Condensed Combined Balance Sheet Adjustments

A. To remove cash balances that were excluded from the acquisition of Marley.

B. To eliminate related party transactions of Marley.

C. To record goodwill related to the acquisition of Marley.

D. To record the contingent consideration from the acquisition of Marley.

E. To record the equity transactions related to the acquisition of  Marley.

Pro Forma Statement of Comprehensive Income Adjustments

F. To eliminate the recorded interest expense related to intercompany payable and note balances related to the acquisition of Marley.

EX-23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the to the incorporation of our reports on the financial statements of Marley Beverage Company, LLC dated August 28, 2017, relating to our audits of the financial statements of Marley Beverage Company, LLC for the years ended December 31, 2016 and 2015; respectively, and our review of the financial statements of Marley Beverage Company, LLC for the period from January 1 to June 13, 2017 in the 8-K/A of New Age Beverages Corporation.

/s/ Accell Audit & Compliance, P.A.

August 28, 2017