SEC v. Brent David Willis, No. 1:22-cv-02744, District of Colorado (Mar. 31, 2026) — Complaint

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO

Civil Action No. 22-2744

UNITED STATES SECURITIES AND
EXCHANGE COMMISION,

Plaintiff,

v.

BRENT DAVID WILLIS,

Defendant.

COMPLAINT AND JURY DEMAND

Plaintiff, United States Securities and Exchange Commission (“Commission”), alleges as

follows against Defendant Brent David Willis.

INTRODUCTION

1. From approximately July 2017 through April 2019 (the “relevant period”), Brent

D. Willis, CEO of previously NASDAQ-listed securities issuer NewAge, Inc. (“NewAge” or the

“Company”), made numerous materially false and misleading public statements concerning

NewAge’s development and sale of beverages during investors conferences, earnings calls,

media interviews, and in at least 12 press releases.  These false and misleading public statements

concerned a wide range of matters that were critical to the Company’s growth and success, and

thus to NewAge’s investors, including purported new and expanded product distribution deals

with large domestic and international beverage distributors and retailers.  In reality, these

distribution deals either did not exist or were significantly smaller than claimed in the public

statements.

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2. For example, between January 2018 and August 2018, Defendant made and

authorized NewAge to make a series of materially false and misleading public statements

announcing a supposed distribution agreement with the U.S. military through which NewAge

would sell its beverage products at all commissaries and exchanges worldwide.  In reality,

NewAge never entered into a distribution agreement with the military; never had plans to sell its

products at all commissaries and exchanges worldwide; and did not even have the inventory to

do so.

3. Several months later, between September 2018 and January 2019, Defendant and

NewAge, at the direction of Defendant, made additional false and misleading public statements

about NewAge’s purported development of a portfolio of cannabidiol (“CBD”)-infused

beverages.  Capitalizing on current media and public attention focused on the legalization of

cannabis and growth in the cannabis industry, Defendant falsely stated that NewAge had secured

substantial retail and distribution orders and commitments to sell its CBD products, and that

NewAge’s CBD products were being sold in retail stores.  In fact, NewAge never completed the

development of a CBD beverage product and never received orders or commitments from any

retailer for CBD beverage products.

4. Defendant made these and other statements, which served to artificially inflate

NewAge’s stock price, improve its financial position, and financially benefit himself, despite

knowing, or recklessly failing to know, that the statements were false and misleading.

5. In addition, Defendant made selective disclosures of material nonpublic

information concerning NewAge’s business activities to select analysts and investors.  For

example, in early January 2018, Defendant made statements to select investors about an alleged

expansion of the U.S. military’s relationship with NewAge in advance of the Company’s late

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January 2018 press release concerning its alleged worldwide distribution agreement with the

military.  Similarly, Defendant sent emails to select equity analysts concerning NewAge’s

purported development, testing, and debut of CBD beverage products the day before NewAge’s

September 2018 press release announcing that information.  On both occasions, Defendant failed

to publicly disclose the material nonpublic information simultaneously with or promptly after

these selective disclosures, placing other investors and the public not privy to the selective

disclosures at a disadvantage.

6. By engaging in this conduct, Defendant violated Section 17(a) of the Securities

Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)]; Section 10(b) of the Securities Exchange

Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)], and Exchange Act Rule 10b-5 [17 C.F.R. §

240.10b-5] thereunder; and aided and abetted NewAge’s violations of Section 13(a) of the

Exchange Act [15 U.S.C. § 78m(a)], and Regulation FD (Fair Disclosure) [17 C.F.R. § 243.100

et seq.] thereunder.  Unless restrained and enjoined, Defendant will continue to violate these

provisions and is likely to engage in future violations of the federal securities laws.

7. The Commission seeks permanent injunctions; disgorgement of ill-gotten gains

derived from the conduct alleged in the Complaint plus prejudgment interest thereon; civil

penalties; an officer and director bar; and a penny stock bar.

JURISDICTION AND VENUE

8. The Commission brings this action pursuant to Sections 20 and 22 of the

Securities Act [15 U.S.C. §§ 77t and 77v] and Sections 21(d) and 21(e) of the Exchange Act [15

U.S.C. §§ 78u(d) and 78u(e)].

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9. The Court has jurisdiction over this action pursuant to Section 22 of the Securities

Act [15 U.S.C. § 77v] and Sections 21(d), 21(e), and 27 of the Exchange Act [15 U.S.C. §§

78u(d), 78u(e), and 78aa].

10. Defendant, directly or indirectly, made use of the means and instrumentalities of

interstate commerce, or of the mails, or of the facilities of a national securities exchange, in

connection with the acts, transactions, practices, and courses of business alleged in this

complaint.

11. Venue is proper in the District of Colorado pursuant to Section 22(a) of the

Securities Act [15 U.S.C. § 77v(a)] and Section 27(a) of the Exchange Act [15 U.S.C. § 78aa(a)]

because many of the acts and transactions constituting violations of the Securities Act and

Exchange Act occurred in this district, including the dissemination of false and misleading press

releases and other false public statements as well as selective disclosures of material information.

In addition, Defendant resides in this district and NewAge’s principal place of business was in

this district during the relevant period.

DEFENDANT

12. Brent D. Willis, age 62, is a resident of Denver, Colorado.  Willis was appointed

as CEO and a director of the NewAge on March 24, 2016, and remained in these positions until

January 10, 2022.

RELEVANT ENTITY

13. NewAge, Inc. (formerly New Age Beverages Corporation, Inc.) is a Delaware

corporation based in Midvale, Utah.  NewAge describes itself as a developer and global seller of

“organic and healthy products,” including numerous beverage product lines.  The Company’s

common stock is registered with the Commission pursuant to Section 12(b) of the Exchange Act.

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During the relevant period, NewAge’s stock traded on the NASDAQ under the ticker symbol

“NBEV.”  NASDAQ suspended trading and filed to delist NewAge in September 2022 and the

Company’s stock currently trades on the OTC market under the ticker symbol “NBEVQ.”  On

August 30, 2022, NewAge filed for bankruptcy under Chapter 11 of the Bankruptcy Code.

FACTS

I. BACKGROUND

A. NewAge’s Dire Financial Straits Leading up to Defendant’s False and
Misleading Press Releases and Public Statements

14. Throughout 2017 and 2018, NewAge was in dire financial straits.  In 2017,

NewAge incurred losses and struggled to pay for inventory and its operating expenses.  For the

year ended December 31, 2017, NewAge reported a net loss of approximately $3.5 million and

had only approximately $285,000 in cash.  For the first six months of 2018 (ending on June 30,

2018), New Age reported a net loss of approximately $3.4 million and had only approximately

$213,000 in cash.  NewAge’s share price also declined substantially in late 2017 amid the

Company’s inability to secure national accounts for its existing brands or develop promising new

products.  During the first nine months of 2018, NewAge’s financial condition continued to

worsen, as it regularly lacked the cash to purchase the inventory needed to fill even limited

beverage orders.  The Company also struggled to secure financing and, in June 2018, obtained a

high-interest loan in order to meet basic financial obligations.

15. As CEO of NewAge, Defendant was fixated on raising the Company’s lagging

share price, reversing the Company’s deteriorating financial position, and growing the Company,

which Defendant believed was necessary for the Company to become profitable.  Defendant

repeatedly expressed frustration with the Company’s inability to secure distribution with major

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retailers and imposed substantial pressure on his employees, particularly his sales personnel, to

generate positive news for the company.

16. During the relevant period, Willis was also frustrated with his compensation at

NewAge and repeatedly urged the Company’s Board of Directors (the “Board”) to increase it, in

part to pay personal tax liabilities.  In or around 2017 and early 2018, the Board told Defendant

that once the Company was on better financial footing, it would revisit his compensation

package.

B. Defendant was Well-Informed and Knowledgeable about NewAge’s Business
Operations and Activities

17. During most of the relevant period, NewAge was a small company of fewer than

200 employees with limited sales, marketing, and operations staffs who worked in close

proximity to each other.  Defendant was a hands-on CEO who communicated frequently with his

sales and marketing personnel and insisted upon receiving regular updates about major business

developments within NewAge, including, but not limited to, the existence and scope of new or

expanded distribution deals with national and international distributors and retailers and the

status of products in development.  Defendant had final editorial control and ultimate authority

over the content of the earnings call scripts and press releases, and often disseminated press

releases to the media directly by placing them on a newswire himself.

II. DEFENDANT’S MATERIALLY FALSE AND MISLEADING STATEMENTS

A. Defendant Made Materially False and Misleading Statements Regarding
NewAge’s Distribution Agreements with Distributors and Retailers

18. Between July 2017 and April 2019, Defendant, through NewAge, issued

numerous materially false and misleading press releases and made false public statements

concerning purportedly new or expanded distribution of its products with major retailers and

distributors.  These misstatements about purported major distribution agreements led to increases

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in NewAge’s share price and increased focus from investors and equity analysts alike about the

potential impacts on NewAge’s share price and financial metrics.

1. July 2017 and August 2017 False and Misleading Statements about
Expanded Relationship with 7-Eleven

19. Defendant’s false and misleading statements to investors during the relevant

period began on July 21, 2017, when NewAge issued a press release announcing an “expansion

of XingTea with 7 Eleven in the U.S.,” whereby this NewAge product line (XingTea) would be

distributed “throughout the Heartland Division of 7 Eleven, one of the chain’s largest divisions

spanning more than 1,400 outlets throughout the Midwest … effective immediately.”  The press

release further stated that “this new distribution represents a major expansion of the brand in the

world’s largest convenience store chain.”

20. Defendant made the sole and ultimate decision to issue the July 21, 2017 NewAge

press release, had final editorial control and ultimate authority over the content of the press

release, drafted the press release, and authorized its issuance.

21. Defendant repeated the false and misleading statement from the July 21, 2017

press release again during a NewAge quarterly earnings call on August 15, 2017, during which

Defendant stated, “On the brand front . . . XingTea, a key piece of our core portfolio, expanded

with 7-Eleven in the United States, initially, in the Heartland Division across around 1,500

stores.”

22. The above statements were false and misleading when made because, as

Defendant knew or was reckless in not knowing at the time: (1) 7-Eleven only sold NewAge

XingTea products within the State of Colorado, constituting approximately 250 stores; (2) 7-

Eleven had not committed or agreed to expand sales of the XingTea product line beyond the

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State of Colorado; and (3) no such expansion to sell XingTea throughout 7-Eleven’s Heartland

Division had occurred.

23. Defendant’s false and misleading statements about the purported “immediate[ ]”

expansion throughout 7-Eleven’s Heartland Division were material and caused a significant

spike in NewAge’s share price.  Following the July 21, 2017 press release announcing the

purported expanded distribution with 7-Eleven, NewAge’s share price increased 9.2% for the

day.  And following Defendant’s August 15, 2017 earnings call during which he repeated false

claims about the expansion with 7-Eleven, an equity analyst issued a report re-affirming its

“buy” rating and setting a $10 price target for NewAge’s stock, in part, because of the

“extension” of the “Xing Tea brand into the Midwest region of 7-11 stores.”

2. October 2017 False and Misleading Statements about Expanded
Relationship with Ahold Delhaize

24. On October 10, 2017, NewAge issued another false and misleading press release

announcing that the Company had expanded its relationship with retailer Ahold Delhaize.

Specifically, the press release stated that (i) NewAge had begun rollout of its Aspen Pure

Probiotic water product “across Ahold Delhaize banners throughout the U.S.”; (ii) sales of

NewAge’s Aspen Pure Probiotic water product would be expanded “throughout the more than

2,000 Ahold Delhaize banner stores across 23 states”; and (iii) NewAge had “began shipment

and shelf placement” of its Aspen Pure Probiotic water product across 700 Ahold Delhaize

banner stores.

25. Defendant made the sole and ultimate decision to issue the October 10, 2017 press

release, had final editorial control and ultimate authority over the content of the press release,

drafted the press release, and authorized its issuance.

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26. The above statements from the October 10, 2017 press release were false and

misleading when made because, as Defendant knew or was reckless in not knowing at the time:

(1) NewAge did not have sufficient inventory of the Aspen Pure Probiotic water product to fulfill

the purported expansion; (2) Ahold Delhaize did not commit to expanding NewAge’s Aspen

Pure Probiotic water product to more than 2,000 stores across 23 states; and (3) Aspen Pure

Probiotic water was carried by no more than 74 Ahold Delhaize stores.

27. Defendant’s false and misleading statements about the expansion with Ahold

Delhaize were material and caused a spike in NewAge’s share price.  For example, following the

October 10, 2017 announcement of the purported expansion with Ahold Delhaize, NewAge’s

share price increased by nearly 6% for the day.  And on September 4, 2018, an equity analyst

initiated coverage of NewAge with a “buy” rating and a target price of $3.00 per share, citing, in

part, NewAge’s purported deal to place its Aspen Pure Probiotic water product and other

products in Ahold Delhaize stores in 23 states with a 700 store initial rollout on the East Coast

and eventually a total of 2,000 locations.

3. November 2017 False and Misleading Statements about a Distribution
Agreement with Unified Strategies Group

28. Less than a month later, on November 1, 2017, NewAge issued another false and

misleading press release announcing that the Company had entered into a written agreement with

Unified Strategies Group (“USG”) to expand distribution of its beverage portfolio to USG’s

“more than 1 million vending machines, 5,000 micro markets, and over 1,800 client dining

facilities throughout the United States.”  The press release further falsely stated that USG “will

now be offering the New Age Beverages portfolio throughout [USG’s] system” which “reaches

75,000 workplace locations a day ….”

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29. Defendant made the sole and ultimate decision to issue the November 1, 2017

press release, had final editorial control and ultimate authority over the content of the press

release, drafted the press release, and authorized its issuance.

30. The above statements were false and misleading when made because, as

Defendant knew or was reckless in not knowing at the time: (1) the agreement USG entered into

with NewAge included no commitment or representation with respect to the number of sales

outlets (including vending machines, markets, and other sales locations)1; and (2) at their sales

peak, NewAge’s products were sold by only 1 or 2 USG members at a total of approximately

100 vending machines.

31. Defendant’s false and misleading statements about the purported expansion with

USG were material and caused a significant spike in NewAge’s share price.  For example,

following the November 1, 2017 announcement of the purported expansion with USG,

NewAge’s share price increased by approximately 17% for the day.  And on September 4, 2018,

an equity analyst initiated coverage of NewAge with a “buy” rating and a target price of $3.00

per share, citing, in part, NewAge’s deal with “United Strategies Group with 1M+ vending

machines.”

4. February 2018 False and Misleading Statements about Expanded
Distribution with Canadian Retailers

32. On February 1, 2018, NewAge issued a materially false and misleading press

release announcing that NewAge (i) “has begun shipments of its Coco-Libre and Bucha Live

Kombucha brands in expanded distribution throughout Loblaws and Sobeys, the largest grocery

1 The agreement between NewAge and USG merely set the rebate terms for the sale of products to USG
members, which independently choose the products they offer at their sales locations.

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retailers across Canada”; and (ii) “is now expanding to all banners within Loblaws and

expanding throughout both Sobeys and Safeway.”

33. Defendant made the sole and ultimate decision to issue the February 1, 2018 press

release, had final editorial control and ultimate authority over the content of the press release,

drafted the press release, and authorized its issuance.

34. NewAge followed this press release with a February 13, 2018 press release stating

that its Bucha Live Kombucha brand “has recently expanded to all major retailers throughout

Canada ….”  Defendant also made the sole and ultimate decision to issue the February 13, 2018

press release, had final editorial control and ultimate authority over the content of the press

release, drafted the press release, and authorized its issuance.

35. The above statements from the February 1 and 13, 2018 press releases were false

and misleading when made because, as Defendant knew or was reckless in not knowing at the

time: (1) there was no expansion of NewAge product lines Coco-Libre and Bucha Live

Kombucha to all banners within Loblaws and throughout Sobeys (including Sobeys’ subsidiary

Safeway); (2) Sobeys never sold Coco-Libre brand beverages; (3) there was no expanded

distribution of Coco-Libre brand beverages to Loblaws in 2018; and (4) NewAge did not expand

distribution of its Bucha Live Kombucha brand to all major retailers throughout Canada.

36. Defendant’s false and misleading statements about the expansion with Loblaws,

Sobeys, and all major retailers throughout Canada were material and caused a spike in

NewAge’s share price.  For example, following the February 1, 2018 announcement of the

expansion with Loblaws and Sobeys, NewAge’s share price increased by more than 6% for the

day.  On March 5, 2018, an equity analyst maintained a “buy” rating for NewAge and a target

price of $6.00 per share based, in part, on NewAge’s purported expansion with Loblaw and

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Sobeys and its expectation that the expansion would generate meaningful revenue growth for

NewAge in 2018 and beyond.

5. February 2018 False and Misleading Statements about a Distribution
Agreement with South Korean Distributor

37. On February 13, 2018, NewAge issued a false and misleading press release

announcing that NewAge “has signed a major distribution agreement for expansion of its Bucha

Live Kombucha brand with the largest food and beverage distributor in South Korea to expand to

all major retail outlets throughout the country effective immediately.”  This is the same press

release that contained the false and misleading statements concerning NewAge’s purported

expansion of its Bucha Live Kombucha product to all major retailers throughout Canada, as

described in paragraph Nos. 34 through 36 above.  The press release went on to identify 14

department stores, hypermarkets, and convenience and grocery outlets in South Korea in which

the Bucha brand would be sold starting by or before June 2018.

38. Defendant made the sole and ultimate decision to issue the February 13, 2018

press release, had final editorial control and ultimate authority over the content of the press

release, drafted the press release, and authorized its issuance.

39. The above statements from the February 13, 2018 press release were false and

misleading when made because, as Defendant knew or was reckless in not knowing at the time:

(1) the South Korea distributor merely received the right to distribute NewAge products within

the Korean market and did not represent that any South Korea retailers would place orders for

NewAge products; (2) none of the 14 department stores, hypermarkets, and convenience and

grocery outlets identified in the press release made any commitment to purchase NewAge

products.

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40. In fact, the South Korea distributor did not place its first order of Bucha Live

Kombucha until December 2018, and the sales of the product were minimal (approximately

1,500 bottles sold) before the relationship was terminated in October 2019.

41.   Defendant’s false and misleading statements about the agreement with the South

Korean distributor were material and caused a spike in NewAge’s share price.  For example,

following the February 13, 2018 announcement of the agreement with the South Korean

distributor, NewAge’s share increased by more than 6% for the day and an equity analyst sent an

email to Defendant congratulating him on the “win[] in . . . South Korea.”

6. April 2019 False and Misleading Statements about Expanded
Distribution with Walmart

42. On April 8, 2019, NewAge issued another false and misleading press release

announcing (1) the “first national distribution” of its products via an expanded distribution of its

Marley beverage line with Walmart; (2) that NewAge had “now begun shipments to Walmart

distribution centers across the United States”; and (3) that each of NewAge’s three Marley Mate

flavors would be available at all Walmart stores in the beginning of April 2019.

43. Defendant made the sole and ultimate decision to issue the April 8, 2019 press

release, had final editorial control and ultimate authority over the content of the press release,

drafted the press release, and disseminated the press release to the media directly by placing it on

a newswire.

44. The above statements from the April 8, 2019 press release were false and

misleading when made because, as Defendant knew or was reckless in not knowing at the time:

(1) NewAge’s agreement only covered some, but not all, of Walmart’s distribution centers across

the U.S.; (2) Walmart did not make specific commitments to NewAge concerning the Marley

line and never agreed to make all Marley Mate flavors available at all Walmart stores in the

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beginning of April 2019; and (3) at their Walmart-sales peak, NewAge’s Marley brand products

were offered in less than 7% of Walmart stores across only 21 of the 50 states.

45. Defendant’s false and misleading statements about the expanded distribution with

Walmart were material and caused a significant spike in NewAge’s share price.  For example,

(1) following the April 8, 2019 press release announcing the expanded distribution with

Walmart, NewAge’s share price increased by more than 38% for the day; (2) within hours of the

press release being issued, an equity analyst sent an email to Defendant congratulating him about

the news; and (3) on April 23, 2019, a NewAge investor emailed NewAge concerning the

availability of the Marley product in certain Walmart stores located in Texas and inquiring

whether NewAge was capable of handling the supply and demand of these products.

B. Defendant Made Materially False and Misleading Statements Regarding
NewAge’s Relationship with the U.S. Military

46.  Between January and August of 2018, Defendant made a series of materially

false and misleading statements concerning NewAge’s purported expansion of its relationship

with the U.S. military.  These misstatements led to increases in NewAge’s share price and

increased focus from investors and equity analysts alike about the potential impacts on revenue.

47. Beginning at an investor conference held on January 8, 2017, Defendant made the

false and misleading statement that the U.S. military had “taken 21 of our SKUs2 across

NewAge’s entire portfolio, across all military commissaries worldwide.”

48. On January 18, 2018, NewAge issued a false and misleading press release

announcing that NewAge had a “new distribution agreement” with the U.S. military which was a

“new U.S. military initiative in partnership with NewAge” whereby 21 NewAge SKUs across

2 The term “SKU” stands for stock keeping unit and refers to each distinct item for sale.

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five product lines were purportedly “shipping out now and throughout the 1st quarter to all

commissary locations worldwide,” with the scope of the distribution agreement including 240

military commissaries and 3,100 exchanges in more than 30 countries across the world; and

claiming that “[t]he new distribution agreement is expected to have a material impact on the

financial results of NewAge.”

49. Defendant made the sole and ultimate decision to issue the January 18, 2018 press

release, had final editorial control and ultimate authority over the content of the press release,

drafted the press release, authorized its issuance, and disseminated the press release to the media

directly by placing it on a newswire.

50. In or around January 2018, Defendant falsely stated to the Board of Directors that

NewAge was negotiating the agreement referenced in the January 18, 2018 press release and that

it was likely to be finalized.

51. During a NewAge earnings call on May 15, 2018, Defendant also made a false

and misleading statement referencing NewAge having “picked up the military business

worldwide.”  In another earnings call on August 14, 2018, Defendant made a false and

misleading statement that New Age was selling “21 core SKUs” of its brands in the “military

channel” that was “as big as Walmart in total sales throughput.”

52. The above statements from the January 18, 2018 press release and the May 15 and

August 14, 2018 earnings calls were false and misleading when made because, as Defendant

knew or was reckless in not knowing at the time: (1) NewAge never entered into a “distribution

agreement” or “initiative in partnership” with the military and never had plans to sell its products

at all commissaries and exchanges worldwide; (2) NewAge did not have adequate inventory to

fulfill this purported agreement; and (3) the only new distribution during this period was to sell

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NewAge products at two individual stores in Virginia and Florida for a trial period of four

weeks.

53. Defendant’s false and misleading statements about its agreement with the U.S.

military were material and caused a significant spike in NewAge’s share price.  For example,

following the January 8, 2018 investor conference during which Defendant first announced the

new agreement with the military, NewAge’s share rose 24%.  Following the January 18, 2018

press release describing the new purported distribution agreement, NewAge’s share price

increased nearly 16% and an equity analyst report highlighted the agreement, noting “the

targeted market this new distribution channel can reach spans a population of nearly 25 million

people.”  NewAge’s share price climbed 16% on August 14, 2018, the day on which Defendant

claimed during an earnings call that “21 core SKUs” of its brands in the “military channel” that

was “as big as Walmart in total sales throughput.”

C. Defendant Made Materially False and Misleading Statements Concerning
NewAge’s Development of CBD-infused Beverages

54. As described below, between September 2018 and January 2019, Defendant made

numerous false and misleading public statements concerning NewAge’s purported development

of a portfolio of CBD-infused beverages.  These misstatements, capitalizing on investor and

media attention centered on the legalization of cannabis, growth in the cannabis industry, and the

potential proliferation of CBD-infused beverages, led to increases in NewAge’s share price and

increased focus from investors and equity analysts alike about the potential impacts on revenue.

1. Announcement of the CBD Portfolio

55. In September 2018, Defendant made multiple false and misleading public

statements announcing that NewAge had been testing and developing a CBD-infused beverage

portfolio.

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56. During a September 5, 2018 investor presentation, Defendant made the false and

misleading claim that NewAge had been testing a CBD beverage over the previous six months.

This statement conveyed the false and misleading impression that NewAge was testing a

proprietary CBD product in development when, in fact, NewAge had merely been distributing a

CBD-infused water that was developed and controlled by a third-party supplier.

57. On September 19, 2018, NewAge issued a press release, stating that NewAge had

tested and developed a portfolio of CBD-infused beverages that it planned to unveil at the

National Association of Convenience Stores (“NACS”) trade show in Las Vegas, Nevada in

October 2018, and stating that NewAge’s Health Sciences Division (“Health Sciences”) was

“overseeing and carefully controlling product production, quality, and its supply chain and sales

channel partners.”

58. Defendant made the sole and ultimate decision to issue the September 19, 2018

press release, had final editorial control and ultimate authority over the content of the press

release, drafted the press release, and authorized its issuance.

59. The statements described above from the September 5, 2018 investor presentation

and September 19, 2018 press release were false and misleading when made because, as

Defendant knew or was reckless in not knowing at the time: (1) NewAge had begun

development of its CBD portfolio shortly before its September 19, 2018 announcement and had,

by that date, taken only preliminary steps towards the development of any CBD-infused

beverage; and (2) Health Sciences, which comprised just two part-time employees, had no role in

the development of the CBD portfolio as of September 19, 2018, and participated minimally, if

at all, in the process thereafter.

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2. October 2018 NACS Trade Show

60. On October 10, 2018, NewAge issued a false and misleading press release

announcing NewAge’s debut of its purported portfolio of “full spectrum” CBD-infused

beverages “from its Health Sciences Division” at the October 2018 NACS trade show in Las

Vegas that included a quote attributed to its Chief Medical Officer attesting to NewAge’s

“scientifically and medically grounded” approach to its CBD beverage portfolio.

61. Defendant made the sole and ultimate decision to issue the October 10, 2018 press

release, had final editorial control and ultimate authority over the content of the press release,

drafted the press release, and authorized its issuance.

62. At an off-site meeting organized by Defendant and attended by retailers,

distributors, and investors during the October 2018 NACS trade show in Las Vegas, NewAge

distributed sell sheets, reviewed, edited, and authorized by Defendant, that included the false and

misleading statements that (i) NewAge’s “full spectrum” CBD products were manufactured via a

“proprietary production process”; (ii) that the purported products were a “proprietary in-house

formula developed by New Age Health Sciences”; (iii) that “every batch” of the purported

products “is third-party tested”; and (iv) that the purported products benefited from a “full

spectrum nano technology-amplified entourage effect.”

63. The above statements from the October 2018 press release and sell sheets were

false and misleading when made because, as Defendant knew or was reckless in not knowing at

the time: (1) NewAge had, by that time, taken only preliminary steps towards the development of

any CBD-infused beverage; (2) the purported debut of the CBD-infused beverages at the off-site

meeting consisted only of samples of existing NewAge products to which drops of CBD

purchased from a local shop had been added onsite just before the event; (3) the Company’s

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Chief Medical Officer did not supply or endorse the quote attributed to him in the October 10,

2018 press release nor did he ever attest to NewAge’s “scientifically and medically grounded”

approach to its CBD beverage portfolio given his lack of involvement in the development of the

CBD beverage portfolio.

3. CBD Portfolio Purported Completion and Distribution

64. Between October 2018 and January 2019, Defendant and NewAge, at the

direction of Defendant, made several public statements, in press releases, investor calls, and

media interviews, which falsely conveyed that NewAge had a completed CBD beverage

portfolio, had secured substantial retail and distribution pre-orders and commitments to sell its

CBD products, and was even selling it in retail stores.

65. On October 16, 2018, NewAge issued a press release announcing that NewAge’s

“portfolio of 9 CBD-infused products generated initial retail distribution commitments spanning

more than 110,000 points of distribution” and that NewAge was now privately engaged in

“launch plans” for its CBD beverage portfolio “with some of the largest convenience and grocery

retailers in North America.”

66. Defendant made the sole and ultimate decision to issue the October 16, 2018 press

release, had final editorial control and ultimate authority over the content of the press release,

drafted the press release, and authorized its issuance.

67. On November 14, 2018, NewAge issued a press release announcing that

NewAge’s CBD portfolio was “in production for launch before Christmas.”

68. Defendant made the sole and ultimate decision to issue the November 14, 2018

press release, had final editorial control and ultimate authority over the content of the press

release, drafted the press release, and authorized its issuance.

20

69. During a November 14, 2018 earnings call on the same day the press release was

issued, Defendant claimed that NewAge, “had commitments of over 125,000 points of

distribution” for its CBD beverage portfolio, and that its purported CBD beverage portfolio was

developed by Health Sciences.

70. During a December 4, 2018 investor call, Defendant claimed that (i) NewAge had

gained 125,000 points of distribution of either preorders or commitments for its CBD products;

(ii) NewAge has three CBD manufacturers in different parts of the U.S. “already lined up”; and

(iii) NewAge would be launching its CBD-infused beverages by Christmas 2018.

71. During a December 6, 2018 interview with TheStreet.com, Defendant claimed

that (i) that NewAge’s CBD portfolio was in production and (ii) that Defendant expected to have

NewAge’s CBD products in stores before Christmas 2018.

72. On December 12, 2018, NewAge issued a press release announcing that (i)

NewAge expected to complete initial production runs for its CBD beverage portfolio by

Christmas 2018; (ii) NewAge was prepared to start selling with independent market and direct

store delivery (“DSD”) distributors starting in January 2019; and (iii) the Company has already

received major commitments from retailers and distributors spanning over 125,000 points of

distribution.

73. Defendant made the sole and ultimate decision to issue the December 12, 2018

press release, had final editorial control and ultimate authority over the content of the press

release, drafted the press release, and authorized its issuance.

74. On or around January 15, 2019, Defendant falsely stated to a member of

NewAge’s Board that the Company had received approximately $40 million of orders (in

annualized sales) for its line of CBD products at the January 2019 Winter Fancy Food Show in

San Francisco, California (“Winter Fancy Food Show”).

75. During a January 16, 2019 earnings call, Defendant directed the Company’s CFO

and Director of Marketing to make the following statements:

a. NewAge had produced its portfolio of CBD-infused beverages prior to Christmas

2018;

b. That this purported portfolio of beverages would be available in certain key

regional stores starting in March and April 2019;

c. That every grocery retailer that NewAge met with at the Winter Fancy Food

Show had placed an order of a CBD beverage products; and

d. That NewAge would begin shipments of its CBD-infused beverage portfolio in

the first quarter of 2019 and that this portfolio would have a material impact on

NewAge’s financial statements during its 2019 fiscal year.

76. Defendant drafted and had final editorial control and ultimate authority over the

content of the January 16, 2019 earnings call script and directly instructed the Company’s CFO

and Director of Marketing to make the above statements that were a part of the earnings call

script.

77. During that same January 16, 2019 earnings call, Defendant also claimed that

major Japanese retailer FamilyMart had placed an order with NewAge to sell NewAge’s CBD

beverage products in 15,000 outlets.

78. During a January 16, 2019 interview by Stuart Varney of Fox Business News,

Defendant claimed that NewAge’s CBD beverages were currently available for purchase at

major Japanese retailer FamilyMart.

22

79. In a January 18, 2019 Forbes article, Defendant stated that FamilyMart stores will

carry NewAge’s CBD beverages and the products will start shipping in March 2019.

80. At the January 27, 2019 Board Meeting, Defendant falsely stated to the Board that

FamilyMart had placed an order for NewAge’s CBD line of products.

81. The above statements from the October 16, 2018 press release, November 14,

2018 press release and earnings call, December 4 and 6, 2018 interviews, December 12, 2018

press release, January 16, 2019 earnings call and interview, and January 18, 2018 Forbes article,

were all false and misleading when made because, as Defendant knew or was reckless in not

knowing that, at the time, NewAge had not completed the development of a single CBD

beverage product and never received orders or commitments from any retailer for CBD beverage

products.

4. Defendant’s False and Misleading Statements Concerning CBD
Beverages were Material

82. Defendant’s false and misleading statements about its putative CBD beverage

portfolio were material and caused significant spikes in NewAge’s share price from September

2018 to early 2019.  For example, following the September 5, 2018 investor presentation

announcing that NewAge had been testing a CBD beverage, NewAge’s share price increased as

much as 26% and a number of analysts published reports on the announcement.  Following the

publication of the September 19, 2018 press release announcing the purported debut of its CBD

beverage portfolio, NewAge’s share price nearly tripled—increasing from a closing price of

$2.82 per share on September 18, 2018 to a closing price of $7.85 per share on September 20,

2018.  The liquidity of NewAge’s stock increased even more dramatically, rising from a trading

volume of 672,000 shares on September 14, 2018 to approximately 130 million shares on

23

September 20, 2018.  Following the November 14, 2018 announcement of “commitments of over

125,000 points of distribution,” the stock price increased by 23%.

83. In response to its CBD-related false and misleading statements, NewAge also

received a substantial number of inquiries from investors and equity analysts from September

2018 to early 2019 seeking information about the status of the CBD beverage program, including

the timing of launch, retail interest, and Health Science’s role in it.  During the relevant period,

Defendant repeatedly confided to members of NewAge’s Board that NewAge’s CBD beverage

portfolio was a major driver of the Company’s share price and that NewAge investors were

interested in “anything CBD related.”

84. The above misstatements artificially boosted NewAge’s share price and increased

the liquidity of its stock, which enabled the Company to turn around its finances and grow the

Company.  For example, immediately following the false and misleading September 19, 2018

press release, Defendant, citing the increased share price and liquidity, put in place an at-the-

market (ATM) securities offering3 that generated net proceeds of approximately $38 million for

NewAge.  Taking advantage of the still-elevated share price and liquidity, in November 2018,

NewAge conducted a second ATM offering that yielded an additional $52 million in cash,

providing it with a cash balance of more than $80 million and significantly improving the

Company’s balance sheet.

85. The Company relied upon the proceeds received from the ATM offerings to

purchase global beverage company Morinda Holdings (“Morinda”), a major acquisition that was

3 An at-the-market (ATM) offering is a type of stock offering used by publicly traded companies in order
to raise capital over time.  In an ATM offering, the issuing company incrementally sell shares into the
secondary trading market at prevailing market prices.

24

projected to grow NewAge’s annual revenue from approximately $50 million in 2018 to over

$300 million in 2019.

III. DEFENDANT CASHED IN ON THE FALSE AND MISLEADING PRESS
RELEASES AND OTHER FALSE AND MISLEADING STATEMENTS

86. Defendant also personally benefitted from the false and misleading statements

described above.  For example, while NewAge’s share price and liquidity were still artificially

inflated as a result of the misstatements described above, between April and October 2019,

Defendant obtained money or property by selling 425,000 NewAge shares for net proceeds of

over $2 million.  In addition, the Board awarded Defendant a significant compensation increase

starting in 2019 due to the Company’s improved financial position, successful stock offerings,

and the completion of the Morinda acquisition, all of which resulted from the above

misstatements.

IV. DEFENDANT AIDED AND ABETTED NEWAGE’S VIOLATIONS OF
REGULATION FD

87. Regulation FD (Fair Disclosure) protects investors by prohibiting issuers from

selectively disclosing material nonpublic information to, among others, securities analysts and

institutional investors, before disclosing the same information to the public.

88. Regulation FD requires that when an issuer, or persons acting on its behalf,

discloses material nonpublic information to persons outside the issuer, it must simultaneously

disclose such information to the public.  Where the issuer or person acting on its behalf knows or

is reckless in not knowing that the information it is communicating is both material and

nonpublic, the disclosure is “intentional” within the meaning of Regulation FD.

89. At a January 8, 2018 conference, an invitation-only event attended primarily by

institutional investors, private equity professionals, and equity analysts, Defendant told select

investors that the Company would be announcing a supposed expansion of the U.S. military’s

25

relationship with NewAge that would include the sale of 21 NewAge SKUs to commissaries

worldwide.

90. This selective material nonpublic disclosure was made in advance of NewAge’s

false and misleading January 18, 2018 press release announcing that very same purported

expansion.  Following the January 18, 2018 press release, NewAge’s share price rose by nearly

16% for the day.

91. On or about September 18, 2018, Defendant sent emails to select equity analysts

stating that in two days, NewAge intended to announce the then-upcoming debut of its CBD line

of beverages at the NACS trade show.

92. These disclosures to the analysts were made in made in advance of NewAge’s

false and misleading September 19, 2018 press release announcing that very same purported

information.  Following the September 19, 2018 press release, NewAge’s share price increased

by 55% for the day.

93. Defendant’s disclosures to investors at the January 8, 2018 conference and to

analysts on September 18, 2018 constituted material nonpublic information that was not

simultaneously disseminated to the public.

94. Defendant knew or was reckless in not knowing that his disclosures at the January

8, 2018 conference and to analysts on September 18, 2018 constituted material nonpublic

information.

95. Defendant’s disclosures were intentional selective disclosures within the meaning

of Regulation FD.

96. Defendant failed to file with the Commission the required Form 8-K disclosing

the material nonpublic information that Defendant had disclosed on January 8, 2018 and

26

September 18, 2018 within the time periods specified in the Commission’s rules or forms, or to

disseminate that information through another method of disclosure reasonably designed to

provide broad, non-exclusionary distribution of the information to the public.

97. Because NewAge failed to simultaneously publicly disseminate the material

information in accordance with Regulation FD, the investing public was placed at a disadvantage

relative to the investors who were privy to the selective disclosures on January 8, 2018, and the

analysts who were privy to the selective disclosures on September 18, 2018.

THIS ACTION IS TIMELY FILED

98. Defendant agreed to toll any statute of limitations applicable to the claims alleged

herein during the period from June 1, 2022 through August 30, 2022.

CLAIMS FOR RELIEF

First Claim for Relief

Section 10(b) and Rule 10b-5 of the Exchange Act

The Commission realleges and incorporates by reference in this claim for relief the allegations

set forth at 1 through 98 above.

99. Defendant, directly or indirectly, in connection with the purchase or sale of a

security, and by the use of means or instrumentalities of interstate commerce, of the mails, or of

the facilities of a national securities exchange, acting with scienter: (a) employed devices,

schemes, or artifices to defraud; (b) made untrue statements of a material fact or omitted to state

a material fact necessary in order to make the statements made, in light of the circumstances

under which they were made, not misleading; and (c) engaged in acts, practices, or courses of

business which operated or would operate as a fraud or deceit upon other persons.  As alleged

above, Defendant knowingly or recklessly engaged in deceptive conduct and made materially

27

false and misleading statements to investors concerning a wide range of matters, including

purported new or expanded product distribution deals with large domestic and international

beverage distributors and retailers.

100. Defendant acted knowingly or recklessly.

101. By engaging in the conduct described above, Defendant violated, and unless

restrained and enjoined will continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. §

78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].

Second Claim for Relief
Section 17(a) of the Securities Act

102. The Commission realleges and incorporates by reference in this claim for relief

the allegations set forth at 1 through 98 above.

103. By engaging in the conduct described above, Defendant, using the means or

instrumentalities of interstate commerce or of the mails, in the offer or sale of securities, directly

or indirectly, with scienter or negligently, employed devices, schemes, or artifices to defraud;

obtained money or property by means of untrue statements of material fact or omissions to state

material facts necessary in order to make the statements made, in light of the circumstances

under which they were made, not misleading; and/or engaged in transactions, practices, or

courses of dealing which operated or would operate as a fraud or deceit upon the purchaser.  As

alleged above, Defendant knowingly, recklessly, or negligently engaged in deceptive conduct

and made materially false and misleading statements to investors concerning a wide range of

matters, including purported new or expanded product distribution deals with large domestic and

international beverage distributors and retailers.

104. Defendant acted knowingly, recklessly, or negligently.

28

105. By virtue of the foregoing, Defendant, directly or indirectly, violated and, unless

restrained and enjoined, will again violate Section 17(a) of the Securities Act [15 U.S.C. §

77q(a)].

Third Claim for Relief
Aiding and Abetting NewAge’s Violations of Section 13(a) of the Exchange Act and

Regulation FD

106. The Commission realleges and incorporates by reference in this claim for relief

the allegations set forth at 1 through 98 above.

107. Regulation FD [17 C.F.R. § 243.100, et seq.] requires that when an issuer or

certain persons acting on its behalf, including officers, privately disclose material nonpublic

information to certain persons outside the issuer, the issuer must simultaneously disclose such

information to the public.  Where the issuer or such persons acting on its behalf knowingly or

recklessly disregard that the information being privately disclosed is both material and

nonpublic, the disclosure is intentional within the meaning of Regulation FD.

108. As alleged above, Defendant intentionally disclosed material nonpublic

information to select investors during a January 8, 2018 conference and via emails sent to equity

analysts on September 18, 2018, without making simultaneous disclosure of that information to

the public.

109. By engaging in the conduct alleged above, Defendant knowingly or recklessly

provided substantial assistance to NewAge with respect to its violations of, and, unless enjoined,

will again aid and abet violations of, Section 13(a) of the Exchange Act [15 U.S.C. § 78m(a)]

and Regulation FD [17 C.F.R. § 243.100, et seq.] thereunder.

29

PRAYER FOR RELIEF

WHEREFORE, the Commission respectfully requests that the Court grant the following

relief:

1. Find that the Defendant committed the violations alleged in this Complaint;

2. Enter an injunction, in a form consistent with Rule 65(d) of the Federal Rules of

Civil Procedure, permanently restraining and enjoining Defendant from violating, directly or

indirectly, the laws and rules Defendant is alleged to have violated in this Complaint;

3. Order Defendant to disgorge ill-gotten gains received during the period of

violative conduct and pay prejudgment interest on such ill-gotten gains;

4. Order Defendant to pay civil money penalties pursuant to Section 20(d) of the

Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. §

78u(d)(3)];

5. Order that Defendant be barred, pursuant to Section 20(e) of the Securities Act

[15 U.S.C. § 77t(e)] and Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)], from

acting as an officer or director of any issuer that has a class of securities registered pursuant to

Section 12 of the Exchange Act [15 U.S.C. § 781] or that is required to file reports pursuant to

Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)];

6. Order that Defendant be prohibited from participating in an offering of a penny

stock pursuant to Section 20(g) of the Securities Act [15 U.S.C. § 77t(g)] and Section 21(d) of

the Exchange Act [15 U.S.C. § 78u(d)]; and

7. Grant such other and further relief as this Court may deem just and proper.

30

JURY DEMAND

The Commission demands a trial by jury on all claims so triable.

Dated:  October 18, 2022  Respectfully submitted,

 By: s/ Edward J. Reilly
Of Counsel:
Edward B. Gerard
James J. Bresnicky

 Edward J. Reilly
Paul W. Kisslinger
James P. Connor
U.S. Securities and Exchange Commission
100 F Street NE
Washington, DC 20549-4473
Telephone: (202) 551-6791 (Reilly)
Email: [email protected]
Attorneys for Plaintiff
U.S. Securities and Exchange Commission

IN THE UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF COLORADO 

 

Civil Action No. 22-2744  
 
UNITED STATES SECURITIES AND 
EXCHANGE COMMISION, 

Plaintiff, 

v. 

BRENT DAVID WILLIS, 

Defendant. 

 
 
 

COMPLAINT AND JURY DEMAND 

 
Plaintiff, United States Securities and Exchange Commission (“Commission”), alleges as 

follows against Defendant Brent David Willis.    

INTRODUCTION 

1. From approximately July 2017 through April 2019 (the “relevant period”), Brent 

D. Willis, CEO of previously NASDAQ-listed securities issuer NewAge, Inc. (“NewAge” or the 

“Company”), made numerous materially false and misleading public statements concerning 

NewAge’s development and sale of beverages during investors conferences, earnings calls, 

media interviews, and in at least 12 press releases.  These false and misleading public statements 

concerned a wide range of matters that were critical to the Company’s growth and success, and 

thus to NewAge’s investors, including purported new and expanded product distribution deals 

with large domestic and international beverage distributors and retailers.  In reality, these 

distribution deals either did not exist or were significantly smaller than claimed in the public 

statements.   

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2. For example, between January 2018 and August 2018, Defendant made and 

authorized NewAge to make a series of materially false and misleading public statements 

announcing a supposed distribution agreement with the U.S. military through which NewAge 

would sell its beverage products at all commissaries and exchanges worldwide.  In reality, 

NewAge never entered into a distribution agreement with the military; never had plans to sell its 

products at all commissaries and exchanges worldwide; and did not even have the inventory to 

do so.   

3. Several months later, between September 2018 and January 2019, Defendant and 

NewAge, at the direction of Defendant, made additional false and misleading public statements 

about NewAge’s purported development of a portfolio of cannabidiol (“CBD”)-infused 

beverages.  Capitalizing on current media and public attention focused on the legalization of 

cannabis and growth in the cannabis industry, Defendant falsely stated that NewAge had secured 

substantial retail and distribution orders and commitments to sell its CBD products, and that 

NewAge’s CBD products were being sold in retail stores.  In fact, NewAge never completed the 

development of a CBD beverage product and never received orders or commitments from any 

retailer for CBD beverage products. 

4. Defendant made these and other statements, which served to artificially inflate 

NewAge’s stock price, improve its financial position, and financially benefit himself, despite 

knowing, or recklessly failing to know, that the statements were false and misleading.   

5. In addition, Defendant made selective disclosures of material nonpublic 

information concerning NewAge’s business activities to select analysts and investors.  For 

example, in early January 2018, Defendant made statements to select investors about an alleged 

expansion of the U.S. military’s relationship with NewAge in advance of the Company’s late 

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January 2018 press release concerning its alleged worldwide distribution agreement with the 

military.  Similarly, Defendant sent emails to select equity analysts concerning NewAge’s 

purported development, testing, and debut of CBD beverage products the day before NewAge’s 

September 2018 press release announcing that information.  On both occasions, Defendant failed 

to publicly disclose the material nonpublic information simultaneously with or promptly after 

these selective disclosures, placing other investors and the public not privy to the selective 

disclosures at a disadvantage.  

6. By engaging in this conduct, Defendant violated Section 17(a) of the Securities 

Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)]; Section 10(b) of the Securities Exchange 

Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)], and Exchange Act Rule 10b-5 [17 C.F.R. § 

240.10b-5] thereunder; and aided and abetted NewAge’s violations of Section 13(a) of the 

Exchange Act [15 U.S.C. § 78m(a)], and Regulation FD (Fair Disclosure) [17 C.F.R. § 243.100 

et seq.] thereunder.  Unless restrained and enjoined, Defendant will continue to violate these 

provisions and is likely to engage in future violations of the federal securities laws. 

7. The Commission seeks permanent injunctions; disgorgement of ill-gotten gains 

derived from the conduct alleged in the Complaint plus prejudgment interest thereon; civil 

penalties; an officer and director bar; and a penny stock bar.  

JURISDICTION AND VENUE 
  

8. The Commission brings this action pursuant to Sections 20 and 22 of the 

Securities Act [15 U.S.C. §§ 77t and 77v] and Sections 21(d) and 21(e) of the Exchange Act [15 

U.S.C. §§ 78u(d) and 78u(e)]. 

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9. The Court has jurisdiction over this action pursuant to Section 22 of the Securities 

Act [15 U.S.C. § 77v] and Sections 21(d), 21(e), and 27 of the Exchange Act [15 U.S.C. §§ 

78u(d), 78u(e), and 78aa]. 

10. Defendant, directly or indirectly, made use of the means and instrumentalities of 

interstate commerce, or of the mails, or of the facilities of a national securities exchange, in 

connection with the acts, transactions, practices, and courses of business alleged in this 

complaint.  

11. Venue is proper in the District of Colorado pursuant to Section 22(a) of the 

Securities Act [15 U.S.C. § 77v(a)] and Section 27(a) of the Exchange Act [15 U.S.C. § 78aa(a)] 

because many of the acts and transactions constituting violations of the Securities Act and 

Exchange Act occurred in this district, including the dissemination of false and misleading press 

releases and other false public statements as well as selective disclosures of material information. 

In addition, Defendant resides in this district and NewAge’s principal place of business was in 

this district during the relevant period. 

DEFENDANT 

12. Brent D. Willis, age 62, is a resident of Denver, Colorado.  Willis was appointed 

as CEO and a director of the NewAge on March 24, 2016, and remained in these positions until 

January 10, 2022. 

RELEVANT ENTITY 

13. NewAge, Inc. (formerly New Age Beverages Corporation, Inc.) is a Delaware 

corporation based in Midvale, Utah.  NewAge describes itself as a developer and global seller of 

“organic and healthy products,” including numerous beverage product lines.  The Company’s 

common stock is registered with the Commission pursuant to Section 12(b) of the Exchange Act.  

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During the relevant period, NewAge’s stock traded on the NASDAQ under the ticker symbol 

“NBEV.”  NASDAQ suspended trading and filed to delist NewAge in September 2022 and the 

Company’s stock currently trades on the OTC market under the ticker symbol “NBEVQ.”  On 

August 30, 2022, NewAge filed for bankruptcy under Chapter 11 of the Bankruptcy Code.   

FACTS 

I. BACKGROUND  

A. NewAge’s Dire Financial Straits Leading up to Defendant’s False and 
Misleading Press Releases and Public Statements 

14. Throughout 2017 and 2018, NewAge was in dire financial straits.  In 2017, 

NewAge incurred losses and struggled to pay for inventory and its operating expenses.  For the 

year ended December 31, 2017, NewAge reported a net loss of approximately $3.5 million and 

had only approximately $285,000 in cash.  For the first six months of 2018 (ending on June 30, 

2018), New Age reported a net loss of approximately $3.4 million and had only approximately 

$213,000 in cash.  NewAge’s share price also declined substantially in late 2017 amid the 

Company’s inability to secure national accounts for its existing brands or develop promising new 

products.  During the first nine months of 2018, NewAge’s financial condition continued to 

worsen, as it regularly lacked the cash to purchase the inventory needed to fill even limited 

beverage orders.  The Company also struggled to secure financing and, in June 2018, obtained a 

high-interest loan in order to meet basic financial obligations. 

15. As CEO of NewAge, Defendant was fixated on raising the Company’s lagging 

share price, reversing the Company’s deteriorating financial position, and growing the Company, 

which Defendant believed was necessary for the Company to become profitable.  Defendant 

repeatedly expressed frustration with the Company’s inability to secure distribution with major 

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6 
 

retailers and imposed substantial pressure on his employees, particularly his sales personnel, to 

generate positive news for the company.   

16. During the relevant period, Willis was also frustrated with his compensation at 

NewAge and repeatedly urged the Company’s Board of Directors (the “Board”) to increase it, in 

part to pay personal tax liabilities.  In or around 2017 and early 2018, the Board told Defendant 

that once the Company was on better financial footing, it would revisit his compensation 

package. 

B. Defendant was Well-Informed and Knowledgeable about NewAge’s Business 
Operations and Activities  

17. During most of the relevant period, NewAge was a small company of fewer than 

200 employees with limited sales, marketing, and operations staffs who worked in close 

proximity to each other.  Defendant was a hands-on CEO who communicated frequently with his 

sales and marketing personnel and insisted upon receiving regular updates about major business 

developments within NewAge, including, but not limited to, the existence and scope of new or 

expanded distribution deals with national and international distributors and retailers and the 

status of products in development.  Defendant had final editorial control and ultimate authority 

over the content of the earnings call scripts and press releases, and often disseminated press 

releases to the media directly by placing them on a newswire himself.  

II. DEFENDANT’S MATERIALLY FALSE AND MISLEADING STATEMENTS  

A. Defendant Made Materially False and Misleading Statements Regarding 
NewAge’s Distribution Agreements with Distributors and Retailers 

18. Between July 2017 and April 2019, Defendant, through NewAge, issued 

numerous materially false and misleading press releases and made false public statements 

concerning purportedly new or expanded distribution of its products with major retailers and 

distributors.  These misstatements about purported major distribution agreements led to increases 

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in NewAge’s share price and increased focus from investors and equity analysts alike about the 

potential impacts on NewAge’s share price and financial metrics.   

1. July 2017 and August 2017 False and Misleading Statements about 
Expanded Relationship with 7-Eleven 

 
19. Defendant’s false and misleading statements to investors during the relevant 

period began on July 21, 2017, when NewAge issued a press release announcing an “expansion 

of XingTea with 7 Eleven in the U.S.,” whereby this NewAge product line (XingTea) would be 

distributed “throughout the Heartland Division of 7 Eleven, one of the chain’s largest divisions 

spanning more than 1,400 outlets throughout the Midwest … effective immediately.”  The press 

release further stated that “this new distribution represents a major expansion of the brand in the 

world’s largest convenience store chain.” 

20. Defendant made the sole and ultimate decision to issue the July 21, 2017 NewAge 

press release, had final editorial control and ultimate authority over the content of the press 

release, drafted the press release, and authorized its issuance. 

21. Defendant repeated the false and misleading statement from the July 21, 2017 

press release again during a NewAge quarterly earnings call on August 15, 2017, during which 

Defendant stated, “On the brand front . . . XingTea, a key piece of our core portfolio, expanded 

with 7-Eleven in the United States, initially, in the Heartland Division across around 1,500 

stores.”   

22. The above statements were false and misleading when made because, as 

Defendant knew or was reckless in not knowing at the time: (1) 7-Eleven only sold NewAge 

XingTea products within the State of Colorado, constituting approximately 250 stores; (2) 7-

Eleven had not committed or agreed to expand sales of the XingTea product line beyond the 

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State of Colorado; and (3) no such expansion to sell XingTea throughout 7-Eleven’s Heartland 

Division had occurred. 

23. Defendant’s false and misleading statements about the purported “immediate[ ]” 

expansion throughout 7-Eleven’s Heartland Division were material and caused a significant 

spike in NewAge’s share price.  Following the July 21, 2017 press release announcing the 

purported expanded distribution with 7-Eleven, NewAge’s share price increased 9.2% for the 

day.  And following Defendant’s August 15, 2017 earnings call during which he repeated false 

claims about the expansion with 7-Eleven, an equity analyst issued a report re-affirming its 

“buy” rating and setting a $10 price target for NewAge’s stock, in part, because of the 

“extension” of the “Xing Tea brand into the Midwest region of 7-11 stores.”   

2. October 2017 False and Misleading Statements about Expanded 
Relationship with Ahold Delhaize  

 
24. On October 10, 2017, NewAge issued another false and misleading press release 

announcing that the Company had expanded its relationship with retailer Ahold Delhaize.  

Specifically, the press release stated that (i) NewAge had begun rollout of its Aspen Pure 

Probiotic water product “across Ahold Delhaize banners throughout the U.S.”; (ii) sales of 

NewAge’s Aspen Pure Probiotic water product would be expanded “throughout the more than 

2,000 Ahold Delhaize banner stores across 23 states”; and (iii) NewAge had “began shipment 

and shelf placement” of its Aspen Pure Probiotic water product across 700 Ahold Delhaize 

banner stores.   

25. Defendant made the sole and ultimate decision to issue the October 10, 2017 press 

release, had final editorial control and ultimate authority over the content of the press release, 

drafted the press release, and authorized its issuance. 

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9 
 

26. The above statements from the October 10, 2017 press release were false and 

misleading when made because, as Defendant knew or was reckless in not knowing at the time: 

(1) NewAge did not have sufficient inventory of the Aspen Pure Probiotic water product to fulfill 

the purported expansion; (2) Ahold Delhaize did not commit to expanding NewAge’s Aspen 

Pure Probiotic water product to more than 2,000 stores across 23 states; and (3) Aspen Pure 

Probiotic water was carried by no more than 74 Ahold Delhaize stores.   

27. Defendant’s false and misleading statements about the expansion with Ahold 

Delhaize were material and caused a spike in NewAge’s share price.  For example, following the 

October 10, 2017 announcement of the purported expansion with Ahold Delhaize, NewAge’s 

share price increased by nearly 6% for the day.  And on September 4, 2018, an equity analyst 

initiated coverage of NewAge with a “buy” rating and a target price of $3.00 per share, citing, in 

part, NewAge’s purported deal to place its Aspen Pure Probiotic water product and other 

products in Ahold Delhaize stores in 23 states with a 700 store initial rollout on the East Coast 

and eventually a total of 2,000 locations. 

3. November 2017 False and Misleading Statements about a Distribution 
Agreement with Unified Strategies Group  

 
28. Less than a month later, on November 1, 2017, NewAge issued another false and 

misleading press release announcing that the Company had entered into a written agreement with 

Unified Strategies Group (“USG”) to expand distribution of its beverage portfolio to USG’s 

“more than 1 million vending machines, 5,000 micro markets, and over 1,800 client dining 

facilities throughout the United States.”  The press release further falsely stated that USG “will 

now be offering the New Age Beverages portfolio throughout [USG’s] system” which “reaches 

75,000 workplace locations a day ….”  

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29. Defendant made the sole and ultimate decision to issue the November 1, 2017 

press release, had final editorial control and ultimate authority over the content of the press 

release, drafted the press release, and authorized its issuance. 

30. The above statements were false and misleading when made because, as 

Defendant knew or was reckless in not knowing at the time: (1) the agreement USG entered into 

with NewAge included no commitment or representation with respect to the number of sales 

outlets (including vending machines, markets, and other sales locations)1; and (2) at their sales 

peak, NewAge’s products were sold by only 1 or 2 USG members at a total of approximately 

100 vending machines.  

31. Defendant’s false and misleading statements about the purported expansion with 

USG were material and caused a significant spike in NewAge’s share price.  For example, 

following the November 1, 2017 announcement of the purported expansion with USG, 

NewAge’s share price increased by approximately 17% for the day.  And on September 4, 2018, 

an equity analyst initiated coverage of NewAge with a “buy” rating and a target price of $3.00 

per share, citing, in part, NewAge’s deal with “United Strategies Group with 1M+ vending 

machines.”   

4. February 2018 False and Misleading Statements about Expanded 
Distribution with Canadian Retailers 

 
32. On February 1, 2018, NewAge issued a materially false and misleading press 

release announcing that NewAge (i) “has begun shipments of its Coco-Libre and Bucha Live 

Kombucha brands in expanded distribution throughout Loblaws and Sobeys, the largest grocery 

                                                 
1 The agreement between NewAge and USG merely set the rebate terms for the sale of products to USG 
members, which independently choose the products they offer at their sales locations.   

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retailers across Canada”; and (ii) “is now expanding to all banners within Loblaws and 

expanding throughout both Sobeys and Safeway.”   

33. Defendant made the sole and ultimate decision to issue the February 1, 2018 press 

release, had final editorial control and ultimate authority over the content of the press release, 

drafted the press release, and authorized its issuance. 

34. NewAge followed this press release with a February 13, 2018 press release stating 

that its Bucha Live Kombucha brand “has recently expanded to all major retailers throughout 

Canada ….”  Defendant also made the sole and ultimate decision to issue the February 13, 2018 

press release, had final editorial control and ultimate authority over the content of the press 

release, drafted the press release, and authorized its issuance. 

35. The above statements from the February 1 and 13, 2018 press releases were false 

and misleading when made because, as Defendant knew or was reckless in not knowing at the 

time: (1) there was no expansion of NewAge product lines Coco-Libre and Bucha Live 

Kombucha to all banners within Loblaws and throughout Sobeys (including Sobeys’ subsidiary 

Safeway); (2) Sobeys never sold Coco-Libre brand beverages; (3) there was no expanded 

distribution of Coco-Libre brand beverages to Loblaws in 2018; and (4) NewAge did not expand 

distribution of its Bucha Live Kombucha brand to all major retailers throughout Canada.  

36. Defendant’s false and misleading statements about the expansion with Loblaws, 

Sobeys, and all major retailers throughout Canada were material and caused a spike in 

NewAge’s share price.  For example, following the February 1, 2018 announcement of the 

expansion with Loblaws and Sobeys, NewAge’s share price increased by more than 6% for the 

day.  On March 5, 2018, an equity analyst maintained a “buy” rating for NewAge and a target 

price of $6.00 per share based, in part, on NewAge’s purported expansion with Loblaw and 

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Sobeys and its expectation that the expansion would generate meaningful revenue growth for 

NewAge in 2018 and beyond.    

5. February 2018 False and Misleading Statements about a Distribution 
Agreement with South Korean Distributor  

 
37. On February 13, 2018, NewAge issued a false and misleading press release 

announcing that NewAge “has signed a major distribution agreement for expansion of its Bucha 

Live Kombucha brand with the largest food and beverage distributor in South Korea to expand to 

all major retail outlets throughout the country effective immediately.”  This is the same press 

release that contained the false and misleading statements concerning NewAge’s purported 

expansion of its Bucha Live Kombucha product to all major retailers throughout Canada, as 

described in paragraph Nos. 34 through 36 above.  The press release went on to identify 14 

department stores, hypermarkets, and convenience and grocery outlets in South Korea in which 

the Bucha brand would be sold starting by or before June 2018.   

38. Defendant made the sole and ultimate decision to issue the February 13, 2018 

press release, had final editorial control and ultimate authority over the content of the press 

release, drafted the press release, and authorized its issuance. 

39. The above statements from the February 13, 2018 press release were false and 

misleading when made because, as Defendant knew or was reckless in not knowing at the time: 

(1) the South Korea distributor merely received the right to distribute NewAge products within 

the Korean market and did not represent that any South Korea retailers would place orders for 

NewAge products; (2) none of the 14 department stores, hypermarkets, and convenience and 

grocery outlets identified in the press release made any commitment to purchase NewAge 

products.  

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40. In fact, the South Korea distributor did not place its first order of Bucha Live 

Kombucha until December 2018, and the sales of the product were minimal (approximately 

1,500 bottles sold) before the relationship was terminated in October 2019.  

41.   Defendant’s false and misleading statements about the agreement with the South 

Korean distributor were material and caused a spike in NewAge’s share price.  For example, 

following the February 13, 2018 announcement of the agreement with the South Korean 

distributor, NewAge’s share increased by more than 6% for the day and an equity analyst sent an 

email to Defendant congratulating him on the “win[] in . . . South Korea.”    

6. April 2019 False and Misleading Statements about Expanded 
Distribution with Walmart  

 
42. On April 8, 2019, NewAge issued another false and misleading press release 

announcing (1) the “first national distribution” of its products via an expanded distribution of its 

Marley beverage line with Walmart; (2) that NewAge had “now begun shipments to Walmart 

distribution centers across the United States”; and (3) that each of NewAge’s three Marley Mate 

flavors would be available at all Walmart stores in the beginning of April 2019. 

43. Defendant made the sole and ultimate decision to issue the April 8, 2019 press 

release, had final editorial control and ultimate authority over the content of the press release, 

drafted the press release, and disseminated the press release to the media directly by placing it on 

a newswire. 

44. The above statements from the April 8, 2019 press release were false and 

misleading when made because, as Defendant knew or was reckless in not knowing at the time: 

(1) NewAge’s agreement only covered some, but not all, of Walmart’s distribution centers across 

the U.S.; (2) Walmart did not make specific commitments to NewAge concerning the Marley 

line and never agreed to make all Marley Mate flavors available at all Walmart stores in the 

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beginning of April 2019; and (3) at their Walmart-sales peak, NewAge’s Marley brand products 

were offered in less than 7% of Walmart stores across only 21 of the 50 states.   

45. Defendant’s false and misleading statements about the expanded distribution with 

Walmart were material and caused a significant spike in NewAge’s share price.  For example, 

(1) following the April 8, 2019 press release announcing the expanded distribution with 

Walmart, NewAge’s share price increased by more than 38% for the day; (2) within hours of the 

press release being issued, an equity analyst sent an email to Defendant congratulating him about 

the news; and (3) on April 23, 2019, a NewAge investor emailed NewAge concerning the 

availability of the Marley product in certain Walmart stores located in Texas and inquiring 

whether NewAge was capable of handling the supply and demand of these products. 

B. Defendant Made Materially False and Misleading Statements Regarding 
NewAge’s Relationship with the U.S. Military 

46.  Between January and August of 2018, Defendant made a series of materially 

false and misleading statements concerning NewAge’s purported expansion of its relationship 

with the U.S. military.  These misstatements led to increases in NewAge’s share price and 

increased focus from investors and equity analysts alike about the potential impacts on revenue.   

47. Beginning at an investor conference held on January 8, 2017, Defendant made the 

false and misleading statement that the U.S. military had “taken 21 of our SKUs2 across 

NewAge’s entire portfolio, across all military commissaries worldwide.”  

48. On January 18, 2018, NewAge issued a false and misleading press release 

announcing that NewAge had a “new distribution agreement” with the U.S. military which was a 

“new U.S. military initiative in partnership with NewAge” whereby 21 NewAge SKUs across 

                                                 
2 The term “SKU” stands for stock keeping unit and refers to each distinct item for sale. 

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five product lines were purportedly “shipping out now and throughout the 1st quarter to all 

commissary locations worldwide,” with the scope of the distribution agreement including 240 

military commissaries and 3,100 exchanges in more than 30 countries across the world; and 

claiming that “[t]he new distribution agreement is expected to have a material impact on the 

financial results of NewAge.”  

49. Defendant made the sole and ultimate decision to issue the January 18, 2018 press 

release, had final editorial control and ultimate authority over the content of the press release, 

drafted the press release, authorized its issuance, and disseminated the press release to the media 

directly by placing it on a newswire. 

50. In or around January 2018, Defendant falsely stated to the Board of Directors that 

NewAge was negotiating the agreement referenced in the January 18, 2018 press release and that 

it was likely to be finalized. 

51. During a NewAge earnings call on May 15, 2018, Defendant also made a false 

and misleading statement referencing NewAge having “picked up the military business 

worldwide.”  In another earnings call on August 14, 2018, Defendant made a false and 

misleading statement that New Age was selling “21 core SKUs” of its brands in the “military 

channel” that was “as big as Walmart in total sales throughput.” 

52. The above statements from the January 18, 2018 press release and the May 15 and 

August 14, 2018 earnings calls were false and misleading when made because, as Defendant 

knew or was reckless in not knowing at the time: (1) NewAge never entered into a “distribution 

agreement” or “initiative in partnership” with the military and never had plans to sell its products 

at all commissaries and exchanges worldwide; (2) NewAge did not have adequate inventory to 

fulfill this purported agreement; and (3) the only new distribution during this period was to sell 

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NewAge products at two individual stores in Virginia and Florida for a trial period of four 

weeks.   

53. Defendant’s false and misleading statements about its agreement with the U.S. 

military were material and caused a significant spike in NewAge’s share price.  For example, 

following the January 8, 2018 investor conference during which Defendant first announced the 

new agreement with the military, NewAge’s share rose 24%.  Following the January 18, 2018 

press release describing the new purported distribution agreement, NewAge’s share price 

increased nearly 16% and an equity analyst report highlighted the agreement, noting “the 

targeted market this new distribution channel can reach spans a population of nearly 25 million 

people.”  NewAge’s share price climbed 16% on August 14, 2018, the day on which Defendant 

claimed during an earnings call that “21 core SKUs” of its brands in the “military channel” that 

was “as big as Walmart in total sales throughput.” 

C. Defendant Made Materially False and Misleading Statements Concerning 
NewAge’s Development of CBD-infused Beverages  

54. As described below, between September 2018 and January 2019, Defendant made 

numerous false and misleading public statements concerning NewAge’s purported development 

of a portfolio of CBD-infused beverages.  These misstatements, capitalizing on investor and 

media attention centered on the legalization of cannabis, growth in the cannabis industry, and the 

potential proliferation of CBD-infused beverages, led to increases in NewAge’s share price and 

increased focus from investors and equity analysts alike about the potential impacts on revenue. 

1. Announcement of the CBD Portfolio  

55. In September 2018, Defendant made multiple false and misleading public 

statements announcing that NewAge had been testing and developing a CBD-infused beverage 

portfolio.   

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56. During a September 5, 2018 investor presentation, Defendant made the false and 

misleading claim that NewAge had been testing a CBD beverage over the previous six months.  

This statement conveyed the false and misleading impression that NewAge was testing a 

proprietary CBD product in development when, in fact, NewAge had merely been distributing a 

CBD-infused water that was developed and controlled by a third-party supplier. 

57. On September 19, 2018, NewAge issued a press release, stating that NewAge had 

tested and developed a portfolio of CBD-infused beverages that it planned to unveil at the 

National Association of Convenience Stores (“NACS”) trade show in Las Vegas, Nevada in 

October 2018, and stating that NewAge’s Health Sciences Division (“Health Sciences”) was 

“overseeing and carefully controlling product production, quality, and its supply chain and sales 

channel partners.” 

58. Defendant made the sole and ultimate decision to issue the September 19, 2018 

press release, had final editorial control and ultimate authority over the content of the press 

release, drafted the press release, and authorized its issuance. 

59. The statements described above from the September 5, 2018 investor presentation 

and September 19, 2018 press release were false and misleading when made because, as 

Defendant knew or was reckless in not knowing at the time: (1) NewAge had begun 

development of its CBD portfolio shortly before its September 19, 2018 announcement and had, 

by that date, taken only preliminary steps towards the development of any CBD-infused 

beverage; and (2) Health Sciences, which comprised just two part-time employees, had no role in 

the development of the CBD portfolio as of September 19, 2018, and participated minimally, if 

at all, in the process thereafter.   

 

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2. October 2018 NACS Trade Show 

60. On October 10, 2018, NewAge issued a false and misleading press release 

announcing NewAge’s debut of its purported portfolio of “full spectrum” CBD-infused 

beverages “from its Health Sciences Division” at the October 2018 NACS trade show in Las 

Vegas that included a quote attributed to its Chief Medical Officer attesting to NewAge’s 

“scientifically and medically grounded” approach to its CBD beverage portfolio. 

61. Defendant made the sole and ultimate decision to issue the October 10, 2018 press 

release, had final editorial control and ultimate authority over the content of the press release, 

drafted the press release, and authorized its issuance. 

62. At an off-site meeting organized by Defendant and attended by retailers, 

distributors, and investors during the October 2018 NACS trade show in Las Vegas, NewAge 

distributed sell sheets, reviewed, edited, and authorized by Defendant, that included the false and 

misleading statements that (i) NewAge’s “full spectrum” CBD products were manufactured via a 

“proprietary production process”; (ii) that the purported products were a “proprietary in-house 

formula developed by New Age Health Sciences”; (iii) that “every batch” of the purported 

products “is third-party tested”; and (iv) that the purported products benefited from a “full 

spectrum nano technology-amplified entourage effect.” 

63. The above statements from the October 2018 press release and sell sheets were 

false and misleading when made because, as Defendant knew or was reckless in not knowing at 

the time: (1) NewAge had, by that time, taken only preliminary steps towards the development of 

any CBD-infused beverage; (2) the purported debut of the CBD-infused beverages at the off-site 

meeting consisted only of samples of existing NewAge products to which drops of CBD 

purchased from a local shop had been added onsite just before the event; (3) the Company’s 

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Chief Medical Officer did not supply or endorse the quote attributed to him in the October 10, 

2018 press release nor did he ever attest to NewAge’s “scientifically and medically grounded” 

approach to its CBD beverage portfolio given his lack of involvement in the development of the 

CBD beverage portfolio. 

3. CBD Portfolio Purported Completion and Distribution   

64. Between October 2018 and January 2019, Defendant and NewAge, at the 

direction of Defendant, made several public statements, in press releases, investor calls, and 

media interviews, which falsely conveyed that NewAge had a completed CBD beverage 

portfolio, had secured substantial retail and distribution pre-orders and commitments to sell its 

CBD products, and was even selling it in retail stores.   

65. On October 16, 2018, NewAge issued a press release announcing that NewAge’s 

“portfolio of 9 CBD-infused products generated initial retail distribution commitments spanning 

more than 110,000 points of distribution” and that NewAge was now privately engaged in 

“launch plans” for its CBD beverage portfolio “with some of the largest convenience and grocery 

retailers in North America.” 

66. Defendant made the sole and ultimate decision to issue the October 16, 2018 press 

release, had final editorial control and ultimate authority over the content of the press release, 

drafted the press release, and authorized its issuance. 

67. On November 14, 2018, NewAge issued a press release announcing that 

NewAge’s CBD portfolio was “in production for launch before Christmas.” 

68. Defendant made the sole and ultimate decision to issue the November 14, 2018 

press release, had final editorial control and ultimate authority over the content of the press 

release, drafted the press release, and authorized its issuance. 

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69. During a November 14, 2018 earnings call on the same day the press release was 

issued, Defendant claimed that NewAge, “had commitments of over 125,000 points of 

distribution” for its CBD beverage portfolio, and that its purported CBD beverage portfolio was 

developed by Health Sciences. 

70. During a December 4, 2018 investor call, Defendant claimed that (i) NewAge had 

gained 125,000 points of distribution of either preorders or commitments for its CBD products; 

(ii) NewAge has three CBD manufacturers in different parts of the U.S. “already lined up”; and 

(iii) NewAge would be launching its CBD-infused beverages by Christmas 2018. 

71. During a December 6, 2018 interview with TheStreet.com, Defendant claimed 

that (i) that NewAge’s CBD portfolio was in production and (ii) that Defendant expected to have 

NewAge’s CBD products in stores before Christmas 2018. 

72. On December 12, 2018, NewAge issued a press release announcing that (i) 

NewAge expected to complete initial production runs for its CBD beverage portfolio by 

Christmas 2018; (ii) NewAge was prepared to start selling with independent market and direct 

store delivery (“DSD”) distributors starting in January 2019; and (iii) the Company has already 

received major commitments from retailers and distributors spanning over 125,000 points of 

distribution. 

73. Defendant made the sole and ultimate decision to issue the December 12, 2018 

press release, had final editorial control and ultimate authority over the content of the press 

release, drafted the press release, and authorized its issuance. 

74. On or around January 15, 2019, Defendant falsely stated to a member of 

NewAge’s Board that the Company had received approximately $40 million of orders (in 

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annualized sales) for its line of CBD products at the January 2019 Winter Fancy Food Show in 

San Francisco, California (“Winter Fancy Food Show”). 

75. During a January 16, 2019 earnings call, Defendant directed the Company’s CFO 

and Director of Marketing to make the following statements: 

a. NewAge had produced its portfolio of CBD-infused beverages prior to Christmas 

2018; 

b. That this purported portfolio of beverages would be available in certain key 

regional stores starting in March and April 2019;  

c. That every grocery retailer that NewAge met with at the Winter Fancy Food 

Show had placed an order of a CBD beverage products; and  

d. That NewAge would begin shipments of its CBD-infused beverage portfolio in 

the first quarter of 2019 and that this portfolio would have a material impact on 

NewAge’s financial statements during its 2019 fiscal year. 

76. Defendant drafted and had final editorial control and ultimate authority over the 

content of the January 16, 2019 earnings call script and directly instructed the Company’s CFO 

and Director of Marketing to make the above statements that were a part of the earnings call 

script.   

77. During that same January 16, 2019 earnings call, Defendant also claimed that 

major Japanese retailer FamilyMart had placed an order with NewAge to sell NewAge’s CBD 

beverage products in 15,000 outlets.   

78. During a January 16, 2019 interview by Stuart Varney of Fox Business News, 

Defendant claimed that NewAge’s CBD beverages were currently available for purchase at 

major Japanese retailer FamilyMart. 

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79. In a January 18, 2019 Forbes article, Defendant stated that FamilyMart stores will 

carry NewAge’s CBD beverages and the products will start shipping in March 2019. 

80. At the January 27, 2019 Board Meeting, Defendant falsely stated to the Board that 

FamilyMart had placed an order for NewAge’s CBD line of products. 

81. The above statements from the October 16, 2018 press release, November 14, 

2018 press release and earnings call, December 4 and 6, 2018 interviews, December 12, 2018 

press release, January 16, 2019 earnings call and interview, and January 18, 2018 Forbes article, 

were all false and misleading when made because, as Defendant knew or was reckless in not 

knowing that, at the time, NewAge had not completed the development of a single CBD 

beverage product and never received orders or commitments from any retailer for CBD beverage 

products. 

4. Defendant’s False and Misleading Statements Concerning CBD 
Beverages were Material 

 
82. Defendant’s false and misleading statements about its putative CBD beverage 

portfolio were material and caused significant spikes in NewAge’s share price from September 

2018 to early 2019.  For example, following the September 5, 2018 investor presentation 

announcing that NewAge had been testing a CBD beverage, NewAge’s share price increased as 

much as 26% and a number of analysts published reports on the announcement.  Following the 

publication of the September 19, 2018 press release announcing the purported debut of its CBD 

beverage portfolio, NewAge’s share price nearly tripled—increasing from a closing price of 

$2.82 per share on September 18, 2018 to a closing price of $7.85 per share on September 20, 

2018.  The liquidity of NewAge’s stock increased even more dramatically, rising from a trading 

volume of 672,000 shares on September 14, 2018 to approximately 130 million shares on 

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September 20, 2018.  Following the November 14, 2018 announcement of “commitments of over 

125,000 points of distribution,” the stock price increased by 23%. 

83. In response to its CBD-related false and misleading statements, NewAge also 

received a substantial number of inquiries from investors and equity analysts from September 

2018 to early 2019 seeking information about the status of the CBD beverage program, including 

the timing of launch, retail interest, and Health Science’s role in it.  During the relevant period, 

Defendant repeatedly confided to members of NewAge’s Board that NewAge’s CBD beverage 

portfolio was a major driver of the Company’s share price and that NewAge investors were 

interested in “anything CBD related.” 

84. The above misstatements artificially boosted NewAge’s share price and increased 

the liquidity of its stock, which enabled the Company to turn around its finances and grow the 

Company.  For example, immediately following the false and misleading September 19, 2018 

press release, Defendant, citing the increased share price and liquidity, put in place an at-the-

market (ATM) securities offering3 that generated net proceeds of approximately $38 million for 

NewAge.  Taking advantage of the still-elevated share price and liquidity, in November 2018, 

NewAge conducted a second ATM offering that yielded an additional $52 million in cash, 

providing it with a cash balance of more than $80 million and significantly improving the 

Company’s balance sheet. 

85. The Company relied upon the proceeds received from the ATM offerings to 

purchase global beverage company Morinda Holdings (“Morinda”), a major acquisition that was 

                                                 
3 An at-the-market (ATM) offering is a type of stock offering used by publicly traded companies in order 
to raise capital over time.  In an ATM offering, the issuing company incrementally sell shares into the 
secondary trading market at prevailing market prices. 

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projected to grow NewAge’s annual revenue from approximately $50 million in 2018 to over 

$300 million in 2019. 

III. DEFENDANT CASHED IN ON THE FALSE AND MISLEADING PRESS 
RELEASES AND OTHER FALSE AND MISLEADING STATEMENTS   

             
86. Defendant also personally benefitted from the false and misleading statements 

described above.  For example, while NewAge’s share price and liquidity were still artificially 

inflated as a result of the misstatements described above, between April and October 2019, 

Defendant obtained money or property by selling 425,000 NewAge shares for net proceeds of 

over $2 million.  In addition, the Board awarded Defendant a significant compensation increase 

starting in 2019 due to the Company’s improved financial position, successful stock offerings, 

and the completion of the Morinda acquisition, all of which resulted from the above 

misstatements. 

IV. DEFENDANT AIDED AND ABETTED NEWAGE’S VIOLATIONS OF 
REGULATION FD  

87. Regulation FD (Fair Disclosure) protects investors by prohibiting issuers from 

selectively disclosing material nonpublic information to, among others, securities analysts and 

institutional investors, before disclosing the same information to the public.   

88. Regulation FD requires that when an issuer, or persons acting on its behalf, 

discloses material nonpublic information to persons outside the issuer, it must simultaneously 

disclose such information to the public.  Where the issuer or person acting on its behalf knows or 

is reckless in not knowing that the information it is communicating is both material and 

nonpublic, the disclosure is “intentional” within the meaning of Regulation FD.   

89. At a January 8, 2018 conference, an invitation-only event attended primarily by 

institutional investors, private equity professionals, and equity analysts, Defendant told select 

investors that the Company would be announcing a supposed expansion of the U.S. military’s 

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relationship with NewAge that would include the sale of 21 NewAge SKUs to commissaries 

worldwide. 

90. This selective material nonpublic disclosure was made in advance of NewAge’s 

false and misleading January 18, 2018 press release announcing that very same purported 

expansion.  Following the January 18, 2018 press release, NewAge’s share price rose by nearly 

16% for the day.   

91. On or about September 18, 2018, Defendant sent emails to select equity analysts 

stating that in two days, NewAge intended to announce the then-upcoming debut of its CBD line 

of beverages at the NACS trade show. 

92. These disclosures to the analysts were made in made in advance of NewAge’s 

false and misleading September 19, 2018 press release announcing that very same purported 

information.  Following the September 19, 2018 press release, NewAge’s share price increased 

by 55% for the day.   

93. Defendant’s disclosures to investors at the January 8, 2018 conference and to 

analysts on September 18, 2018 constituted material nonpublic information that was not 

simultaneously disseminated to the public. 

94. Defendant knew or was reckless in not knowing that his disclosures at the January 

8, 2018 conference and to analysts on September 18, 2018 constituted material nonpublic 

information. 

95. Defendant’s disclosures were intentional selective disclosures within the meaning 

of Regulation FD.  

96. Defendant failed to file with the Commission the required Form 8-K disclosing 

the material nonpublic information that Defendant had disclosed on January 8, 2018 and 

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September 18, 2018 within the time periods specified in the Commission’s rules or forms, or to 

disseminate that information through another method of disclosure reasonably designed to 

provide broad, non-exclusionary distribution of the information to the public. 

97. Because NewAge failed to simultaneously publicly disseminate the material 

information in accordance with Regulation FD, the investing public was placed at a disadvantage 

relative to the investors who were privy to the selective disclosures on January 8, 2018, and the 

analysts who were privy to the selective disclosures on September 18, 2018. 

THIS ACTION IS TIMELY FILED  

98. Defendant agreed to toll any statute of limitations applicable to the claims alleged 

herein during the period from June 1, 2022 through August 30, 2022. 

 
CLAIMS FOR RELIEF 

 
First Claim for Relief 

Section 10(b) and Rule 10b-5 of the Exchange Act  
 

The Commission realleges and incorporates by reference in this claim for relief the allegations 

set forth at 1 through 98 above.   

99. Defendant, directly or indirectly, in connection with the purchase or sale of a 

security, and by the use of means or instrumentalities of interstate commerce, of the mails, or of 

the facilities of a national securities exchange, acting with scienter: (a) employed devices, 

schemes, or artifices to defraud; (b) made untrue statements of a material fact or omitted to state 

a material fact necessary in order to make the statements made, in light of the circumstances 

under which they were made, not misleading; and (c) engaged in acts, practices, or courses of 

business which operated or would operate as a fraud or deceit upon other persons.  As alleged 

above, Defendant knowingly or recklessly engaged in deceptive conduct and made materially 

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false and misleading statements to investors concerning a wide range of matters, including 

purported new or expanded product distribution deals with large domestic and international 

beverage distributors and retailers. 

100. Defendant acted knowingly or recklessly. 

101. By engaging in the conduct described above, Defendant violated, and unless 

restrained and enjoined will continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 

78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

Second Claim for Relief 
Section 17(a) of the Securities Act 

 
102. The Commission realleges and incorporates by reference in this claim for relief 

the allegations set forth at 1 through 98 above.  

103. By engaging in the conduct described above, Defendant, using the means or 

instrumentalities of interstate commerce or of the mails, in the offer or sale of securities, directly 

or indirectly, with scienter or negligently, employed devices, schemes, or artifices to defraud; 

obtained money or property by means of untrue statements of material fact or omissions to state 

material facts necessary in order to make the statements made, in light of the circumstances 

under which they were made, not misleading; and/or engaged in transactions, practices, or 

courses of dealing which operated or would operate as a fraud or deceit upon the purchaser.  As 

alleged above, Defendant knowingly, recklessly, or negligently engaged in deceptive conduct 

and made materially false and misleading statements to investors concerning a wide range of 

matters, including purported new or expanded product distribution deals with large domestic and 

international beverage distributors and retailers. 

104. Defendant acted knowingly, recklessly, or negligently. 

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105. By virtue of the foregoing, Defendant, directly or indirectly, violated and, unless 

restrained and enjoined, will again violate Section 17(a) of the Securities Act [15 U.S.C. § 

77q(a)]. 

Third Claim for Relief 
Aiding and Abetting NewAge’s Violations of Section 13(a) of the Exchange Act and 

Regulation FD 
 

106. The Commission realleges and incorporates by reference in this claim for relief 

the allegations set forth at 1 through 98 above.  

107. Regulation FD [17 C.F.R. § 243.100, et seq.] requires that when an issuer or 

certain persons acting on its behalf, including officers, privately disclose material nonpublic 

information to certain persons outside the issuer, the issuer must simultaneously disclose such 

information to the public.  Where the issuer or such persons acting on its behalf knowingly or 

recklessly disregard that the information being privately disclosed is both material and 

nonpublic, the disclosure is intentional within the meaning of Regulation FD. 

108. As alleged above, Defendant intentionally disclosed material nonpublic 

information to select investors during a January 8, 2018 conference and via emails sent to equity 

analysts on September 18, 2018, without making simultaneous disclosure of that information to 

the public.  

109. By engaging in the conduct alleged above, Defendant knowingly or recklessly 

provided substantial assistance to NewAge with respect to its violations of, and, unless enjoined, 

will again aid and abet violations of, Section 13(a) of the Exchange Act [15 U.S.C. § 78m(a)] 

and Regulation FD [17 C.F.R. § 243.100, et seq.] thereunder. 

 
 

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PRAYER FOR RELIEF 
 

WHEREFORE, the Commission respectfully requests that the Court grant the following 

relief: 

1. Find that the Defendant committed the violations alleged in this Complaint;  

2. Enter an injunction, in a form consistent with Rule 65(d) of the Federal Rules of 

Civil Procedure, permanently restraining and enjoining Defendant from violating, directly or 

indirectly, the laws and rules Defendant is alleged to have violated in this Complaint; 

3. Order Defendant to disgorge ill-gotten gains received during the period of 

violative conduct and pay prejudgment interest on such ill-gotten gains; 

4. Order Defendant to pay civil money penalties pursuant to Section 20(d) of the 

Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 

78u(d)(3)];  

5. Order that Defendant be barred, pursuant to Section 20(e) of the Securities Act 

[15 U.S.C. § 77t(e)] and Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)], from 

acting as an officer or director of any issuer that has a class of securities registered pursuant to 

Section 12 of the Exchange Act [15 U.S.C. § 781] or that is required to file reports pursuant to 

Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)]; 

6. Order that Defendant be prohibited from participating in an offering of a penny 

stock pursuant to Section 20(g) of the Securities Act [15 U.S.C. § 77t(g)] and Section 21(d) of 

the Exchange Act [15 U.S.C. § 78u(d)]; and  

7. Grant such other and further relief as this Court may deem just and proper. 

 
 

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JURY DEMAND 
 
The Commission demands a trial by jury on all claims so triable.   

Dated:  October 18, 2022  Respectfully submitted, 
   
 By: s/ Edward J. Reilly 
Of Counsel: 
Edward B. Gerard 
James J. Bresnicky 

 Edward J. Reilly 
Paul W. Kisslinger 
James P. Connor  
U.S. Securities and Exchange Commission 
100 F Street NE 
Washington, DC 20549-4473 
Telephone: (202) 551-6791 (Reilly) 
Email: [email protected] 
Attorneys for Plaintiff 
U.S. Securities and Exchange Commission 

 
 
 

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