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Aug 30 (Reuters) – NewAge Inc (NBEV.O)a direct-to-consumer seller of health and wellness products, filed for bankruptcy Tuesday and said it plans to sell itself after discovering material weaknesses in its financial reporting.
The Midvale, Utah-based company and three affiliates filed for Chapter 11 protection from creditors in U.S. bankruptcy court in Delaware.
Tuesday’s announcement came three weeks after the company received a notice of default on a loan agreement.
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NewAge said it had $310.9 million in assets and $149.4 million in debt at the end of 2021.
In a regulatory filing, NewAge said it received a $28 million offer from an entity known as DIP Financing LLC to buy essentially all of its assets, subject to court approval and higher bids.
NewAge also said it has raised $16 million in funding to help it operate during the restructuring.
The company has not filed annual or quarterly reports this year after it found a material weakness in its 2020 annual report related to how it reported acquisitions.
In March, NewAge corrected revelations about the sale of CBD (cannabidiol)-infused drinks, saying some were made on its behalf without authorization, and that a former chief executive knew its store distribution division directly sold the drinks.
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Reporting by Jonathan Stempel in New York; Editing by Mark Porter and Josie Kao
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