| Nature of Operations, Basis of Presentation and Significant Accounting Policies | On April 1, 2015, American Brewing acquired
the assets of B&R Liquid Adventure, which included the brand, Búcha Live Kombucha. Prior to acquiring the Búcha Live
Kombucha brand and business, we were a craft brewery operation. In April 2016, new management assumed daily operation of the business,
and began the implementation of a new vision for the Company. In May 2016 we changed our name to Búcha, Inc. (“Búcha”),
and then on June 30, 2016, we acquired the combined assets of “Xing” including Xing Beverage, LLC, New Age Beverages,
LLC, Aspen Pure, LLC, and New Age Properties. We then shut down all California operations where Búcha was based, relocated
the Company’s operational headquarters to Denver, Colorado, and changed our name to New Age Beverages Corporation. On October
1, 2015, we then sold American Brewing including their brewery, brewery assets and its related liabilities to focus exclusively
on the healthy beverages. We recognized the sale of our brewery and brewery operations as a discontinued operation beginning in
the third quarter of 2015, and ultimately concluded the transaction in February 2016. In February 2017, we uplisted onto The NASDAQ
Capital Market. In March 2017, we acquired the assets of Maverick Brands, including their brand Coco-Libre. In June 2017, we acquired
the assets of Premier Micronutrient Corporation (“PMC”), and also completed the acquisition of the Marley Beverage
Company (“Marley”) including the brand licensing rights to all Marley brand ready to drink beverages. We have three wholly-owned subsidiaries, NABC,
Inc., NABC Properties, LLC (“NABC Properties”), and New Age Health Sciences. NABC, Inc. is our Colorado-based operating
company that consolidates performance and financial results of our divisions. NABC Properties incorporates all our buildings and
warehouses, and New Age Health Sciences includes all our patents, and the operating performance in the medical and hospital channels. Reclassification Certain amounts in the prior periods presented
have been reclassified to conform to the current period financial statement presentation. These reclassifications have no effect
on previously reported net income. Basis of Presentation The accompanying audited consolidated financial
statements and related footnotes have been prepared in accordance with accounting principles generally accepted in the United States
of America (or U.S. GAAP) and with the Securities and Exchange Commission’s (or SEC) instructions for the Form 10-K. Principles of Consolidation Our consolidated financial statements include
the accounts of all majority-owned subsidiary companies. All intercompany transactions and balances have been eliminated. Use of Estimates The preparation of the consolidated financial
statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements
and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
The more significant estimates and assumptions made by management include allowance for doubtful accounts, inventory valuation,
provision for excess or expired inventory, depreciation of property and equipment, realizability of long-lived assets, allowance
for sales returns and chargebacks, estimated cash flows in the acquisitions, and fair market value of equity instruments issued
for goods or services. The current economic environment has increased the degree and uncertainty inherent in these estimates and
assumptions. Cash and Cash Equivalents Cash and cash equivalents as
of December 31, 2017 and 2016 included cash on-hand. Cash equivalents are considered all accounts with an original maturity date
within 90 days. Accounts Receivable The Company’s accounts receivable primarily
consists of trade receivables. The Company records an allowance for doubtful accounts that is based on historical trends, customer
knowledge, any known disputes, and the aging of the accounts receivable balances combined with management’s estimate of future
potential recoverability. Receivables are written off against the allowance after all attempts to collect a receivable have failed.
The Company’s allowance for doubtful accounts was $52,345 as of December 31, 2017 and $46,350 as of December 31, 2016. Concentrations of Credit Risk Financial instruments that potentially subject
the Company to concentrations of credit risk consist principally of cash and accounts receivables. The Company places its
cash with high credit quality financial institutions. At times such amounts may exceed federally insured limits. For the year ended December 31, 2017, three
customers represented approximately 21.4% (9.9%, 6.3% and 5.2%) of net revenues. For the year ended December 31, 2016, three customers
represented approximately 27.5% (14.5%, 7.5% and 5.5%) of net revenues. As of December 31, 2017, three customers represented 23.1%
(10.5%, 6.7% and 5.9%) of accounts receivables. As of December 31, 2016, three customers represented approximately 29.4% (12.3%,
8.9% and 8.2%) of accounts receivable. Fair Value of Financial Instruments The carrying amount of the financial instruments,
which principally include cash, trade receivables, accounts payable and accrued expenses, approximates fair value due to the relative
short maturity of such instruments. The carrying amount of the Company’s debt approximates its fair value as it bears interest
at market rates of interest after taking into consideration the debt discounts. Accounting Standards Codification (ASC) 820
defines fair value, establishes a framework for measuring fair value under U.S. GAAP and enhances disclosures about fair value
measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer
a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between
market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use
of observable inputs and minimize the use of unobservable inputs. The standard describes a fair-value hierarchy based on three
levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair
value as follows: Level 1 Level 2 Level 3 The following tables set forth the fair value
of the Company’s contingent provision as of December 31, 2017 and 2016:
December 31, 2017
Level I Level II Level III Total
(in thousands)
Contingent Provision:
Earn-out attributable to Marley acquisition $ - $ - $ 800 $ 800
Total contingent provision $ - $ - $ 800 $ 800
December 31, 2016
Level I Level II Level III Total
(in thousands)
Contingent Provision:
Earn-out attributable to Marley acquisition $ - $ - $ - $ -
Total contingent provision $ - $ - $ - $ - There were no transfers between levels within the fair value hierarchy
during the periods presented. Goodwill and Intangible Assets Goodwill represents the excess
of the purchase price of acquired businesses over the estimated fair value of the identifiable net assets acquired. Goodwill and
other intangibles with indefinite useful lives are not amortized but tested for impairment annually or more frequently when events
or circumstances indicates that the carrying value of a reporting unit more likely than not exceeds its fair value. The goodwill
impairment test is applied by performing a qualitative assessment before calculating the fair value of the reporting unit. If,
on the basis of qualitative factors, it is considered not more likely than not that the fair value of the reporting unit is less
than the carrying amount, further testing of goodwill for impairment would not be required. If the carrying amount of a reporting
unit exceeds the reporting unit’s fair value, an impairment loss is recognized in an amount equal to that excess, limited
to the total amount of goodwill allocated to that reporting unit. The Company performed a qualitative assessment and determined
there was no impairment of goodwill for the years ended December 31, 2017 and 2016. Intangible assets are recorded at acquisition
fair value as part of the acquisitions. The balance as of December 31, 2017 and 2016 is reflected net of accumulated amortization.
Definite lived intangible assets are amortized over their estimated useful life using the straight-line method, which is determined
by identifying the period over which the cash flows from the asset are expected to be generated, typically 15 to 42 years. As of
December 31, 2017 and 2016 accumulated amortization was $1,368,568 and $340,126, respectively. Amortization expense was $1,028,443
and $340,126 for the years ended December 31, 2017 and 2016, respectively. Long-lived Assets Long-lived assets consisted of property and
equipment and customer relationships and are reviewed for impairment in accordance with the guidance of the ASC 360, Property,
Plant, and Equipment. The Company tests for impairment losses on long-lived assets used in operations whenever events or changes
in circumstances indicate that the carrying amount of the asset may not be recoverable. For the years ended December 31, 2017 and
2016, respectively, the Company had not experienced impairment losses on the long-lived assets as management determined that there
were no indicators that the carrying amount of the asset may not be recoverable. Share-Based Compensation The Company accounts for share--based compensation
to employees in accordance with ASC 718 Compensation—Stock Compensation. Share Included in prepaid expenses as of December
31, 2017 and 2016 are prepaid share-based compensation of approximately $1,000,000 and $-, of which approximately $500,000 and
$- are presented as long-term on the consolidated balance sheets under the caption Prepaid Expenses, long-term. These amounts represent
the prepaid compensation to employees and certain non-employees for services rendered. Inventories and Provision for Excess or
Expired Inventory Inventories consist of tea ingredients, packaging
and finished goods and are stated at the lower of cost (first-in, first-out basis) or market value. Provisions for excess
inventory are included in cost of goods sold and have historically been immaterial but adequate to provide for losses on its raw
materials. There was no reserve for obsolescence as of December 31, 2017 and December 31, 2016. Property and Equipment Property and equipment consists primarily of
building, brewing equipment, vehicles and coolers and are stated at cost. Depreciation is computed using the straight-line
method based upon the estimated useful lives of the underlying assets, generally five years. Major renewals and betterments
that extend the life of the property are capitalized. Expenditures for repairs and maintenance are expensed as incurred. Revenue Recognition The Company’s products are distributed
in major health and grocery chains throughout North America. Revenue is recognized upon delivery of goods to the customer.
An allowance for estimated returns is provided at the time of the sale. In accordance with the guidance in FASB Topic ASC
605, Revenue Recognition Customer Programs and Incentives Customer programs and incentives, which include
customer promotional discount programs and customer incentives, are a common practice in the beverage industry. The Company
incurs customer program costs to promote sales of products and to maintain competitive pricing. Amounts paid in connection
with customer programs and incentives are recorded as reductions to net revenue or as advertising, promotional and selling expenses
in accordance with ASC Topic 605-50, Revenue Recognition—Customer Payments and Incentives Cost of Goods Sold Cost of goods sold mainly consisted of raw material
costs, packaging costs and direct labor. Costs are recognized when the related revenue is recorded. Shipping and handling
costs for all wholesale sales transactions are billed to the customer and are included in costs of goods sold for all periods presented. Advertising, Promotions and Sales Advertising, promotional and selling expenses
consisted of sales salaries, tap handles, media advertising costs, sales and marketing expenses, and promotional activity expenses
and are recognized when incurred in the accompanying consolidated statements of operations. Estimated Chargebacks Included in accrued expenses are estimated
chargebacks which represent certain incentives including, but not limited to, cash discounts, funds for promotional and marketing
activities, volume-based programs and for anticipated price differences. Amounts are based on estimated historical amounts. As
of December 31 2017 and 2016, the total amount of chargebacks were $321,154 and $175,987. General and Administrative Expenses General and administrative expenses consisted
of professional service fees, rent and utility expenses, meals, travel and entertainment expenses, and other general and administrative
overhead costs. Expenses are recognized when incurred. Income Taxes The Company accounts for income taxes pursuant
to the provisions of ASC 740, Income Taxes ASC 740 requires that the Company recognize
in the consolidated financial statements the effect of a tax position that is more likely than not to be sustained upon examination
based on the technical merits of the position. The first step is to determine whether or not a tax benefit should be recognized.
A tax benefit will be recognized if the weight of available evidence indicates that the tax position is more likely than not to
be sustained upon examination by the relevant tax authorities. The recognition and measurement of benefits related to our tax positions
requires significant judgment as uncertainties often exist with respect to new laws, new interpretations of existing laws, and
rulings by taxing authorities. Differences between actual results and our assumptions, or changes in our assumptions in future
periods, are recorded in the period they become known. For tax liabilities, the Company recognizes accrued interest related to
uncertain tax positions as a component of income tax expense, and penalties, if incurred, are recognized as a component of operating
expense. Net Income (Loss) Per Share Basic net income (loss) per share is calculated
by dividing net income (loss) by the weighted-average common shares outstanding. Diluted net income per share is calculated
by dividing net income by the weighted-average common shares outstanding during the period using the treasury stock method or the
two-class method, whichever is more dilutive. As the Company incurred net losses for the periods ended December 31, 2017
and 2016 no potentially dilutive securities were included in the calculation of diluted earnings per share as the impact would
have been anti-dilutive. Therefore, basic and dilutive net income (loss) per share were the same. If the Company had
net income, potential dilutive securities consist of warrants to purchase zero and 1,127,000 shares of common stock as of December
31, 2017 and December 31, 2016, respectively. Recently Issued Accounting Standards In May 2014, the FASB issued ASU No. 2014-09,
Revenue from Contracts with Customers, as a new Topic, ASC Topic 606. The new revenue recognition standard provides a five-step
analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize
revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which
the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU No. 2015-14, Revenue
from Contracts with Customers: Deferral of the Effective Date, which deferred the effective date of the new revenue standard for
periods beginning after December 15, 2016 to December 15, 2017, with early adoption permitted but not earlier than the original
effective date. This ASU must be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the
date of adoption. The Company is considering the alternatives of adoption of this ASU and is conducting its review of the
likely impact to the existing portfolio of customer contracts entered into prior to adoption. After completing its review, the
Company will continue to evaluate the effect of adopting this guidance upon the Company results of operations, cash flows and financial
position. Currently, the Company does not expect the adoption of this ASU to have a material impact on its financial statements
except that there are significant additional reporting requirements under the new standard. In February 2016, the FASB issued ASU No. 2016-02,
Leases. This ASU establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the
balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification
affecting the pattern of expense recognition in the income statement. This ASU is effective for fiscal years beginning after December
15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees
for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented
in the financial statements, with certain practical expedients available. During the year ended December 31, 2017 management elected
to early adopt the guidance under ASU 2016-02. Management’s decision was based on the stock price during the year would most
likely result in the Company entering into and being designated an accelerated filer by June 30, 2019, which would result in management
having to restate the financial statements to reflect the adoption of the new standard. In March 2016, the FASB issued ASU 2016-08,
Revenue from Contracts with Customers (Topic 606). This ASU is related to reporting revenue gross versus net, or principal versus
agent considerations. This ASU is meant to clarify the guidance in ASU 2014-09, Revenue from Contracts with Customers, as
it pertains to principal versus agent considerations. Specifically, the guidance addresses how entities should identify goods and
services being provided to a customer, the unit of account for a principal versus agent assessment, how to evaluate whether a good
or service is controlled before being transferred to a customer, and how to assess whether an entity controls services performed
by another party. This ASU has the same effective date as the new revenue standard, which is effective for fiscal years, and for
interim periods within those fiscal years, beginning after December 15, 2017. The Company is evaluating the effect and methodology
of adopting this new accounting guidance upon the Company results of operations, cash flows and financial position. The Company
has begun to consider the alternatives of adoption of this ASU, and has started its review of the likely impact to the existing
portfolio of customer contracts entered into prior to adoption. The Company will also continue to evaluate the effect of adopting
this guidance upon its results of operations, cash flows and financial position. Currently, the Company does not expect the adoption
of this ASU to have a material impact on its consolidated financial statements except that there are significant additional reporting
requirements under the new standard. In March 2016, the FASB issued ASU 2016-09,
Compensation-Stock Compensation (Topic 718). This ASU is related to simplifications of employee share-based payment accounting.
This pronouncement eliminates the APIC pool concept and requires that excess tax benefits and tax deficiencies be recorded in the
income statement when awards are settled. The pronouncement also addresses simplifications related to statement of cash flows classification,
accounting for forfeitures and minimum statutory tax withholding requirements. This ASU is effective for fiscal years, and for
interim periods within those fiscal years, beginning after December 15, 2016. This ASU does not have a material impact on the Company’s
consolidated financial statements based on management's conclusion. In April 2016, the FASB issued ASU 2016-10,
Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. This ASU is meant to clarify
the guidance in FASB ASU 2014-09, Revenue from Contracts with Customers. Specifically, the guidance addresses an entity’s
identification of its performance obligations in a contract, as well as an entity’s evaluation of the nature of its promise
to grant a license of intellectual property and whether or not that revenue is recognized over time or at a point in time. This
ASU has the same effective date as the new revenue standard, which is effective for fiscal years, and for interim periods within
those fiscal years, beginning after December 15, 2017. The Company is considering the alternatives of adoption of this ASU and
will continue to review the likely impact to the existing portfolio of customer contracts entered into prior to adoption. The Company
will continue to evaluate the effect of adopting this guidance upon its results of operations, cash flows and financial position.
The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements except
that there are significant additional reporting requirements under the new standard. In May 2016, the FASB issued ASU 2016-11, Revenue
Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates
2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting. This ASU rescinds SEC paragraphs pursuant
to two SEC Staff Announcements at the March 3, 2016 Emerging Issues Task Force (EITF) meeting. Specifically, registrants should
not rely on the following SEC Staff Observer comments upon adoption of Topic 606: (1) Revenue and Expense Recognition for Freight
Services in Process, which is codified in paragraph 605-20-S99-2; (2) Accounting for Shipping and Handling Fees and Costs, which
is codified in paragraph 605-45-S99-1; (3) Accounting for Consideration Given by a Vendor to a Customer (including Reseller of
the Vendor’s Products), which is codified in paragraph 605-50-S99-1; and (4) Accounting for Gas-Balancing Arrangements (i.e.,
use of the “entitlements method”), which is codified in paragraph 932-10-S99-5. This ASU becomes effective upon adoption
of ASU 2014-09, which is effective for fiscal years, and for interim periods within those fiscal years, beginning after December
15, 2017. The Company has not yet begun to consider the alternatives of adoption of this ASU or its impact on its consolidated
financial statements. In May 2016, the FASB issued ASU 2016-12, Revenue
from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. This ASU does not change the core
principle of the guidance in Topic 606. Instead, the amendments provide clarifying guidance in a few narrow areas and add some
practical expedients to the guidance. This ASU has the same effective date as the new revenue standard, which is effective for
fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. The Company is currently evaluating
the impact of the pending adoption of this new standard on its consolidated financial statements. The Company is considering the
alternatives of adoption of this ASU. Currently, the Company does not expect the adoption of this ASU to have a material impact
on its financial statements except that there are significant additional reporting requirements under the new standard. In August 2016, the FASB issued ASU 2016-15,
Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The new guidance is intended to
reduce diversity in practice in how transactions are classified in the statement of cash flows. This ASU is effective for fiscal
years, and for interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The Company
is currently evaluating the impact of this ASU on its consolidated financial statements and currently the Company has determined
there to be no impact of this ASU on its financial statements and related disclosures. In January 2017, the FASB issued 2017-04, Intangibles
- Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments in this ASU simplify the subsequent
measurement of goodwill by eliminating Step 2 from the goodwill impairment test and eliminating the requirement for a reporting
unit with a zero or negative carrying amount to perform a qualitative assessment. Instead, under this pronouncement, an entity
would perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying
amount and would recognize an impairment change for the amount by which the carrying amount exceeds the reporting unit’s
fair value; however, the loss recognized is not to exceed the total amount of goodwill allocated to that reporting unit. In addition,
income tax effects will be considered, if applicable. This ASU is effective for fiscal years, and interim periods within those
fiscal years, beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact of
this ASU on its consolidated financial statements and related disclosures. |
